C.F.R. » Title 48 » CHAPTER 1—FEDERAL ACQUISITION REGULATION › SUBCHAPTER E—GENERAL CONTRACTING REQUIREMENTS › PART 28—BONDS AND INSURANCE › Subpart 28.1—Bonds and Other Financial Protections

48 C.F.R. § 28.106-7

28.106-7 Withholding contract payments.

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(a) During contract performance, agencies shall not withhold payments due contractors or assignees because subcontractors or suppliers have not been paid.

(b) If, after completion of the contract work, the Government receives written notice from the surety regarding the contractor's failure to meet its obligation to its subcontractors or suppliers, the contracting officer shall withhold final payment. However, the surety must agree to hold the Government harmless from any liability resulting from withholding the final payment. The contracting officer will authorize final payment upon agreement between the contractor and surety or upon a judicial determination of the rights of the parties.

(c) For any withholding incident to the labor standards provisions of the contract, see part 22.

Notes of Decisions
Cited in 1 case, 1988–1988 · leading case: Reliance Insurance v. United States
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Reliance Insurance v. United States (1988) cc “Valley Bank, the contract assignee, claims that under applicable Federal Acquisition Regulations (FAR), 48 CFR 28.106-7, the contracting officer was required to pay the disputed contract funds to the contractor’s assignee because the contract was being performed when it sent the…”
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