Common use of Subcontractor Bonds Clause in Contracts

Subcontractor Bonds. 2.26.1 If required by the Subcontract Agreement or the Subcontract Work Order, the Subcontractor shall furnish to the Contractor, as the named Obligee, appropriate surety bonds to secure the faithful performance of the Subcontract Work and to satisfy all Subcontractor payment obligations related to Subcontract Work. 2.26.2 If a performance or payment bond, or both, are required of the Subcontractor under this Agreement, the bonds shall be in a form and by a surety mutually agreeable to the Contractor and Subcontractor, and in the full amount of the Subcontract, unless otherwise specified. If payment and performance bonds are required of the Subcontractor, said bonds shall be from a surety company listed in the latest edition of the Federal Register as holding a certificate of authority and an underwriting limit large enough for the Project. The surety must also be licensed to do business in the State in which the project is located. 2.26.3 The Subcontractor shall be reimbursed for the cost of any required performance or payment bonds simultaneously with the first progress payment. If the Subcontract Agreement or Subcontract Work Order requires payment and performance bonds, the Subcontractor and his surety agree to increase the amount of Subcontractor's payment and performance bond by the full amount of any amendment in work scope resulting in a cost increase. If the Contract sum is increased by more than twenty percent (20%) of the original Contract sum, the Subcontractor will furnish a consent of surety to the Contractor. The Subcontractor agrees that the additional bond premium for any amendment will be included in the Contract sum increase in that amendment. 2.26.4 In the event the Subcontractor shall fail to promptly provide any required bonds, the Contractor may terminate this Agreement and enter into a subcontract for the balance of the Subcontract Work with another subcontractor. All Contractor costs and expenses incurred by the Contractor as a result of said termination shall be paid by the Subcontractor.