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subpart 228.3--insurance

(Revised November 10, 2004)



 228.304 Risk-pooling arrangements.
 228.305 Overseas workers' compensation and war-hazard insurance.
 228.307 Insurance under cost-reimbursement contracts.
 228.307-1 Group insurance plans.
 228.311 Solicitation provision and contract clause on liability insurance under cost-reimbursement contracts.
 228.311-1 Contract clause.
 228.370 Additional clauses.


228.304  Risk
-pooling arrangements.

DoD has established the National Defense Projects Rating Plan, also known as the Special Casualty Insurance Rating Plan, as a risk-pooling arrangement to minimize the cost to the Government of purchasing the liability insurance listed in FAR 28.307-2.  Use the plan in accordance with the procedures at PGI 228.304 (Pop-up Window or PGI Viewer Mode) when it provides the necessary coverage more advantageously than commercially available coverage.

228.305  Overseas workers' compensation and war-hazard insurance.

      (d)  When submitting requests for waiver, follow the procedures at PGI 228.305(d) (Pop-up Window or PGI Viewer Mode).

228.307  Insurance under cost-reimbursement contracts.

228.307-1  Group insurance plans.

The Defense Department Group Term Insurance Plan is available for contractor use under cost-reimbursement type contracts when approved as provided in department or agency regulations.  A contractor is eligible if—

      (a)  The number of covered employees is 500 or more; and

      (b)  The contractor has all cost-reimbursement contracts; or

      (c)  At least 90 percent of the payroll for contractor operations to be covered by the Plan is under cost-reimbursement contracts.

228.311  Solicitation provision and contract clause on liability insurance under cost-reimbursement contracts.

228.311-1  Contract clause.

Use the clause at FAR 52.228-7, Insurance--Liability to Third Persons, in solicitations and contracts, other than those for construction and those for architect-engineer services, when a cost-reimbursement contract is contemplated, unless the head of the contracting activity waives the requirement for use of the clause.

228.370  Additional clauses.

      (a)  Use the clause at 252.228-7000, Reimbursement for War-Hazard Losses, when—

              (1)  The clause at FAR 52.228-4, Worker's Compensation and War-Hazard Insurance Overseas, is used; and

              (2)  The head of the contracting activity decides not to allow the contractor to buy insurance for war-hazard losses.

      (b)(1)  Use the clause at 252.228-7001, Ground and Flight Risk, in negotiated fixed-price contracts for aircraft production, modification, maintenance, repair, or overhaul, unless—

                    (i)  The aircraft is being acquired for a foreign military sale and the foreign government has not agreed to assume the risk; or

                    (ii)  The cost of insurance for damage, loss, or destruction of aircraft does not exceed $500, and the contracting officer agrees to recognize the insurance costs.

              (2)  If appropriate, revise the clause at 252.228-7001, Ground and Flight Risk, as follows—

                    (i)  Include a modified definition of “aircraft” if the contract covers other than conventional types of winged aircraft, i.e., helicopters, vertical take-off aircraft, lighter-than-air airships or other nonconventional aircraft.  The modified definition should describe a stage of manufacture comparable to the standard definition.

                    (ii)  Modify “in the open” to include “hush houses,” test hangars and comparable structures, and other designated areas.

                    (iii)  Expressly define the “contractor's premises” where the aircraft will be located during and for contract performance.  These locations may include contract premises which are owned, leased, or premises where the contractor is a permittee or licensee or has a right to use, including Government airfields.

                    (iv)  Revise paragraph (d)(iii) of the clause to provide Government assumption of risk for transportation by conveyance on streets or highways when transportation is—

                            (A)  Limited to the vicinity of contractor premises; and

                            (B)  Incidental to work performed under the contract.

      (c)(1)  Use the clause at 252.228-7002, Aircraft Flight Risk, in cost reimbursement contracts—

                    (i)  For the development, production, modification, maintenance, repair, or overhaul of aircraft; or

                    (ii)  Otherwise involving the furnishing of aircraft to the contractor by the Government.

                    (iii)  With the definition of “aircraft” modified, if appropriate, to include helicopters, vertical take-off aircraft, lighter-than-air airships or other nonconventional aircraft.

              (2)  Use the clause at 252.228-7002, Aircraft Flight Risk, appropriately modified, in fixed price contracts when—

                    (i)  The clause at 252.228-7001, Ground and Flight Risk, is not used; and

                    (ii)  Contract performance involves the flight of Government furnished aircraft.

      (d)  The clause at 252.228-7003, Capture and Detention, may be used when contractor employees are subject to capture and detention and may not be covered by the War Hazards Compensation Act (42 U.S.C. 1701 et seq.).

      (e)  The clause at 252.228-7005, Accident Reporting and Investigation Involving Aircraft, Missiles, and Space Launch Vehicles, may be used in solicitations and contracts which involve the manufacture, modification, overhaul, or repair of these items.

      (f)  Use the clause at 252.228-7006, Compliance with Spanish Laws and Insurance, in solicitations and contracts for services or construction to be performed in Spain, unless the Contractor is a Spanish concern.


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