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PART 1228
BONDS AND INSURANCE
SUBPART
1228.1--BONDS AND OTHER FINANCIAL PROTECTIONS
1228.106
Administration.
1228.106-1
Bonds and bond-related forms.
(b) Standard Form (SF) 25, Performance Bond, prescribed at (FAR) 48 CFR
28.106-1(b), shall provide
coverage for taxes imposed by the United States which are collected, deducted,
or withheld from wages paid by the contractor. Forms other than the SF 25
(e.g., a commercial form) shall
not be used by contractors when a performance bond is required.
1228.106-6
Furnishing of information.
(b) When furnishing
surety information, the inquirer should also be informed that:
(1) Persons believing that they have legal remedies under
the Miller Act (40 U.S.C. 3131-3134) are cautioned to consult their own legal
advisor regarding the proper steps to take to obtain remedies.
(2) On construction contracts exceeding $2,000, if the
contracting officer is informed (through routine compliance checking, a
complaint, or a request for information) that a laborer, mechanic, apprentice,
trainee, watchman, or guard employed by the contractor or subcontractor at any
tier may have been paid wages less than those required by the applicable labor
standards provisions of the contract, the contracting officer shall promptly initiate an
investigation in accordance with (FAR) 48 CFR
Subpart 22.4, irrespective of the employee's rights under the Miller
Act. When an employee's request for information is involved, the contracting
officer shall inform the
inquirer that such investigation will be made. To insure proper payment to such
employees, this investigation is required pursuant to the provisions of the
Davis-Bacon Act, Contract Work Hours and Safety Standards Act (40 U.S.C. 3141),
and Copeland (Anti-Kickback) Act (41 U.S.C. 51-58).
(c) When furnishing a copy of a payment bond and contract
in accordance with (FAR) 48 CFR 28.106-6(b),
the requirement for a copy of the contract may be satisfied by furnishing a
machine-duplicate copy of the contractor's first pages which show the contract
number and date, the contractor's name and signature, the contracting officer's
signature, and the description of the contract work. The contracting officer
furnishing the copies shall place
the statement "Certified to be a true and correct copy" followed by
his/her signature, title and name of the OA. The fee for furnishing the
requested certified copies shall
be determined in accordance with the DOT Freedom of Information Act regulation,
49 CFR Part 7, (TAR) 48 CFR
1224.203).
1228.106-70
Execution and administration of bonds.
(a) The contracting
officer shall notify the surety within
30 days, of the contractor's failure to perform in accordance with the
terms of the contract.
(b) When a partnership is a principal on a bond, the names
of all the members of the firm shall
be listed in the bond following the name of the firm, and the phrase "a
partnership composed of." If a principal is a corporation, the state of
incorporation must also appear on the bond.
(c) Performance or payment bond(s), other than an annual bond, shall not predate
the contract to which it pertains.
(d) Bonds may
be filed with the original contract to which they apply, or all bonds can be separately maintained and
reviewed quarterly for validity. If separately maintained, each contract file shall cross-reference the applicable
bonds.
1228.106-71 Performance
and payment bonds for certain contracts.
1228.106-7100 Waiver.
(a) Pursuant to the authority vested in the Secretary of Transportation by the
Miller Act, the requirements of 40 U.S.C. 3131 et seq. are waived, to the
extent authorized in 40 U.S.C. 3134(b),
with respect to contracts for the construction, alteration, or repair of
vessels when the contract is made under sections 1535 and 1536 of Title 31, the
Merchant Marine Act 1936 (46 App. U.S.C. 1101 et. seq.), or the Merchant Ship
Sales Act of 1946 (50 App. U.S.C. 1735 et seq.), regardless of the terms of the
contracts as to payment or title.
(b) The Miller Act’s
requirement that certain contracts have payment bonds in place in order to
protect the public, including the Government, material, men and laborers is not
generally necessary with respect to the classes of contracts described under (TAR) 48 CFR
1228.106-7100(a). Inasmuch as
the Government would directly or indirectly bear the burden of premiums for
performance and payment bonds obtained in connection with such contracts, a
substantial savings can be made by waiving the requirement that they be
obtained. However, unusual circumstances
may arise in which either payment or performance bonds, or both, will be
advantageous in connection with certain such contracts.
1228.106-7101 Exception.
A performance and payment bond
for the contracts described under (TAR) 48 CFR
1228.106-7100(a) may be
advantageous in view of unusual circumstances arising in connection with such
contracts. Requests for the authority to
include the requirement for either a performance or payment bond, or both in
the contracts described under (TAR) 48 CFR
1228.106-7100(a) shall be
submitted by the contracting officer to the HCA, before a solicitation is
issued.
1228.106-470
Contract clause.
The contracting officer must
insert the clause at (TAR) 48 CFR
1252.228-73, Notification of Miller Act Payment Bond Protection, in
solicitations and contracts when payment bonds are required.
SUBPART
1228.3--INSURANCE
1228.306
Insurance under fixed-price contracts.
1228.306-70
Contracts for lease of aircraft.
(a) The contracting officer shall insert the clauses at (TAR) 48 CFR
1252.228-70 through 1252.228-72, unless otherwise indicated by the
specific instructions for their use, in any contract for the lease of aircraft
(including aircraft used in out-service flight training).
(b) The contracting officer shall insert the clause at (TAR) 48 CFR
1252.228-70, Loss of or Damage to Leased Aircraft, in any contract
for the lease of aircraft, except in the following circumstances:
(1) When the hourly rental rate does not exceed $250 and
the total rental cost for any single transaction is not in excess of $2,500:
(2) When the cost of hull insurance does not exceed 10
percent of the contract rate; or
(3) When the lessor's insurer does not grant a credit for
uninsured hours, thereby preventing the lessor from granting the same to the
Government.
(c) The contracting officer must insert the clause at (TAR) 48 CFR
1252.228-71, Fair Market Value of Aircraft, when fair market value
of the aircraft can be determined.
(d) 49 U.S.C. provides that an aircraft lessor under a lease of 30 days or more is not liable for injury or death of
persons, or damage or loss of property unless the aircraft is in the actual
possession or control of the lessor and the damage occurs because of
1228.307-1
Group insurance plans.
(a) Prior approval
requirements. The contracting officer shall instruct the
contractor on a contract-by-contract basis on proposed purchases of group
insurance plans. Legal advice should be sought where necessary on the
advantages to the Government.
1228.311-1
Contract clause.
The contracting officer shall insert the clause at (FAR) 48 CFR 52.228-7, Insurance Liability to Third Persons, as prescribed in FAR 28.311-1 unless it is waived by an official one level above the contracting officer.