Demolition/Abatement Constracts (Folders 1-2)

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Chaptcr 4: Mcthods of Selection http:~~w~u~~~.fia.dot.go~:!fta~libraryiadminBPf'man~scct 40.htm under a bid bond, collection is like the capture of the king in chess. It dictates many of the moves you will want to make to use a bid bond effectively without imposing unnecessary burden on your offerors. The conditions which discharge the bond should be specified in your solicitation. Generally, the principal condition that discharges the bond or guaranty is the furnishing of a performance bond. Often the terms of the bid guaranty also guarantee that the offeror will provide executed contract documents, insurance certificates, payment bonds, or evidence of DBE compliance. Once the performance bond is in place, it guarantees performance of all other contractor obligations. The most likely reasons a performance bond wouid not be furnished (which are the conditions you might look for in deciding whether to require bid guaranty) are: a financial condition so weak that bonding companies will not participate, such a large amount of bonds already issued that the bond cannot be obtained, second thoughts about the contract based on the information revealed up to the point in time of bonding, or a frivolous bid. If the performance bond is not provided, you can specify the right under your bid guaranty provision to immediately accept the next ranked offer and to collect from the defaulting offeror the price and value difference between the offers. (Estimating this difference is one way to set the amount of the bid guaranty.) If the guaxanty is a bond or equivalent letter of credit, you may need to obtain a judgment against the offeror before you can actually collect from the bonding company or bank. As indicated above, it is critical to most suppliers who provide bid guaranty that they retain the confidence of bonding companies. The bonding company's concern may assist in collection from a defaulting offeror. Click here to return to the top of the document Section Footnotes 1" See Section 1.3.2. "Federal Contractual Sphere " 2- United States v. John C. Grimberg Co., 702 F.2d 1362, 1367 (Fed Cir. 1983) (in banc). 3' See Chapter 6~future sectionJ for a discussion of the procurement methads commonly used for each object of procurement. 4" FTA Circular 4220.1 D§ 7. f. 5' 49 CFR § 661.7, Appendix A to § 661.7, subparagraph {e). 6" As a practical matter, you may wish to adopt the statutory threshold for the Bavis Bacon Act of $2,000 as the micro-purchase threshold for construction services. This is what has been done with the Federal Acquisition Regulation -- see, FAR, § 13.601(a) which defines rnicra-purchases for construction as being limited to $2,000. However, if you have a requirement for $2,300 ofconstruction, you no longer need competitive quotations, but you still need Davis Bacon wage rate submissions and compliance. ~' FTA Circular 4220.1 D' § 8. c. g- You must not split a procurement that would be in excess of $2,500 (three widgets worth $1,500 of 45 O 1 / l0/97 13:09:53