4357.1 The CCO has the discretion to require any types of security specified in this section for any solicitation or contract including the following:

1. (a) Bid bonds or proposal bonds;
2. (b) Performance or payment bonds for construction;
3. (c) Performance or payment bonds or other security for non-construction contracts;

4357.2 The CCO shall consider the following factors in non-construction contracts:

1. (a) Whether Library property or funds are to be provided to the contractor for use in performing the contract or as partial compensation (such as retention of salvaged material);
2. (b) When a contractor sells assets to or merges with another business entity, whether the Library (after recognizing the other entity as the successor in interest) needs assurance that it is financially capable;
3. (c) Whether substantial progress payments are to be made before delivery of end items starts;
4. (d) Whether the contract is for dismantling, demolition, or removal of improvements; or
5. (e) Any other factors which might favor the use of security instruments to protect the best interests of the Library.

4357.3 A payment security shall be required only when a performance security is required and the use of the payment security is in the best interests of the Library.

4357.4 When a security is required by the Library, the CCO may accept any of the following types of security:

1. (a) A bond provided by a surety in accordance with Section 4358;
2. (b) A certified check or irrevocable letter of credit issued by an insured financial institution in the equivalent amount of the security; or
3. (c) United States government securities that are assigned to the Library which pledge the full faith and credit of the United States.

4357.5 The CCO shall determine a contractor's responsibility even though security has been or can be obtained.

SOURCE: Final Rulemaking published at 55 DCR 493 (January 18, 2008).