Section 550.309  Bonding

a)         These requirements apply only to contracts for construction.

b)         For contracts exceeding $100,000 the following bonding requirements shall apply unless other requirements are approved by the USEPA award official:

1)         A bid guarantee from each bidder equivalent to five percent of the bid price.  The "bid guarantee" shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will upon acceptance of the bid, execute such contractual documents as may be required within the time specified.

2)         A performance bond for 100 percent of the contract price.   A "performance bond" is one that the contractor executes in connection with a contract to secure fulfillment of all the contractor's obligations under such contract.

3)         A payment bond for 100 percent of the contract price.  A "payment bond" is one that the contractor executes in connection with a contract to assure payment as required by law, to all persons supplying labor and material in the execution of the work provided for in the contract.

c)         Where bonds are required in the situations described above, the bonds shall be obtained from companies holding certificates of authority as acceptable sureties (31 CFR 223).

d)         The flood hazard area requirements contained in 40 CFR 30 apply.