3602.14 What kind of financial security does BLM require§ 3602.14 What kind of financial security does BLM require?
(a) For contracts of $2,000 or more, BLM will require a performance bond of an amount sufficient to meet the reclamation standards provided for in the contract, but at least $500. If you have a sales contract from a community pit or common use area and you pay a reclamation fee, BLM will not require you to post a performance bond.
(b) BLM may require a performance bond for contracts of less than $2,000. We will not require a bond amount greater than 20 percent of the total contract value.
(c) A performance bond may be a -
(1) Bond of a corporate surety shown on the approved list (Circular 570) issued by the U.S. Treasury Department, including surety bonds arranged or paid for by third parties;
(2) Certificate of deposit that:
(i) Is issued by a financial institution whose deposits are Federally insured;
(ii) Does not exceed the maximum insurable amount set by the Federal Deposit Insurance Corporation;
(iii) Is made payable or assigned to the United States;
(iv) Grants BLM authority to demand immediate payment if you fail to meet the terms and conditions of the contract;
(v) States that no party may redeem it before BLM approves its redemption; and
(vi) Otherwise conforms to BLM's instructions as found in the contract terms;
(3) Cash bond, with a power of attorney to BLM to convert it upon your failure to meet the terms and conditions of the contract;
(4) Irrevocable letter of credit from a bank or financial institution organized or authorized to transact business in the United States, with a power of attorney to BLM to redeem it upon your failure to meet the terms and conditions of the contract; or
(5) Negotiable Treasury bond of the United States of a par value equal to the amount of the required bond, together with a power of attorney to BLM to sell it upon your failure to meet the terms and conditions of the contract.