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MEMORANDUM FOR: Heads of the Contracting Activities FROM: (Integrated Acquisition Environment)

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U.S. Department of Homeland Security

Washington, DC 20528

Page 1 of 13

MEMORANDUM FOR: Heads of the Contracting Activities

FROM: Soraya Correa

Chief Procurement Officer

SUBJECT: Federal Acquisition Regulation (FAR) Class Deviation (Number

20-06) – Eliminate hard copy original documents, signatures,

notarization, seals on bonds and other seals for certain contract

requirements (FAR 28, 32.8, and 42)

Purpose: This class deviation is issued in accordance with Federal Acquisition Regulation

(FAR) 1.404 to implement CAAC letter 2020-04 allowing agencies to authorize a class deviation

in response to the Coronavirus 2019 (COVID-19) national emergency.

Effective Date: Immediately.

Background: On May 1, 2019, CAAC Letter 2020-04, Class Deviation from the FAR

eliminating hard copy original documents, signatures, notarization, seals on bonds and other

seals for certain contract requirements was issued and serves as consultation to agencies in

accordance with FAR 1.404. CAAC Letter 2020-04 authorizes the Department of Homeland

Security (DHS) to issue this class deviation.

This class deviation is issued to allow greater flexibility by eliminating the requirement for hard

copy original documents, original signatures, notarization, seals on bonds and other seals that

may create a challenge for the acquisition workforce to obtain as a result of the current COVID-

19 pandemic. Social distancing policies and shelter-in-place orders to prevent the spread of

COVID-19 have forced public and private sector employees to work from home which makes it

difficult for notaries to be present to witness oaths and affirmations as well as physically affix

their signature and notary stamp on documents. Equally difficult is for vendors and sureties to

produce manual signatures and provide their seals on bonds.

In addition, the importance of original and notarized documents has dwindled in this

electronic age. Currently, FAR 2.101 defines “signature” or “signed” to include electronic

signatures, and FAR 4.502(d) expressly authorizes agencies to “accept electronic signatures

and records in connection with government contracts.”

Contracting officers shall use the following changes in accordance with this

class deviation:

• When obtaining financial protection against losses under contracts per FAR 28:

o 28.101-3(c) allowing the use of electronic means is moved to an added section

at 28.002 to apply the same flexibilities to all of part 28;

o 28.106-1 adding an exception to stamping a corporate seal on bonds;

o 28.106-8 allowing a signed statement by the contractor that the payment is due

SORAYA

CORREA

Digitally signed by SORAYA

CORREA

Date: 2020.05.14 16:24:14

-04'00'

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Page 2 of 13

and owed;

o 28.203(b) not requiring the Standard Form 28 to be sworn and notarized;

o 28.203-5 allowing a written authorization of the release signed by the

surety saying that it approves of such release;

o 52.228-11, Pledges of Assets (Aug 2018)(DEVIATION MAY 2020), not

requiring the Standard Form 28 to be sworn and notarized, in place of

52.228-11, Pledges of Assets (Aug 2018);

o 52.228-15, Performance and Payment Bonds—Construction (OCT

2010)(DEVIATION MAY 2020), not requiring the seal when executing the

standard forms required by the clause; and

o 52.228-16, Performance and Payment Bonds—Other than Construction

(NOV 2006)(DEVIATION MAY 2020), not requiring the seal when

executing the standard forms required by the clause.

• When processing assignment of claims per FAR subpart 32.8:

o 32.802(e) allowing the use of a copy of the assignment instrument; and

o 32.805(a), (b), (c), and (e) allowing the use of electronically signed documents

and a copy of the assignment instrument.

• When executing novation agreements and change-of-name agreements per FAR 42:

o 42.1204(f) allowing the use of a copy of the documents;

o 42.1204(i) not requiring a seal on the Novation Agreement; and

o 42.1205(b) not requiring a seal on the Change-of-Name Agreement.

Requirement: DHS contracting officers shall insert the clauses as advised in Attachment 1

in all solicitations and contracts that are issued and awarded on or after the issuance date of

this class deviation when contracting officers are obtaining financial protection against losses

under contracts per FAR 28, when processing assignment of claims per FAR subpart 32.8, or

executing novation agreements and change-of- name agreements per FAR 42. Solicitations

issued on or after the issuance date of this class deviation shall be amended to include the

modified clauses in the situations mentioned above.

The following are the modified clauses that can be found in Attachment 1:

• 52.228-11, Pledges of Assets (Aug 2018)(DEVIATION MAY 2020);

• 52.228-15, Performance and Payment Bonds—Construction (OCT

2010)(DEVIATION MAY 2020); and

• 52.228-16, Performance and Payment Bonds—Other than Construction (NOV

2006)(DEVIATION MAY 2020).

Applicability: This class deviation is applicable to: (1) all solicitations and contracts, as

defined in FAR 2.101, that are issued and awarded on or after the issuance date of this class

deviation when contracting officers are obtaining financial protection against losses under

contracts per FAR 28, when processing assignment of claims per FAR subpart 32.8, or

executing novation agreements and change-of- name agreements per FAR 42; and (2)

solicitations issued on or after the issuance date of this class deviation shall be amended to

include the modified clauses in the situations mentioned above.

Page 3 of 13

Expiration Date: DHS will consider whether to cancel the deviation after the COVID-19

emergency passes.

Additional Information: In order to provide access to clauses in Component Contract Writing

Systems (CWS), Component Acquisition Policy Chiefs should coordinate with the appropriate

Component CWS personnel to determine if the addition of the updated clauses to their CWS is

possible.

Attachments:

Attachment 1: Conformed FAR Deviation Text and Updated Full Text Clauses

Attachment 2: CAAC letter 2020-04 Class Deviation from the FAR to eliminate hard copy

original documents, signatures, notarization, seals on bonds and other seals for certain contract

requirements

Questions or comments about this class deviation may be directed to Joanne Battaglia at (202)

893-0607 or Joanne.Battaglia@hq.dhs.gov.

Page 4 of 13

Attachment 1

Conformed FAR Deviation Text and Updated Full Text Clauses

FEDERAL ACQUISITION REGULATION

PART 28- BONDS AND INSURANCE

28.002 Policy.

For purposes of this part, electronic signatures and electronic, mechanically-applied, or printed

dates may be used and shall be considered original signatures and dates, without regard to the

order in which they were affixed.

SUBPART 28.1—BONDS AND OTHER FINANCIAL PROTECTIONS

28.106 Administration.

28.106-1 Bonds and bond-related forms.

The following Standard Forms (SF’s) and Optional Forms (OF’s), shall be used, except in foreign

countries, when a bid bond, performance or payment bond, or an individual surety is required.

The bond forms shall be used as indicated in the instruction portion of each form, except that a seal

is not required. For SF 28 also see 28.203(b).

28.106-8 Payment to subcontractors or suppliers.

The contracting officer will only authorize payment to subcontractors or suppliers from an ILC (or

any other cash equivalent security) upon a judicial determination of the rights of the parties, a

signed statement by the contractor that the payment is due and owed, or a signed agreement

between the parties as to amount due and owed.

SUBPART 28.2 – SURETIES AND OTHER SECURITY FOR BONDS

28.203 Acceptability of individual sureties.

(b) An individual surety must execute the bond, and the unencumbered value of the

assets (exclusive of all outstanding pledges for other bond obligations) pledged by the

individual surety, must equal or exceed the penal amount of each bond. The individual surety

shall provide a security interest in accordance with 28.203-1 and execute the Standard Form 28,

except that the words “being duly sworn, depose and say” on the Standard Form 28 are

replaced with the word “affirm” and such Standard Form 28 is not required to be sworn and

notarized. One individual surety is adequate support for a bond, provided the unencumbered

value of the assets pledged by that individual surety equal or exceed the amount of the bond.

Page 5 of 13

An offeror may submit up to three individual sureties for each bond, in which case the pledged

assets, when combined, must equal or exceed the penal amount of the bond. Each individual

must accept both joint and several liability to the extent of the penal amount of the bond.

28.203-5 Release of Lien.

(a) After consultation with legal counsel, the contracting officer shall release the

security interest on the individual surety’s assets using the Optional Form 90, Release of Lien

on Real Property, or Optional Form 91, Release of Personal Property from Escrow, or a similar

release as soon as possible consistent with the conditions in subparagraphs (a)(1) and (2) of this

subsection. A surety’s assets pledged in support of a payment bond may be released to a

subcontractor or supplier upon Government receipt of a Federal district court judgment, or a

sworn statement by the subcontractor or supplier that the claim is correct along with a written

authorization of the release signed by the surety saying that it approves of such release.

PART 32- CONTRACT FINANCING

SUBPART 32.8- ASSIGNMENT OF CLAIMS

32.802 Conditions.

(e) The assignee sends a written notice of assignment together with a copy of

the assignment instrument to the—

(1) Contracting officer or the agency head;

(2) Surety on any bond applicable to the contract; and

(3) Disbursing officer designated in the contract to make payment.

32.805 Procedure.

(a) Assignments.

(1) Assignments by corporations shall be-

(i) Signed by an authorized representative;

(ii) Signed by the secretary or the assistant secretary of the corporation; and

(iii) Accompanied by a copy of the resolution of the corporation’s board of

directors authorizing the signing representative to sign the assignment.

(3) Assignments by an individual shall be signed by that individual.

Page 6 of 13

(b) Filing. The assignee shall forward by email or other electronic means the

notice of assignment and a copy of the instrument of assignment to each party specified in

32.802(e).

an assignee in providing the notice of assignment required by 32.802(e).

Notice of Assignment

To: [Name, address and email address for one of the parties specified in

32.802(e)].

This has reference to Contract No.___________________dated_____________, entered

into between [Contractor’s name and address] and

[Government agency, name of office, and address], for

[Describe nature of the contract].

Monies due or to become due under the contract described above have been assigned to the

undersigned under the provisions of the Assignment of Claims Act of1940, as amended, (31

U.S.C. 3727, 41 U.S.C.6305).

A copy of the instrument of assignment executed by the Contractor on [Date], is

attached to this notice.

Payments due or to become due under this contract should be made to the undersigned

assignee.

Please acknowledge receipt on behalf of the addressee by return email or other

electronic means to the undersigned.

Very truly yours,

[Name of Assignee]

By [Signature of Signing Officer]

[Title of Signing Officer]

[Address of Assignee]

[Email Address of Assignee]

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Page 7 of 13

(e) Release of assignment.

(2) The assignee, under a further assignment or reassignment, in order to

establish a right to receive payment from the Government, must send to the

addressees listed in 32.802(e) a-

(i) Written notice of release of the contractor by the assigning financing

institution;

(ii) Copy of the release instrument;

(iii) Written notice of the further assignment or reassignment; and

(iv) Copy of the further assignment or reassignment instrument.

(3) If the assignee releases the contractor from an assignment of claims

under a contract, the contractor, in order to establish a right to receive payment of the

balance due under the contract, must send a written notice of release together with a

copy of the release of assignment instrument to the addressees noted in 32.802(e).

PART 42—CONTRACT ADMINISTRATION AND AUDIT SERVICES

SUBPART 42.12—NOVATION AND CHANGE-OF-NAME AGREEMENTS

42.1204 Applicability of novation agreements.

(f) Except as provided in paragraph (g) of this section, the contractor shall submit to

the responsible contracting officer one copy of each of the following documents, as

applicable, as the documents become available:

(1) A copy of the instrument effecting the transfer of assets; e.g., bill of

sale, certificate of merger, contract, deed, agreement, or court decree.

(2) A copy of each resolution of the corporate parties’ boards of directors

authorizing the transfer of assets.

(3) A copy of the minutes of each corporate party’s stockholder meeting

necessary to approve the transfer of assets.

(4) A copy of the transferee’s certificate and articles of incorporation, if a

corporation was formed for the purpose of receiving the assets

involved in performing the Government contracts.

(i) The responsible contracting officer shall use the following format for

agreements when the transferor and transferee are corporations and all

the transferor's assets are transferred. This format may be adapted to fit

specific cases and may be used as a guide in preparing similar

Page 8 of 13

agreements for other situations.

NOVATION AGREEMENT

(b)

(9) The contracts shall remain in full force and effect, except as modified by

this Agreement. Each party has executed this Agreement as of the day and

year first above written.

UNITED STATES OF AMERICA,

By Title

ABC Corporation,

By Title

XYZ Corporation,

By Title

CERTIFICATE

I, , certify that I am the Secretary of ABC Corporation, that

, who signed this Agreement for this corporation, was then

of this corporation; and that this

Agreement was duly signed for and on behalf of this corporation by authority of its

governing body and within the scope of its corporate powers.

Witness my hand this day of 20 .

CERTIFICATE

I, , certify that I am the Secretary of XYZ Corporation, that

, who signed this Agreement for this corporation, was then

of this corporation; and that this

Agreement was duly signed for and on behalf of this corporation by authority of its

governing body and within the scope of its corporate powers.

Witness my hand this day of 20 .

Page 9 of 13

42.1205 Agreement to recognize contractor’s change of name.

(b)

CHANGE-OF-NAME AGREEMENT

(b) In consideration of these facts, the parties agree that-

(1) The contracts covered by this Agreement are amended by substituting

the name “ABC Corporation” for the name “XYZ Corporation”

wherever it appears in the contracts; and

(2) Each party has executed this Agreement as of the day and year first

above written.

UNITED STATES OF AMERICA,

By Title

ABC CORPORATION,

By Title

CERTIFICATE

I, , certify that I am the Secretary of ABC Corporation; that

, who signed this Agreement for this corporation, was then

of this corporation; and that this

Agreement was duly signed for and on behalf of this corporation by authority of its

governing body and within the scope of its corporate powers.

Witness my hand this day of 20 .

PART 52 – SOLICITATION PROVISIONS AND CONTRACT CLAUSES

52.228-11 Pledges of Assets.

As prescribed in 28.203-6, insert the following clause:

PLEDGES OF ASSETS (AUG 2018) (DEVIATION (MAY 2020))

(a) Offerors shall obtain from each person acting as an individual surety on a

bid guarantee, a performance bond, or a payment bond—

Page 10 of 13

(1) Pledge of assets; and

(2) Standard Form 28, Affidavit of Individual Surety, except that the words

“being duly sworn, depose and say” on the Standard Form 28 are replaced

with the word “affirm” and the Standard Form 28 is not required to be

sworn and notarized in block 12.

(b) Pledges of assets from each person acting as an individual

surety shall be in the form of—

(1) Evidence of an escrow account containing cash, certificates of deposit,

commercial or Government securities, or other assets described in FAR

28.203-2 (except see 28.203- 2(b)(2) with respect to Government

securities held in book entry form); and/or

(2) A recorded lien on real estate. The offeror will be required to

provide—

(i) A mortgagee title insurance policy, in an insurance amount equal

to the amount of the lien, or other evidence of title that is

consistent with the requirements of Section 2 of the United States

Department of Justice Title Standards at

https://www.justice.gov/enrd/page/file/922431/download. This

title evidence must show fee simple title vested in the surety along

with any concurrent owners; whether any real estate taxes are due

and payable; and any recorded encumbrances against the property,

including the lien filed in favor of the Government as required by

FAR 28.203-3(d);

(ii) Evidence of the amount due under any encumbrance shown in the

evidence of title;

(iii) A copy of the current real estate tax assessment of the property or

a current appraisal dated no earlier than 6 months prior to the date

of the bond, prepared by a professional appraiser who certifies that

the appraisal has been conducted in accordance with the

generally accepted appraisal standards as reflected in the Uniform

Standards of Professional Appraisal Practice, as promulgated by

the Appraisal Foundation.

(End of clause)

52.228-15 Performance and Payment Bonds-Construction.

As prescribed in 28.102-3(a), insert a clause substantially as follows:

PERFORMANCE AND PAYMENT BONDS-CONSTRUCTION (OCT 2010)

(DEVIATION (MAY 2020))

Page 11 of 13

(a) Definitions. As used in this clause—

Original contract price means the award price of the contract; or, for requirements

contracts, the price payable for the estimated total quantity; or, for indefinite-quantity

contracts, the price payable for the specified minimum quantity. Original contract price

does not include the price of any options, except those options exercised at the time of

contract award.

(b) Amount of required bonds. Unless the resulting contract price is $150,000 or less,

the successful offeror shall furnish performance and payment bonds to the

Contracting Officer as follows:

(2) Performance bonds (Standard Form 25, except that no seal is required).

The penal amount of performance bonds at the time of contract award

shall be 100 percent of the original contract price.

(3) Payment bonds (Standard Form 25A, except that no seal is required).

The penal amount of payment bonds at the time of contract award shall

be 100 percent of the original contract price.

(4) Additional bond protection.

(i) The Government may require additional performance and payment

bond protection if the contract price is increased. The increase in

protection generally will equal 100 percent of the increase in

contract price.

(ii) The Government may secure the additional protection by directing

the Contractor to increase the penal amount of the existing bond or

to obtain an additional bond.

including any necessary reinsurance agreements, to the Contracting Officer, within

the time period specified in the Bid Guarantee provision of the solicitation, or

otherwise specified by the Contracting Officer, but in any event, before starting

work.

(b) Surety or other security for bonds. The bonds shall be in the form of firm

commitment, supported by corporate sureties whose names appear on the list

contained in Treasury Department Circular 570, individual sureties, or by other

acceptable security such as postal money order, certified check, cashier's check,

irrevocable letter of credit, or, in accordance with Treasury Department regulations,

certain bonds or notes of the United States. Treasury Circular 570 is published in the

Federal Register or may be obtained from the U.S. Department of the Treasury,

Financial Management Service, Surety Bond Branch, 3700 East West Highway,

Room 6F01, Hyattsville, MD 20782. Or via the internet at

http://www.fms.treas.gov/c570/.

Page 12 of 13

waiver of the right to sue on the payment bond is void unless it is in writing, signed

by the person whose right is waived, and executed after such person has first

furnished labor or material for use in the performance of the contract.

(End of clause)

52.228-16 Performance and Payment Bonds-Other Than Construction.

As prescribed in 28.103-4, insert a clause substantially as follows:

PERFORMANCE AND PAYMENT BONDS-OTHER THAN CONSTRUCTION (NOV 2006)

(DEVIATION MAY 2020)

(a) Definitions. As used in this clause—

Original contract price means the award price of the contract or, for requirements

contracts, the price payable for the estimated quantity; or, for indefinite-quantity

contracts, the price payable for the specified minimum quantity. Original contract price

does not include the price of any options, except those options exercised at the time of

contract award.

(b) The Contractor shall furnish a performance bond (Standard Form 1418, except that a

seal is not required) for the protection of the Government in an amount equal to

percent of the original contract price and a payment bond Standard Form 1416, except

that a seal is not required) in an amount equal to percent of the original contract

price.

reinsurance agreements, to the Contracting Officer, within days, but in any

event, before starting work.

(d) The Government may require additional performance and payment bond protection if

the contract price is increased. The Government may secure the additional protection

by directing the Contractor to increase the penal amount of the existing bonds or to

obtain additional bonds.

(e) The bonds shall be in the form of firm commitment, supported by corporate sureties

whose names appear on the list contained in Treasury Department Circular 570,

individual sureties, or by other acceptable security such as postal money order,

certified check, cashier's check, irrevocable letter of credit, or, in accordance with

Treasury Department regulations, certain bonds or notes of the United States.

Treasury Circular 570 is published in the Federal Register, or may be obtained

from the U.S. Department of the Treasury, Financial Management Service, Surety

Bond Branch, 3700 East West Highway, Room 6F01, Hyattsville, MD 20782. Or

via the internet at http://www.fms.treas.gov/c570/.

(End of clause)

Page 13 of 13

52.228-16 Performance and Payment Bonds-Other Than Construction. ALTERNATE I

As prescribed in 28.103-4, insert a clause substantially as follows:

PERFORMANCE AND PAYMENT BONDS-OTHER THAN CONSTRUCTION (NOV 2006)

(DEVIATION (MAY 2020))

(a) Definitions. As used in this clause—

Original contract price means the award price of the contract or, for requirements

contracts, the price payable for the estimated quantity; or, for indefinite-quantity

contracts, the price payable for the specified minimum quantity. Original contract

price does not include the price of any options, except those options exercised at the

time of contract award.

(b) The Contractor shall furnish a performance bond (Standard Form 1418, except

that a seal is not required) for the protection of the Government in an amount

equal to percent of the original contract price.

reinsurance agreements, to the Contracting Officer, within days, but in any

event, before starting work.

(d) The Government may require additional performance bond protection if the contract

price is increased. The Government may secure the additional protection by

directing the Contractor to increase the penal amount of the existing bond or to

obtain an additional bond.

(e) The bonds shall be in the form of firm commitment, supported by corporate sureties

whose names appear on the list contained in Treasury Department Circular 570,

individual sureties, or by other acceptable security such as postal money order,

certified check, cashier's check, irrevocable letter of credit, or, in accordance with

Treasury Department regulations, certain bonds or notes of the United States.

Treasury Circular 570 is published in the Federal Register, or may be obtained from

the U.S. Department of the Treasury, Financial Management Service, Surety Bond

Branch, 3700 East West Highway, Room 6F01, Hyattsville, MD 20782. Or via the

internet at http://www.fms.treas.gov/c570/.

(End of clause)

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