§3131 Bonds of Contractors of Public Buildings or Works

Summary

Before the federal government awards any contract over $100,000 to build, change, or repair a public building or public work, the person who wins the contract must give two bonds that take effect when the contract is awarded. Contractor — the person awarded such a contract. One bond is a performance bond with a surety the contracting officer accepts and in an amount the officer thinks is enough to protect the government. The other is a payment bond with a surety the officer accepts to protect people who supply labor and materials. The payment bond must equal the total contract price unless the officer, in writing with specific findings, says that is impractical and sets a different amount. The payment bond cannot be less than the performance bond. The performance bond must also cover taxes the government withholds from wages on the job. The government must give the bond’s surety written notice about unpaid taxes within 90 days after the contractor files the tax return for that period, but no later than 180 days after the return was due. The government cannot sue on the bond for those taxes unless it gives that notice, and it must bring the suit within one year after the notice. A contracting officer may waive the bond requirement for work done in a foreign country if furnishing the bonds is impractical. The officer may also require other or extra bonds or security beyond these rules.