FAR and DFARS › FAR Part 28: Bonds and Insurance › Subpart 28.1
FAR 28.103-2 Performance bonds.
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 explains when a performance bond may be required on a contract above the simplified acquisition threshold. A performance bond protects the Government if the contractor fails to perform, and the contracting officer may require one in certain situations such as when Government property or funds are provided, substantial progress payments are made, or the work involves dismantling or demolition. Even if a bond is obtained, the contracting officer must still determine that the contractor is responsible.
Applies to: Contracts exceeding the simplified acquisition threshold
What it requires
- The contracting officer must determine the contractor's responsibility even if a bond has been or can be obtained.
Key terms: performance bonds · simplified acquisition threshold · contracting officer · progress payments · successor in interest
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(a) Performance bonds may be required for contracts exceeding the simplified acquisition threshold when necessary to protect the Government's interest. The following situations may warrant a performance bond:
(1) Government property or funds are to be provided to the contractor for use in performing the contract or as partial compensation (as in retention of salvaged material).
(2) A contractor sells assets to or merges with another concern, and the Government, after recognizing the latter concern as the successor in interest, desires assurance that it is financially capable.
(3) Substantial progress payments are made before delivery of end items starts.
(4) Contracts are for dismantling, demolition, or removal of improvements.
(b) The Government may require additional performance bond protection when a contract price is increased.
(c) The contracting officer must determine the contractor's responsibility (see subpart 9.1) even though a bond has been or can be obtained.
← 28.103-1 General. · 28.103-3 Payment bonds. →
Rule changes for FAR Part 28
- Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 14, 28, 36, and 52 ↗ · proposed 2026-09-18 · comments due 2026-10-19
- Federal Acquisition Regulation; Technical Amendments ↗ · final rule 2024-04-22 · effective 2024-05-22
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.