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.