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    The question is: do we require bonds for 100% of the contract even if it's a SVS w/ CON work elements contract? The contract is not coded as CON and the preponderance of the work is SVS. If we do require Bonds, is it only for the base that we require 100% or does that include Option Items as well? Do we require the Bonds to be delivered 15 days after award, or upon the start of actual CON work?


    Answer

    You can have a construction contract that contains services elements.  According to the definition of Construction in FAR 2.101.  "Construction means construction, alteration, or repair (including dredging, excavating, and painting) of buildings, structures, or other real property. For purposes of this definition, the terms “buildings, structures, or other real property” include, but are not limited to, improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, cemeteries, pumping stations, railways, airport facilities, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, and channels. Construction does not include the manufacture, production, furnishing, construction, alteration, repair, processing, or assembling of vessels, aircraft, or other kinds of personal property (except that for use in Subpart 22.5, see definition at 22.502)."

    It is not clear what you mean by "coded".  Your agency will need to determine whether the contract qualifies as a construction contract or a services contract.  If it is a construction contract then you would have to consider the amount of the contract as that will determine whether or not you will require bonds pursuant to FAR 28.102.  Generally you do look at all option amounts in determining the value of a contract. See FAR 1.108(c).  However, this is only if it is not otherwise provided elsewhere in the FAR.  In your case, FAR 28.102-2(a) does provide exception to this general rule.  It defines “Original contract price”, which is important because your performance and payment bonds are going to be based off of the original contract price.  FAR 28.102-2(a) indicates that the "original contract price" does not include the price of any options except those that are exercised at the time of the contract award.  Therefore, your bond will be 100% of the base and any option exercised at the time of contract award. See FAR 28.102-2(a) for the rules with respect to requirements and IDIQ contracts if you are using either of those contract vehicles. 

    According to the FAR any bonds need to be delivered by the contractor prior to their receiving a notice to proceed with the work or being allowed to start work.  However, note that there is a DFARS provision that is mentioned in DFARS 228.170 (DFARS 252.228-7004) that speaks specifically to FAR 37.300 requirements (dismantling, demolition, or removal of improvements).  If your contract regards dismantling, demolition, or removal of improvements look to FAR 37.302 for further guidance. 

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