FEDERAL CLAIMS COURT UPHOLDS TERMINATION FOR DEFAULT FOR FAILURE TO MAINTAIN AN ADEQUATE PAYMENT BOND
publication date: Jan 25, 2004
By Lawrence E. Conley, AIA, Esq.
When the surety became insolvent, the contractor on a Corps of Engineers project did not take steps to obtain a payment bond. The contractor was terminated for default. Its multiple defenses, including its assertion that the reinsurance covered both performance and payment bonds, was insufficient to overturn the termination.
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