[Code of Federal Regulations]

[Title 48, Volume 4]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR352.228-7]



[Page 76-77]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                  CHAPTER 3--HEALTH AND HUMAN SERVICES

 

PART 352_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents

 

              Subpart 352.2_Texts of Provisions and Clauses

 

Sec. 352.228-7  Insurance--Liability to third persons.



    As prescribed in 328.311-2, contracting officers shall include the 

following clause in all cost-reimbursement contracts, in lieu of the 

clause at FAR 52.228-7:



            Insurance--Liability to Third Persons (DEC 1991)



    (a)(1) Except as provided in paragraph (a)(2) immediately following, 

or in paragraph (h) of this clause (if the clause has a paragraph (h)), 

the Contractor shall provide and maintain workers' compensation, 

employer's liability, comprehensive general liability (bodily injury), 

comprehensive automobile liability (bodily injury and property damage) 

insurance, and such other insurance as the Contracting Officer may 

require under this contract.

    (2) The Contractor may, with the approval of the Contracting 

Officer, maintain a self-insurance program; provided that, with respect 

to workers' compensation, the Contractor is qualified pursuant to 

statutory authority.

    (3) All insurance required by this paragraph shall be in form and 

amount and for those periods as the Contracting Officer may require or 

approve and with insurers approved by the Contracting Officer.

    (b) The Contractor agrees to submit for the Contracting Officer's 

approval, to the extent and in the manner required by the Contracting 

Officer, any other insurance that is maintained by the Contractor in 

connection with performance of this contract and for which the 

Contractor seeks reimbursement.

    (c) Except as provided in paragraph (h) of this clause (if the 

clause has a paragraph (h)), the Contractor shall be reimbursed:

    (1) For that portion of the reasonable cost of insurance allocable 

to this contract, and required or approved under this clause; and

    (2) For certain liabilities (and expenses incidental to such 

liabilities) to third persons not compensated by insurance or otherwise 

within the funds available under the Limitation of Cost or the 

Limitation of Funds clause of this contract. These liabilities must 

arise out of the performance of this contract, whether or not caused by 

the negligence of the Contractor or the Contractor's agents, servants, 

or employees, and must be represented by final judgments or settlements 

approved in writing by the Government. These liabilities are for:

    (i) Loss of or damage to property (other than property owned, 

occupied, or used by the Contractor, rented to the Contractor, or in the 

care, custody, or control of the Contractor); or

    (ii) Death or bodily injury.

    (d) The Government's liability under paragraph (c) of this clause is 

limited to the amounts reflected in final judgements, or settlements 

approved in writing by the Government, but in no event to exceed the 

funds available under the Limitation of Cost or Limitation of Funds 

clause of this contract. Nothing in this contract shall be construed as 

implying that, at a later date, the Government will request, or the 

Congress will appropriate, funds sufficient to meet any deficiencies.

    (e) The Contractor shall not be reimbursed for liabilities (and 

expenses incidental to such liabilities):

    (1) For which the Contractor is otherwise responsible under the 

express terms of any clause specified in the Schedule or elsewhere in 

the contract:

    (2) For which the Contractor has failed to insure or to maintain 

insurance as required by the Contracting Officer; or

    (3) That result from willful misconduct or lack of good faith on the 

part of the Contractor's directors, officers, managers, superintendents, 

or other representatives who have supervision or direction of:

    (i) All or substantially all of the Contractor's business;

    (ii) All or substantially all of the Contractor's operations at any 

one plant or separate location in which this contract is being 

performed; or

    (iii) A separate and complete major industrial operation in 

connection with the performance of this contract.

    (f) The provisions of paragraph (e) of this clause shall not 

restrict the right of the Contractor to be reimbursed for the cost of 

insurance maintained by the Contractor in connection with the 

performance of this contract, other than insurance required in 

accordance with this clause; provided, that such cost is allowable under 

the Allowable Cost and Payment clause of this contract.

    (g) If any suit or action is filed or any claim is made against the 

Contractor, the cost and expense of which may be reimbursable to the 

Contractor under this contract, and the risk of which is then uninsured 

or is insured for less than the amount claimed, the Contractor shall:

    (1) Immediately notify the Contracting Officer and promptly furnish 

copies of all pertinent papers received;

    (2) Authorize Government representatives to collaborate with counsel 

for the insurance carrier in settling or defending the claim when the 

amount of the liability claimed exceeds the amount of coverage; and

    (3) Authorize Government representatives to settle or defend the 

claim and to represent the Contractor in or to take charge of any



[[Page 77]]



litigation, if required by the Government, when the liability is not 

insured or covered by the bond. The Contractor may, at its own expense, 

be associated with the Government representatives in any such claim or 

litigation.



                             (End of clause)



    Alternate I (APR 1984). If the successful offeror represents in the 

offer that the offeror is partially immune from tort liability as a 

State agency, add the following paragraph (h) to the basic clause:



    (h) Notwithstanding paragraphs (a) and (c) of this clause--

    (1) The Government does not assume any liability to third persons, 

nor will the Government reimburse the Contractor for its liability to 

third persons, with respect to loss due to death, bodily injury, or 

damage to property resulting in any way from the performance of this 

contract or any subcontract under this contract; and

    (2) The Contractor need not provide or maintain insurance coverage 

as required by paragraph (a) of this clause; provided, that the 

Contractor may obtain any insurance coverage deemed necessary, subject 

to approval by the Contracting Officer as to form, amount, and duration. 

The Contractor shall be reimbursed for the cost of such insurance and, 

to the extent provided in paragraph (c) of this clause, to liabilities 

to third persons for which the Contractor has obtained insurance 

coverage as provided in this paragraph, but for which such coverage is 

insufficient in amount.



                             (End of clause)



    Alternate II (APR 1984). If the successful offeror represents in the 

offer that the offeror is totally immune from tort liability as a State 

agency, substitute the following paragraphs (a) and (b) for paragraphs 

(a) and (b) of the basic clause:



    (a) The Government does not assume any liability to third persons, 

nor will the Government reimburse the Contractor for its liability to 

third persons, with respect to loss due to death, bodily injury, or 

damage to property resulting in any way from the performance of this 

contract or any subcontract under this contract.

    (b) If any suit or action is filed, or if any claim is made against 

the Contractor, the cost and expense of which may be reimbursable to the 

Contractor under this contract, the Contractor shall immediately notify 

the Contracting Officer and promptly furnish copies of all pertinent 

papers received by the Contractor. The Contractor shall, if required by 

the Government, authorize Government representatives to settle or defend 

the claim and to represent the Contractor in or take charge of any 

litigation. The Contractor may, at its own expense, be associated with 

the Government representatives in any such claims or litigation.



                             (End of clause)