Term -Bond

Bond means a written instrument executed by a bidder or contractor (the
“principal”), and a second party (the “surety” or “sureties”) (except
as provided in 28.204), to assure fulfillment of the principal’s
obligations to a third party (the “obligee” or “Government”),
identified in the bond. If the principal’s obligations are not met, the
bond assures payment, to the extent stipulated, of any loss sustained
by the obligee. The types of bonds and related documents are as
follows:

    (1) An advance payment bond secures
fulfillment of the contractor’s obligations under an advance payment
provision.

    (2) An annual bid bond is a single bond
furnished by a bidder, in lieu of separate bonds, which secure all bids
(on other than construction contracts) requiring bonds submitted during
a specific Government fiscal year.

    (3) An annual performance bond is a
single bond furnished by a contractor, in lieu of separate performance
bonds, to secure fulfillment of the contractor’s obligations under
contracts (other than construction contracts) requiring bonds entered
into during a specific Government fiscal year.

    (4) A patent infringement bond secures
fulfillment of the contractor’s obligations under a patent provision.

    (5) A payment bond assures payments as
required by law to all persons supplying labor or material in the
prosecution of the work provided for in the contract.

    (6) A performance bond secures
performance and fulfillment of the contractor’s obligations under the
contract.

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