Any such contract shall provide for the furnishing by the contractor of a performance bond and a payment bond with a surety or sureties satisfactory to the head of the contracting agency, or his designee, and the furnishing of such bonds shall be deemed a sufficient compliance with the provisions of section 1 of the Act of August 24, 1935 (49 Stat. 793) [40 USCS 3131], and no additional bonds shall be required under such section.
Surety-contractor relationship. Any surety which provides a bid, performance, or payment bond in connection with any direct Federal procurement 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.
Limitation of accrual of rights of action under bonds. If, under applicable Federal law, surety bonds are required for any direct Federal procurement, 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.
Liability of sureties under bonds. If, under applicable Federal law, surety bonds are required for any direct Federal procurement, 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.
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.
Applicability. Subsections (x) and (x) shall not apply to bonds executed before[Date].