Surety Bond Quarterly - Summer 2017 - 30

* Any other information or documentation required by the contract.
52.232-27(a)(2).
If the invoice is not proper or does
not contain the required information, the government does not have
an  obligation to pay the invoice;
and  the interest clock does not
begin  to run. Thus, the contractor must focus on submitting an
accurate payment application complying with the requirements of
the contract.

If payment is late, the government
should automatically add interest. If
it does not, the contractor needs to
provide notice of the lack of interest
and pursue the issue.
The government typically does
not withhold retainage. However, if
the contractor is not achieving satisfactory progress, the government
may withhold up to 10% retainage.
FAR 32.103; FAR 52.232-5(e). The government also can withhold retainage
for cause, including defective work

OVER
IN SURETY

and the failure to provide sufficient
supporting data and schedules.
Billing for Bond Premiums
The FAR specifically addresses
billing for bond premiums. It does
not allow the contractor to bill for
those premiums until the contractor has made payment to the surety.
FAR 52.232-5(g). All too often, the
contractor bills the bond premiums
as part of mobilization before it actually pays the surety, which is a violation of the FAR and can lead to false
claim allegations. This is also true
on the bond premiums included in
changes to the work. Typically, the
surety does a true-up at the end of
the job and collects the additional
bond premiums for increases in the
contract price. As a result, the contractor should not bill the bond premiums on change order work until
the end of the job when it makes the
payment to the surety.
Read the second part of this article in the fall issue of Surety Bond
Quarterly.
●
Adrian L. Bastianelli, III is a partner in
Peckar & Abramson's Washington, DC
office. He has devoted his practice to
construction claims and litigation for
40 years, handling numerous large
surety bond cases. He has an active
alternative dispute resolution practice
having served as an arbitrator, mediator, and DRB member on over 500 disputes. Bastianelli serves on the NASBP
Attorney Advisory Council. He can be
reached at abastianelli@pecklaw.com
or 202.457.4036.

THE STRENGTH OF ARCH

www.archinsurance.com

®

A.M. Best: "A+" Standard & Poor's: "A+"

Insurance coverage is underwritten by one or more member companies of Arch Insurance Group in North America, which consists of (1) Arch Insurance Company (a Missouri corporation,
NAIC # 11150) with admitted assets of $3.62 billion, total liabilities of $2.74 billion and surplus to policyholders of $875.31 million, (2) Arch Specialty Insurance Company (a Missouri corporation, NAIC #21199) with admitted assets of $515.45 million, total liabilities of $215.49 million and surplus to policyholders of $299.96 million, (3) Arch Excess & Surplus Insurance Company
(a Missouri corporation, NAIC # 10946) with admitted assets of $65.14 million, total liabilities of $328,448 and surplus to policyholders of $64.82 million and (4) Arch Indemnity Insurance
Company (a Missouri corporation, NAIC# 30830) with admitted assets of $62.28 million, total liabilities of $35.63 million and surplus to policyholders of $27.05 million. All figures are as
shown in each entity's respective Quarterly Statement for the quarter ended June 30, 2016. Executive offices are located at One Liberty Plaza, New York, NY 10006. Not all insurance coverages
or products are available in all jurisdictions. Coverage is subject to actual policy language. This information is intended for use by licensed insurance producers. © Arch Insurance Group 2016

30

SURETY
826629_Arch.indd
1

BOND QUARTERLY | SUMMER 2017

Lori Ann Lange, a partner in the
Washington, DC office of the law firm
of Peckar & Abramson, P.C. specializes in government contract law, bid
protests, and corporate compliance
counseling. She represents a range
of government contractors, including construction contractors, major
defense contractors, informational
technology contractors, and service
contractors. She can be reached at
llange@pecklaw.com or 202.293.8815
ext. 7103.

24/08/16 11:36 PM


http://www.archinsurance.com http://www.archinsurance.com

Table of Contents for the Digital Edition of Surety Bond Quarterly - Summer 2017

NASBP Upcoming Meetings & Events
2017–2018 Executive Committee
From the CEO: Bringing Summer Heat: A Rundown of “Hot” Stuff in the Evolving World Surrounding Surety
Howard Cowan—Building on a Solid Foundation
Mitigating the Hidden Risks in the “New Normal” Construction Environment
Acting Director of the U.S. SBA Office of Surety Guarantees
Drones Take Flight in the Construction Industry
2017 AIA Contract Documents: Selected Key Changes
NASBP to Release Continuing Education Course: Joint Ventures in Construction
How Can Construction Contractors Expedite Payment on Federal Contracts?
Insurtech for Surety: The Future Is Closer than You Think!
Index to Advertisers
Surety Bond Quarterly - Summer 2017 - Intro
Surety Bond Quarterly - Summer 2017 - cover1
Surety Bond Quarterly - Summer 2017 - cover2
Surety Bond Quarterly - Summer 2017 - 3
Surety Bond Quarterly - Summer 2017 - 4
Surety Bond Quarterly - Summer 2017 - 5
Surety Bond Quarterly - Summer 2017 - 6
Surety Bond Quarterly - Summer 2017 - 2017–2018 Executive Committee
Surety Bond Quarterly - Summer 2017 - 8
Surety Bond Quarterly - Summer 2017 - From the CEO: Bringing Summer Heat: A Rundown of “Hot” Stuff in the Evolving World Surrounding Surety
Surety Bond Quarterly - Summer 2017 - Howard Cowan—Building on a Solid Foundation
Surety Bond Quarterly - Summer 2017 - 11
Surety Bond Quarterly - Summer 2017 - Mitigating the Hidden Risks in the “New Normal” Construction Environment
Surety Bond Quarterly - Summer 2017 - 13
Surety Bond Quarterly - Summer 2017 - 14
Surety Bond Quarterly - Summer 2017 - 15
Surety Bond Quarterly - Summer 2017 - 16
Surety Bond Quarterly - Summer 2017 - 17
Surety Bond Quarterly - Summer 2017 - 18
Surety Bond Quarterly - Summer 2017 - 19
Surety Bond Quarterly - Summer 2017 - Acting Director of the U.S. SBA Office of Surety Guarantees
Surety Bond Quarterly - Summer 2017 - 21
Surety Bond Quarterly - Summer 2017 - Drones Take Flight in the Construction Industry
Surety Bond Quarterly - Summer 2017 - 23
Surety Bond Quarterly - Summer 2017 - 2017 AIA Contract Documents: Selected Key Changes
Surety Bond Quarterly - Summer 2017 - 25
Surety Bond Quarterly - Summer 2017 - 26
Surety Bond Quarterly - Summer 2017 - NASBP to Release Continuing Education Course: Joint Ventures in Construction
Surety Bond Quarterly - Summer 2017 - How Can Construction Contractors Expedite Payment on Federal Contracts?
Surety Bond Quarterly - Summer 2017 - 29
Surety Bond Quarterly - Summer 2017 - 30
Surety Bond Quarterly - Summer 2017 - 31
Surety Bond Quarterly - Summer 2017 - Insurtech for Surety: The Future Is Closer than You Think!
Surety Bond Quarterly - Summer 2017 - 33
Surety Bond Quarterly - Summer 2017 - Index to Advertisers
Surety Bond Quarterly - Summer 2017 - cover3
Surety Bond Quarterly - Summer 2017 - cover4
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