Section 27-2703. PERFORMANCE AND PAYMENT SECURITY

 

2703.1The contracting officer shall require a contractor to furnish performance and payment bonds or other security on any construction contract when the District's independent estimate of the cost of the contract exceeds one hundred thousand dollars ($100,000), in accordance with the provisions of this section.

 

2703.2The contracting officer may require a contractor to furnish a payment or performance bond or other security for any construction or non-construction contract, regardless of amount, when the contracting officer determines that the security is necessary or advisable to protect the interests of the District. The security shall be furnished in accordance with the provisions of this section.

 

2703.3The amount of the performance security shall be one hundred percent (100%) of the original contract price, unless the contracting officer determines that a lesser amount or percentage would be adequate for the protection of the District. The contracting officer shall state the amount or percentage in the solicitation.

 

2703.4The contracting officer shall require additional performance security when a contract price is increased. The increase in performance security shall equal one hundred percent (100%) of the increase in the contract price, unless the contracting officer determines that a lesser amount or percentage is adequate for the protection of the District.

 

2703.5The contracting officer may require additional performance security by directing a contractor to increase the original sum of the existing security or to obtain an additional security.

 

2703.6The payment security shall be in an amount of not less than fifty percent (50%) of the total amount of the contract price.

 

2703.7When a contract price is increased, the District may require additional payment security in an amount adequate to protect suppliers of labor and material. However, in no event shall the amount of payment security fall below fifty percent (50%) of the increased contract price.

 

2703.8When performance or payment security is required, the solicitation shall contain the following:

 

(a)A statement that security is required;

 

(b)The amount of the security expressed as a fixed sum or percentage of the contract price; and

 

(c)The deadline for submitting acceptable security.

 

2703.9In construction contracts, the contractor shall furnish all performance and payment bonds (or other securities) by the deadline for submitting bonds (or other securities) as stated in the solicitation. The bonds (or other securities) must be submitted before a notice to proceed is issued.

 

2703.10No performance security or payment security shall be required after the contract has been executed if it was not specifically required in the contract, except when determined necessary by the contracting officer for a contract modification.

 

2703.11If the contracting officer uses a letter contract to allow the contractor to proceed with work before execution of the definitive contract, the letter contract shall contain a clause, approved by the Director, that no payments shall be made under the letter contract until the required payment and performance securities have been received.

 

source

Final Rulemaking published at 35 DCR 1599 (February 26, 1988).