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  • Question

    Do all Service Contracts require a Certificate of Insurance, irregardless of the dollar value ?


    Answer

    1. The FAR references quoted below in pertinent part are applicable to this response.

    FAR 2.101 -- Definitions
    “Simplified acquisition threshold” means $150,000 … .

    FAR 28.310 -- Contract Clause for Work on a Government Installation
    (a) Insert the clause at 52.228-5, Insurance -- Work on a Government Installation, in solicitations and contracts if a fixed-price contract is contemplated, the contract amount is expected to exceed the simplified acquisition threshold, and the contract will require work on a Government installation.

    FAR 28.313 -- Contract Clauses for Insurance of Transportation or Transportation-Related Services
    (b) The contracting officer shall insert a clause substantially the same as that at 52.228-10, Vehicular and General Public Liability Insurance, in solicitations and contracts for transportation or for transportation-related services when the contracting officer determines that vehicular liability or general public liability insurance required by law is not sufficient.

    FAR 52.228-5 -- Insurance -- Work on a Government Installation
    (b) Before commencing work under this contract, the Contractor shall notify the Contracting Officer in writing that the required insurance has been obtained. The policies evidencing required insurance shall contain an endorsement to the effect that any cancellation or any material change adversely affecting the Government’s interest shall not be effective --
      (1) For such period as the laws of the State in which this contract is to be performed prescribe; or
      (2) Until 30 days after the insurer or the Contractor gives written notice to the Contracting Officer, whichever period is longer.

    FAR 52.228-10 -- Vehicular and General Public Liability Insurance
    (a) The Contractor, at the Contractor’s expense, agrees to maintain, during the continuance of this contract, vehicular liability and general public liability insurance with limits of liability for --
      (1) Bodily injury of not less than $ ______ for each person and $ ______ for each occurrence; and
      (2) Property damage of not less than $ ______ for each accident and $ ______ in the aggregate.

    2. As indicated in this inquiry, this acquisition involves work on a Government installation. Therefore, pursuant to FAR 28.310(a), if the value of this acquisition exceeds $150,000, then the clause as FAR 52.228-5 must be included in the contract. Paragraph (b) of this clause essentially requires the contractor to provide a Certificate of Insurance to the Contracting Officer in order to prove that it has the required liability insurance coverages.

    3. As indicated in this inquiry, this acquisition also involves transportation services. Pursuant to FAR 28.313(b), the Contracting Officer must determine whether the vehicular liability or general public liability insurance required by law is sufficient for the specific transportation services involved. Therefore, in order to fully comply with this requirement, it is our opinion that the Contracting Officer must still obtain a Certificate of Insurance from the prospective contractor(s) prior to contract award, even if the acquisition is at or below the simplified acquisition threshold, in order to confirm that the prospective contractor(s) actually have the liability insurance required by law to provide transportation services.


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