Why Part 28 Matters

Bonds protect the government and subcontractors/suppliers against contractor default. Payment bonds under the Miller Act provide subcontractors their only security interest on federal construction projects since federal property cannot be subjected to mechanic's liens. Contractors must understand bonding capacity limitations, as they directly affect the size of projects a contractor can pursue. Insurance requirements vary by contract type and must be verified before performance begins.

Key Topics in Part 28

FAR Part 28 addresses several critical areas of the federal acquisition process. Understanding these topics is essential for both contracting officers and contractors working within this regulatory framework.

• Bid guarantees and bid bonds (Subpart 28.1)
• Performance bonds (Subpart 28.2)
• Payment bonds — Miller Act requirements
• Individual and corporate sureties
• Treasury Circular 570 — approved sureties
• Insurance requirements — workers' comp, CGL, auto (Subpart 28.3)
• Errors and omissions insurance
• Bonds for other than construction contracts

How FAR Part 28 Applies

The Federal Acquisition Regulation is organized into 53 parts, each covering a distinct area of the procurement process. Part 28 (Bonds and Insurance) is part of this framework and works in conjunction with other FAR parts to create a comprehensive regulatory structure. Contracting officers must comply with all applicable parts when executing procurement actions, and contractors must understand the requirements that flow from these regulations into their contracts.

The requirements in Part 28 may be implemented through specific contract clauses prescribed in FAR Part 52. When a clause references Part 28, the substantive requirements originate here, while Part 52 provides the actual clause language incorporated into contracts and solicitations.

Subparts

FAR Part 28 is divided into 3 subparts, each addressing a specific aspect of bonds and insurance.

• 28.1 — Bonds and Other Financial Protections
• 28.2 — Sureties and Other Security for Bonds
• 28.3 — Insurance

Reading FAR Part 28

The full text of FAR Part 28 is available on the Electronic Code of Federal Regulations (eCFR). The eCFR provides the most current version of the regulation, including any recent amendments published through Federal Acquisition Circulars (FACs). For historical versions, use the eCFR's point-in-time search feature.

• What does FAR Part 28 cover?

  FAR Part 28 covers bonds and insurance within the federal acquisition process. FAR Part 28 covers bonds and insurance requirements in government contracting. Subpart 28.1 addresses bid guarantees, Subpart 28.2 covers performance and payment bonds required under the Miller Act for construction contracts over $150,000, and Subpart 28.3 prescribes insurance requirements including workers' compensation, general liability, and automobile liability. It also addresses individual sureties and the acceptability of corporate sureties listed on Treasury's Circular 570.

• Who must comply with FAR Part 28?

  FAR Part 28 applies to all executive branch agencies conducting acquisitions, unless a specific exemption exists. Contractors must comply with the requirements that are incorporated into their contracts through prescribed clauses from FAR Part 52. Agency-specific supplements (DFARS, GSAM, etc.) may add additional requirements beyond the base FAR.

• Where can I read the full text of FAR Part 28?

  The full text is available on the Electronic Code of Federal Regulations (eCFR). You can also access it through acquisition.gov, which is maintained by the General Services Administration. Both sources reflect the most current version of the regulation.

• How does FAR Part 28 relate to contract clauses?

  FAR Part 28 establishes the substantive policies and procedures. The actual clause language that gets incorporated into contracts is found in FAR Part 52. Each clause in Part 52 includes a "prescription" that references the relevant policy part, creating a direct link between the requirement and its implementation in the contract.