Reimbursements of Total Performance or Payment Bond Premiums to Contractor in First Progress Payment

On behalf of the National Research Council, GAO was asked if it would object to revising the Armed Services Procurement Regulation (ASPR) and the Federal Procurement Regulations (FPR) to authorize the consideration of paid performance bond and payment bond premiums in computing progress payments under Government contracts. Reimbursement to Government contractors of the total amount of paid performance and payment bond premiums in the first progress payment can be authorized by amending the relevant ASPR and FPR clauses. Such reimbursements are not payments for future performance, but are reimbursements to the contractor for his costs in providing a surety satisfactory to the Government as required by law and, therefore, are not prohibited.