Just as with my Quick Hitters on the FAR and GSAR, my Quick Hitter series on the DFARS is meant to simplify contracting business with the government. This time with DoD.
DFARS Part 228 Bonds & Insurance
DFARS 228.102 Performance And Payment Bonds & Alternative Payment Structures For Construction Contracts
The overarching premise is the same for DoD as with other agencies. They require certainty that construction companies possess the funds to pay for materials up front, obtain proper insurance coverage and to compensate employees for their labor skills and time spent as well as a display of comparable past performance. In the construction arena this is shown through acquiring payment and performance bonds.
DoD waives bonds for cost-reimbursement contracts (DFARS 228.102-1). This is because the aWardee assumes all of the responsibility upfront, and the government simply reimburses them for their action which includes an agreed to profit margin. This act is specific to DoD construction contracts.
DFARS 228.304 Risk Pooling Arrangements
DoD possesses the right to offer liability insurance when they are able to offer a plan more advantageous than what is available commercially. This is done through their National Defense Projects Rating Plan or the Special Casualties Insurance Rating Plan. In affect, DoD has the capability to act as their own insurance company on their own projects. Such is another example that speaks to their trustworthiness worldwide inside the contracting arena.
DoD plays by different rules. Because they have to and they can. Don’t worry. They can be trusted. If you trust are armed forces to protect and serve our country then you must trust their prowess at the business table. After all, they take the same ethical approach to both duties.
I’m not as familiar with bonds in the construction arena as I am with insurance policies. I worked in Services for seven years and there aren’t many types of policies and binders that I haven’t seen. Often times, you must trust your CO over your preparer. However, that’s where the advantage of a consultant comes in. They can be a sounding board and give you answers in a manner that your CO may not be able to, or may not have the time to.
If you think I can help you then email nicholas.s.robertson@outlook.com for your introductory email and free consultation. 
RobertsonKX Business Blog 