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                            28.203-1 Acceptability of individual sureties.
        
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FAC Number: 2024-03 Effective Date: 02/23/2024
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Subpart28.028.128.228.3
Section28.20028.20128.20228.20328.204
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28.203-1 Acceptability of 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 shall 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://www.treasurydirect.gov/instit/statreg/collateral/collateral.htm                   and clicking on “Acceptable Collateral for 31 CFR part                   225”.                                          (b)                                                         (1)An individual surety shall 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 shall 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, the contracting officer shall 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. The contracting officer shall 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. The contracting officer shall notify both the offeror or contractor and the individual surety of this determination.                                          (d)If the contracting officer determines the individual surety is acceptable, the contracting officer shall 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, the offeror utilizing the individual surety shall be rejected 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  19.602-1(a) 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 possible criminal or fraudulent activities by an individual surety shall be referred to the appropriate agency official in accordance with agency procedures.    **Parent topic:**  28.203 Individual Sureties.
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