Bid Surety Bond

Important Notice Regarding Bid Surety Bond Amount

The bid surety bond amount is currently under notice and comment rulemaking – Fiscal Year 2027 Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) Proposed Rule. The Centers for Medicare & Medicaid Services (CMS) has proposed requiring a bid surety bond amount of $100,000 for a remote item delivery (RID) competitive bidding area (CBA). Prospective bidders should Subscribe for email updates on the final bid surety bond amount and refrain from purchasing their bid surety bond for Round 2028 until the IRF Rule is finalized. The bid surety bond amount stated in this fact sheet reflects the current regulatory requirement of $50,000.

 

Bidders in Round 2028 of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP) must obtain a bid surety bond for the RID CBA in which they submit a bid1, as required under 42 CFR § 414.412(g). 

Key Points

The bid surety bond required for the DMEPOS CBP is not the same as the bid surety bond required for Medicare DMEPOS supplier enrollment with your National Provider Enrollment (NPE) contractor.

  • The bid surety bond required for the DMEPOS CBP is not the same as the bid surety bond required for Medicare DMEPOS supplier enrollment with your National Provider Enrollment (NPE) contractor.
  • The bid surety bond must be purchased from an authorized surety on the Department of the Treasury's List of Certified Companies. 
  • Proof of the bid surety bond must be uploaded in Connexion, the DMEPOS CBP’s secure portal, before the close of the bid window.
  • One bid surety bond is required per CBA, regardless of how many product categories you bid on.
  • If you are offered a contract and your composite bid2 is at or below the median composite bid rate, you must accept the contract offer or your bid surety bond will be forfeited.

How to Obtain a Bid Surety Bond

  1. Visit the Department of the Treasury's website and locate the List of Certified Companies.
  2. Purchase a bid surety bond from an authorized surety on that list.
  3. Provide the surety with this fact sheet and the sample bid surety bond template available on the CBIC website to ensure the bid surety bond meets all requirements.

Required Bond Information

Each bid surety bond must include, at a minimum:

Required ElementDescription
Principal/ObligorThe bidding entity's legal business name (must match Form A in Connexion
Surety Name & NAIC NumberName and National Association of Insurance Commissioners (NAIC) number of the authorized surety
ObligeeThe Centers for Medicare & Medicaid Services (CMS)
CBA CoveredThe specific CBA covered by the bond
Bond NumberUnique bond identifier
Date of IssuanceThe date the bid surety bond was issued
Bond Value$50,000 (this amount may change — see notice above)

 

When is a Bid Surety Bond Forfeited?

A bid surety bond will be forfeited if:

  • You are offered a contract for a CBA and product category combination (competition) where your composite bid is at or below the median composite bid rate, and
  • You do not accept the contract offer.

Because one bid surety bond covers an entire CBA, failing to accept any contract offer within that CBA (when your bid meets the forfeiture conditions) will result in forfeiture of the full bond for that CBA. CMS will collect forfeited bid surety bonds via electronic funds transfer from the authorized surety, following written notice to both the bidder and the surety.

If forfeiture conditions AREN'T met (e.g., you aren't offered a contract, or your composite bid is above the median rate), the bid surety bond liability will be released within 90 days of the Round 2028 public announcement of DMEPOS CBP suppliers (contract suppliers) for the CBA. CMS will notify you if forfeiture does not apply.

Additional Important Information

  • Missing bid surety bond = disqualified bid. If you do not submit a bid surety bond for a CBA, your bid(s) for any competitions associated with that CBA will be disqualified. There are no exceptions, exemptions, or waivers.
  • Bid Surety Bond Rider Process: Pursuant to 42 CFR § 414.412(g)(5), CMS reviews bid surety bonds submitted by the close of the bid window to identify any deficiencies that could make a bid ineligible for a contract offer, and if a correctable deficiency is found, CMS notifies the bidder so it can submit a rider to fix it. Bidders that are notified would have 10 business days from the date of the notice to submit a corrected bid surety bond, which must come from the same authorized surety that issued the original bond.
  • Accepting a contract and not performing to avoid forfeiture will result in your entire contract being terminated, and you will be barred from the next round of competitive bidding per 42 CFR § 414.412(g)(4)(ii).
  • Submitting a falsified bid surety bond may result in being prohibited from both the current and next round of the DMEPOS CBP per 42 CFR § 414.412(g)(4)(i), and you will be referred to the Office of Inspector General (OIG) and the Department of Justice (DOJ) for investigation.
  • Late contract offers: If you receive a contract offer after the initial public announcement and within 90 days of that announcement, your bid surety bond is still subject to forfeiture if the forfeiture conditions are met under 42 CFR § 414.412(g)(3)(i).


1 Bid – an offer to furnish an item or items for a particular price and time period that includes, where appropriate, any services that are directly related to the furnishing of the item or items. 42 CFR § 414.402

2 Composite Bid – the bid submitted by the supplier for the lead item in the product category. The lead item is the item in a product category with multiple items with the highest total nationwide Medicare allowed charges of any item in the product category prior to each competition. 42 CFR § 414.402

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