Here are the facts.

1. The Miller Act requires requires payment and performance bonds only for construction contracts over $100,000.

2. FAR 52.228-15 says unless the resulting contract is $100,000 or less, the successful offeror shall furnish performance and payment bonds.

3. FAR 28.101 says a contracting officer shall not require a bid bond unless a performance bond or a performance and payment bond is also required.

That sound to me like you do not put bid bond requirements in IFBs under $100,000. Now, I have an IFB that I bid on and it required a bid bond on a price I bid under $100,000.

Am I required to have a bid bond? Or should the contracting officer get some remedial reading lessons?

By Anonymous on Saturday, February 03, 2001 - 03:10 pm:

Based solely on your quotes it seems the operative words are "required" and "require." There is no language evident in your post precluding a decision to reauire performance and payment bonds and the bid bond due to some agency need. The key would seem to be whether there is "shall not require" language for performance and payment bonds of amounts under $100,000 elsewhere.

By joel hoffman on Saturday, February 03, 2001 - 06:44 pm:

Anon1, is the requirement obviously worth less than $100k or is it close enough to the limit that it is possible bids would come in over $100k?

As you may know one of the alternative forms of security for construction contracts between $25k and $100k is a payment bond.

A Surety's bonding agency usually won't issue a bid bond unless the Surety is willing to bond the contractor after award. In addition, I understand agencies often don't charge regular customers for bid bonds, when the contractor agrees to purchase the bonds from the agency.

One problem with Part 28 of the FAR is that the rest of this part was not fully edited a couple of years ago, when the Miller Act threshold was raised from $25k to $100k and alternative protections for contracts under $100k were added. In one place, it says payment bonds are an alternative security. In another place it says that payment bonds are only necessary when a performance bond is also required.

Bottom line is that the $25-100k range was recently changed and they are still working out the details and working out the bugs. You may want to call up the Contracting office and express your reservations to them.

Happy Sails! Joel

By joel hoffman on Sunday, February 04, 2001 - 05:05 pm:

Anon, another question. Is the Clause 52.228-13 "Alternative Payment Protections" in your invitation for bids package? If so, was a payment bond selected as one of the alternative payment protections? If this clause was in your IFB, the Government recognized the probability of an award below $100k. If not, they assumed the contract would cost more than $100k, whuch meant payment and performance bonds would have been needed. Hence, an expanation why they may have required a bid bond. Happy Sails! Joel