Barry McVay's FEDERAL CONTRACTS DISPATCH
DATE: September 8, 2000
FROM: Barry McVay, CPCM
SUBJECT: National Aeronautics and Space Administration Federal Acquisition Regulation (FAR) Supplement (NFS); Insurance -- Partial or Total Immunity from Tort Liability for State Agencies and Charitable Institutions
SOURCE: Federal Register, September 8, 2000, Vol. 65, No. 175, page 54439
AGENCIES: National Aeronautics and Space Administration (NASA)
ACTION: Final Rule
SYNOPSIS: NASA is amending NFS Subpart 1828.3, Insurance, and adding a provision and two clauses to NFS Part 1852 to allow state agencies and charitable institutions partial or total immunity from tort liability on NASA contracts. This was permitted in the 1990 version of the Federal Acquisition Regulation (FAR) but was deleted by Federal Acquisition Circular (FAC) 90-37, dated January 26, 1996. NASA finds that it needs the provision and clauses.
EDITOR'S NOTE: For more on the proposed rule, see the April 25, 2000, FEDERAL CONTRACTS DISPATCH "National Aeronautics and Space Administration Federal Acquisition Regulation (FAR) Supplement (NFS); Partial or Total Immunity from Tort Liability for State Agencies and Charitable Institutions."
EFFECTIVE DATE: September 8, 2000.
FOR FURTHER INFORMATION CONTACT: Richard Kall, NASA, Office of Procurement, Contract Management Division (Code HK), 202-358-0459.
SUPPLEMENTAL INFORMATION: FAC 90-37, published January 26, 1996, deleted FAR 52.228-6, Insurance -- Immunity from Tort Liability, because it applied only to cost-reimbursement contracts for research and development awarded to state agencies or charitable institutions that claimed partial or total immunity from tort liability. In addition, Alternate I and Alternate II of FAR 52.228-7, Insurance -- Liability to Third Persons, were deleted: Alternate I was used when a state agency or charitable institution claimed partial immunity; Alternate II was used when a state agency or charitable institution claimed total immunity. FAC 90-37 also deleted what was then FAR 28.311-1, Solicitation Provision, which prescribed the use of FAR 52.228-6, and all references to tort liability in what was then FAR 28.311-2, Contract Clause (specifically, the directions on when to use the alternates to FAR 52.228-7).
NASA has awarded cost-reimbursement contracts to state agencies and charitable institutions that claim partial or total immunity from tort liability. Because NASA found it needed the provision and clause alternates, it proposed on April 25, 2000, to revise the NFS to add language similar to that which was removed from the FAR by FAC 90-37. No comments were received, so NASA is revising the NFS as proposed.
The following are the changes being made to the NFS by this final rule:
- NFS 1828.311-1, Contract Clause, adds the following as an additional exception to the requirement that FAR 52.228-7 be included in cost-reimbursement contracts: "The successful offeror represents in its offer that it is totally immune from tort liability as a State agency or as a charitable institution."
- The text of NFS 1828.311-2, Agency Solicitation Provisions and Contract Clauses, is removed (leaving the section title), and the text becomes paragraph (a) of new NFS 1828.311-270, NASA Solicitation Provisions and Contract Clauses. New paragraph (b) requires that the new NFS provision 1852.228-80, Insurance -- Immunity from Tort Liability, be included in solicitations for cost-reimbursement research and development. New paragraph (c) requires that FAR 52.228-7 and new NFS clause 1852.228-81, Insurance -- Partial Immunity From Tort Liability, be included in a cost-reimbursement research and development contract when the successful offeror represents it is partially immune from tort liability as a state agency or a charitable institution. New paragraph (d) would require that new NFS clause 1852.228-82, Insurance -- Total Immunity From Tort Liability, be included in a cost-reimbursement research and development contract when the successful offeror represents it is totally immune from tort liability as a state agency or a charitable institution.
- New NFS 1852.228-80 requires offerors that claim to be a state agency or charitable organization that is partially or totally immune from tort liability to "offer a representation to that effect."
- New NFS 1852.228-81 states that "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." It provides that the contractor is not required to provide or maintain insurance coverage as required by FAR 52.228-7 "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...for liabilities to third person for which the Contractor has obtained insurance coverage...but for which such coverage is insufficient in amount." (EDITOR'S NOTE: This is essentially the same language that was contained in Alternate I of FAR 52.228-7.)
- New NFS 1852.228-82 states that "the Government does not assume any liability to third persons, nor will the Government reimburse the contractor for its liability..." It provides that "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 will immediately notify the Contracting Officer and promptly furnish copies of all pertinent papers received by the Contractor. The Contractor will, 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 claim or litigation." (EDITOR'S NOTE: This is essentially the same language that was contained in Alternate II of FAR 52.228-7.)
FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.
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