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FAR and DFARS › FAR Part 28: Bonds and Insurance › Subpart 28.2

FAR 28.204 Alternatives in lieu of corporate or individual sureties.

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 lets a contractor use certain types of security instead of a corporate or individual surety when a bond is required by the Government. If security is deposited, the bond form must include a statement pledging that security, and the contractor signs the bond as principal. Agencies must protect the security and return it or its equivalent once the bond obligation ends.

Applies to: Contractors required to furnish a bond to the Government

What it requires

  • Incorporate a statement in the bond form pledging the security in lieu of execution by corporate or individual sureties when security is deposited
  • Execute the bond forms as the principal
  • Furnish an affidavit agreeing that partial release of security does not relieve the contractor of its obligations under the bond(s), as a condition of partial release

Key terms: corporate or individual surety · security · bond form · principal · performance or payment bond

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

The text

(a) Any person required to furnish a bond to the Government may furnish any of the types of security listed in 28.204-1 through 28.204-3 instead of a corporate or individual surety for the bond. When any of those types of security are deposited, a statement shall be incorporated in the bond form pledging the security in lieu of execution of the bond form by corporate or individual sureties. The contractor shall execute the bond forms as the principal. Agencies shall establish safeguards to protect against loss of the security and shall return the security or its equivalent to the contractor when the bond obligation has ceased.

(b) Upon written request by any contractor securing a performance or payment bond by any of the types of security listed in 28.204-1 through 28.204-3, the contracting officer may release a portion of the security only when the conditions allowing the partial release of security in 28.203-3(c) are met. The contractor shall, as a condition of the partial release, furnish an affidavit agreeing that the release of such security does not relieve the contractor of its obligations under the bond(s).

(c) The contractor may satisfy a requirement for bond security by furnishing a combination of the types of security listed in 28.204-1 through 28.204-3 or a combination of bonds supported by these types of security and additional surety bonds under 28.202 or 28.203. During the period for which a bond supported by security is required, the contractor may substitute one type of security listed in 28.204-1 through 28.204-3 for another, or may substitute, in whole or combination, additional surety bonds under 28.202 or 28.203.

Sections it refers to

  • 28.204-1 United States bonds or notes.
  • 28.204-3 Irrevocable letter of credit.
  • 28.203-3 Release of security interest.
  • 28.202 Acceptability of corporate sureties.
  • 28.203 Individual sureties.

Sections that refer to it

← 28.203-5 Exclusion of individual sureties. · 28.204-1 United States bonds or notes. →

Rule changes for FAR Part 28

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

FAR 28.204 Alternatives in lieu of corporate or individual sureties · SpendQuery