Statutory changes to assets pledged by individual sureties on federal contracts directly impacting current FAR Regulations – 10/07/2016

We are contacting you to urge that the FAR Council implement an important statutory change regarding the types of assets that individual sureties can pledge to support their surety bonds on federal construction contracts. Section 874 of the National Defense Authorization Act (NDAA) for Fiscal Year 2016 amends Title 31 USCA § 9304 to require individual sureties to use only “eligible obligations” as defined in 31 CFR Part 223, as collateral for their obligations to the federal agencies and to deposit such assets in the care and custody of the federal government. The signatory associations request that the current FAR regulations, specifically FAR 28.203-2(b)(3), be revised and made consistent with the statutory changes adopted in the FY 2016 NDAA prior to the November 30, 2016, effective date of the new requirements.

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