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  • Question

    Is it okay for a contractor to use the vehicle without it being GFP? Also would they have to carry separate auto insurance or would the be covered the same a Government personnel are when driving Gov't/GSA fleet vehicles.


    Answer

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

    FAR 28.306 -- Insurance Under Fixed-Price Contracts
    (a) General.  Although the Government is not ordinarily concerned with the contractor’s insurance coverage if the contract is a fixed-price contract, in special circumstances agencies may specify insurance requirements under fixed-price contracts. Examples of such circumstances include the following:
      (2) Government property is involved.
      (3) The work is to be performed on a Government installation.

    (b) Work on a Government installation.
      (1) When the clause at 52.228-5, Insurance -- Work on a Government Installation, is required to be included in a fixed-price contract by 28.310 [i.e., the contract will require work on a Government installation], the coverage specified in 28.307 is the minimum insurance required and shall be included in the contract Schedule or elsewhere in the contract. The contracting officer may require additional coverage and higher limits.

    FAR 45.101 -- Definitions
    “Government property” means all property owned or leased by the Government.

    “Government-furnished property” means property in the possession of, or directly acquired by, the Government and subsequently furnished to the contractor for performance of a contract.

    FAR 51.201 -- Policy
    (a) If it is in the Government’s interest, the contracting officer may authorize cost-reimbursement contractors to obtain, for official purposes only, interagency fleet management system (IFMS) vehicles and related services.

    FAR 52.228-5, Insurance -- Work on a Government Installation
    (a) The Contractor shall, at its own expense, provide and maintain during the entire performance of this contract, at least the kinds and minimum amounts of insurance required in the Schedule or elsewhere in the contract.

    2. The following reference quoted in pertinent part is also applicable to this response.

    Army Regulation 58-1, Management, Acquisition, and Use of Motor Vehicles (12 June 2014)
    https://www.army.mil/e2/c/downloads/455098.pdf

    Chapter 8 – Use of Nontactical Vehicles by Contractor Personnel
    8-1. General
      a. Army NTVs may be provided to DOD contractors in accordance with contract stipulations and the FAR. When NTVs are provided to contractors or subcontractors, contracts and agreements shall require that such vehicles be used for official use only and operated and maintained in accordance with the provisions of the contract, DOD 4500.36–R, and this regulation.

    8-3. Procedures
      c. Motor vehicles required for use by contractors in their work shall be included as Government furnished, contractor operated vehicles to be provided in accordance with Government acquisition regulations.

    3. In response to this inquiry, we agree with one of the premises of this question that FAR subpart 51.2, Contractor Use of Interagency Fleet Management System (IFMS) Vehicles, does not apply because the contractor is not “obtaining” an IFMS vehicle under a cost-reimbursement type contract in accordance with FAR 51.201(a). However, we do not agree with the other premise of this question that FAR part 45 also does not apply to this situation.

    4. As defined in FAR 45.101, “Government-furnished property” (GFP) means property in the possession of, or directly acquired by, the Government and subsequently furnished to the contractor for performance of a contract. As described in this inquiry, apparently the Army RA desires to allow contractor personnel to use the Government-owned GSA vehicle to facilitate contractor performance of the work. Therefore in our opinion, allowing the contractor to use the GSA vehicle to perform the contract work would constitute the provision of GFP to the contractor. As a result and pursuant to Chapter 8 of Army Regulation 58-1, the contract must first be modified to stipulate the specific terms and conditions governing contractor use of this Government-provided GSA vehicle before their personnel may be permitted by the RA to drive it.

    5. With regard to the issue of auto insurance, FAR 28.306(a) states that additional contractor insurance may be necessary in fixed-price contracts when Government property is involved (i.e., the GSA vehicle in question) and when the work is being performed on a Government installation, also assumed to be the case here. Therefore pursuant to FAR 28.310, this FFP contract should already include clause FAR 52.228-5 which requires contractor to provide at its own expense the “minimum amounts of insurance required in the Schedule or elsewhere in the contract”. Accordingly, the contract modification authorizing the use of the GSA vehicle by contractor personnel must also specify the kinds and minimum amounts of insurance required to be maintained by the contractor at its expense for this purpose.



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