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~, Performance and Payment Bonding Req~irements (Construction Contracts) The Contractor shali be required to obtain performance and payment bonds as follows: ~ (a) Ferformance bonds 1. The penal amount of performance bonds shall be 100 percent of the original contract price, unless the Recipient determines that a lesser amount would be adequate for the protection of the Recipient. ; ~ . 2. The Recipient may require additional performance bond protection when a contract price is increased. The increase in protection shall generally equal 100 percent of the increase in contract ~ price. The Recipient may secure additional protection by directing the Contractor to increase the • penal amount of the existing bond or to obtain an additional bond. ~ (b) Payment bonds ~ 1. The penal amou;:t of the payment bonds shall equal 100 percent of the contract price, unless the Recipient determines that a lesser amount would be adequate for the protection of the Recipient. ~ 2. The Recipient may require additional payment bond protection when a contract price is increased. ~~~; The increase in protect~on shall generally equal 100 percent of the increase in contraot price. The Recipient may secure additional protection by directing the Contractor to increase the penal amount ~ of the existing bond or to obtain an additional bond. '-` Performance and Payment Bonding Reqnirements (Non-Construction Contracts) The Contractor may be required to obtain performance and payment bonds when necessary to protect the Recipient's interes~ ff the Recipient requires such bomding after execution of the Contract, then Recipient will pay the reasonable cost of the bond premium. ~ ,--~ •(a) The following situations may warrant a performance bond: i_ : i, 1. Recipient property or funds are to be provided to the Contractor for use in perfomung the contract u or as partial compensation (as in retention of salvaged material). ~~ 2. A contractor sells assets to or merges with another concern, and the Recipient, after recognizing the ~ latter concern as the successor in int.erest, desires assurance that it is financially capable. ~ ~ 3. Substantial progress payments are made before delivery of end items starts. 4. Contractfi"are for dismanding, demolition, or removal of improvements. (b) When it is determined that a pcrformance bond is required, the Contractor shall be required to obtain performance bonds as follows: ~~ 1. The penal amount of perfomnance bonds shall be 100 percent of the original contract price, unless .,~ the Recipient determines that a lesser amount would be adequate for the protection of the Recipient. l~,~ 2. The Recipient may require additional performance bond pmtection when a contract price is ~ increased. The increase m protecdon shall generally equal 100 percent of the increase in contract ! price. The Recipient may secure additional protection by directing the Contractor to increase the ~ penal amount of the existing bond or to obtain an additional bond. .~ .y Addendum, F'TA Contract Requirements Page - 12 ~ 1008981030 ` :~ ~ :: ::;