E9-8402. General Services Administration Acquisition Regulation; GSAR Case 2006-G517, Rewrite of GSAR Part 528, Bonds and Insurance

AGENCIES:

General Services Administration (GSA), Office of the Chief Acquisition Officer.

ACTION:

Final rule.

SUMMARY:

The General Services Administration (GSA) is amending the GSA Acquisition Regulation (GSAR) to update the text addressing bonds and insurance. This rule is a result of the GSA Acquisition Manual (GSAM) rewrite initiative undertaken by GSA to revise the GSAM to maintain consistency with the Federal Acquisition Regulation (FAR), and to implement streamlined and innovative acquisition procedures that contractors, offerors, and GSA contracting personnel can utilize when entering into and administering contractual relationships. The GSAM incorporates the GSAR as well as internal agency acquisition policy.

DATES:

Effective Date: May 14, 2009.

FOR FURTHER INFORMATION CONTACT:

For clarification of content, contact Mr. Michael O. Jackson at [phone]. For information pertaining to the status or publication schedules, contact the Regulatory Secretariat (VPR), Room 4041, GS Building, Washington, DC 20405, [phone]. Please cite GSAR Case 2006-G517 (Change 28).

SUPPLEMENTARY INFORMATION:

A. Background

The General Services Administration published an Advance Notice of Proposed Rulemaking (ANPR) in the Federal Register at 71 FR 7910 on February 15, 2006, with request for comments on all parts of the GSAM. No comments were received on Part 528. However, internal review comments have been incorporated as appropriate. A proposed rule for the regulatory portion of the GSAM was published in the Federal Register at 73 FR 45378 on August 5, 2008. The public comment period for GSAR Part 528 closed on October 6, 2008, and no comments were received.

The Rewrite of Part 528

This final rule contains the revisions made to Part 528, Bonds and Insurance, as a result of internal review comments. The rule revises Part 528 to address the text at GSAR 528.202, Acceptability of corporate sureties, and GSAR 528.310, Contract clause for work on a Government installation. The rule adds GSAR 528.311, Solicitation provision and contract clause on liability insurance under cost-reimbursement contracts, and GSAR 552.228-5, Government as Additional Insured, and deletes GSAR 552.228-70, Workers’ Compensation Laws. The specific changes are as follows:

• The language in GSAR 528.202, Acceptability of corporate sureties is revised to change “you” to the “contracting officer.”
• The change in GSAR 528.310, Contract clause for work on a Government installation deletes GSAR 528.310 paragraph (b) and GSAR 552.228-70, Workers’ Compensation Laws. The clause GSAR 552.228-70 is deleted because its only purpose is to recite the fact that 40 U.S.C. 3172 effects a limited cession of jurisdiction to states with respect to enforcement of worker’s compensation laws and has no contractual effect. Paragraph (b) in GSAR 528.310 is being deleted because it relates to the deletion of GSAR 552.228-70 where it states “in the case of an owner-controlled insurance program, or wrap-up insurance, the clause will be a part of the policy holder’s requirements” the phrase “the clause” refers to GSAR 552.528-70.
• GSA is adding GSAR 528.311, Solicitation provision and contract clause on liability insurance under cost-reimbursement contracts. The new language at section 528.311-l clarifies the usage for the FAR clause 52.228-7, Insurance—Liability to Third Persons, in solicitations and contracts. The language states that other than contracts and solicitations for construction and 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, FAR clause 52.228-7 is required.
• GSA is adding clause 552.228-5 to the GSAR. The language in this clause was previously in the GSAR and based upon GSA’s experience with contracts that do not have such a clause, it is being reinstated to protect the Federal Government’s interest. In essence, the new GSAR 552.228-5 replaced the newly deleted GSAR 552.228-70. GSAR 552.228-70 (formerly GSAR 552.228-75) did not serve any purpose other than to recite the fact that 40 U.S.C. 3172 (formerly 40 U.S.C. 290) effects a limited cession of jurisdiction to states with respect to enforcement of worker’s compensation laws. GSAR clause 552.228-70 had no contractual effect and was superfluous.

Discussion of Comments

There were no public comments received in response to the Advanced Notice of Proposed Rulemaking published in the Federal Register at 71 FR 7910 on February 15, 2006. A proposed rule was published in the Federal Register at 73 FR 45378 on August 5, 2008. The comment period closed October 6, 2008, and no comments were received.

This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

The General Services Administration certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the revisions are not considered substantive. The revisions only update and reorganize existing coverage.

C. Paperwork Reduction Act

The Paperwork Reduction Act does apply; however, these changes to the GSAR do not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Number 3090-0027.

List of Subjects in 48 CFR Parts 528 and 552

• Government procurement

Dated: March 6, 2009

Rodney P. Lantier,

Acting, Senior Procurement Executive, Office of the Chief Acquisition Officer, General Services Administration.

Therefore, GSA amends 48 CFR parts 528 and 552 as set forth below:

PART 528—BONDS AND INSURANCE

1. The authority citation for 48 CFR part 528 is revised to read as follows:

Authority: 40 U.S.C. 121(c).

2. Revise section 528.202 to read as follows:

528.202

Acceptability of corporate sureties.

Corporate surety bonds must be manually signed by the Attorney-in-Fact or officer of the surety company and the corporate seal affixed. The contracting officer may waive failure of the surety to affix the corporate seal as a minor informality. (See B-184120, July 2, 1975, 75-2 CPD 9.)

3. Revise section 528.310 to read as follows:

528.310

Contract clause for work on a Government installation.

Insert the clause at 552.228-5, Government as Additional Insured, in each solicitation and contract that meets all the following conditions:

(a) The contract amount is expected to exceed the simplified acquisition threshold; and

(b) The contract will require work to be performed on Government property.

4. Add sections 528.311 and 528.311-1 to read as follows:

528.311

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

528.311—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.

PART 552—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

5. The authority citation for 48 CFR part 552 continues to read as follows:

Authority: 40 U.S.C. 121(c).

6. Add section 552.228-5 to read as follows:

552.228-5

Government as Additional Insured.

As prescribed in 528.310, insert the following clause:

GOVERNMENT AS ADDITIONAL INSURED (MAY 2009)

(a) This clause supplements the requirements set forth in FAR clause 52.528-5, Insurance—Work on a Government Installation.

(b) Each insurance policy required under this contract, other than workers’ compensation insurance, shall contain an endorsement naming the United States as an additional insured with respect to operations performed under this contract. The insurance carrier is required to waive all subrogation rights against any of the named insured.

(End of clause)

552.228-70

[Removed]

7. Remove section 552.228-70.