SURETY BONDS FOR DEFENSE ENVIRONMENTAL RESTORATION PROGRAM CONTRACTS.

SEC. 336. SURETY BONDS FOR DEFENSE ENVIRONMENTAL RESTORATION PROGRAM CONTRACTS. (a) In General.—Section 2701 of title 10, United States Code, is amended by adding at the end the following: “(h) Surety-Contractor Relationship.—Any surety which provides a bid, performance, or payment bond in connection with any direct Federal procurement for a response action contract under the Defense Environmental Restoration Program and begins activities to meet its obligations under such bond, shall, in connection with such activities or obligations, be entitled to any indemnification and the same standard of liability to which its principal was entitled under the contract or under any applicable law or regulation. “(i) Surety Bonds.— “(1) Applicability of miller act.—If under the Act of August 24, 1935 (40 U.S.C. 270a–270d), commonly referred to as the ‘Miller Act’, surety bonds are required for any direct Federal procurement of any response action contract under the Defense Environmental Restoration Program and are not waived pursuant to the Act of April 29, 1941 (40 U.S.C. 270e–270f), the surety bonds shall be issued in accordance with such Act of August 24, 1935. “(2) Limitation of accrual of rights of action under bonds.—If, under applicable Federal law, surety bonds are required for any direct Federal procurement of any response action contract under the Defense Environmental Restoration Program, no right of action shall accrue on the performance bond issued on such contract to or for the use of any person other than an obligee named in the bond. “(3) Liability of sureties under bonds.—If, under applicable Federal law, surety bonds are required for any direct Federal procurement of any response action contract under the Defense Environmental Restoration Program, unless otherwise provided for by the Secretary in the bond, in the event of a default, the surety’s liability on a performance bond shall be only for the cost of completion of the contract work in accordance with the plans and specifications of the contract less the balance of funds remaining to be paid under the contract, up to the penal sum of the bond. The surety shall in no event be liable on bonds to indemnify or compensate the obligee for loss or liability arising from personal injury or property damage whether or not caused by a breach of the bonded contract. 105 STAT. 1343 “(4) Nonpreemption.—Nothing in this section shall be construed as preempting, limiting, superseding, affecting, applying to, or modifying any State laws, regulations, requirements, rules, practices, or procedures. Nothing in this section shall be construed as affecting, applying to, modifying, limiting, superseding, or preempting any rights, authorities, liabilities, demands, actions, causes of action, losses, judgment, claims, statutes of limitation, or obligations under Federal or State law, which do not arise on or under the bond. “(j) Applicability.—Subsections Ch) and (i) shall not apply to bonds executed before the date of the enactment of the National Defense Authorization Act for Fiscal Years 1992 and 1993 or after December 31, 1992.”.