Code of Federal Regulations (Last Updated: February 15, 2024) |
Title 48 - Federal Acquisition Regulations System |
Chapter 1 - Federal Acquisition Regulation |
SubChapter E - General Contracting Requirements |
Part 31 - Contract Cost Principles and Procedures |
Subpart 31.2 - Contracts With Commercial Organizations |
§ 31.205-4 - Bonding costs.
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31.205-4 Bonding costs.
(a) Bonding costs arise when the Government requires assurance against financial loss to itself or others by reason of the act or default of the contractor. They arise also in instances where the contractor requires similar assurance. Included are such bonds as bid, performance, payment, advance payment, infringement, and fidelity bonds.
(b) Costs of bonding required pursuant to the terms of the contract are allowable.
(c) Costs of bonding required by the contractor in the general conduct of its business are allowable to the extent that such bonding is in accordance with sound business practice and the rates and premiums are reasonable under the circumstances.