IRREVOCABLE LETTER OF CREDIT (52.228-14) (DEC 1999)

\(a\) \"Irrevocable letter of credit\" (ILC), as used in this clause,
means a written commitment by a federally insured financial institution
to pay all or part of a stated amount of money, until the expiration
date of the letter, upon presentation by the Government (the
beneficiary) of a written demand therefor. Neither the financial
institution nor the offeror/Contractor can revoke or condition the
letter of credit.

\(b\) If the offeror intends to use an ILC in lieu of a bid bond, or to
secure other types of bonds such as performance and payment bonds, the
letter of credit and letter of confirmation formats in paragraphs (e)
and (f) of this clause shall be used.

\(c\) The letter of credit shall be irrevocable, shall require
presentation of no document other than a written demand and the ILC
(including confirmation letter, if any), and shall be issued/confirmed
by an acceptable federally insured financial institution as provided in
paragraph (d) of this clause, and‑‑

\(1\) If used as a bid guarantee, the ILC shall expire no earlier than
60 days after the close of the bid acceptance period;

\(2\) If used as an alternative to corporate or individual sureties as
security for a performance or payment bond, the offeror/contractor may
submit an ILC with an initial expiration date estimated to cover the
entire period for which financial security is required or may submit an
ILC with an initial expiration date that is a minimum period of one year
from the date of issuance. The ILC shall provide that, unless the issuer
provides the beneficiary written notice of non-renewal at least 60 days
in advance of the current expiration date, the ILC is automatically
extended without amendment for one year from the expiration date, or any
future expiration date, until the period of required coverage is
completed and the Contracting Officer provides the financial institution
with a written statement waiving the right to payment. The period of
coverage shall be:

\(i\) For contracts subject to the Miller Act, the later of‑‑

\(A\) One year following the expected date of final payment;

\(B\) For performance bonds only, until completion of any warranty
period; or

\(C\) For payment bonds only, until resolution of all claims filed
against the payment bond during the one‑year period following final
payment.

\(ii\) For contracts not subject to the Miller Act, the later of‑‑

\(A\) 90 days following final payment; or

\(B\) For performance bonds only, until completion of the warranty
period.

\(d\) Only federally insured financial institutions rated investment
grade or higher shall issue or confirm the ILC. The offeror/Contractor
shall provide the Contracting Officer a credit rating that indicates the
financial institution has the required rating(s) as of the date of
issuance of the ILC. Unless the financial institution issuing the ILC
had a letter of credit business of at least \$25 million in the past
year, ILCs over \$5 million must be confirmed by another acceptable
institution that had letter of credit business of at least \$25 million
in the past year.

\(e\) The following format shall be used by the issuing financial
institution to create an ILC:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Issuing Financial Institution\'s Letterhead or Name and Address

Issue Date \_\_\_\_\_\_\_\_\_\_\_\_

IRREVOCABLE LETTER OF CREDIT NO. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Account party\'s name
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Account party\'s address
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

For Solicitation No.
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(for reference only)

TO: \[U.S. Government agency\]

\[U.S. Government agency\'s address\]

1\. We hereby establish this irrevocable and transferable Letter of
Credit in your favor for one or more drawings up to United States
\$\_\_\_\_\_\_\_. This Letter of Credit is payable at \[issuing
financial institution\'s and, if any, confirming financial
institution\'s\] office at \[issuing financial institution\'s address
and, if any, confirming financial institution\'s address\] and expires
with our close of business on \_\_\_\_\_\_\_\_\_\_, or any automatically
extended expiration date.

2\. We hereby undertake to honor your or the transferee\'s sight
draft(s) drawn on the issuing or, if any, confirming financial
institution, for all or any part of this credit that if presented with
this Letter of Credit and confirmation, if any, at the office specified
in paragraph 1 of this Letter of Credit on or before the expiration date
or any automatically extended expiration date.

3\. \[This paragraph is omitted if used as a bid guarantee, and
subsequent paragraphs are renumbered.\] It is a condition of this Letter
of Credit that it is deemed to be automatically extended without
amendment for one year from the expiration date hereof, or any future
expiration date, unless at least 60 days prior to any expiration date,
we notify you or the transferee by registered mail, or other receipted
means of delivery, that we elect not to consider this Letter of Credit
renewed for any such additional period. At the time we notify you, we
also agree to notify the account party (and confirming financial
institution, if any) by the same means of delivery.

4\. This Letter of Credit is transferable. Transfers and assignments of
proceeds are to be effected without charge to either the beneficiary or
the transferee/assignee of proceeds. Such transfer or assignment shall
only be at the written direction of the Government (the beneficiary) in
a form satisfactory to the issuing financial institution and the
confirming financial institution, if any.

5\. This Letter of Credit is subject to the Uniform Customs and Practice
(UCP) for Documentary Credits, 1993 Revision, International Chamber of
Commerce Publication No. 500, and to the extent not inconsistent
therewith, to the laws of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\[state of confirming financial institution, if any, otherwise state of
issuing financial institution\].

6\. If this credit expires during an interruption of business of this
financial institution as described in Article 17 of the UCP, the
financial institution specifically agrees to effect payment if this
credit is drawn against within 30 calendar days after the resumption of
our business.

Sincerely,

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Issuing financial institution\]

\(f\) The following format shall be used by the financial institution to
confirm an ILC:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\[Confirming
Financial Institution\'s Letterhead or Name and Address\]

(Date)\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Our Letter of Credit Advice Number \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Beneficiary: \_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[U.S. Government agency\]

Issuing Financial Institution:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Issuing Financial Institution\'s LC No.: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Gentlemen:

1\. We hereby confirm the above indicated Letter of Credit, the original
of which is attached, issued by \_\_\_\_\_\_\_\_\_\_ \[name of issuing
financial institution\] for drawings of up to United States dollars
\_\_\_\_\_\_\_\_\_\_\_/U.S. \$\_\_\_\_\_\_\_ and expiring with our close
of business on \_\_\_\_\_\_\_\_\_\_\_\_\_ \[the expiration date\], or
any automatically extended expiration date.

2\. Draft(s) drawn under the Letter of Credit and this Confirmation are
payable at our office located at \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

3\. We hereby undertake to honor sight draft(s) drawn under and
presented with the Letter of Credit and this Confirmation at our offices
as specified herein.

4\. \[This paragraph is omitted if used as a bid guarantee, and
subsequent paragraphs are renumbered.\] It is a condition of this
confirmation that it be deemed automatically extended without amendment
for one year from the expiration date hereof, or any automatically
extended expiration date, unless:

\(a\) At least sixty (60) days prior to any such expiration date, we
shall notify the Contracting Officer, or the transferee and the issuing
financial institution, by registered mail or other receipted means of
delivery, that we elect not to consider this confirmation extended for
any such additional period; or

\(b\) The issuing financial institution shall have exercised its right
to notify you or the transferee, the account party, and ourselves, of
its election not to extend the expiration date of the Letter of Credit.

5\. This confirmation is subject to the Uniform Customs and Practice
(UCP) for Documentary Credits, 1993 Revision, International Chamber of
Commerce Publication No. 500, and to the extent not inconsistent
therewith, to the laws of \_\_\_\_\_\_\_\_ \[state of confirming
financial institution\].

6\. If this confirmation expires during an interruption of business of
this financial institution as described in Article 17 of the UCP, we
specifically agree to effect payment if this credit is drawn against
within 30 calendar days after the resumption of our business.

Sincerely,

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Confirming financial institution\]

\(g\) The following format shall be used by the Contracting Officer for
a sight draft to draw on the Letter of Credit:

SIGHT DRAFT

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[City, State\]

(Date)\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Name and address of financial institution\]

Pay to the order of \_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[Beneficiary Agency\]
\_\_\_\_\_\_\_\_\_\_\_ the sum of United States
\$\_\_\_\_\_\_\_\_\_\_\_\_. This draft is drawn under Irrevocable Letter
of Credit No.
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Beneficiary Agency\]

By: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of clause)