28.204-1 U.S. bonds or debentures. Any person who is required to pay an obligation to the government has the option of depositing certain U.S. bonds or debentures in an amount equal to their face value of the amount of the bond penalty in lieu of one or more collateral for the bond (Act of February 24, 1919 (31 U.S.C.9303) and Treasury Department Circular No. 154 (31 CFR Part 225)). In addition, the Debentures or Debentures are accompanied by a duly signed power of attorney and an agreement authorizing the collection or sale of such U.S. Notes or Debentures in the event of default by the investor in the Notes. The agent may: – (a) transfer guarantees to the Ministry of Finance or to another agent of the approved Agency; or (b) deposit them with the Treasurer of the United States, a Federal Reserve Bank (or a branch with the necessary facilities) or any other custodian designated for that purpose by the Secretary of the Treasury in accordance with the procedures prescribed by that authority and Treasury Circular No. 154 (exception: the contract agent deposits all notes and debentures received in the District of Columbia with the Treasurer of the United States). 28.204-2 Certified cheques or cashiers, bank cheques, money orders or currencies.
Anyone who is required to present a bond has the option to present a certified or cashier cheque, bank cheque, money order or currency equal to the amount of the bond penalty, rather than providing guarantees or bonds for sureties. Those who submit cheques, drafts or money orders must draw them by order of the appropriate federal agency. 28.204-3 Irrevocable letter of credit. (a) Any person who is obliged to post a bond may deposit a bond secured by an irrevocable letter of credit (ILC) of the amount of the penalty to be secured (see 28.204). A separate CIT is required for each link. (b) The CIT is irrevocable, requires the submission of a document other than a written request and the CIT (and, if applicable, a confirmation letter), expires only as provided for in paragraph (f) of this Subsection and is issued/confirmed by an acceptable government-insured financial institution in accordance with paragraph (g) of this Subsection. c) To use the CIT, the contract agent must use the draft point of view set out in clause 52.228-14 and submit it to the CIT (including, where applicable, a confirmation letter) to the issuing financial institution or confirming financial institution (if applicable). (d) If the contractor does not provide an acceptable replacement CDI or other acceptable replacement at least 30 days before the expected expiry of a CIT, the contract agent shall immediately have recourse to the CIT. (e) If there are unpaid claims on the payment guarantee after the expiry of the period of performance of a contract in which ILCs are used to support payment guarantees, the contractor shall rely on the ILC to cover such claims before the expiry date of the ILC. (f) The period for which a financial guarantee is required is as follows: (1) When used as tendering guarantee, the CIT should expire no earlier than 60 days after the expiry of the period of acceptance of the tender. 2. Instead of guaranteeing an undertaking or an individual guarantee as collateral for performance or payment, the tenderer/contractor may submit a CIT whose initial expiry date is estimated at the entire period for which a financial guarantee is required or a CIT whose initial expiry date is at least one year from the date of issue.
The CIT provides that, unless the issuer notifies the beneficiary in writing of a non-renewal at least 60 days before the current expiry date, the CIT shall be automatically renewed without modification for one year from the expiry date or a future expiry date until the required coverage period has ended and the contract agent submits a written declaration to the financial institution: in which the right to payment is waived. The required coverage period is as follows: (i) for contracts subject to the status of debt securities, whichever is later: (A) one year after the expected date of final payment; (B) only for performance guarantees until the conclusion of a warranty period; or (C) Only for payment guarantees until all claims against the payment guarantee are settled within one year of final payment. (ii) in the case of contracts not subject to the Debt Instruments Statute, the later of – (A) 90 days after final payment; or (B) only for performance warranties until the expiration of a warranty period. (g) Only government-insured financial institutions with an investment-grade rating issue or confirm the ILC. Unless the financial institution issuing RInC had a letter of credit of at least $25 million in the past year, RInCs over $5 million must be confirmed by another acceptable financial institution that had a letter of credit of at least $25 million last year. (1) The Bidder/Contractor shall be bound in accordance with paragraph (d) of Article 52.228-14. Irrevocable letter of credit to provide the contract agent with a credit rating from a recognized trade credit rating service demonstrating that the financial institution has the required rating(s) at the time the ILC is issued. (2) In order to support the creditworthiness of the financial institution issuing or confirming the CIT, the contract agent shall verify the following information: (i) Federal insurance: Each financial institution is federally insured. The Federal Insurance Review is available in the Federal Deposit Insurance Corporation`s (FDIC) Directory of Institutions on the www2.fdic.gov/idasp/index.asp website. (ii) Current solvency. Each financial institution`s current credit rating is investment grade and the credit rating comes from a nationally recognized statistical rating agency (NRSRO).
NRSROs are located on the www.sec.gov/answers/nrsro.htm website, which is maintained by the SEC. (3) The rating services listed on the website www.sec.gov/answers/nrsro.htm use different rating scales (e.B AAA, AA, A, BBB, BB, B, CCC, CC, C and D; or Aaa, Aa, A, Baa, Ba, B, Caa, Ca, and C) to conduct institutional credit risk assessments; However, all these systems indicate the range of investment grade ratings (e.B BBB-AAA or Baa-Aaa in the examples in this section) and allow an assessment of the relative risk associated with a particular institution. If the Client becomes aware that a financial institution`s rating has fallen below the investment grade level, the Agent shall give the Contractor 30 days to replace an acceptable ILC, relying on the ILC using the draft view in paragraph (g) of the clause at 52.228-14. h) A copy of the Uniform Customs and Practices (UCP) for Documentary Credits, 2007 Edition, International Chamber of Commerce Publication No. 600, is available from: ICC Books USA, 1212 Avenue of the Americas, 21 st Floor, New York, NY 10036; Phone: 212-703-5078; Fax: 212-391-6568; Email: iccbooks@uscib.org; Via the Internet to the following address: www.uscib.org/ucp-600-ud-4465/. 28.204-4 Contractual clause. Include the clause under 52.228-14, Irrevocable Letter of Credit, in requests and contracts for services, supplies or construction if a quote guarantee or performance guarantees or performance and payment guarantees are required. 28,100 Scope of the paragraph. This subsection sets out the requirements and procedures for the use of debt instruments, alternative payment protection measures and all types of tender guarantees. 28,101 offer guarantees.
28.101-1 Terms of Use. (a) An agent does not require an offer guarantee unless a performance guarantee or a performance and payment guarantee is also required (see 28.102 and 28.103). Subject to the provisions of point (c) of this Subsection, offer guarantees shall be required whenever a performance guarantee or a performance and payment guarantee is required. (b) All types of tender guarantees are permitted for supply or service contracts (see annual tendering obligations and annual performance guarantees in section 28.001). In the context of works contracts, only separate offer guarantees are accepted. Agencies may stipulate that only separate bid bonds are permitted under construction contracts. (c) The head of the procuring entity may waive the obligation to obtain a tender guarantee if a performance guarantee or a performance and payment guarantee is required, if it is determined that a tender guarantee for a particular acquisition (. B for example, construction abroad, emergency procurement, individual source contracts) is not in the best interest of the government. Group waivers may be approved by the agency`s director or agent. 28.101-2 Solicitation provision or contractual clause. (a) In invitations or contracts requiring quotation or similar warranty, the Contractor shall insert a provision or clause substantially equivalent to the provision of Article 52.228(1), Warranty Offer.
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