
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC694a]

 
                      TITLE 15--COMMERCE AND TRADE
 
             CHAPTER 14B--SMALL BUSINESS INVESTMENT PROGRAM
 
                       SUBCHAPTER IV-A--GUARANTEES
 
                     Part B--Surety Bond Guarantees
 
Sec. 694a. Definitions

    As used in this part--
    (1) The term ``bid bond'' means a bond conditioned upon the bidder 
on a contract entering into the contract, if he receives the award 
thereof, and furnishing the prescribed payment bond and performance 
bond.
    (2) The term ``payment bond'' means a bond conditioned upon the 
payment by the principal of money to persons under contract with him.
    (3) The term ``performance bond'' means a bond conditioned upon the 
completion by the principal of a contract in accordance with its terms.
    (4) The term ``surety'' means the person who (A) under the terms of 
a bid bond, undertakes to pay a sum of money to the obligee in the event 
the principal breaches the conditions of the bond, (B) under the terms 
of a performance bond, undertakes to incur the cost of fulfilling the 
terms of a contract in the event the principal breaches the conditions 
of the contract, (C) under the terms of a payment bond, undertakes to 
make payment to all persons supplying labor and material in the 
prosecution of the work provided for in the contract if the principal 
fails to make prompt payment, or (D) is an agent, independent agent, 
underwriter, or any other company or individual empowered to act on 
behalf of such person.
    (5) The term ``obligee'' means (A) in the case of a bid bond, the 
person requesting bids for the performance of a contract, or (B) in the 
case of a payment bond or performance bond, the person who has 
contracted with a principal for the completion of the contract and to 
whom the obligation of the surety runs in the event of a breach by the 
principal of the conditions of a payment bond or performance bond.
    (6) The term ``principal'' means (A) in the case of a bid bond, a 
person bidding for the award of a contract, or (B) the person primarily 
liable to complete a contract for the obligee, or to make payments to 
other persons in respect of such contract, and for whose performance of 
his obligation the surety is bound under the terms of a payment or 
performance bond. A principal may be a prime contractor or a 
subcontractor.
    (7) The term ``prime contractor'' means the person with whom the 
obligee has contracted to perform the contract.
    (8) The term ``subcontractor'' means a person who has contracted 
with a prime contractor or with another subcontractor to perform a 
contract.

(Pub. L. 85-699, title IV, Sec. 410, as added Pub. L. 91-609, title IX, 
Sec. 911(a)(4), Dec. 31, 1970, 84 Stat. 1812; amended Pub. L. 95-507, 
title I, Sec. 110, Oct. 24, 1978, 92 Stat. 1758.)


                               Amendments

    1978--Par. (4)(D). Pub. L. 95-507 added cl. (D).


    Technical Assistance in Connection with Construction Contracts; 
                     Authorization of Appropriations

    Section 911(b) of Pub. L. 91-609 authorized the Secretary of Housing 
and Urban Development to take such steps and carry out such activities 
as he determined to be necessary or desirable to provide, either 
directly or by contract or other arrangement, technical assistance to 
any contractor or subcontractor for whom a bid, payment, or performance 
bond is guaranteed under part B of title IV of the Small Business 
Investment Act of 1958 [this part] in connection with any construction 
contract, in order to assist such contractor or subcontractor in 
obtaining or carrying out such contract, and authorized to be 
appropriated for each of the first three fiscal years ending after the 
date of the enactment of this Act [Dec. 31, 1970] such sums, not to 
exceed $1,500,000, as were necessary to enable the Secretary to carry 
out his functions under paragraph (1).

                  Section Referred to in Other Sections

    This section is referred to in title 25 section 1452.
