Both bonds above $150,000
FAR 28.102-1(a), as amended through FAC 2026-01, requires a performance bond and a payment bond for any federal construction contract exceeding $150,000. Both bonds share the same threshold.
The statute, 40 U.S.C. 3131(b), still reads "more than $100,000". Contracting officers apply $150,000 because it is the inflation-adjusted threshold in FAR 28.102-1.
- The trap: $100,000 is the figure still printed in the statute and older brochures.
- Reversing the two (statute $150,000, regulation $100,000) is wrong.
- Splitting $100,000 and $150,000 by bond type is wrong.
Over $35,000 up to $150,000
Under FAR 28.102-1(b), for contracts over $35,000 up to $150,000, the contracting officer selects two or more payment protections and the contractor submits one of those selected.
Example: a $90,000 award. Full Miller Act bonds are not mandatory, but some protection is required because the price is above $35,000. The contractor picks only from the options the contracting officer selected. A letter of credit is one such alternative protection. $25,000 is an old alternative-protection floor and a common error.
Performance bond amount
FAR 28.102-2(b): the performance bond is 100% of the original contract price plus 100% of any price increase, unless the contracting officer finds a lesser amount adequate.
Worked example: original price $2,000,000, later increase $300,000. $2,000,000 + $300,000 = $2,300,000.
$2,000,000 ignores the increase, $1,150,000 applies 50%, and $2,600,000 adds the increase twice.
Payment bond amount
Also FAR 28.102-2(b): the payment bond is 100% of the original price plus 100% of increases, and it must be no less than the performance bond. A lower amount needs a written determination with specific findings that the full amount is impractical.
The traps: a 50% payment bond, a performance bond larger than the payment bond, and treating $150,000 as a cap on the bond rather than the threshold.
The only waiver ground
FAR 28.102-1(a) lets the contracting officer waive the bonds only for as much of the work as is performed in a foreign country, on a finding that furnishing a bond is impracticable, or as otherwise authorized by law. A good performance history is not a ground, and there is no $1,000,000 domestic floor.