X13 Performance Bond - Recoverable cost?

Under contract option X13 performance bond, is this a recoverable cost under an option C contract?

1 Like

In an Option C contract the Defined Cost is, essentially the Cost of Subcontractors or the cost of components of the Schedule of Cost Components. Provision of a Bond obviously isn’t a Subcontractor cost. You then turn to the Schedule of Cost Components and will fid that there is no heading in there that relates to payment of the premium on a Bond or indeed insurance etc. These premiums will be part of the Fee.

It is of course possible to amend that position with a specific provision allowing payment of the premium up front (which may be appropriate as long as it is taken into account in assessing the fee percentage).