Common use of Payment Bonds Clause in Contracts

Payment Bonds. 1. The penal amount of the labor and materials payment bonds shall equal to the full value of the contract must be furnished by the contractor to Recipient as security for payment by the Contractor and subcontractors for labor, materials, and rental of equipment. The bond may be issued by a fully qualified surety company acceptable to (Recipient) and listed as a company currently authorized under 31 C.F.R. part 223 as possessing a Certificate of Authority as described thereunder. 2. If the original Contract price is $5 million (5,000.000.) or less, the MTA may require additional protection as required by subparagraph 1, if the Contract price is increased.