Bonding costs.

Federal Acquisition Regulations System 1 2023-10-01 2023-10-01 false Bonding costs. 31.205-4 Section 31.205-4 Federal Acquisition Regulations System FEDERAL ACQUISITION REGULATION GENERAL CONTRACTING REQUIREMENTS CONTRACT COST PRINCIPLES AND PROCEDURES Contracts With Commercial Organizations 31.205–4 Bonding costs. (a) Bonding costs arise when the Government requires assurance against financial loss to itself or others by reason of the act or default of the contractor. They arise also in instances where the contractor requires similar assurance. Included are such bonds as bid, performance, payment, advance payment, infringement, and fidelity bonds. (b) Costs of bonding required pursuant to the terms of the contract are allowable. (c) Costs of bonding required by the contractor in the general conduct of its business are allowable to the extent that such bonding is in accordance with sound business practice and the rates and premiums are reasonable under the circumstances.