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FAR and DFARS › DFARS Part 228: Bonds and Insurance › Subpart 228.1

DFARS 228.102-1 General.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section waives the usual performance and payment bond requirement for cost-reimbursement contracts. However, when a cost-type contract includes fixed-price construction subcontracts above $40,000, the prime contractor must obtain performance and payment protections from those subcontractors. The type of protection depends on the subcontract value.

Applies to: Prime contractors on cost-reimbursement contracts with fixed-price construction subcontracts

What it requires

  • For fixed-price construction subcontracts over $40,000 but not exceeding $150,000, obtain payment protection sufficient to pay labor and material costs, using any FAR 28.102-1(b)(1) alternative.
  • For fixed-price construction subcontracts over $150,000, obtain a payment bond sufficient to pay labor and material costs.
  • For fixed-price construction subcontracts over $150,000, obtain a performance bond in an equal amount if available at no additional cost.

Key terms: performance and payment bonds · cost-reimbursement contracts · fixed-price construction subcontracts · payment protection · performance bond

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

The requirement for performance and payment bonds is waived for cost-reimbursement contracts. However, for cost-type contracts with fixed-price construction subcontracts over $40,000, require the prime contractor to obtain from each of its construction subcontractors performance and payment protections in favor of the prime contractor as follows:

(1) For fixed-price construction subcontracts over $40,000, but not exceeding $150,000, payment protection sufficient to pay labor and material costs, using any of the alternatives listed at FAR 28.102-1(b)(1).

(2) For fixed-price construction subcontracts over $150,000—

(i) A payment bond sufficient to pay labor and material costs; and

(ii) A performance bond in an equal amount if available at no additional cost.

Sections it refers to

← 228.102 Performance and payment bonds and alternative payment protections for construction contracts. · 228.102-70 Defense Environmental Restoration Program construction contracts. →

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

DFARS 228.102-1 General · SpendQuery