Service Contract Bonding Under FAR Part 37
Janitorial Performance Bonds for Government Cleaning Contracts
School districts, federal agencies, and municipalities require performance bonds from cleaning contractors to guarantee custodial services will continue without interruption. If you have ever lost a bid because you could not produce a bond, this page explains how to fix that.
Which describes your situation best?
Official Federal Requirements
"Agencies shall not require performance and payment bonds for other than construction contracts. However, performance bonds may be used as permitted in FAR 28.103-2 when government property or funds are provided to the contractor, or when the contracting officer determines a bond is necessary to protect the Government's interest."Federal Acquisition Regulation • FAR 28.103-1 & 28.103-2
Official Federal Requirements
"Before any contract of more than $100,000 is awarded for the construction, alteration, or repair of any public building or public work of the Federal Government, a person must furnish to the Government a performance bond with a surety satisfactory to the officer awarding the contract."Miller Act • 40 USC 3131
Fidelity Bonds vs. Performance Bonds for Cleaning Companies
Most cleaning companies need both, but they serve entirely different purposes
Fidelity Bond (Employee Dishonesty)
Protects your client if an employee steals property while cleaning their facility. Required by most commercial clients and property managers. Does not guarantee contract completion.
Performance Bond (Contract Guarantee)
Guarantees you will complete the cleaning contract as specified. If you default, the surety pays for a replacement contractor. Required for government and school district custodial contracts.
Where Janitorial Performance Bonds Are Required
Bond requirements vary significantly by contract type and agency
School Districts
K-12 school districts are the largest buyers of outsourced custodial services. Most require performance bonds equal to 100% of the annual contract value. A $500,000 school cleaning contract means a $500,000 bond. Service Contract Act prevailing wages apply to contracts over $2,500.
Federal Buildings
GSA-managed facilities procure janitorial services under FAR Part 37. Performance bonds are not automatically required for service contracts, but contracting officers can require them under FAR 28.103-2. Contracts over $250,000 frequently include bond requirements.
Municipal Buildings
Cities and counties follow state-level "Little Miller Act" requirements. Thresholds vary: California requires bonds over $25,000 for public works; Texas over $100,000. Municipal custodial contracts for courthouses, libraries, and city halls frequently require performance bonds.
What Janitorial Performance Bonds Cost
| Contract Value | Bond Amount | Good Credit (1-3%) | Fair Credit (3-5%) | Poor Credit (5-10%) |
|---|---|---|---|---|
| $100,000 | $100,000 | $1,000-$3,000 | $3,000-$5,000 | $5,000-$10,000 |
| $300,000 | $300,000 | $3,000-$9,000 | $9,000-$15,000 | $15,000-$30,000 |
| $500,000 | $500,000 | $5,000-$15,000 | $15,000-$25,000 | $25,000-$50,000 |
| $1,000,000 | $1,000,000 | $10,000-$30,000 | $30,000-$50,000 | $50,000-$100,000 |
Factor bond costs into your bid. A common mistake among first-time government cleaning contractors is forgetting to include the 1-3% bond premium in their pricing. On a $500,000 contract, that is $5,000-$15,000 off your margin if you miss it.
Service Contract Act Compliance
Federal janitorial contracts over $2,500 require prevailing wage payments
What Sureties Look For
Underwriters evaluating janitorial companies for performance bonds pay close attention to your ability to manage labor costs under the Service Contract Act. They want to see:
- Experience with DOL Wage Determination compliance
- Proper fringe benefit calculations in your bid pricing
- Workers compensation and general liability coverage ($1M-$5M)
- History of completed government contracts without disputes
Building Bonding Capacity
Cleaning companies that want to grow into larger government contracts need to build bonding capacity deliberately. Here is the typical path:
- Start with $100K-$250K contracts using SBA bond guarantees
- Complete 2-3 bonded contracts successfully over 12-18 months
- Keep cash in the business to grow working capital
- Move to $500K-$1M contracts as your financial track record grows
Frequently Asked Questions
Do federal janitorial contracts require performance bonds?
What is the difference between a janitorial fidelity bond and a performance bond?
How much does a janitorial performance bond cost for a school district contract?
What documents do I need to apply for a janitorial performance bond?
Can a new cleaning company get a performance bond?
Do I need a performance bond for commercial cleaning contracts?
Official Resources
Guarantees up to 90% of bond value for small cleaning companies on contracts up to $6.5 million
Federal regulations governing when performance bonds are required on service contracts
List of Treasury-certified surety companies authorized to write bonds on federal contracts
Stop Losing School District Contracts to Bonded Competitors
Every large cleaning company started by getting their first performance bond. The SBA program exists to help small janitorial companies do exactly that.
No obligation. No pushy sales calls. Just honest advice about your bonding capacity.