Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 14, 28, 36, and 52

Federal RegisterSep 18, 2026

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OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 14, 28, 36, and 52

[FAR Case 2026-010, Docket No. FAR-2026-0010, Sequence No. 1]

RIN 9000-AO83

Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 14, 28, 36, and 52

AGENCY:

Office of Federal Procurement Policy (OFPP), Office of Management and Budget (OMB); Department of Defense (DoD); General Services Administration (GSA); and National Aeronautics and Space Administration (NASA).

ACTION:

Proposed rule.

SUMMARY:

OFPP, DoD, GSA, and NASA (collectively referred to as the Federal Acquisition Regulatory Council or FAR Council) are proposing to amend the Federal Acquisition Regulation (FAR) to implement Executive Order (E.O.) 14275, Restoring Common Sense to Federal Procurement. The E.O. directs the elimination of excessive acquisition regulations to stop the inefficient use of American taxpayer dollars. The FAR Council is issuing twelve proposed rules that collectively will streamline the FAR in its entirety. This rule proposes revisions to FAR parts 14, 28, 36, and 52.

DATES:

Interested parties should submit written comments to the Regulatory Secretariat Division at the address shown below on or before October 19, 2026, to be considered in the formation of the final rule.

ADDRESSES:

Submit comments in response to FAR Case 2026-010 to the Federal eRulemaking portal at

https://www.regulations.gov.

Follow the instructions for sending comments.

Instructions:

Please submit comments only and cite “FAR Case 2026-010” in all correspondence related to this case. Include your name, company name (if any), and “FAR Case 2026-010” on any attached document. Comments received generally will be posted without change to

https://www.regulations.gov,

including any personal and/or business confidential information provided. Public comments may be submitted as an individual, as an organization, or anonymously (see frequently asked questions at

https://www.regulations.gov/faq

). To confirm receipt of your comment(s), please check

https://www.regulations.gov,

approximately two to three days after submission to verify posting.

Docket:

For access to the docket to read background documents or comments received, go to

https://www.regulations.gov/FAR-2026-010.

FOR FURTHER INFORMATION CONTACT:

For clarification of content, contact

FARpolicy@gsa.gov

or call 202-969-4075 and cite “FAR Case 2026-010.” For information pertaining to status, publication schedules, or alternate instructions for submitting comments if

https://www.regulations.gov

cannot be used, contact the Regulatory Secretariat Division at 202-501-4755 or

GSARegSec@gsa.gov.

Please cite “FAR Case 2026-010.”

SUPPLEMENTARY INFORMATION:

I. Background

E.O. 14275, Restoring Common Sense to Federal Procurement (April 15, 2025), resets the foundation for Federal buying by requiring the FAR Council to produce a streamlined FAR that is simpler, clearer, and structured for speed. According to the E.O., the FAR has evolved from its original purpose (

i.e.,

to establish uniform procedures across executive departments and agencies), into an excessive and overcomplicated regulatory framework and bureaucracy. While meant to “deliver, on a timely basis, the best value product or service to the customer, while maintaining the public's trust and fulfilling public policy objectives,” the FAR has become an expensive barrier to achieving those objectives. As a result, the E.O. directed the FAR Council and OMB to create an agile, effective, and efficient regulation that contains only provisions required by statute or essential to sound procurement.

To implement E.O. 14275, OMB issued Memorandum M-25-26, Overhauling the Federal Acquisition Regulation, which announced the “Revolutionary FAR Overhaul” (RFO) and created a roadmap for producing simpler regulation aligned to statute, rewritten in plain language, and including nonstatutory requirements that are necessary to conducting a sound procurement. The memorandum described a new streamlined vision for the FAR, to be maintained alongside nonregulatory governmentwide guidance to provide a common-sense authoritative foundation for nimble response and delivery of mission capability.

This new vision represents a paradigm shift where over-engineered regulations designed for paperwork and compliance are replaced with streamlined regulations focused on core stewardship principles and nonregulatory guidance that will be used in concert with the streamlined FAR focused on proven buying strategies, critical thinking, market awareness (including to expand awareness of goods, products, and materials offered in the United States), and risk literacy to enhance workforce problem-solving. The significant reduction of unnecessary mandates is intended to clarify and reinforce the contracting officer's discretion to determine the best way to apply policies and practices. The newly established, nonregulatory guidance, which has been inspired by acquisition innovation advocates, category managers, other experienced practitioners, and many years of feedback from the contractor community—is expected to facilitate contracting officers' use of their discretion more efficiently and effectively to make smarter buying decisions.

OMB Memorandum M-25-26 also directed the FAR Council to complete the regulatory overhaul in two phases, each with robust public input. The FAR Council conducted its phase one effort in fiscal year 2025 by issuing model class deviations to replace each part in the FAR until such time as formal rulemaking occurred. This proposed rule is one of a series that constitute the FAR Council's phase two effort to obtain public comment through formal rulemaking.

II. Discussion and Analysis

A summary of proposed changes to existing FAR parts 14, 28, and 36 and their corresponding provisions and clauses in part 52 follows:

A. General

1. General RFO Updates

This proposed rule generally reorganizes the FAR parts into phases of acquisition and simplifies the text into plain language, where possible. The plain language efforts include changes to active voice, edits to improve readability, and reorganization to present information more logically. None of the plain language edits are intended to change existing FAR requirements. The rewriting of the entire FAR also required edits to

harmonize the changes being proposed such as updating the cross-references. This aligns with the Federal plain language guidelines as directed by the Plain Writing Act of 2010 (5 U.S.C. 301 note).

2. Standardization of Prescriptions

This rule proposes revisions to standardize prescriptions for provisions and clauses. These changes are intended to provide better clarity around the applicability of provisions and clauses such as whether they apply to commercial products and services.

3. Use of “Must” Instead of “Shall”

Additional revisions are being proposed throughout the FAR text and FAR provisions and clauses to replace the use of the term “shall” with “must” or “will,” as appropriate, to impose requirements.

4. Non-Statutory Requirements

Section 4 of the E.O. required amendments to the FAR to ensure it contains only provisions that are required by statute or that are otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security. The FAR Council reviewed all non-statutory requirements to determine if they are still relevant and essential to sound procurement in today's contracting environment based on the criteria from section 4 of the E.O. The proposed rule retains non-statutory requirements that further one or more of the elements of sound procurements, including those requirements that serve as guardrails to protecting taxpayer interests and promote taxpayer confidence in the procurement system. Non-statutory requirements that were beneficial but not essential were retained in the non-regulatory guidance documents. Other non-statutory requirements that did not meet these standards, were removed. The Council considered the extent to which regulation is the most efficient means for capturing the benefit of the policy. For example, most “how to” requirements were found to be more appropriately suited for non-regulatory coverage which better enables a contracting officer to use discretion in determining the application of a strategy to a given situation and limits the risk of overapplication, which can create wasteful burden on the contracting parties.

As part of the RFO, the FAR Council has created a number of non-regulatory resources, including the FAR Companion, which provides insight from experienced practitioners across the government on using more streamlined practices and processes. The migration of significant coverage to non-regulatory guidance is intended to ensure that the benefits of the policy are not outweighed by the compliance burden of a more rigidly written regulation that is prone to application in an overly broad manner. This approach was explained to the public in a set of “frequently asked questions” that were posted on the Revolutionary FAR Overhaul homepage shortly after the initiative was launched.

B. Summary of Changes to FAR Part 14, Sealed Bidding

The proposed rule, if finalized, would revise FAR part 14 to simplify and streamline the policies and procedures pertaining to sealed bidding. These proposed revisions align with the broader RFO initiatives and do not substantively change the policy or procedures in the part. Several types of streamlining are highlighted below with specific examples for further illustration.

1. Restructuring and Eliminating Redundancy

The proposed rule, if finalized, would remove the general uniform contract format text since it was duplicative of existing text in FAR part 15 but it would retain use instructions for sealed bidding; it would move the text regarding publicizing contract actions to FAR part 5; it would move the text regarding protests against award to FAR part 33; it would remove permissive, nonstatutory price-related factors; and it would remove outdated regulations regarding facsimile bids and bid envelopes.

2. Pre-Bid Conference

The proposed rule, if finalized, would remove the text permitting pre-bid conferences at FAR 14.207. While pre-bid conferences are value added in certain circumstances, it is unnecessary for the FAR to give permission to the contracting officer to use a pre-bid conference or define its purpose.

C. Summary of Changes to FAR part 28, Bonds and Insurance

The proposed rule, if finalized, would revise FAR part 28 to simplify and make administrative corrections. The proposed revisions align with the broader RFO initiatives and would not substantively change policy or procedures.

D. Summary of Changes to FAR part 36, Construction and Architect-Engineering Contracts

The proposed rule, if finalized, would revise FAR part 36 to simplify and streamline the policies and procedures pertaining to construction contracting and architect-engineering contracting. The proposed revisions align with the broader RFO initiatives. Several types of streamlining are highlighted below with specific examples for further illustration.

1. Restructuring

In addition to the acquisition lifecycle phasing, the proposed rule includes extensive restructuring to improve readability. The existing FAR part 36 text originated from 1946 committee recommendations to standardize acquisition policies and procedures between departments. As such, many of the regulations for construction contracts and architect-engineer contracts were comingled. As part of the restructuring, the proposed rule would separate construction regulations from architect-engineer regulations. Further proposed revisions include the removal of duplicative text and removal of unnecessary provisions and clauses. For example, the proposed rule would remove the existing FAR text regarding publicizing contract actions from FAR part 36 and would point the contracting officer to FAR part 5.

2. Eliminating Extraneous Content

Several paragraphs within FAR part 36 contained nonstatutory suggestive or permissive text. For example, the text at FAR 36.212 provides suggestive/permissive guidance that the contracting officer may conduct a preconstruction conference. Removal of this text and the associated clause at FAR 52.236-26, Preconstruction Conference, would not prohibit nor limit the contracting officer from establishing a requirement for an optional or mandatory preconstruction conference; rather, it would shift the requirement to the solicitation stage. By identifying the requirement for a preconstruction conference within the invitation for bid, the Government would be providing industry with the clarity needed to accurately estimate administrative costs. The FAR Council has recommended this removed text for inclusion in the reference FAR Companion guide.

The proposed rule would also remove FAR provision 52.236-1, Performance of Work by the Contractor. The E.O. 14275, Restoring Common Sense to Federal Procurement, directs the removal of regulations restricting competition. This

clause is proposed for removal as it is believe to restrict competition on fixed-price contracts because not all construction prime contractors perform certain scopes of work.

In addition, the proposed rule would remove the clause FAR 52.236-4, Physical Data, because the intent of the clause is served by the FAR clause 52.236-3, Site Investigation and Conditions Affecting the Work. The identification of data provided to bidders should already be included within the invitation for bid. The text of FAR clause 52.236-3 states, “. . .including all exploratory work done by the Government, as well as from the drawings and specifications made a part of this contract”, which further supports the data provided by the Government should already be part of the invitation for bid.

The proposed rule would remove nonstatutory text at FAR 36.519 and the associated FAR clause 52.236-19, Organization and Direction of the Work. Additionally, the mandate for full-time resident direction by an owner or senior officer represents a nonstatutory overreach. While contractors may currently seek approval for alternative oversight, Government intervention in internal organizational structures remains unnecessary and contradicts FAR 52.236-6, Superintendence by the Contractor.

The existing FAR text at 36.210 provides the contracting officer the opportunity to plan for prospective bidders to inspect the work site, examine data provided by the Government, etc., for the purposes of preparing and submitting a more informed and complete and accurate bid. Since there is no statute prohibiting such action, there is no need for the permissive text in the regulation. Further, the associated provision at FAR 52.236-27, Site Visit, is also unnecessary as the invitation for bid can clearly articulate the same information. The proposed removal of this text and the associated provision would not prohibit nor limit the contracting officer from providing the opportunity or requirement for offerors to visit the site or examine Government provided information.

The proposed rule would also remove FAR 36.520 and the associated provision at FAR 52.236-28, Preparation of Offers—Construction. This provision is redundant as it merely instructs offerors to comply with the solicitation terms to avoid rejection—a fundamental requirement already established in the invitation for bid and general procurement law.

E. Summary of Changes to FAR Part 52, Contract Clauses

1. Plain Language Update

As part of the broader plain language initiative, the term “shall” has been replaced with “must” throughout all affected clauses and prescriptions in this rulemaking to promote clarity and consistency. These updates will streamline contract drafting and compliance, reduce ambiguity, and save time for both contracting officers and contractors.

2. Clarification of FAR Clause Applicability to Commercial Products and Commercial Services

This rule clarifies the applicability of FAR part 52 clause prescriptions to commercial acquisitions to ensure consistent treatment across the FAR. Conforming revisions were made to prescriptions associated with FAR parts 14, 28, and 36 to accurately reflect when clauses apply to commercial products and commercial services. Affected prescriptions include those at 14.207, 14.208, 28.102-3, 28.103-4, 28.106-4, 28.203-4, 28.204-4, 28.309, 28.311-1, 28.312, 28.313, and 36.101-7.

3. Part 52 Renumbering

As a result of the RFO, the FAR Council is considering establishing a new FAR subpart in part 52 and relocating and renumbering all provisions and clauses under this new subpart. This means, if FAR subpart 52.4 was used, all provisions and clauses would begin with 52.4 instead of 52.2. This change is anticipated to prevent confusion and increase compliance by creating a clear distinction between versions of a provision or clause prior to the RFO. Other benefits include avoiding potential clause numbering conflicts and information system and data collection impacts. The FAR Council welcomes comments on the potential impact of such a change on contractors, Government personnel, and other stakeholders.

III. Applicability to Contracts and Subcontracts Valued at or Below the Simplified Acquisition Threshold and for Commercial Products and Commercial Services

The following sections address the applicability of provisions and clauses prescribed in FAR parts 14, 28, and 36 to solicitations and contracts valued at or below the simplified acquisition threshold (SAT) and those for the acquisition of commercial products, commercially available off-the-shelf (COTS) items, and commercial services. Prescriptions for provisions and clauses in these parts have been updated to reflect applicability to commercial acquisitions.

A. Contracts and Subcontracts Valued at or Below the Simplified Acquisition Threshold

This proposed rule, if finalized, does not alter the prescriptions of provisions and clauses included in this proposed rule to change their applicability to contracts and subcontracts valued at or below the SAT.

B. Contracts and Subcontracts for Commercial Products, Commercially Available Off-The-Shelf Items, and Commercial Services.

41 U.S.C. 1906 governs the applicability of laws to contracts for the acquisition of commercial products and commercial services and gives the FAR Council the authority to determine to apply a law to contracts or subcontracts for the acquisition of commercial products and commercial services. 41 U.S.C. 1907 exempts contracts for commercially available off-the-shelf (COTS) items from certain provisions of law unless the Administrator for Federal Procurement Policy determines that doing so would not be in the best interest of the Federal Government.

Section 839 of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232) required the FAR Council and the Administrator of Federal Procurement Policy to review prior determinations under 41 U.S.C. 1906 and 41 U.S.C. 1907, as well as the applicability of provisions and clauses to contracts and subcontracts for commercial products, COTS items, and commercial services that do not implement statute or Executive order, and propose amendments to the FAR to eliminate or exempt such requirements from commercial acquisitions, unless there are specific reasons to retain particular requirements.

In accordance with section 839 of the NDAA for FY 2019 and their authorities under 41 U.S.C. 1906 and 1907, the FAR Council reviewed the applicability of the provisions and clauses associated with the FAR parts covered by this proposed rule.

The following table reflects the FAR Council and Administrator of Federal Procurement Policy's proposed determination regarding the applicability of the provisions and clauses to solicitations and contracts for commercial products, COTS items, and/or commercial services. In making proposed applicability determinations, the FAR Council considered factors

such as whether the provision or clause advances national security or economic security, contributes to the resilience of contractors and subcontractors in the Federal marketplace, or advances uniformity and clarity in the performance of basic functions that are essential to sound procurement.

Accordingly, this proposed rule, if finalized, would revise provision and clause prescriptions to clearly reflect applicability to commercial acquisitions as outlined in the table. An “X” in the following table indicates the provision or clause will apply to that category of commercial acquisition, as prescribed:

Provision/clause No.

Title

Commercial

products

Commercial

services

COTS items

52.214-3

Amendments to Invitations for Bids

52.214-4

False Statements in Bids

52.214-5

Submission of Bids

52.214-6

Explanation to Prospective Bidders

52.214-7

Late Submissions, Modifications, and Withdrawals of Bids

52.214-10

Contract Award-Sealed Bidding

52.214-12

Preparation of Bids

52.214-14

Place of Performance-Sealed Bidding

52.214-15

Period for Acceptance of Bids

52.214-16

Minimum Bid Acceptance Period

52.214-18

Preparation of Bids-Construction

52.214-19

Contract Award-Sealed Bidding-Construction

52.214-20

Bid Samples

52.214-20 Alt I

Bid Samples

52.214-20 Alt II

Bid Samples

52.214-21

Descriptive Literature

52.214-21 Alt I

Descriptive Literature

52.214-22

Evaluation of Bids for Multiple Awards

52.214-23

Late Submissions, Modifications, Revisions, and Withdrawals of Technical Proposals under Two-Step Sealed Bidding

52.214-24

Multiple Technical Proposals

52.214-25

Step Two of Two-Step Sealed Bidding

52.214-26

Audit and Records-Sealed Bidding

52.214-27

Price Reduction for Defective Certified Cost or Pricing Data-Modifications-Sealed Bidding

52.214-28

Subcontractor Certified Cost or Pricing Data-Modifications-Sealed Bidding

52.214-28 Alt I

Subcontractor Certified Cost or Pricing Data-Modifications-Sealed Bidding

52.214-29

Order of Precedence-Sealed Bidding

52.214-34

Submission of Offers in the English Language

52.214-35

Submission of Offers in U.S. Currency

52.228-1

Bid Guarantee

52.228-2

Additional Bond Security

52.228-3

Workers' Compensation Insurance (Defense Base Act)

52.228-4

Workers' Compensation and War-Hazard Insurance Overseas

52.228-5

Insurance-Work on a Government Installation

52.228-7

Insurance-Liability to Third Persons

52.228-8

Liability and Insurance-Leased Motor Vehicles

52.228-9

Cargo Insurance

52.228-10

Vehicular and General Public Liability Insurance

52.228-11

Individual Surety—Pledge of Assets

52.228-12

Prospective Subcontractor Requests for Bonds

52.228-13

Alternative Payment Protections

52.228-14

Irrevocable Letter of Credit

52.228-15

Performance and Payment Bonds-Construction

52.228-16

Performance and Payment Bonds-Other Than Construction

52.228-16 Alt I

Performance and Payment Bonds-Other Than Construction

52.228-17

Individual Surety—Pledge of Assets (Bid Guarantee)

52.236-2

Differing Site Conditions

52.236-3

Site Investigation and Conditions Affecting the Work

52.236-5

Material and Workmanship

52.236-6

Superintendence by the Contractor

52.236-7

Permits and Responsibilities

52.236-8

Other Contracts

52.236-9

Protection of Existing Vegetation, Structures, Equipment, Utilities, and Improvements

52.236-10

Operations and Storage Areas

52.236-11

Use and Possession Prior to Completion

52.236-12

Cleaning Up

52.236-13

Accident Prevention

52.236-13 Alt I

Accident Prevention

52.236-14

Availability and Use of Utility Services

52.236-15

Schedules for Construction Contracts

52.236-16

Quantity Surveys

52.236-16 Alt I

Quantity Surveys

52.236-17

Layout of Work

52.236-18

Work Oversight in Cost-Reimbursement Construction Contracts

52.236-21

Specifications and Drawings for Construction

52.236-21 Alt I

Specifications and Drawings for Construction

52.236-21 Alt II

Specifications and Drawings for Construction

52.236-22

Design Within Funding Limitations

52.236-23

Responsibility of the Architect-Engineer Contractor

52.236-24

Work Oversight in Architect-Engineer Contracts

52.236-25

Requirements for Registration of Designers

The FAR Council also reviewed subcontract flow down requirements in clauses associated with the FAR parts covered by this proposed rule. The following table reflects the FAR Council and Administrator of Federal Procurement Policy's proposal regarding whether those clauses flow down to subcontracts for commercial products, COTS items, and/or commercial services. This proposed rule, if finalized, would revise the subcontract paragraphs in these clauses to clearly state whether the clause flows down to commercial subcontracts, as outlined in the table. An “X” in the following table indicates the provision or clause will apply to subcontracts for that category of commercial subcontracts, as described in the clause:

Clause No.

Title

Commercial

products

Commercial

services

COTS items

52.214-26

Audit and Records-Sealed Bidding

52.214-28

Subcontractor Certified Cost or Pricing Data-Modifications

52.214-28 Alt I

Subcontractor Certified Cost or Pricing Data-Modifications

52.228-3

Workers' Compensation Insurance (Defense Base Act)

52.228-4

Workers' Compensation and War-Hazard Insurance Overseas

52.228-5

Insurance-Work on a Government Installation

52.236-13

Accident Prevention

52.236-13 Alt I

Accident Prevention

IV. Expected Impact of the Rule

The intended impact of the RFO, as stated in E.O. 14275, is to restore the Government's ability to “deliver on a timely basis the best value product or service to the customer, while maintaining the public's trust and fulfilling public policy objectives.” Each of the RFO rulemakings is designed to contribute to this impact by emphasizing mission first, by aligning acquisition activities directly to achieving the agency's overarching objectives and serving the public interest and elevating the importance of fiscal responsibility. The proposed RFO rules focus on three goals in particular: (1) timely acquisition and delivery, (2) lower cost and accountability in all spending, and (3) increased competition.

Timeliness.

Timely acquisition and delivery are essential for mission success. To this end, RFO rules propose to eliminate mandates that unnecessarily interfere with agency discretion to determine the best way to procure products and services. The proposed RFO rules highlight more clearly streamlined and simplified authorities that allow buyers to use their time more efficiently and are expected to reduce time between solicitation and award. The proposed RFO rules are expected to make it easier for contracting officers to leverage commercial practices that are familiar to the commercial marketplace. This is expected to make it easier for sellers to engage and respond to Government solicitations more rapidly.

Lower cost.

E.O. 14271, Ensuring Commercial, Cost-Effective Solutions in Federal Contracts (April 15, 2025), directs the Government to utilize, to the maximum extent practicable, the commercial marketplace and the innovations of private enterprise to provide better, more cost-effective services to taxpayers, as envisioned by the Federal Acquisition Streamlining Act. The procurement of custom products and services where a suitable or superior commercial solution would have fulfilled the Government's needs has resulted in avoidable waste to the detriment of American taxpayers.

To address these concerns, consistent with associated responsibilities in section 839 of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232), the FAR Council reviewed prescriptions for provisions and clauses to ensure all prescriptions are clear regarding their applicability to acquisitions for commercial products and services. Currently, many prescriptions do not specify applicability to commercial acquisitions and leave the applicability determination to contracting officer interpretation. By specifically stating when a provision or clause can be applied to commercial acquisitions, proposed RFO rules should decrease the likelihood of inclusion of provisions and clauses in commercial acquisitions that are not required by law and drive greater consistency in the terms and conditions used in these contracts. In turn, these changes should increase the participation of commercial sellers, who are unwilling or unable to manage the cost of complying with noncommercial requirements, and also improve taxpayer access to affordable commercial solutions.

Some RFO rules propose to delete requirements placed on commercial or noncommercial sellers that are not related to performance of the contract, drive up cost without attendant performance benefits, and may misdirect efforts away from innovation, investment and economic growth. Greater emphasis on timeliness should reduce bidders' carrying costs, enabling them to pass those savings on to customers through lower prices.

Increased competition.

Since enactment of the Competition in

Contracting Act of 1984 (Title VII of Pub. L. 98-369), competition has been the cornerstone of the Federal acquisition system. The benefits of competition are well established: competition saves money for the taxpayer, improves contractor performance, curbs fraud, and promotes accountability for results. Competition also drives contractor resilience and positions the U.S. market to develop a strategic advantage for the nation.

According to data in the System for Award Management, roughly 45 percent of contract dollars were awarded in FY 2025 either without competition or with competition that received only one offer. Of equal concern, the Federal marketplace has seen a significant decline over the past 20 years in the number of businesses—especially small businesses—participating in the Federal supplier base. Studies suggest that high compliance costs lead to the misallocation of resources away from more profitable activities and discourage innovation, investment, and economic growth (Council of Economic Advisers, Executive Office of the President. June 2025. The Economic Benefits of Current Deregulatory Policies.

https://www.whitehouse.gov/wp-content/uploads/2025/03/The-Economic-Benefits-of-Current-Deregulatory-Efforts.pdf

). This may shelter incumbent contractors and stifle competition, reducing startup activity and job formation.

The RFO rules seek to increase participation in agency competitions and the resilience of the Federal supplier base which includes commercial entities, small businesses, manufacturers, and nontraditional suppliers. The RFO will achieve this outcome by removing regulatory mandates that are not rooted in statute or essential to sound procurement, promoting greater reliance on practices that reduce transaction costs, and improving the quality of communications with offerors and potential offerors. Access to a broader range of solutions in a more dynamic marketplace will drive better return for each taxpayer dollar spent and increase taxpayer confidence in the Federal acquisition system.

The Government has conducted a regulatory impact analysis (RIA) for the RFO rulemaking inclusive of this proposed rule for FAR parts 14, 28, and 36. The RIA includes a discussion of the anticipated effects of the rulemakings as follows:

1. FAR Part 14

The changes to FAR part 14 are not expected to have a significant impact on contractors or subcontractors. The proposed changes to FAR part 14 are primarily internal Government procedures.

This proposed rule simplifies and streamlines the sealed bidding policies without changing fundamental requirements. The consolidation of content and elimination of redundant and permissive text will reduce the time contracting officers spend navigating regulations.

These proposed revisions will reduce administrative burden through clearer, more concise regulations; potentially faster processing of sealed bidding acquisitions; eventually reduced risk of procedural errors.

While the changes are primarily internal to Government, industry may experience ancillary benefits associated with Government process improvements (

e.g.,

increased shared understanding through plain language adjustments, faster processing with improved clarity).

For these reasons, this proposed rule is expected to make it somewhat less burdensome on contracting officers and industry once they have after the initial learning curve. Ultimately, the changes should make sealed bidding acquisitions easier.

2. FAR Part 28

The changes to FAR part 28 are not expected to have a significant impact on contractors or subcontractors. The proposed changes to FAR part 28 are primarily internal Government procedures and implement administrative corrections that align with the broader RFO initiatives.

3. FAR Part 36

The proposed changes to FAR part 36 simplify and streamline construction and architect-engineer policies without changing fundamental requirements. This reorganization, consolidation of content, and elimination of redundant and unnecessary text will reduce the time contracting officers spend navigating regulations and will also promote competition.

The proposed rule removes the non-statutory FAR clause 52.236-1, Performance of Work by the Contractor. This clause restricts competition because not all contractors self-perform work. By removing this competition restricting clause, the Government should eventually experience greater competition, which should result in lower prices.

This proposed rule removes the duplicative text regarding publicizing contract actions throughout the existing FAR part 36 text and now points the contracting officer to FAR part 5. By removing this existing duplicative text and consolidating it to FAR part 5, the Government will eliminate time spent by contracting officers bouncing between the two parts.

The proposed rule removes non-statutory text at FAR 36.519 and the associated clause 52.236-19, Organization and Direction of the Work. This clause imposes an unnecessary burden by requiring contractors to establish and maintain project specific organizational. Additionally, the mandate for full-time resident direction by an owner or senior officer represents a non-statutory overreach. While contractors may currently seek approval for alternative oversight, Government intervention in internal organizational structures remains unnecessary and contradicts FAR 52.236-6, Superintendence by the Contractor. Removing this clause eliminates the unnecessary costs associated with unnecessary project specific reports and eliminates potential cost-padding for senior leadership oversight and streamlines contractor operations.

The proposed rule removes the permissive text at FAR 36.522 and its associated clause, 52.236-26, Preconstruction Conference. This removal does not impede a contracting officer's authority to mandate such a conference; rather, it shifts the requirement to the solicitation stage. By identifying the need for a preconstruction conference within the invitation for bid, the Government provides industry with the clarity needed to accurately estimate administrative costs. This ensures the Government pays only for defined requirements rather than anticipatory contingencies.

The proposed rule further eliminates the permissive language at FAR 36.210 and the associated provision 52.236-27, Site Visit. Because no statute prohibits contracting officers from allowing site inspections or data examinations, the existing regulatory text is redundant; the authority to offer these opportunities exists inherently. Removing this provision does not restrict a contracting officer's ability to mandate or facilitate site visits but rather removes unnecessary verbiage that merely restates an existing authority.

The proposed rule removes FAR 36.520 and the associated provision 52.236-28, Preparation of Offers—Construction. This provision is redundant as it merely instructs offerors to comply with the solicitation terms to avoid rejection—a fundamental requirement already established in the invitation for bid and general procurement law. Eliminating this text

streamlines the regulation by removing unnecessary restatements of the requirement for bid responsiveness.

The proposed rule reduces administrative burden through clearer, more concise regulations; potentially faster processing of construction and architect-engineer contract awards; and reduced risk of procedural errors.

For these reasons, this rule is expected to make it easier for contracting officers to accomplish award of construction and architect-engineer contracts. However, this change is not expected to create measurable direct cost savings for the Government or contractors as these proposed changes to FAR part 36 are primarily internal Government procedures.

V. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993.

VI. Executive Order 14192

This rule is subject to E.O. 14192, Unleashing Prosperity Through Deregulation. This proposed rule, if finalized as proposed, is anticipated to be an E.O. 14192 deregulatory action. See discussion in the “Expected Impact of the Rule” section of this preamble.

VII. Regulatory Flexibility Act

This proposed rule, if finalized, may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act 5 U.S.C. 601-612. However, an Initial Regulatory Flexibility Analysis (IRFA) is as follows:

1. Reasons for the action.

Executive Order (E.O.) 14275, Restoring Common Sense to Federal Procurement, directs the elimination of excessive acquisition regulations to stop the inefficient use of American taxpayer dollars. The E.O. directs the first comprehensive end-to-end overhaul of the FAR in its 40-year history. The E.O. establishes the policy that the FAR should “contain only provisions that are required by statute or that are otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests.” In response to E.O. 14275, the Office of Management and Budget issued memorandum M-25-26, Overhauling the Federal Acquisition Regulation. The Memo directed the FAR Council to complete a “revolutionary overhaul” of the FAR. Therefore, the FAR Council is issuing twelve proposed rules that collectively will streamline the FAR in its entirety.

2. Objectives of, and legal basis for, the rule.

The revolutionary FAR overhaul (RFO) rewrite represents a paradigm shift in Federal acquisition. It emphasizes streamlining, clarity, and accessibility, while ensuring that the regulation focuses only on statutory mandates and foundational procurement principles. The RFO is designed to simplify compliance for contracting professionals, improve acquisition speed and agility, and reinforce mission outcomes over process formalities.

The basis for the RFO is E.O. 14275. The authority for promulgation of the FAR is 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.

3. Description of and an estimate of the number of small entities to which the rule will apply.

All small entities who want to contract with the Federal Government will have to familiarize themselves with the reorganized, streamlined, and revised FAR, including the content of this rulemaking. As of January 2026, there are 401,196 entities registered in the System for Award Management (SAM) that were small for at least one North American Industry Classification System (NAICS) code they had selected.

a. FAR Part 14

The proposed revisions to FAR part 14 simplify and streamline the policies and procedures pertaining to sealed bidding by reorganizing the text into the acquisition lifecycle, and by removing or relocating FAR text that is outdated, redundant, or otherwise unnecessary. These revisions align with the broader RFO initiatives and do not substantively change the policy or procedures in the part.

b. FAR Part 28

The proposed revision to FAR part 28 simplifies and makes administrative corrections. These revisions align with the broader RFO initiatives and do not substantively change policy or procedures.

c. FAR Part 36

The proposed revisions to FAR part 36 simplify, streamline, restructure, and remove extraneous policies and procedures pertaining to construction contracting and architect-engineering contracting. The revisions align with the broader RFO initiatives.

d. FAR Part 52

This change clarifies the applicability of provisions and clauses to commercial applications in clauses associated with updates to prescriptions in FAR parts 14, 28, and 36. In addition to these clarifications, the rule includes plain language edits, such as improvements to readability, updates to active voice, and replacement of the term “shall” with “must,” to promote consistency across prescriptions and clauses. Any costs are negligible and limited to internal policy updates. Therefore, the changes are not expected to have a significant economic impact on a substantial number of small entities.

4. Description of projected reporting, recordkeeping, and other compliance requirements of the rule.

This proposed rule, if finalized, does not contain any new reporting, recordkeeping or other compliance requirements.

a. FAR Part 14

This proposed rule does not contain any new reporting, recordkeeping, or other compliance requirements under FAR part 14. The revisions are structural and editorial in nature and do not impose additional compliance obligations on contractors. Small entities may need to review the reorganized content and update internal procedures, but no new reporting or recordkeeping requirements are introduced.

b. FAR Part 28

This proposed rule does not contain any new reporting, recordkeeping, or other compliance requirements under FAR part 28. The revisions do not create new compliance obligations; they simply improve clarity and eliminate redundancy.

c. FAR Part 36

This proposed rule does not contain any new reporting, recordkeeping, or other compliance requirements under FAR part 36. The revisions reduce administrative burden by simplifying documentation requirements and do not introduce new compliance activities.

d. FAR Part 52

This proposed rule does not contain any new reporting, recordkeeping, or other compliance requirements under FAR part 52. The updates clarify the applicability of prescriptions and clauses to commercial acquisitions and make conforming revisions to clauses associated with FAR parts 14, 28, and 36. These changes are editorial and organizational in nature and do not impose new compliance obligations.

5. Relevant Federal rules which may duplicate, overlap, or conflict with the rule.

The proposed rule, if finalized, would not duplicate, overlap, or conflict with other Federal rules.

6. Description of any significant alternatives to the rule which accomplish the stated objectives of applicable statutes, and which minimize any significant economic impact of the rule on small entities.

The FAR Council has not, at this stage, identified any significant alternatives that would minimize the impact of the rule on small entities, while also implementing the requirements of E.O. 14275. The FAR Council will consider any significant alternatives identified by commenters for the final rule.

The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. The FAR Council invites comments from small business concerns and other interested parties on the expected impact of this proposed rule on small entities.

The FAR Council will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite “5 U.S.C. 610 (FAR Case 2026-010)” in correspondence.

VIII. Paperwork Reduction Act

This rule includes information collections under the Paperwork Reduction Act (44 U.S.C. 3501-3521). Following are the specific collections associated with each FAR part in this rule as previously approved by OMB followed by how each collection would be affected by the proposed rule. If a FAR part is not listed below, then there are no information collections associated with the part.

A. FAR Part 14

•

OMB Control No. 9000-0013, Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data—FAR Sections Affected:

52.214-28, 52.215-12, 52.215-13, 52.215-20, and 52.215-21. The changes under this proposed rule, if finalized, would not affect the information collection or the paperwork burden previously approved by OMB. The collection would remain unchanged.

•

OMB Control No. 9000-0034, Examination of Records by Comptroller General and Contract Audit—FAR Section(s) Affected:

52.212-5(d), 52.214-26, 52.215-2. The changes under this proposed rule, if finalized, would not affect the information collection or the paperwork burden previously approved by OMB. The collection would remain unchanged.

•

OMB Control No. 9000-0037, Presolicitation Notice and Response—FAR Sections Affected:

14.205; 15.201(c); and 36.213-2. The changes under this proposed rule, if finalized, would remove the information collection in its entirety. The collection would be discontinued.

•

OMB Control No. 9000-0047, Place of Performance—FAR Sections Affected:

52.214-14, and 52.215-6. The changes under this proposed rule, if finalized, would not affect the information collection or the paperwork burden previously approved by OMB. The collection would remain unchanged.

B. FAR Part 28

• OMB Control No. 9000-0001, Certain Federal Acquisition Regulation Part 28 Requirements (SF 24, 25, 25-A, 25-B, 28, 34, 35, 273, 274, 275, 1414 through 1418; Sections: 52.228-1, 52.228-2, 52.228-11, 52.228-13 through 52.228-17). The changes under this proposed rule, if finalized, would not affect the information collection or the paperwork burden previously approved by OMB. The collection would remain unchanged.

• OMB Control No. 9000-0135, Prospective Subcontractor Requests for Bonds; FAR 52.228-12. The changes under this proposed rule, if finalized, would not affect the information collection or the paperwork burden previously approved by OMB. The collection would remain unchanged.

C. FAR Part 36

• OMB Control No. 9000-0037, Presolicitation Notice and Response. See details in section VIII.A of this preamble.

• OMB Control No. 9000-0064, Certain Federal Acquisition Regulation Part 36 Construction Contract Requirements; FAR Sections Affected: 52.236-5, 52.236-15, and 52.236-19. The changes under this proposed rule, if finalized, would revise this information collection and the paperwork burden previously approved by OMB due to the removal of the clause at FAR 52.236-19.

The revised annual burden is estimated as follows:

Respondents:

3,762.

Total Annual Responses:

13,258.

Total Burden Hours:

21,331.

• OMB Control No. 9000-0157, Architect-Engineer Qualifications (SF 330). The changes under this proposed rule, if finalized, would not affect the information collection or the paperwork burden previously approved by OMB. The collection would remain unchanged.

D. Comments Regarding Paperwork Burden.

The FAR Council will publish a separate first notice in accordance with the Paperwork Reduction Act seeking comments on the changes to these collections of information affected by this rule.

IX. Severability

If any portion (

e.g.,

section, clause, sentence) of this rule is held to be invalid or unenforceable facially, or as applied to any entity or circumstance, it shall be severable from the remainder of this rule, and shall not affect the remainder thereof, or its application to entities not similarly situated or to other dissimilar circumstances. The various portions of this rule are independent and serve distinct purposes. Even if one aspect were rendered invalid, the other benefits of the rule would still be applicable.

List of Subjects in 48 CFR 14, 28, 36, and 52

Government procurement.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Therefore, OFPP, DoD, GSA, and NASA propose amending 48 CFR parts 14, 28, 36, and 52 as set forth below:

1. Revise parts 14, 28, and 36 to read as follows:

PART 14—SEALED BIDDING

Sec.

14.000

Scope of part.

14.001

Definitions.

Subpart 14.1—General

14.101

Using sealed bidding.

Subpart 14.2—Presolicitation

14.201

Preparation of invitations for bids.

14.201-1

Format.

14.202

Uniform contract format.

14.202-1

Part I-Schedule.

14.202-2

Part II Contract Clauses.

14.202-3

Part III Documents, exhibits, and other attachments.

14.202-4

Part IV Representations and instructions.

14.203

Requirements.

14.204

Economic purchase quantities (supplies).

14.205

Bid samples.

14.206

Descriptive literature.

14.207

Solicitation provisions.

14.208

Contract clauses.

14.209

Soliciting bids.

14.210

Submission of bids.

14.211

Two-Step sealed bidding.

14.211-1

General.

14.211-2

Conditions for use.

14.211-3

Procedures.

Subpart 14.3—Evaluation and award

14.301

Submission, modification, or withdrawal of bids.

14.302

Receipt of an unreadable electronic bid.

14.303

Bid opening.

14.304

Mistakes in bids.

14.304-1

General.

14.304-2

Apparent clerical mistakes.

14.304-3

Other mistakes disclosed before award.

14.305

Cancellation of invitations after opening.

14.306

Evaluation.

14.306-1

Responsiveness of bids.

14.306-2

Responsible bidder—reasonableness of price.

14.306-3

Rejection of individual bids.

14.306-4

Rejection of all bids.

14.306-5

Restrictions on disclosure of descriptive literature.

14.306-6

All or none qualifications.

14.306-7

Minor informalities or irregularities in bids.

14.306-8

Prompt payment discounts.

14.306-9

Economic price adjustment.

14.307

Award.

14.308

Award of equal low bids.

14.309

Information to bidders.

14.309-1

Award of unclassified contracts.

14.309-2

Award of classified contracts.

Subpart 14.4—Postaward

14.401

Mistakes after award.

14.402

Pricing modifications.

Authority:

41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.

14.000

Scope of part.

This part prescribes—

(a) The basic requirements of contracting for supplies and services (including construction) by sealed bidding;

(b) The information to be included in the invitation for bids (IFB);

(d) Requirements for opening bids, evaluating bids, awarding contracts; and

(e) Procedures for two-step sealed bidding.

14.001

Definitions.

As used in this part:

Acceptable evidence

means a verifiable record, either physical or electronic, that provides a clear and authenticated account of the exact time a submission was received by the Government, which includes:

(1) The time/date stamp of that installation on the bid wrapper;

(2) Other documentary evidence of receipt maintained by the installation (

e.g.,

receiving reports, mailroom logs, or internal logs);

(3) Oral testimony or statements of Government personnel; or

(4) Electronic metadata, electronic audit trails, server gateway logs, or delivery receipts generated by the bidder's or the Government's email system.

Government control

means the point at which a bid has been delivered, either physically or electronically, into the custody of the Government, such that the bidder can no longer modify or exercise dominion over the submission.

Subpart 14.1—General.

14.101

Using sealed bidding.

(a) Sealed bidding is a method of contracting that employs competitive bids, public opening of bids, and awards.

(b) Use sealed bidding whenever the conditions in 6.101(b)(1) are met.

(c) Use firm-fixed-price contracts when using sealed bidding or fixed-price contracts with economic price adjustment clauses when some flexibility is necessary and feasible.

Subpart 14.2—Presolicitation.

14.201

Preparation of invitations for bids.

14.201-1

Format.

(a) Prepare IFB and contracts using parts I, II, III, and IV of the uniform contract format (see 15.109) to the maximum extent practicable.

(b) The uniform contract format is not required when contracting for—

(1) Construction (see part 36);

(2) Shipbuilding (including design, construction, and conversion), ship overhaul, and ship repair;

(3) Subsistence items;

(4) Supplies or services requiring special contract forms prescribed elsewhere in this regulation that are inconsistent with the uniform contract format; or

(5) Firm-fixed-price or fixed-price with economic price adjustment acquisitions that use the simplified contract format.

(c)(1) The contracting officer may use the simplified contract format in lieu of the uniform contract format.

(2) The contracting officer has flexibility in preparation and organization of the simplified contract format. The following format should be used to the maximum extent practicable:

(i) Use Standard Form (SF) 1447, Solicitation/Contract, as the first page of the IFB.

(ii) Include the following for each line item:

(A) Line item number.

(B) Description of supplies or services, or data sufficient to identify the requirement.

(D) Unit price and amount.

(E) Packaging and marking requirements.

(F) Inspection and acceptance, quality assurance, and reliability requirements.

(G) Place of delivery, performance and delivery dates, period of performance, and f.o.b. point.

(H) Other item-peculiar information as necessary (

e.g.,

individual fund citations).

(iii) Include the clauses required by this regulation. Additional clauses must be incorporated only when necessary to the particular acquisition.

(iv) List of documents and attachments (include if necessary).

(v) Representations and instructions:

(A) Insert the IFB provisions that require representations, certifications, or the submission of other information by offerors.

(B) Insert the IFB provisions required by 14.207. Include any other information/instructions necessary to guide offerors.

(D) Upon award, retain the representations and instructions in the contract file.

14.202

Uniform contract format.

14.202-1

Part I-Schedule.

Prepare the Schedule as follows:

(a)

Section A, Solicitation/contract form.

(1) For sealed bidding the SF 33 or the SF 1447 may be used. When the SF 1447 is used as the IFB document, insert the information in subdivisions (a)(2)(i) and (a)(2)(iv) of this section in block 9 of the SF 1447.

(2) If the SF 33 or the SF 1447 are not used, include the following on the first page of the IFB:

(i) Name, address, and location of issuing activity, including room and building where bids must be submitted.

(ii) Invitation for bids number.

(iii) Date of issuance.

(iv) Time specified for receipt of bids.

(v) Number of pages.

(vi) Requisition or other purchase authority.

(vii) Requirement for a bidder to provide its name and complete address, including street, city, county, State, and ZIP code.

(viii) A statement that bidders should include in the bid the address to which payment should be mailed, if that address is different from that of the bidder.

(b)

Section B, Supplies or services and prices.

(1) See 15.109-1(b)

(2) Optional Form 336, Continuation Sheet, may be used.

(c)

Section C, Description/specifications.

See 15.109-1(c).

(d)

Section D, Packaging and marking.

See 15.109-1(d).

(e)

Section E, Inspection and acceptance.

See 15.109-1(e).

(f)

Section F, Deliveries or performance.

See 15.109-1(f).

(g)

Section G, Contract administration data.

See 15.109-1(g).

(h)

Section H, Special contract requirements.

See 15.109-1(h).

14.202-2

Part II Contract Clauses.

Section I, Contract clauses (see 15.109-2).

14.202-3

Part III Documents, exhibits, and other attachments.

Section J, List of documents, exhibits, and other attachments (see 15.109-3).

14.202-4

Part IV Representations and instructions.

Prepare the representations and instructions as follows:

(a) Section K, Representations, certifications, and other statements of bidders (see 15.109-4(a)).

(b) Section L, Instructions, conditions, and notices to bidders (see 15.109-4(b)). Insert in this section solicitation provisions, other information, instructions not required elsewhere to guide bidders, include the time and place for bid openings.

(c) Section M, Factors for award. Identify the price related factors other than the bid price that will be considered in evaluating bids and awarding the contract.

14.203

Requirements.

(a) An IFB must clearly, accurately, and completely describe the Government requirements.

(b) Restrictive specifications or requirements that might unduly limit the number of bidders are prohibited.

(c) Include all documents and information (whether attached or incorporated by reference) prospective bidders will need for the purpose of bidding.

(d) State in the IFB that bids will be evaluated without discussions (see 52.214-10 and, for construction contracts, 52.214-19).

(e) When considering establishing qualification requirements, see and follow subpart 9.2.

14.204

Economic purchase quantities (supplies).

Comply with the economic purchase quantity planning requirements for supplies in part 7. See part 7 for instructions regarding use of the provision at 52.207-4, Economic Purchase Quantity—Supplies, and for guidance on handling responses to that provision.

14.205

Bid samples.

(a) Do not require bidders to furnish bid samples unless—

(1) Characteristics of the product cannot be described adequately in the specification or purchase description;

(2) Necessary to determine the responsiveness of the bid. Do not use samples to determine a bidder's ability to produce the required items; and

(3) Products must be suitable from the standpoint of balance, facility of use, general “feel”, color, pattern, or other characteristics that cannot be described adequately in the specification.

(b) If the contracting officer requires bid samples, the IFB must state—

(1) The number and, if appropriate, size, and description of the bid samples required; and

(2) List all the characteristics for which the bid samples will be examined.

(c)(1) Contracting officers may waive bid sample requirements when a bidder offers a product previously or currently contracted for or tested by the Government and found to comply with specification requirements conforming in every material respect with those in the current IFB. (See 14.207(j)(2)).

(2) Where samples required by a Federal, Military, or other formal specification are not considered necessary and a waiver of the sample requirements of the specification is authorized, include a statement in the invitation that notwithstanding the requirements of the specification, samples are not required.

(d) Bid samples furnished with a bid that are not required by the invitation generally will not be considered as qualifying the bid and will be disregarded. However, the bid sample will not be disregarded if it is clear from the bid or accompanying papers that the bidder's intention was to qualify the bid. If the qualification does not conform to the IFB, see 14.306-3(d).

(e)(1) Return samples that are not destroyed in testing to bidders at their request and expense, unless otherwise specified in the invitation.

(2) Request disposition instructions from bidders.

(3) Samples are ordinarily returned collect to the address from which received if disposition instructions are not received within 30 days. Small items may be returned by mail, postage prepaid.

(4) Transmit samples that are intended for inspection purposes in connection with deliveries to the inspecting activity concerned, with instructions to retain the sample until completion of the contract or until disposition instructions are furnished.

(5) Where samples are consumed or their usefulness is impaired by tests, dispose as scrap unless the bidder requests their return.

14.206

Descriptive literature.

(a) Do not require bidders to furnish descriptive literature unless it is needed before award to determine whether the products offered meet the specification and to establish exactly what the bidder proposes to furnish.

(b) Document in the contract file the justification why product acceptability cannot be determined without the submission of descriptive literature, except when the contract specifications require submission.

(c)(1) If the invitation will require descriptive literature, the IFB must clearly state—

(i) What descriptive literature the bidders must furnish;

(ii) The purpose for requiring the literature;

(iii) The extent of its consideration in the evaluation of bids; and

(iv) The rules that will apply if a bidder fails to furnish the literature before bid opening or if the literature provided does not comply with the requirements of the invitation.

(2) If bidders must furnish descriptive literature, see 14.207(k).

(d)(1) The contracting officer may waive the requirement for descriptive literature if—

(i) The bidder states in the bid that the product being offered is the same as a

product previously or currently being furnished to the contracting activity; and

(ii) The contracting officer determines that the product offered complies with the specification requirements of the current IFB. When the contracting officer waives the requirement, see 14.207(k)(2).

(2) When descriptive literature is not necessary and a waiver of literature requirements of a specification has been authorized, include a statement in the invitation that, despite the requirements of the specifications, descriptive literature is not required.

(3) If the IFB provides for a waiver, a bidder may submit a bid on the basis of either the descriptive literature furnished with the bid or a previously furnished product. If the bid is submitted on one basis, the bidder may not have it considered on the other basis after bids are opened.

(e) If descriptive literature is furnished when it is not required by the IFB, follow the procedures at 14.205(d).

14.207

Solicitation provisions.

(a) The provisions prescribed in this section apply to preparation and submission of bids in general. See other FAR parts for provisions and clauses related to specific acquisition requirements.

(b) Insert in all IFBs, including those for commercial products and commercial services, the provisions at—

(1) 52.214-3, Amendments to Invitations for Bids; and

(2) 52.214-4, False Statements in Bids.

(3) 52.214-5, Submission of Bids.

(4) 52.214-6, Explanation to Prospective Bidders.

(5) 52.214-7, Late Submissions, Modifications, and Withdrawals of Bids.

(c) Insert the provision at 52.214-10, Contract Award—Sealed Bidding in IFBs, including those for commercial products and commercial services, but excluding those for construction.

(d) Insert the provision at 52.214-12, Preparation of Bids in IFBs to which the uniform contract format applies, including those for commercial products and commercial services.

(e) Insert the provision at 52.214-14, Place of Performance—Sealed Bidding, in IFBs, including those for commercial products and commercial services but excluding those in which the place of performance is specified by the Government.

(f) Insert the provision at 52.214-15, Period for Acceptance of Bids, in IFBs, including those for commercial products and commercial services, that are not issued on SF 33 or SF 1447 except IFBs—

(1) For construction work, which includes construction that is a commercial service; or

(2) That the Government specifies a minimum acceptance period.

(g) Insert the provision at 52.214-16, Minimum Bid Acceptance Period, in IFBs, including those for commercial products and commercial services, except for construction, if the contracting officer determines that a minimum acceptance period must be specified.

(h) Insert the provision at 52.214-18, Preparation of Bids—Construction, in IFBs for construction contracts, including those for construction that is a commercial service.

(i) Insert the provision at 52.214-19, Contract Award—Sealed Bidding—Construction, in IFBs for construction work, including for construction that is a commercial service.

(j)(1) Insert the provision at 52.214-20, Bid Samples, in IFBs, including those for commercial products and commercial services, if bid samples are required.

(2) If it appears that the conditions in 14.205(c)(1) will apply and the contracting officer anticipates granting waivers and—

(i) If the nature of the required product does not necessitate limiting the grant of a waiver to a product produced at the same plant in which the product previously acquired or tested was produced, use the provision with its Alternate I; or

(ii) If the nature of the required product necessitates limiting the grant of a waiver to a product produced at the same plant in which the product previously acquired or tested was produced, use the provision with its Alternate II.

(3) See 14.205(c)(2) regarding waiving the requirement for all bidders.

(k)(1) Insert the provision at 52.214-21, Descriptive Literature, in IFBs including those for commercial products and commercial services, if—

(i) Descriptive literature is required to evaluate the technical acceptability of an offered product and

(ii) The required information will not be readily available unless it is submitted by bidders.

(2) Use the basic clause with its Alternate I if the possibility exists that the contracting officer may waive the requirement for furnishing descriptive literature for a bidder offering a previously supplied product that meets specification requirements of the current IFB.

(3) See 14.206(d)(2) regarding waiving the requirement for all bidders.

(l) Insert the provision at 52.214-22, Evaluation of Bids for Multiple Awards, in IFBs, including those for commercial products and commercial services, if the contracting officer determines that multiple awards might be made if doing so is economically advantageous to the Government.

(m) Insert the provision at 52.214-23, Late Submissions, Modifications, Revisions, and Withdrawals of Technical Proposals under Two-Step Sealed Bidding, other than those for commercial products or commercial services, in solicitations for technical proposals in step one of two-step sealed bidding.

(n) Insert the provision at 52.214-24, Multiple Technical Proposals, other than those for commercial products or commercial services, in solicitations for technical proposals in step one of two-step sealed bidding if the contracting officer permits the submission of multiple technical proposals.

(o) Insert the provision at 52.214-25, Step Two of Two-Step Sealed Bidding, in IFBs, other than those for commercial products or commercial services, issued under step two of two-step sealed bidding.

(p) Insert the provision at 52.214-34, Submission of Offers in the English Language, in solicitations that include any of the clauses prescribed in part 25, including those for commercial products and commercial services. It may be included in other solicitations when the contracting officer decides that it is necessary.

(q) Insert the provision at 52.214-35, Submission of Offers in U.S. Currency, in solicitations, including those for commercial products and commercial services, that include any of the clauses prescribed in part 25, unless the contracting officer includes the clause at 52.225-17, Evaluation of Foreign Currency Offers, as prescribed in part 25. It may be included in other solicitations when the contracting officer decides that it is necessary.

14.208

Contract clauses.

(a) Insert the clause at 52.214-26, Audit and Records—Sealed Bidding, in solicitations and contracts, other than those for commercial products and commercial services, if the contract amount is expected to exceed the threshold at part 15 for submission of certified cost or pricing data.

(b)(1) Insert the clause at 52.214-27, Price Reduction for Defective Certified Cost or Pricing Data—Modifications—Sealed Bidding, in solicitations and contracts, including those for commercial products (other than commercially available off-the-shelf

items) and commercial services, if the contract amount is expected to exceed the threshold for submission of certified cost or pricing data at part 15.

(2) In exceptional cases, the head of the contracting activity may waive the requirement for inclusion of the clause in a contract with a foreign government or agency of that government. The authorizations for the waiver and the reasons for granting it must be in writing.

(c) Insert the clause at 52.214-28, Subcontractor Certified Cost or Pricing Data—Modifications—Sealed Bidding, in solicitations and contracts, other than those for commercial products and commercial services, if the contract amount is expected to exceed the threshold for submission of certified cost or pricing data at part 15.

(1) This clause may also be included upon request of a contractor in connection with a prime contract entered into before July 1, 2018 by modifying the contract without requiring consideration to replace clause 52.214-28, Subcontractor Certified Cost or Pricing Data—Modifications—Sealed Bidding, with its Alternate I.

(d) Insert the clause at 52.214-29, Order of Precedence—Sealed Bidding, in solicitations and contracts, other than those for commercial products and commercial services, to which the uniform contract format applies.

14.209

Soliciting bids.

(a) See subpart 5.1 for presolicitation notices.

(b) See subpart 5.2 for publicizing the IFB.

(d) If the IFB has been issued and it becomes necessary to make changes in quantity, specifications, delivery schedules, opening dates, etc., or to make a correction, such changes must be accomplished by amendment of the IFB using Standard Form 30, Amendment of Solicitation/Modification of Contract. Amendments must—

(1) Be issued before the time set for bid opening;

(2) If determined necessary by the contracting officer, consider the amount of time remaining until bid opening and the need for an extension to the bid opening date;

(3) Be published in the GPE, if the IFB was published in the GPE, as a solicitation amendment;

(4) If applicable, be displayed in the bid room;

(5) Provide all prospective bidders equal access to the amendment providing the information necessary to submit bids; and

(6) Require acknowledgment of each amendment within each bidder's bid.

(e) When electronic bids are specified, include in the IFB the acceptable methods and the necessary information that allows bidders to submit bids that are compatible with Government systems.

(f) When a contracting office is located in the United States, any IFB sent to a prospective bidder located outside the United States must be sent by electronic data interchange or air mail if security classification permits.

(g)(1) The master IFB is provided to potential sources who are requested to retain it for continued and repetitive use.

(2) Subsequent individual IFB must reference the date of the current master IFB and identify any changes.

(3) When using a master IFB—

(i) Make available copies of the master IFB on request; and

(ii) Provide the cognizant contract administration activity a current copy of the master IFB.

(h) Retain records of IFB and records of bids as a record of each invitation a contracting office issues and each abstract or record of bids. The file for each invitation must show the—

(1) Distribution that was made;

(2) Date the invitation was issued; and

(3) Names and addresses of prospective bidders who requested the invitation and were not included on the original IFB list must be added to the list and made a part of the record.

(i) An IFB may be cancelled by the contracting officer when clearly in the public interest;

(1) Where there is no longer a requirement for the supplies or services; or

(2) Where amendments to the IFB would be of such magnitude that a new IFB is desirable.

(j) If an IFB is cancelled prior to the date and time specified in 14.301—

(1) Identify the IFB number and short title or subject matter;

(2) Briefly explain the reason for the cancellation; and

(3) Where appropriate, assure prospective bidders that they will be given an opportunity to bid on any resolicitation of bids or any future requirements for the type of supplies or services involved.

14.210

Submission of bids.

(a) Allow prospective bidders a reasonable time to prepare and submit bids in response to all invitations, consistent with the needs of the Government.

(b) Provide at least 30 calendar days when a presolicitation notice is required (see subpart 5.1).

14.211

Two-Step sealed bidding.

14.211-1

General.

Two-step sealed bidding is a combination of competitive procedures designed to obtain the benefits of sealed bidding when adequate specifications are not available. The objective is to permit the development of a sufficiently descriptive and not unduly restrictive statement of the Government's requirements, including an adequate technical data package, so that subsequent acquisitions may use conventional sealed bidding methods. This two-step method is especially useful in acquisitions requiring technical proposals, particularly those for complex items.

(a) Step one consists of the request for submission, evaluation, and (if necessary) discussion of a technical proposal. No pricing is submitted with step one. The objective is to determine the acceptability of the supplies or services offered. As used in this context, the word technical has a broad connotation and includes, among other things, the engineering approach, special manufacturing processes, and special testing techniques. It is the proper step for clarification of questions relating to technical requirements. Conformity to the technical requirements is resolved in this step, but not responsibility as defined in part 9.

(b) Step two involves the submission of sealed priced bids by those who submitted acceptable technical proposals in step one. Bids submitted in step two are evaluated and the awards made in accordance with subpart 14.3.

14.211-2

Conditions for use.

(a) Unless other factors require the use of sealed bidding, the contracting officer may use two-step sealed bidding rather than negotiation when all of the following conditions are present:

(1) Available specifications or purchase descriptions are not definite or complete or may be too restrictive

without technical evaluation, and any necessary discussion, of the technical aspects of the requirement to ensure mutual understanding between each source and the Government.

(2) Definite criteria exist for evaluating technical proposals.

(3) More than one technically qualified source is expected to be available.

(4) There is sufficient time to use the two-step method.

(5) The contracting officer intends to award a firm-fixed-price contract or a fixed-price contract with economic price adjustment.

(b) None of the following precludes the use of two-step sealed bidding:

(1) Multiyear contracting;

(2) Government property to be made available to the successful bidder;

(3) A total small business set-aside (see part 19);

(4) The use of a set-aside or price evaluation preference for HUBZone small business concerns (see part 19);

(5) The use of a set-aside for service-disabled veteran-owned small business concerns (see part 19);

(6) The use of a set-aside for economically disadvantaged women-owned small business concerns and women-owned small business concerns eligible under the Women-Owned Small Business Program (see part 19); or

(7) A first or subsequent production quantity is being acquired under a performance specification.

14.211-3

Procedures.

(a)

Step one.

(1) Post a presolicitation notice for technical proposals in accordance with part 5. The request must include, as a minimum, the following:

(i) A description of the supplies or services required.

(ii) A statement of intent to use the two-step method.

(iii) The requirements of the technical proposal.

(iv) The evaluation criteria, to include all factors and any significant subfactors.

(v) A statement that the technical proposals must not include prices or pricing information.

(vi) The date, or date and hour, by which the technical proposal must be received.

(vii) A statement that, in the second step—

(A) The contracting officer will consider awards based upon bids that have acceptable technical proposals, either initially or as a result of discussions; and

(B) Each bid must be based on the bidder's own technical proposals.

(viii) A statement that—

(A) Bidders should submit technical proposals that are acceptable without additional explanation or information;

(B) The Government may make a final determination regarding a technical proposal's acceptability solely on the basis as submitted; and

(C) The Government may proceed with the second step without requesting further information from any bidder; however, the Government may request additional information from bidders about their technical proposals that it considers reasonably susceptible of being made acceptable and may discuss bids with their bidders.

(ix) A statement that a notice of unacceptability will be forwarded to the bidder upon completion of the technical proposal evaluation and final determination of unacceptability.

(x) A statement either that each bidder may only submit one technical proposal or, if authorized, multiple technical proposals. When specifications permit different technical approaches, it is generally in the Government's interest to authorize multiple technical proposals. If multiple technical proposals are authorized, see 14.207(n).

(2) Include information on delivery or performance requirements that may assist bidders in determining whether or not to submit a technical proposal. Indicate that the information is not binding on the Government and that the invitation issued under step two will include actual delivery or performance requirements.

(3) Upon receipt—

(i) Safeguard technical proposals against disclosure to unauthorized persons;

(ii) Accept and handle data marked in accordance with part 15 and 27; and

(iii) Remove any reference to price or cost.

(4) Establish a time period for evaluating technical proposals. The period may vary with the complexity and number of technical proposals involved. However, the evaluation should be completed quickly.

(5)(i) Base evaluations on the criteria in the request for technical proposals but not consideration of responsibility as defined in part 9. Categorize technical proposals as—

(A) Acceptable;

(B) Reasonably susceptible of being made acceptable; or

(ii) Categorize any proposal that modifies, or fails to conform to the essential requirements or specifications of, the request for technical proposals as unacceptable.

(6)(i) The contracting officer may proceed directly with step two if there are sufficient acceptable proposals to ensure adequate price competition under step two, and if further time, effort and delay to make additional technical proposals acceptable and thereby increase competition would not be in Government's interest. If this is not the case, request bidders whose technical proposals may be made acceptable to submit additional clarifying or supplementing information. Identify the nature of the deficiencies in the technical proposal or the nature of the additional information required. The contracting officer may also arrange negotiations for this purpose. Do not discuss a technical proposal with any bidder other than the submitter.

(ii) When requesting additional information, establish an appropriate time for bidders to conclude discussions, if any, submit all additional information, and incorporate such additional information as part of their technical proposals. The contracting officer may extend the due date for such submissions at their discretion. If the additional information is incorporated into a technical proposal within the established time, and the contracting officer determines that the technical proposal is acceptable, update its category to acceptable.

(7) When a technical proposal is found unacceptable (either initially or after negotiations), promptly notify the bidder of the basis of the determination and that a revision of the technical proposal will not be considered. Upon written request, debrief unsuccessful bidders (see 15.206).

(8) Late technical proposals are governed by 14.301.

(9) If it is necessary to discontinue two-step sealed bidding, include a statement of the facts and circumstances in the contract file. Notify each bidder in writing. When step one results in no acceptable technical proposals or only one acceptable technical proposal, the acquisition may be continued by negotiation.

(b)

Step two.

(1) Follow sealed bidding procedures except that IFB in step two must—

(i) Be issued only to those bidders that submitted acceptable technical proposals in step one;

(ii) Include the provision prescribed in 14.207(o);

(iii) Clearly state that the bidder must comply with the specifications and the bidder's technical proposal; and

(iv) Not be solicited through the Governmentwide point of entry (GPE) as an acquisition opportunity nor publicly posted.

(2) List the names of firms that submitted acceptable proposals in step one through the GPE for the benefit of prospective subcontractors (see 5.101).

Subpart 14.3—Evaluation and award

14.301

Submission, modification, or withdrawal of bids.

(a) Bidders are responsible for submitting bids, and any modifications or withdrawals not later than the exact time set for opening of bids. If no time is specified in the IFB, the time for receipt is 4:30 p.m., local time, for the designated Government office on the date that bids are due.

(b) Bids may be modified or withdrawn by any method authorized by the IFB.

(1) Write on the envelope—

(i) The date and time of receipt and by whom; and

(ii) The IFB number; and

(2) Sign the envelope.

(3) Not disclose bid information before the time set for bid opening. See part 3 for requirements for protecting information including access to and disclosure thereof.

(d) A bidder or its authorized representative may withdraw a paper bid submission in person if, before the exact time set for opening of bids, the identity of the persons requesting withdrawal is established and that person signs a receipt for the bid.

(e) A bidder may withdraw an electronically submitted bid if notice is received in the office designated in the IFB not later than the exact time set for opening of bids. Upon withdrawal of an electronically transmitted bid, the data received must not be viewed and, to the maximum extent practical, must be purged from primary and backup data storage systems.

(f)(1) Any bid, modification, or withdrawal of a bid received at the Government office designated in the IFB after the exact time specified for receipt of bids is “late” and will not be considered unless—

(i) It is received before award is made; and

(ii) The contracting officer determines that accepting the late bid is in the Government's best interest and would not unduly delay the acquisition; and—

(A) If it was transmitted through an electronic commerce method authorized by the IFB, it was received at the initial point of entry to the Government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of bids; or

(B) There is acceptable evidence to establish that it was received at the Government installation designated for receipt of bids and was under the Government's control prior to the time set for receipt of bids.

(2) The contracting officer will consider and may accept, a late modification of an otherwise successful bid, that makes its terms more favorable to the Government, at any time it is received.

(g) If an emergency or unanticipated event (

e.g.,

weather emergencies, government-wide or agency-specific network outages, server crashes, or cybersecurity-related blocking of authorized file types) interrupts normal Government processes so that bids cannot be received at the Government office designated for receipt of bids by the exact time specified in the IFB, and urgent Government requirements preclude amendment of the bid opening date, the time specified for receipt of bids will be deemed to be extended to the same time of day specified in the IFB on the first work day on which normal Government processes resume.

(h) Promptly notify any bidder if its bid, modification, or withdrawal was received late, and must inform the bidder whether its bid will be considered, unless contract award is imminent, and the notices prescribed in 14.309 would suffice.

(i) Late bids and modifications that are not considered must be held unopened, unless opened for identification, until after award and then retained with other unsuccessful bids. However, any bid bond or guarantee must be returned.

(j) If available, the following must be included in the contract files for each late bid, modification, or withdrawal:

(1) The date and hour of receipt.

(2) A statement, with supporting rationale, regarding whether the bid was considered for award.

(3) The envelope, wrapper, or other evidence of the date of receipt.

14.302

Receipt of an unreadable electronic bid.

If a bid received at the Government facility by electronic data interchange is unreadable to the degree that conformance to the essential requirements of the IFB cannot be ascertained, immediately notify the bidder that the bid will be rejected unless the bidder provides clear and convincing evidence—

(a) Of the content of the bid as originally submitted; and

(b) That the unreadable condition of the bid was caused by Government software or hardware error, malfunction, or other Government mishandling.

14.303

Bid opening.

(a) All bids (including modifications) received before the time set for the opening of bids must be secured in a locked bid box, a safe, or in a secure restricted-access electronic bid box (

i.e.,

secure password protected file folder on a controlled access Government computer network).

(b) The bid opening officer must inform those present at the public bid opening that the time set for the opening of bids has arrived.

(c)(1) The bid opening officer must personally and publicly open all bids received before the exact time set for opening of bids and if practical, read the bids aloud to all present.

(2) The public may not attend bid openings for classified acquisitions. No public record must be made of bids or bid prices received in response to classified IFB.

(d) The contracting officer may postpone the public bid opening if determined in writing that there is reason to believe—

(1) An important segment of bidders has been delayed in the mail;

(2) That there are delays in the communications system specified for transmission of bids;

(3) That circumstances beyond the control of the bidders have delayed their timely submission, (

e.g.,

flood, fire, accident, weather, strikes, or Government equipment blackout or malfunction); or

(4) That emergency or unanticipated events has interrupted normal Governmental processes so that the scheduled opening of bids is impractical.

(e) Publicly post a determination to postpone a bid opening under paragraph (d) of this section. If practical before issuance of a formal amendment of the invitation, communicate the determination to the prospective bidders likely to attend the scheduled bid opening.

(f) In the case of paragraph (d)(4) of this section, and when urgent Government requirements preclude amendment of the IFB, the time specified for opening of bids will be deemed to be extended to the same time of day specified in the IFB on the first workday on which normal Government processes resume. In such cases, the time of actual bid opening must be deemed to be the time set for bid opening for the purpose of determining “late bids” under section 14.301. A note should be made on the abstract of bids

or otherwise added to the file explaining the circumstances of the postponement.

(g) The bid opening officer must complete and certify the accuracy of the Standard Form 1409, Abstract of Offers, or Optional Form 1419, Abstract of Offers—Construction (or automated equivalent) as soon after bid opening as practicable. Where bid items are too numerous to warrant complete recording of all bids, abstract entries for individual bids may be limited to item numbers and bid prices. The contracting activity may use the extra columns and SF 1410, Abstract of Offers—Continuation, and OF 1419A, Abstract of Offers—Construction, Continuation Sheet, to label and record such information as necessary.

(h) Abstracts of offers for unclassified acquisitions must be available for public inspection.

14.304

Mistakes in bids.

14.304-1

General.

(a) After the opening of bids, examine all bids for mistakes.

(b) The authority to permit correction of bids is limited to bids that, as submitted, are responsive to the invitation. The authority does not permit correction of bids to make them responsive.

(c) If the contracting officer identifies an apparent mistake or has reason to believe that a mistake exists request the bidder verify its bid, calling attention to the suspected mistake.

(d) If the bidder asserts a mistake in its bid, the matter must be processed in accordance with this section and 14.304. Such actions must be taken before award.

14.304-2

Apparent clerical mistakes.

The contracting officer may correct any clerical mistake, apparent on its face in the bid, before award. The contracting officer first must obtain from the bidder a verification of the bid intended. Examples of apparent mistakes are obvious—

(a) Misplacement of a decimal point;

(b) Incorrect discounts (for example, 1 percent 10 days, 2 percent 20 days, 5 percent 30 days);

(d) Mistake in designation of unit.

14.304-3

Other mistakes disclosed before award.

(a) A bidder may request in writing permission from the contracting officer to correct a mistake after providing clear and convincing evidence that establishes both the existence of the mistake, and the bid actually intended.

(1) If the contracting officer accepts the clear and convincing evidence and the correction does not cause the bidder to outbid other lower bids, the contracting officer may allow the correction.

(2) If the correction causes the bidder to outbid one or more otherwise lower bids, the head of the agency may make a determination to permit the correction only if the mistake and intended bid are obvious from the final bid documents.

(b) If a bidder requests permission to withdraw a bid rather than correct it, the evidence is clear and convincing both as to the existence of a mistake and as to the bid actually intended, and the bid, both as uncorrected and as corrected, is the lowest received, the head of the agency may make a determination to correct the bid and not permit its withdrawal.

(1) The evidence of a mistake is clear and convincing only as to the mistake but not as to the intended bid, or

(2) The evidence reasonably supports the existence of a mistake but is not clear and convincing, an official above the contracting officer, unless otherwise provided by agency procedures, may make a determination permitting the bidder to withdraw the bid.

(d) If the evidence does not warrant a determination under paragraph (a), (b), or (c) of this section, the head of the agency may make a determination that the bid be neither withdrawn nor corrected.

(e) Heads of agencies may delegate their authority to make the determinations under paragraphs (a), (b), (c), and (d) of this section to a central authority, or a limited number of authorities as necessary, in their agencies, without power of redelegation.

(f) Before issuance of the determinations in this section, legal counsel within the respective agency must provide concurrence.

(g) Process Government suspected or alleged mistakes in bids as follows:

(1) A mere statement by the administrative officials that they are satisfied that an error was made is insufficient.

(2) Immediately request that the bidder verify its bid.

(i) Actions taken to verify bids must be sufficient to reasonably assure the contracting officer that the bid as confirmed is without error, or to elicit the allegation of a mistake by the bidder.

(ii) To assure that the bidder will be put on notice of a suspected mistake by the contracting officer, the bidder should be advised as appropriate—

(A) That its bid is so much lower than the other bids or the Government's estimate as to indicate a possibility of error;

(B) Of important or unusual characteristics of the specifications;

(D) Of any other information, proper for disclosure, that leads the contracting officer to believe that there is a mistake in bid.

(3) If the bid is verified, consider the bid as originally submitted.

(4) If the time for acceptance of bids is likely to expire before a decision can be made, request all bidders whose bids may become eligible for award to extend the time for acceptance of their bids.

(5) If the bidder whose bid is believed erroneous does not (or cannot) grant an extension of time, the bid must be considered as originally submitted (but see paragraph (g)(8) of this section).

(6) If the bidder alleges a mistake, advise the bidder to make a written request to withdraw or modify the bid. The request must be supported by statements (sworn statements, if possible) and must include all pertinent evidence such as the bidder's file copy of the bid, the original worksheets and other data used in preparing the bid, subcontractors' quotations, if any, published price lists, and any other evidence that establishes the existence of the error, the manner in which it occurred, and the bid actually intended.

(7) When the bidder furnishes evidence supporting an alleged mistake, refer the case to the appropriate authority together with the following data:

(i) A signed copy of the bid involved.

(ii) A copy of the IFB and any specifications or drawings relevant to the alleged mistake.

(iii) An abstract or record of the bids received.

(iv) The bidder's written request to withdraw or modify the bid, together with the bidder's written statement and supporting evidence.

(v) A written statement by the contracting officer providing—

(A) A description of the supplies or services involved;

(B) The expiration date of the bid in question and of the other bids submitted;

(D) A summary of the evidence submitted by the bidder;

(E) In the event only one bid was received, a quotation of the most recent contract price for the supplies or services involved or, in the absence of a recent comparable contract, the

contracting officer's estimate of a fair price for the supplies or services;

(F) Any additional pertinent evidence; and

(G) A recommendation to consider the bid as submitted or to authorize the bidder to withdraw or modify its bid.

(8) Where the bidder fails or refuses to furnish evidence in support of a suspected or alleged mistake, consider the bid as submitted unless—

(i) The amount of the bid is so far out of line with the amounts of other bids received, or with the amount estimated by the agency or determined by the contracting officer to be reasonable; or

(ii) There are other indications of error which are so clear, as to reasonably justify the conclusion that acceptance of the bid would be unfair to the bidder or to other bona fide bidders. Document all attempts made to obtain the information required and the action taken with respect to correct the bid.

(h) Each agency must maintain records of all determinations made in accordance with this section, the facts involved, and the action taken in each case. Include copies of all such determinations in the file.

(i) Nothing contained in this section prevents an agency from submitting doubtful cases to the Comptroller General for advance decision.

14.305

Cancellation of invitations after opening.

(a) Unless there is a compelling reason to reject all bids and cancel the invitation after the opening, award to the responsible bidder who submitted the lowest responsive bid.

(b) Invitations may be cancelled after opening when, consistent with paragraph (a) of this section, the agency head determines in writing that—

(1) Inadequate or ambiguous specifications were cited in the invitation;

(2) Specifications have been revised;

(3) The supplies or services being contracted for are no longer required;

(4) The invitation did not provide for consideration of all factors of cost to the Government, such as cost of transporting Government-furnished property to bidders' plants;

(5) Bids received indicate that the needs of the Government can be satisfied by a less expensive article differing from that for which the bids were invited;

(6) All otherwise acceptable bids received are at unreasonable prices, or only one bid is received and the contracting officer cannot determine the reasonableness of the bid price;

(7) The bids were not independently arrived at in open competition, were collusive, or were submitted in bad faith (see part 3 for reports to be made to the Department of Justice);

(8) No responsive bid has been received from a responsible bidder;

(9) A cost comparison as prescribed in OMB Circular A-76 shows that performance by the Government is more economical; or

(10) For other reasons, cancellation is clearly in the public's interest.

(c) If award is delayed beyond the bidders' acceptance periods, request bidders extend in writing the bid acceptance period (with consent of sureties, if any) in order to avoid the need for resoliciting.

(d) Under some circumstances, completion of the acquisition after cancellation of the IFB may be appropriate.

(1) If the IFB has been cancelled for the reasons specified in paragraphs (b)(6) through (8) of this section, and the agency head has authorized, in the determination in paragraph (b) of this section, the completion of the acquisition through negotiation, proceed in accordance with paragraph (e) of this section.

(2) If the IFB has been cancelled for the reasons specified in paragraphs (b)(1), (2), (4), (5), or (10) of this section, or for the reasons in paragraphs (b)(6), (7), or (8) of this section and completion through negotiation is not authorized under paragraph (d)(1) of this section, proceed with a new acquisition.

(e) When the agency head has determined, in accordance with paragraph (d)(1) of this section, that an IFB should be canceled and that use of negotiation is in the Government's interest, the contracting officer may negotiate (in accordance with part 15, as appropriate) and make award without issuing a new IFB provided—

(1) Each responsible bidder in the sealed bid acquisition has been given notice that negotiations will be conducted and has been given an opportunity to participate in negotiations; and

(2) The award is made to the responsible bidder offering the lowest negotiated price.

14.306

Evaluation.

14.306-1

Responsiveness of bids.

(a) To be considered for award, a bid must comply in all material respects with the IFB.

(b) Bids must be filled out, executed, and submitted in accordance with the instructions in the invitation. If a bidder uses its own bid form or a letter to submit a bid, the bid may be considered only if—

(1) The bidder accepts all the terms and conditions of the invitation; and

(2) Award on the bid would result in a binding contract with terms and conditions that do not vary from the terms and conditions of the invitation.

(c) Bids submitted by electronic commerce may be considered only if the electronic commerce method was specifically stipulated or permitted by the IFB.

(d) If any sample fails to conform to the characteristics listed in the invitation, the respective bid will be rejected as nonresponsive.

14.306-2

Responsible bidder—reasonableness of price.

(a) Prior to award determine that—

(1) The apparent awardee(s) is responsible (see subpart 9.1); and

(2) The prices offered are reasonable and not materially unbalanced.

(b) The price analysis techniques in part 15 should be used as guidelines for determining reasonableness and if prices offered are materially unbalanced.

(c) In each case the determination must be made in the light of all prevailing circumstances. Particular care must be taken in cases where only a single bid is received.

14.306-3

Rejection of individual bids.

(a) Reject bids that fail to conform to the basic requirements of the IFB.

(b) Unless the invitation authorized the submission of alternate bids and the supplies offered as alternates meet the requirements specified in the invitation, reject bids that do not conform to the requirements.

(d) If the bidder imposes conditions that would modify requirements of the invitation or limit the bidder's liability to the Government, reject the bid. For example, bids must be rejected in which the bidder—

(1) Protects against future changes in conditions, such as increased costs, if total possible costs to the Government cannot be determined;

(2) Fails to state a price and indicates that price will be the price in effect at time of delivery;

(3) States a price but qualifies it as being subject to the price in effect at time of delivery;

(4) When not authorized by the invitation, conditions or qualifies a bid by stipulating that it is to be considered only if, before date of award, the bidder receives (or does not receive) award under a separate IFB;

(5) Requires the Government to determine that the bidder's product

meets applicable Government specifications; or

(6) Limits rights of the Government under any contract clause.

(e) A low bidder may be requested to delete objectionable conditions from a bid provided the conditions do not go to the substance, as distinguished from the form, of the bid, or work an injustice on other bidders. A condition goes to the substance of a bid where it affects price, quantity, quality, or delivery of the items offered.

(f) The contracting officer may reject any bid if they determine in writing that it is unreasonable as to the total price of the bid or the prices for individual line items as well.

(g) The contracting officer may reject any bid if the prices for any line items or subline items are materially unbalanced (see 15.404-6).

(h) Reject any bid received from a person or concern that is suspended, debarred, proposed for debarment, or declared ineligible as of the bid opening date unless determined in writing that there is a compelling reason for such action (see subpart 9.4).

(i) Unless a bid is received from a small business concern (see part 19 with respect to certificates of competency), reject low bids received from concerns determined to be not responsible pursuant to part 9.

(j) Reject a bid when a bid guarantee is required and a bidder fails to furnish the guarantee in accordance with the requirements of the IFB, except as otherwise provided in part 28.

(k) Preserve the originals of all rejected bids, and any written findings with respect to such rejections with the contract file.

(l) After submitting a bid, if all of a bidder's assets or that part related to the bid are transferred during the period between the bid opening and the award, the transferee may not be able to take over the bid. Reject the bid unless the transfer is effected by merger, operation of law, or other means not barred by 41 U.S.C. 6305 or 31 U.S.C. 3727.

14.306-4

Rejection of all bids.

When it is determined necessary to reject all bids, notify each bidder that all bids have been rejected and provide the reason for such action.

14.306-5

Restrictions on disclosure of descriptive literature.

When a bid is accompanied by descriptive literature, and the bidder imposes a restriction that prevents the public disclosure of such literature, the restriction may render the bid nonresponsive. The restriction renders the bid nonresponsive if it prohibits the disclosure of sufficient information to permit competing bidders to know the essential nature and type of the products offered or those elements of the bid that relate to quantity, price, and delivery terms. The provisions of this paragraph do not apply to unsolicited descriptive literature submitted by a bidder if such literature does not qualify the bid.

14.306-6

All or none qualifications.

Except where prohibited by the IFB, an `all or none' qualification by a bidder does not render the bid nonresponsive. Do not permit bidders to withdraw or modify all or none qualifications after bid opening since such qualifications are substantive and affect the rights of other bidders.

14.306-7

Minor informalities or irregularities in bids.

A minor informality or irregularity is merely a matter of form and not of substance or some immaterial defect in a bid or variation of a bid from the exact requirements of the invitation that can be corrected or waived without being prejudicial to other bidders. The defect or variation is immaterial when the effect on price, quantity, quality, or delivery is negligible when contrasted with the total cost or scope of the supplies or services being acquired. Either give the bidder an opportunity to cure any deficiency resulting from a minor informality or irregularity in a bid or waive the deficiency, whichever is to the advantage of the Government. Examples of minor informalities or irregularities include failure of a bidder to—

(a) Return the number of copies of signed bids required by the invitation;

(b) Furnish required information concerning the number of its employees;

(1) The unsigned bid is accompanied by other material indicating the bidder's intention to be bound by the unsigned bid (such as the submission of a bid guarantee or a letter signed by the bidder, with the bid, referring to and clearly identifying the bid itself); or

(2) The firm submitting a bid has formally adopted or authorized, before the date set for opening of bids, the execution of documents by written, printed, or stamped signature and submits evidence of such authorization and the bid carries such a signature;

(d) Acknowledge receipt of an amendment to an IFB, but only if—

(1) The bid received clearly indicates that the bidder received the amendment, such as where the amendment added another item to the invitation and the bidder submitted a bid on the item; or

(2) The amendment involves only a matter of form or has either no effect or merely a negligible effect on price, quantity, quality, or delivery of the item bid upon.

14.306-8

Prompt payment discounts.

Prompt payment discounts must not be considered in the evaluation of bids.

14.306-9

Economic price adjustment.

(a) Bidder proposed economic price adjustment.

(1) When an IFB does not contain an economic price adjustment clause but a bidder proposes one with a ceiling that the price will not exceed, evaluate the bid on the basis of the maximum possible economic price adjustment of the quoted base price.

(2) If the bid is eligible for award, request the bidder to agree to the inclusion in the award of an approved economic price adjustment clause (see part 16) that is subject to the same ceiling. If the bidder will not agree to an approved clause, the contracting officer may award based on the bid as originally submitted.

(3) Reject bids that contain economic price adjustments with no ceiling unless a clear basis for evaluation exists.

(b)(1) When an invitation contains a Government proposed economic price adjustment clause and no bidder takes exception to the provisions, evaluate bids on the basis of the quoted prices without the allowable economic price adjustment being added.

(2) Reject a bid as nonresponsive if a bidder increases the maximum percentage of economic price adjustment stipulated in the invitation or limits the downward economic price adjustment provisions of the invitation.

(3) Reject a bid as nonresponsive if a bid indicates deletion of the economic price adjustment clause because the downward economic price adjustment provisions are thereby limited.

(4) When a bidder decreases the maximum percentage of economic price adjustment stipulated in the invitation, evaluate the bid at the base price on an equal basis with bids that do not reduce the stipulated ceiling. However, after evaluation, if the bidder offering the lower ceiling is in a position to receive the award, the award must reflect the lower ceiling.

14.307

Award.

(a) Make contract award—

(1) By written or electronic notice,

(2) Within the time for acceptance specified in the bid or an extension, and

(3) To that responsible bidder whose bid, conforming to the invitation, will be most advantageous to the

Government, considering only price and the price-related factors included in the invitation.

(b) When more than one award results from any single IFB, separate award documents must be executed.

(c) When an award is made to a bidder for less than all of the items that may be awarded to that bidder and additional items are being withheld for subsequent award, the IFB and award document must state that the Government may make subsequent awards for those additional items within the bid acceptance period.

(d) All provisions of the IFB, including any acceptable additions or changes made by a bidder in the bid, must be clearly and accurately set forth (either expressly or by reference) in the award document.

(e)(1) Award is generally made by using the Award portion of Standard Form (SF) 33, Solicitation, Offer, and Award, or SF 1447, Solicitation/Contract. If an offer on an SF 33 leads to further changes, the resulting contract must be prepared as a bilateral document on SF 26, Award/Contract.

(2) Use of the Award portion of SF 33, SF 26, or SF 1447, does not preclude the additional use of informal documents, including electronic communications, as notices of awards.

(3) Do not physically include Part IV in the contract. Award by acceptance of a bid on the award portion of Standard Form 33, Solicitation Offer and Award (SF 33), Standard Form 26, Award/Contract (SF 26), or Standard Form 1447, Solicitation/Contract (SF 1447), incorporates Section K, Representations, certifications, and other statements of bidders, in the resultant contract even though not physically attached.

(f) Any discount offered will form a part of the award and will be taken by the payment center if payment is made within the discount period specified by the bidder.

(1) As an alternative to indicating a discount in conjunction with the offer, bidders may prefer to offer discounts on individual invoices.

(2) See part 32, which prescribes the contract clause at 52.232-8, Discounts for Prompt Payment.

14.308

Award of equal low bids.

(a) Award contracts in the following order of priority when two or more low bids are equal in all respects:

(1) Small business concerns that are also labor surplus area concerns.

(2) Other small business concerns.

(3) Other business concerns.

(b) If two or more bidders remain equally eligible after application of paragraph (a) of this section, conduct a drawing, limited to those bidders. If time permits, give the bidders involved an opportunity to attend the drawing. The drawing must be witnessed by at least three persons, and the contract file must contain the names and addresses of the witnesses and the person supervising the drawing.

(c) When an award is to be made by using the priorities under this section, include a written agreement in the contract that the contractor will perform, or cause to be performed, the contract in accordance with the circumstances justifying the priority used to break the tie or select bids for a drawing by lot.

14.309

Information to bidders.

14.309-1

Award of unclassified contracts.

(a) At a minimum (subject to any restrictions in part 9)—

(1) Notify each unsuccessful bidder in writing or electronically within three days after contract award, that its bid was not accepted. “Day,” for purposes of the notification process, means calendar day, except that the period will run until a day which is not a Saturday, Sunday, or legal holiday; and

(2) When award is made to other than a low bidder, state the reason for rejection in the notice to each of the unsuccessful low bidders.

(b) For acquisitions covered by the World Trade Organization Government Procurement Agreement or a Free Trade Agreement (see part 25), agencies must include in notices given unsuccessful bidders from World Trade Organization Government Procurement Agreement or Free Trade Agreement countries—

(1) The dollar amount of the successful bid; and

(2) The name and address of the successful bidder.

14.309-2

Award of classified contracts.

In addition to 14.309-1, if classified information was furnished or created in connection with the IFB, advise the unsuccessful bidders, including any who did not bid, to take disposition action in accordance with agency procedures. The contracting officer may provide the name of the successful bidder and the contract price to unsuccessful bidders upon request. Information regarding a classified award must not be provided by telephone.

Subpart 14.4—Postaward

14.401

Mistakes after award.

If a contractor's discovery and request for correction of a mistake in bid is not made until after the award, process the request using the procedures of part 33 and the following:

(a) When a mistake in a contractor's bid is not discovered until after award, correct the mistake by contract modification if it would be favorable to the Government without changing the essential requirements of the specifications.

(b) In addition to the cases contemplated in paragraph (a) of this section or as otherwise authorized by law, agencies are authorized to make a determination—

(1) To rescind a contract;

(2) To reform a contract to—

(i) Delete the items involved in the mistake; or

(ii) Increase the price if the contract price, as corrected, does not exceed that of the next lowest acceptable bid under the original IFB; or

(3) That no change will be made in the contract as awarded, if the evidence does not warrant a determination under paragraphs (1) or (2).

(c) Make determinations under paragraphs (b)(1) and (2) on the basis of clear and convincing evidence that a mistake in bid was made. In addition, it must be clear that the mistake was—

(1) Mutual, or

(2) If unilaterally made by the contractor, so apparent as to have charged the contracting officer with notice of the probability of the mistake.

(d) Each proposed determination must be coordinated with legal counsel in accordance with agency procedures.

(e) Process mistakes alleged or disclosed after award as follows:

(1) Request the contractor to support the alleged mistake by submission of written statements and pertinent evidence, such as—

(i) The contractor's file copy of the bid,

(ii) The contractor's original worksheets and other data used in preparing the bid,

(iii) Subcontractors' and suppliers' quotations, if any,

(iv) Published price lists, and

(v) Any other evidence that will serve to establish the mistake, the manner in which the mistake occurred, and the bid actually intended.

(2) The case file concerning an alleged mistake must contain the following:

(i) All evidence furnished by the contractor in support of the alleged mistake.

(ii) A signed statement by the contracting officer—

(A) Describing the supplies or services involved;

(B) Specifying how and when the mistake was alleged or disclosed;

(D) Quoting, in cases where only one bid was received, the most recent contract price for the supplies or services involved, or in the absence of a recent comparable contract, the contracting officer's estimate of a fair price for the supplies or services and the basis for the estimate;

(E) Setting forth the contracting officer's opinion whether a bona fide mistake was made and whether the contracting officer was, or should have been, on constructive notice of the mistake before the award, together with the reasons for, or data in support of, such opinion;

(F) Setting forth the course of action with respect to the alleged mistake that the contracting officer considers proper on the basis of the evidence, and if other than a change in contract price is recommended, the manner by which the supplies or services will otherwise be acquired; and

(G) Disclosing the status of performance and payments under the contract, including contemplated performance and payments.

(iii) A signed copy of the bid involved.

(iv) A copy of the IFB and any specifications or drawings relevant to the alleged mistake.

(v) An abstract of written record of the bids received.

(vi) A written request by the contractor to reform or rescind the contract, and copies of all other relevant correspondence between the contracting officer and the contractor concerning the alleged mistake.

(vii) A copy of the contract and any related change orders or supplemental agreements.

(f) Each agency must include in the contract file a record of—

(1) All determinations made in accordance with this 14.401;

(2) the facts involved, and

(3) the action taken in each case.

14.402

Pricing modifications.

See subpart 15.4 for cost and price negotiation policies and procedures.

PART 28—BONDS AND INSURANCE

Sec.

28.000

Scope of part.

28.001

Definitions.

Subpart 28.1—Bonds and Other Financial Protections

28.100

Scope of subpart.

28.101

Bid guarantees.

28.101-1

Policy on use.

28.101-2

Solicitation provision or contract clause.

28.101-3

Authority of an attorney-in-fact for a bid bond.

28.101-4

Noncompliance with bid guarantee requirements.

28.102

Performance and payment bonds and alternative payment protections for construction contracts.

28.102-1

General.

28.102-2

Amount required.

28.102-3

Contract clauses.

28.103

Performance and payment bonds for other than construction contracts.

28.103-1

General.

28.103-2

Performance bonds.

28.103-3

Payment bonds.

28.103-4

Contract clause.

28.104

Annual performance bonds.

28.105

Other types of bonds.

28.105-1

Advance payment bonds.

28.105-2

Patent infringement bonds.

28.106

Administration.

28.106-1

Bonds and bond related forms.

28.106-2

Substitution of surety bonds.

28.106-3

Additional bond and security.

28.106-4

Contract clause.

28.106-5

Consent of surety.

28.106-6

Furnishing information.

28.106-7

Withholding contract payments.

28.106-8

Payment to subcontractors or suppliers.

Subpart 28.2—Sureties and Other Security for Bonds

28.200

Scope of subpart.

28.201

Requirements for security.

28.202

Acceptability of corporate sureties.

28.203

Individual sureties.

28.203-1

Acceptability of individual sureties.

28.203-2

Substitution of assets.

28.203-3

Release of security interest.

28.203-4

Solicitation provision and contract clause.

28.203-5

Exclusion of individual sureties.

28.204

Alternatives in lieu of corporate or individual sureties.

28.204-1

United States bonds or notes.

28.204-2

Certified or cashier's checks, bank drafts, money orders, or currency.

28.204-3

Irrevocable letter of credit.

28.204-4

Contract clause.

Subpart 28.3—Insurance

28.301

Policy.

28.302

Notice of cancellation or change.

28.303

Insurance against loss of or damage to Government property.

28.304

Risk-pooling arrangements.

28.305

Overseas workers' compensation and war-hazard insurance.

28.306

Insurance under fixed-price contracts.

28.307

Insurance under cost-reimbursement contracts.

28.307-1

Group insurance plans.

28.307-2

Liability.

28.308

Self-insurance.

28.309

Contract clauses for workers' compensation insurance.

28.310

Contract clause for work on a Government installation.

28.311

Solicitation provision and contract clause on liability insurance under cost-reimbursement contracts.

28.311-1

Contract clause.

28.311-2

Agency solicitation provisions and contract clauses.

28.312

Contract clause for insurance of leased motor vehicles.

28.313

Contract clauses for insurance of transportation or transportation-related services.

Authority:

41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.

28.000

Scope of part.

This part prescribes requirements for obtaining financial protection against losses under contracts that result from the use of the sealed bid or negotiated methods. It covers bid guarantees, bonds, alternative payment protections, security for bonds, and insurance.

28.001

Definitions.

As used in this part—

Attorney-in-fact

means an agent, independent agent, underwriter, or any other company or individual holding a power of attorney granted by a surety.

Bid

means any response to a solicitation, including a proposal under a negotiated acquisition.

Bidder

means any entity that is responding or has responded to a solicitation, including an offeror under a negotiated acquisition.

Bid guarantee

means a form of security assuring that the bidder (1) will not withdraw a bid within the period specified for acceptance, and (2) will execute a written contract and furnish required bonds, including any necessary coinsurance or reinsurance agreements, within the time specified in the bid, unless a longer time is allowed, after receipt of the specified forms.

Bond

means a written instrument executed by a bidder or contractor (the “principal”), and a second party (“the surety” or “sureties”) (except as provided in 28.204), to assure fulfillment of the principal's obligations to a third party (the “obligee” or “Government”), identified in the bond. If the principal's obligations are not met, the bond assures payment, to the extent stipulated, of any loss sustained by the obligee. The types of bonds and related documents are as follows:

(1) An advance payment bond secures fulfillment of the contractor's obligations under an advance payment provision.

(2) An annual bid bond is a single bond furnished by a bidder, in lieu of separate bid bonds, which secures all bids (on other than construction contracts) requiring bonds submitted during a specific Government fiscal year.

(3) An annual performance bond is a single bond furnished by a contractor, in lieu of separate performance bonds, to secure fulfillment of the contractor's obligations under contracts (other than

construction contracts) requiring bonds entered into during a specific Government fiscal year.

(4) A patent infringement bond secures fulfillment of the contractor's obligations under a patent provision.

(5) A payment bond assures payments as required by law to all persons supplying labor or material in the prosecution of the work provided for in the contract.

(6) A performance bond secures performance and fulfillment of the contractor's obligations under the contract.

Consent of surety

means an acknowledgment by a surety that its bond given in connection with a contract continues to apply to the contract as modified.

Penal sum or penal amount

means the amount of money specified in a bond (or a percentage of the bid price in a bid bond) as the maximum payment for which the surety is obligated or the amount of security required to be pledged to the Government in lieu of a corporate or individual surety for the bond.

Reinsurance

means a transaction which provides that a surety, for a consideration, agrees to indemnify another surety against loss which the latter may sustain under a bond which it has issued.

Subpart 28.1—Bonds and Other Financial Protections

28.100

Scope of subpart.

This subpart prescribes requirements and procedures for the use of bonds, alternative payment protections, and all types of bid guarantees.

28.101

Bid guarantees.

28.101-1

Policy on use.

(a) Do not require a bid guarantee unless a performance bond or a performance and payment bond is also required (see 28.102 and 28.103). Except as provided in paragraph (c) of this subpart, bid guarantees must be required whenever a performance bond or a performance and payment bond is required.

(b) All types of bid guarantees are acceptable for supply or service contracts (see annual bid bonds and annual performance bonds coverage in 28.001). Only separate bid guarantees are acceptable in connection with construction contracts. Agencies may specify that only separate bid bonds are acceptable in connection with construction contracts.

(c) The chief of the contracting office may waive the requirement to obtain a bid guarantee when a performance bond or a performance and payment bond is required if it is determined that a bid guarantee is not in the best interest of the Government for a specific acquisition (

e.g.,

overseas construction, emergency acquisitions, sole-source contracts). Class waivers may be authorized by the agency head or designee.

28.101-2

Solicitation provision or contract clause.

(a) Insert a provision or clause substantially the same as the provision at 52.228-1, Bid Guarantee, in solicitations or contracts, including those for commercial products and commercial services, that require a bid guarantee or similar guarantee. For example, the contracting officer may modify this provision—

(1) For use in connection with construction solicitations when the agency has specified that only separate bid bonds are acceptable in accordance with 28.101-1(b);

(2) For use in solicitations for negotiated contracts; or

(3) For use in service contracts containing options for extended performance.

(b) Determine the amount of the bid guarantee, at least 20 percent of the bid price and must not exceed $3 million, for insertion in the provision at 52.228-1 (see 28.102-2(a)). The amount must be adequate to protect the Government from loss should the successful bidder fail to execute further contractual documents and bonds as required. When the penal sum is expressed as a percentage, a maximum dollar limitation may be stated.

28.101-3

Authority of an attorney-in-fact for a bid bond.

(a) Any person signing a bid bond as an attorney-in-fact must include with the bid bond evidence of authority to bind the surety.

(b) An original, or a photocopy or facsimile of an original, power of attorney is sufficient evidence of such authority.

(c) For purposes of this section, electronic, mechanically-applied and printed signatures, seals and dates on the power of attorney must be considered original signatures, seals and dates, without regard to the order in which they were affixed.

(d) The contracting officer must—

(1) Treat the failure to provide a signed and dated power of attorney at the time of bid opening as a matter of responsiveness; and

(2) Treat questions regarding the authenticity and enforceability of the power of attorney at the time of bid opening as a matter of responsibility. These questions are handled after bid opening.

(e)(1) If the contracting officer contacts the surety to validate the power of attorney, document the file providing, at a minimum, the following information:

(i) Name of person contacted.

(ii) Date and time of contact.

(iii) Response of the surety.

(2) If, upon investigation, the surety declares the power of attorney to have been valid at the time of bid opening, the contracting officer may require correction of any technical error.

(3) If the surety declares the power of attorney to have been invalid, do not allow the bidder to substitute a replacement power of attorney or a replacement surety.

(f) Determinations of non-responsibility based on the unacceptability of a power of attorney are not subject to the Certificate of Competency process of part 19 if the surety has disavowed the validity of the power of attorney.

28.101-4

Noncompliance with bid guarantee requirements.

(a) In sealed bidding, noncompliance with a solicitation requirement for a bid guarantee requires rejection of the bid, except in the situations described in paragraph (c) of this subsection when the noncompliance must be waived.

(b) In negotiation, noncompliance with a solicitation requirement for a bid guarantee requires rejection of an initial proposal as unacceptable, if a determination is made to award the contract based on initial proposals without discussion, except in the situations described in paragraph (c) of this subsection when noncompliance must be waived. (See part 15 for conditions regarding making awards based on initial proposals.) If the conditions for awarding based on initial proposals are not met, deficiencies in bid guarantees submitted by offerors determined to be in the competitive range must be addressed during discussions and the offeror must be given an opportunity to correct the deficiency.

(c) Noncompliance with a solicitation requirement for a bid guarantee must be waived in the following circumstances unless the contracting officer determines in writing that acceptance of the bid would be detrimental to the Government's interest when—

(1) Only one offer is received. In this case, the contracting officer may require the furnishing of the bid guarantee before award;

(2) The amount of the bid guarantee submitted is less than required, but is

equal to or greater than the difference between the offer price and the next higher acceptable offer;

(3) The amount of the bid guarantee submitted, although less than that required by the solicitation for the maximum quantity offered, is sufficient for a quantity for which the offeror is otherwise eligible for award. Any award to the offeror must not exceed the quantity covered by the bid guarantee;

(4) The bid guarantee is received late, and late receipt is waived under part 14;

(5) A bid guarantee becomes inadequate as a result of the correction of a mistake under part 14 (but only if the bidder will increase the bid guarantee to the level required for the corrected bid);

(6) An otherwise acceptable bid bond was submitted with a signed offer, but the bid bond was not signed by the offeror;

(7) An otherwise acceptable bid bond is erroneously dated or bears no date at all; or

(8) A bid bond does not list the United States as obligee, but correctly identifies the offeror, the solicitation number, and the name and location of the project involved, so long as it is acceptable in all other respects.

28.102

Performance and payment bonds and alternative payment protections for construction contracts.

28.102-1

General.

(a) 40 U.S.C. chapter 31, subchapter III, Bonds (formerly known as the Miller Act), requires performance and payment bonds for any construction contract exceeding $150,000, except that this requirement may be waived—

(1) By the contracting officer for as much of the work as is to be performed in a foreign country upon finding that it is impracticable for the contractor to furnish such bonds; or

(2) As otherwise authorized by the Bonds statute or other law.

(b)(1) Pursuant to 40 U.S.C. 3132, for construction contracts greater than $35,000, but not greater than $150,000, select two or more of the following payment protections, giving particular consideration to inclusion of an irrevocable letter of credit as one of the selected alternatives:

(i) A payment bond.

(ii) An irrevocable letter of credit (ILC).

(iii)

A tripartite escrow agreement.

The prime contractor establishes an escrow account in a federally insured financial institution and enters into a tripartite escrow agreement with the financial institution, as escrow agent, and all of the suppliers of labor and material. The escrow agreement must establish the terms of payment under the contract and of resolution of disputes among the parties. The Government makes payments to the contractor's escrow account, and the escrow agent distributes the payments in accordance with the agreement or triggers the disputes resolution procedures if required.

(iv)

Certificates of deposit.

The contractor deposits certificates of deposit from a federally insured financial institution with the contracting officer, in an acceptable form, executable by the contracting officer.

(v) A deposit of the types of security listed in 28.204-1 and 28.204-2.

(2) The contractor must submit to the Government one of the payment protections selected by the contracting officer.

(c) The contractor must furnish all bonds or alternative payment protection, including any necessary reinsurance agreements, before receiving a notice to proceed with the work or being allowed to start work.

28.102-2

Amount required.

(a)

Definition.

As used in this subsection—

Original contract price

means the award price of the contract; or, for requirements contracts, the price payable for the estimated total quantity; or, for indefinite-quantity contracts, the price payable for the specified minimum quantity. Original contract price does not include the price of any options, except those options exercised at the time of contract award.

(b)

Contracts exceeding $150,000.

(1)

Performance bonds.

Unless the contracting officer determines that a lesser amount is adequate for the protection of the Government, the penal amount of performance bonds must equal—

(i) 100 percent of the original contract price; and

(ii) If the contract price increases, an additional amount equal to 100 percent of the increase.

(2)

Payment bonds.

(i) Unless the contracting officer makes a written determination supported by specific findings that a payment bond in this amount is impractical, the amount of the payment bond must equal—

(A) 100 percent of the original contract price; and

(B) If the contract price increases, an additional amount equal to 100 percent of the increase.

(ii) The amount of the payment bond must be no less than the amount of the performance bond.

(c)

Contracts exceeding $35,000 but not exceeding $150,000.

Unless the contracting officer determines that a lesser amount is adequate for the protection of the Government, the penal amount of the payment bond or the amount of alternative payment protection must equal—

(1) 100 percent of the original contract price; and

(2) If the contract price increases, an additional amount equal to 100 percent of the increase.

(d)

Securing additional payment protection.

If the contract price increases, the Government must secure any needed additional protection by directing the contractor to—

(1) Increase the penal sum of the existing bond;

(2) Obtain an additional bond; or

(3) Furnish additional alternative payment protection.

(e)

Reducing amounts.

The contracting officer may reduce the amount of security to support a bond, subject to the conditions of 28.203-3(c) or 28.204(b).

28.102-3

Contract clauses.

(a) Insert a clause substantially the same as the clause at 52.228-15, Performance and Payment Bonds—Construction, in solicitations and contracts for construction, including those for construction that is a commercial service, but excluding those for commercial products, that contain a requirement for performance and payment bonds if the resultant contract is expected to exceed $150,000. The contracting officer may revise paragraphs (b)(1) and/or (b)(2) of the clause to establish a lower percentage in accordance with 28.102-2(b). If the provision at 52.228-1 is not included in the solicitation, set a period of time for return of executed bonds.

(b) Insert the clause at 52.228-13, Alternative Payment Protections, in solicitations and contracts for construction, including those for construction that is a commercial service, when the estimated or actual value exceeds $35,000 but does not exceed $150,000. Complete the clause by specifying the payment protections selected (see 28.102-1(b)(1)) and the deadline for submission. The contracting officer may revise paragraph (b) of the clause to establish a lower percentage in accordance with 28.102-2(c).

28.103

Performance and payment bonds for other than construction contracts.

28.103-1

General.

(a) Generally, agencies must not require performance and payment bonds

for other than construction contracts. However, performance and payment bonds may be used as permitted in 28.103-2 and 28.103-3.

(b) The contractor must furnish all bonds before receiving a notice to proceed with the work.

(c) No bond must be required after the contract has been awarded if it was not specifically required in the contract, except as may be determined necessary for a contract modification.

28.103-2

Performance bonds.

(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.

28.103-3

Payment bonds.

(a) A payment bond is required only when a performance bond is required, and if the use of payment bond is in the Government's interest.

(b) When a contract price is increased, the Government may require additional bond protection in an amount adequate to protect suppliers of labor and material.

28.103-4

Contract clause.

Insert a clause substantially the same as the clause at 52.228-16, Performance and Payment Bonds—Other than Construction, in solicitations and contracts, including those for commercial products (other than commercially available off-the-shelf items) and commercial services, that contain a requirement for both payment and performance bonds. Determine the amount of each bond for insertion in the clause. The amount must be adequate to protect the interest of the Government. Set a period of time (normally 10 days) for return of executed bonds. Use Alternate I when only performance bonds are required.

28.104

Annual performance bonds.

(a) Annual performance bonds only apply to nonconstruction contracts. They must provide a gross penal sum applicable to the total amount of all covered contracts.

(b) When the penal sums obligated by contracts are approximately equal to or exceed the penal sum of the annual performance bond, an additional bond will be required to cover additional contracts.

28.105

Other types of bonds.

The head of the contracting activity may approve using other types of bonds in connection with acquiring particular supplies or services. These types include advance payment bonds and patent infringement bonds.

28.105-1

Advance payment bonds.

Advance payment bonds may be required only when the contract contains an advance payment provision, and a performance bond is not furnished. Determine the amount of the advance payment bond necessary to protect the Government

28.105-2

Patent infringement bonds.

(a) Contracts providing for patent indemnity may require these bonds only if—

(1) A performance bond is not furnished; and

(2) The financial responsibility of the contractor is unknown or doubtful.

(b) The contracting officer must determine the penal sum.

28.106

Administration.

28.106-1

Bonds and bond related forms.

The following Standard Forms (SF's) and Optional Forms (OF's) must be used, except in foreign countries, when a bid bond, performance or payment bond, or an individual surety is required. The bond forms must be used as indicated in the instruction portion of each form.

(a) SF 24, Bid Bond (see 28.101).

(b) SF 25, Performance Bond (see 28.102-1 and 28.106-3(b)).

(d) SF 25B, Continuation Sheet (for SFs 24, 25, and 25A).

(e) SF 28, Affidavit of Individual Surety (see 28.203).

(f) SF 34, Annual Bid Bond (see 28.001).

(g) SF 35, Annual Performance Bond (see 28.104).

(h) SF 273, Reinsurance Agreement for a Bonds Statute Performance Bond (see 28.202(a)(4)).

(i) SF 274, Reinsurance Agreement for a Bonds Statute Payment Bond (see 28.202(a)(4)).

(j) SF 275, Reinsurance Agreement in Favor of the United States (see 28.202(a)(4)).

(k) SF 1414, Consent of Surety (see 28.106-5).

(l) SF 1415, Consent of Surety and Increase of Penalty (see 28.106-3).

(m) SF 1416, Payment Bond for Other Than Construction Contracts (see 28.103-3 and 28.106-3(b)).

(n) SF 1418, Performance Bond for Other Than Construction Contracts (see 28.103-2 and 28.106-3(b)).

(o) OF 91, Release of Personal Property from Escrow (see 28.203-3).

28.106-2

Substitution of surety bonds.

(a) A new surety bond covering all or part of the obligations on a bond previously approved may be substituted for the original bond if approved by the head of the contracting activity, or as otherwise specified in agency regulation.

(b) When a new surety bond is approved, notify the principal and surety of the original bond of the effective date of the new bond.

28.106-3

Additional bond and security.

(a) When additional bond coverage is required and is secured in whole or in part by the original surety or sureties, agencies must use Standard Form 1415, Consent of Surety and Increase of Penalty. Standard Form 1415 is authorized for local reproduction.

(b) When additional bond coverage is required and is secured in whole or in part by a new surety or by one of the alternatives described in 28.204 in lieu of corporate or individual surety, agencies must use Standard Form 25, Performance Bond; Standard Form 1418, Performance Bond for Other Than Construction Contracts; Standard Form 25A, Payment Bond; or Standard Form 1416, Payment Bond for Other Than Construction Contracts.

28.106-4

Contract clause.

(a) Insert the clause at 52.228-2, Additional Bond Security, in solicitations and contracts, including those for commercial products (other than commercially available off-the-shelf items) and commercial services, when bonds are required.

(b) In accordance with section 806(a)(3) of Public Law 102-190, as amended by sections 2091 and 8105 of Public Law 103-355 (10 U.S.C. 4601 note prec.), insert the clause at 52.228-

12, Prospective Subcontractor Requests for Bonds, in solicitations and contracts other than those for commercial products and commercial services, except for construction that is a commercial service, when a payment bond will be furnished pursuant to 40 U.S.C. chapter 31, subchapter III, Bonds (see 28.102-1).

28.106-5

Consent of surety.

(a) When any contract is modified, obtain the consent of surety if—

(1) An additional bond is obtained from other than the original surety;

(2) No additional bond is required and—

(i) The modification is for new work beyond the scope of the original contract; or

(ii) The modification does not change the contract scope but changes the contract price (upward or downward) by more than 25 percent or $50,000; or

(3) Consent of surety is required for a novation agreement (see part 42).

(b) When a contract for which performance or payment is secured by any of the types of security listed in 28.204 is modified as described in paragraph (a) of this subsection, no consent of surety is required.

28.106-6

Furnishing information.

(a) The surety on the bond, upon its written request, may be furnished information on the progress of the work, payments, and the estimated percentage of completion, concerning the contract for which the bond was furnished.

(b) When a payment bond has been provided, upon request, furnish the name and address of the surety or sureties to any subcontractor or supplier who has furnished or been requested to furnish labor or material for the contract. In addition, general information concerning the work progress, payments, and the estimated percentage of completion may be furnished to persons who have provided labor or materials and have not been paid.

(c) When a payment bond has been provided for a contract, the head of the agency or designee must furnish a certified copy of the bond and the contract for which it was given to any person who makes a request therefor and who furnishes an affidavit that the requestor has supplied labor or materials for such work and payment therefor has not been made or that the requestor is being sued on such bond. The person who makes the request must be required to pay such costs of preparation as determined by the head of the agency or designee to be reasonable and appropriate (see 40 U.S.C. 3133).

(d) Section 806(a)(2) of Public Law 102-190, as amended by sections 2091 and 8105 of Public Law 103-355 (10 U.S.C. 4601 note prec.), requires that the Federal Government provide information to subcontractors on payment bonds under contracts, including contracts for construction that is a commercial service. Upon the written or oral request of a subcontractor/supplier, or prospective subcontractor/supplier, under a contract with respect to which a payment bond has been furnished pursuant to the Bonds statute, promptly provide to the requester, either orally or in writing, as appropriate, any of the following:

(1) Name and address of the surety or sureties on the payment bond.

(2) Penal amount of the payment bond.

(3) Copy of the payment bond. The contracting officer may impose reasonable fees to cover the cost of copying and providing a copy of the payment bond.

28.106-7

Withholding contract payments.

(a) During contract performance, agencies must not withhold payments due contractors or assignees because subcontractors or suppliers have not been paid.

(b) If, after completion of the contract work, the Government receives written notice from the surety regarding the contractor's failure to meet its obligation to its subcontractors or suppliers, withhold final payment. However, the surety must agree to hold the Government harmless from any liability resulting from withholding the final payment. The contracting officer will authorize final payment upon agreement between the contractor and surety or upon a judicial determination of the rights of the parties.

28.106-8

Payment to subcontractors or suppliers.

The contracting officer will only authorize payment to subcontractors or suppliers from an ILC (or any other cash equivalent security) upon a judicial determination of the rights of the parties, a signed notarized statement by the contractor that the payment is due and owed, or a signed agreement between the parties as to amount due and owed.

Subpart 28.2—Sureties and Other Security for Bonds

28.200

Scope of subpart.

This subpart prescribes procedures for the use of sureties and other security to protect the Government from financial losses.

28.201

Requirements for security.

(a) Agencies must obtain adequate security for bonds (including coinsurance and reinsurance agreements) required or used with a contract for supplies or services (including construction). Acceptable forms of security include—

(1) Corporate or individual sureties; or

(2) Any of the types of security authorized in lieu of sureties by 28.204.

(b) Solicitations must not preclude offerors from using the types of surety or other security permitted by this subpart, unless prohibited by law or regulation.

28.202

Acceptability of corporate sureties.

(a)(1) Corporate sureties offered for bonds furnished with contracts performed in the United States or its outlying areas must appear on the list contained in the Department of the Treasury's Listing of Approved Sureties (Treasury Department Circular 570), “Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies.”

(2) The penal amount of the bond should not exceed the surety's underwriting limit stated in the Treasury Department Circular 570. If the penal amount exceeds the underwriting limit, the bond will be acceptable only if—

(i) The amount which exceeds the specified limit is coinsured or reinsured; and

(ii) The amount of coinsurance or reinsurance does not exceed the underwriting limit of each coinsurer or reinsurer.

(3) Coinsurance or reinsurance agreements must conform to the Department of the Treasury (Treasury) regulations in 31 CFR 223.10 and 223.11. When reinsurance is contemplated, require reinsurance agreements to be executed and submitted with the bonds before making a final determination on the bonds.

(4) When specified in the solicitation, the contracting officer may accept a bond from the direct writing company in satisfaction of the total bond requirement of the contract. This is permissible until necessary reinsurance agreements are executed, even though the total bond requirement may exceed

the insurer's underwriting limitation. The contractor must execute and submit necessary reinsurance agreements to the contracting officer within the time specified on the bid form, which may not exceed 45 calendar days after the execution of the bond. The contractor must use Standard Form (SF) 273, Reinsurance Agreement for a Bonds Statute Performance Bond, and SF 274, Reinsurance Agreement for a Bonds Statute Payment Bond, when reinsurance is furnished with the required performance or payment bonds. SF 275, Reinsurance Agreement in Favor of the United States, is used when reinsurance is furnished with bonds for other purposes.

(b) For contracts performed in a foreign country, sureties not appearing on Treasury Department Circular 570 are acceptable if the contracting officer determines that it is impracticable for the contractor to use Treasury listed sureties.

(c) Treasury issues supplements to Treasury Department Circular 570, notifying all Federal agencies of new approved corporate surety companies and the termination of the authority of any specific corporate surety to qualify as a surety on Federal bonds. Upon receipt of notification of termination of a company's authority to qualify as a surety on Federal bonds, review the outstanding contracts and take action necessary to protect the Government, including, where appropriate, securing new bonds with acceptable sureties in lieu of outstanding bonds with the named company.

(d) Treasury Department Circular 570 may be obtained from the U.S. Department of the Treasury, Bureau of the Fiscal Service, Surety Bond Branch, 3201 Pennsy Drive, Building E, Landover, MD 20785 or at

https://www.fiscal.treasury.gov/fsreports/ref/suretyBnd/c570.htm.

28.203

Individual sureties.

28.203-1

Acceptability of individual sureties.

(a) An individual surety is acceptable for all types of bonds except position schedule bonds. Assets pledged by an individual surety must meet the eligibility requirements of Treasury's Bureau of the Fiscal Service. Per 31 U.S.C. 9310, individual sureties must pledge eligible obligations, which Treasury refers to as acceptable collateral or eligible collateral. A list of acceptable assets, entitled “Acceptable Collateral for 31 CFR part 225,” may be accessed by going to

https://fiscal.treasury.gov/tcmm/resources.html

and clicking on “31 CFR part 225”.

(b)(1) An individual surety must execute the bond (

e.g.,

bid bond (SF 24), performance bond (SF 25), payment bond (SF 25A)).

(2) The net adjusted value of unencumbered assets is their market value minus the margin. The margin tables are available at

www.treasurydirect.gov.

The net adjusted value of unencumbered assets pledged by the individual surety must equal or exceed the penal amount (

i.e.,

face value) of each bond.

(3) The individual surety must execute the SF 28, Affidavit of Individual Surety, and provide a security interest. One individual surety is adequate support for a bond, provided the net adjusted value of unencumbered assets pledged by that individual surety equals or exceeds the amount of the bond.

(4) An offeror or contractor may submit up to three individual sureties for each bond, in which case the net adjusted value of the pledged unencumbered assets, when combined, must equal or exceed the penal amount of the bond. Each individual surety is jointly and severally liable to the extent of the penal amount of the bond.

(c) Using the information from the SF 28 submitted by the offeror or contractor, notify the Treasury's collateral operations support team by email at

BMT@fiscal.treasury.gov

or by phone at 888-568-7343 of the individual surety, the assets to be pledged, and the amount necessary to cover the individual surety bond,

i.e.,

the required amount to be collateralized. Treasury will advise the contracting officer whether the assets are eligible to be pledged, consistent with 28.203-1(a), and of the valuation of the assets offered to be pledged, consistent with the valuation standards in 28.203-1(b)(2). If after 3 business days the contracting officer has not received a response from Treasury, the contracting officer may seek assistance from the Director, Bank Policy and Oversight, at 202-504-3502. Determine whether the individual surety bond is acceptable as to the amount necessary to cover the individual surety bond based on the asset eligibility and valuation assessment from Treasury. Notify both the offeror or contractor and the individual surety of this determination.

(d) If the contracting officer determines the individual surety is acceptable, request the Treasury's collateral operations support team set up the necessary individual surety pledged asset collateral account.

(e) If the contracting officer determines that no individual surety in support of a bid guarantee is acceptable, reject the offeror utilizing the individual surety as nonresponsible, except as provided in 28.101-4. A finding of nonresponsibility based on unacceptability of an individual surety, need not be referred to the Small Business Administration for a Certificate of Competency. (See part 19 and 61 Comp. Gen. 456 (1982).)

(f) If a contractor submits an unacceptable individual surety, or one that Treasury could not assess the asset eligibility and valuation within a reasonable time, then the contracting officer may permit the contractor to substitute an acceptable surety within a reasonable time.

(g) Evidence of

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