Requires contractor to post performance and payment bonds guaranteeing contract completion and subcontractor/supplier payment.
Applicability: Required for construction and large services contracts (typically >$150K).
Key Requirements
Obtain performance bond from surety guaranteeing contract completion
Obtain payment bond guaranteeing subcontractor/supplier payment
Bond amounts equal contract value (or specified percentage)
Maintain bond coverage throughout contract period
Common Issues & Pitfalls
Underestimating bond cost (can be 2-3% of contract value)
Losing bond coverage midway through contract (auto-default)
Not understanding surety can sue contractor for bond claims
Failing to notify surety of contract changes/delays
Contractor Guidance for Your Bid
Bonds are insurance the government forces you to buy. Get bonding capacity BEFORE bidding. Surety will require financial statements and references. Budget 2-3% of contract value. If you fail, surety pays government, then sues you for reimbursement + interest.
Related FAR Clauses
Frequently Asked Questions
What are the key requirements for FAR 52.228-1: Bonds—Performance and Payment?
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Requires contractor to post performance and payment bonds guaranteeing contract completion and subcontractor/supplier payment. Required for construction and large services contracts (typically >$150K).
When does FAR 52.228-1 apply to a federal contract?
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Required for construction and large services contracts (typically >$150K).
What are the most common compliance issues with FAR 52.228-1?
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Underestimating bond cost (can be 2-3% of contract value) Losing bond coverage midway through contract (auto-default) Not understanding surety can sue contractor for bond claims Failing to notify surety of contract changes/delays
How should contractors approach FAR 52.228-1 in their proposals?
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Bonds are insurance the government forces you to buy. Get bonding capacity BEFORE bidding. Surety will require financial statements and references. Budget 2-3% of contract value. If you fail, surety pays government, then sues you for reimbursement + interest.
What related FAR clauses should contractors review alongside FAR 52.228-1?
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Contractors reviewing FAR 52.228-1 should also study related clauses: 52-249-1, 52-249-2. Understanding how these clauses interact helps avoid compliance gaps that can trigger contract disputes or disqualify bids.
What happens if a contractor fails to comply with FAR 52.228-1?
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Non-compliance with FAR 52.228-1 can result in contract termination for default, withholding of payments, debarment proceedings, or False Claims Act liability. Contracting officers typically issue a cure notice before termination. Contractors should consult with a contract attorney if they receive a cure notice related to this clause.