Public works bonds: which ones your contract needs
Federal construction bonds by contract size, the bid guarantee, and where the premium goes in your bid.
Source: FAR 28.102-1 General. (48 CFR) (eCFR, current as of 2026-11-10)
On federal construction, the bonds statute (formerly the Miller Act)
requires performance and payment bonds over $150,000, each normally 100% of the contract price.
Between $35,000 and $150,000 the contracting officer picks two or more payment protections.
A bid guarantee is required whenever a performance bond is.
- FAR text quoted word for word
- eCFR as of 2026-11-10
- State Little Miller Acts: being verified one by one
Check a contract size
What the rule says
“requires performance and payment bonds for any construction contract exceeding $150,000”
FAR 28.102-1 General. (48 CFR) · eCFR, current as of 2026-11-10
“for construction contracts greater than $35,000, but not greater than $150,000,
the contracting officer shall select two or more of the following payment protections”
FAR 28.102-1 General. (48 CFR) · eCFR, current as of 2026-11-10
“100 percent of the original contract price”
FAR 28.102-2 Amount required. (48 CFR) · eCFR, current as of 2026-11-10
“The bid guarantee amount shall be at least 20 percent of the bid price but shall not exceed $3
million.”
FAR 28.101-2 Solicitation provision or contract clause. (48 CFR) · eCFR, current as of 2026-11-10
“The chief of the contracting office may waive the requirement to obtain a bid guarantee when a
performance bond or a performance and payment bond is required if it is determined that a bid
guarantee is not in the best interest of the Government for a specific acquisition (e.g.,
overseas construction, emergency acquisitions, sole-source contracts).”
FAR 28.101-1 Policy on use. (48 CFR) · eCFR, current as of 2026-11-10
Between $35,000 and $150,000
| Payment protection (FAR 28.102-1(b)(1)) | What you hand in |
|---|---|
| Payment bond | A surety bond for the subcontractors and suppliers (premium quoted by your surety) |
| Irrevocable letter of credit | A bank letter of credit; the FAR asks the officer to give it particular consideration |
| Tripartite escrow agreement | An escrow account with a federally insured bank that pays labor and suppliers |
| Certificates of deposit | Certificates of deposit from a federally insured bank, deposited with the contracting officer |
| Deposit of security | Securities of the types listed in FAR 28.204-1 and 28.204-2 |
The contracting officer picks two or more of these; you furnish one.
No bid guarantee is required in this band, because there is no performance bond (FAR 28.101-1(a)).
What bonds cost in your bid
The premium is a private price quoted by your surety; no official table sets it, so we don't invent one.
The bond premium estimator turns your surety's rate into dollars,
and the bid cost calculator adds it to wages and fringe.
The bid guarantee is not a cost you carry; the bid bond guide shows how to size it.
“The contractor shall furnish all bonds or alternative payment protection,
including any necessary reinsurance agreements,
before receiving a notice to proceed with the work or being allowed to start work.”
FAR 28.102-1 General. (48 CFR) · eCFR, current as of 2026-11-10
Guides and tools
Miller Act: payment and performance bonds
Thresholds and the alternatives under $150,000.
Bid bond: how much and when
20% of the bid, capped at $3 million.
Bid cost calculator
Add the bond premium to wages and fringe in one number.
Sources
- FAR 28.101-2, FAR 28.102-1, FAR 28.102-2 (48 CFR) — eCFR, current as of 2026-11-10