E8-17938. General Services Acquisition Regulation; GSAR Case 2006-G517; Rewrite of GSAR Part 528, Bonds and Insurance

AGENCY:

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

ACTION:

Proposed rule with request for comments.

SUMMARY:

The General Services Administration (GSA) is proposing to amend the General Services Acquisition Regulation (GSAR) to revise language that provides requirements for bonds and insurance.

DATES:

Interested parties should submit written comments to the Regulatory Secretariat on or before October 6, 2008 to be considered in the formulation of a final rule.

ADDRESSES:

Submit comments identified by GSAR Case 2006-G517 by any of the following methods:

• Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by inputting “GSAR Case 2006-G517” under the heading “Comment or Submission”. Select the link “Send a Comment or Submission” that corresponds with GSAR Case 2006-G517. Follow the instructions provided to complete the “Public Comment and Submission Form”. Please include your name, company name (if any), and “GSAR Case 2006-G517” on your attached document.
• Fax: [phone].
• Mail: General Services Administration, Regulatory Secretariat (VPR), 1800 F Street, NW., Room 4041, ATTN: Laurieann Duarte, Washington, DC 20405.

Instructions: Please submit comments only and cite GSAR Case 2006-G517 in all correspondence related to this case. All comments received will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT:

For clarification of content, contact Mr. Michael O. Jackson at [phone], or by e-mail at [e-mail]. 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.

SUPPLEMENTARY INFORMATION:

A. Background

The General Services Administration (GSA) is amending the General Services Administration Acquisition Regulation (GSAR) to revise GSAR 528.202, Acceptability of corporate sureties, and 528.310, Contract clause for work on a Government installation; to add 528.311, Solicitation provision and contract clause on liability insurance under cost-reimbursement contracts, and the GSAR clause at 552.228-5, Government as Additional Insured; and to delete GSAR clause 552.228-70, Workers' Compensation Laws.

This rule is a result of the General Services Administration Acquisition Manual (GSAM) Rewrite initiative undertaken by GSA to revise the GSAM to maintain consistency with the 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 General Services Administration Acquisition Regulation (GSAR) as well as internal agency acquisition policy.

GSA will rewrite each part of the GSAR and GSAM, and as each GSAR part is rewritten, will publish it in the Federal Register.

This rule covers the rewrite of GSAR Part 528. The rule amends Part 528 to update the text addressing GSAR 528.202, Acceptability of corporate sureties, and 528.310, Contract clause for work on a Government installation. The rule adds 528.311, Solicitation provision and contract clause on liability insurance under cost-reimbursement contracts, and the GSAR clause at 552.228-5, Government as Additional Insured, and deletes the clause 552.228-70, Workers' Compensation Laws. The specific changes are as follows:

• The language in 528.202, Acceptability of corporate sureties, is revised to change “you” to “The contracting officer.”
• GSAR 528.310, Contract clause for work on a Government installation, deletes 528.310(b) and the clause 552.228-70, Workers' Compensation Laws. Clause 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. GSAR 528.310(b) is being deleted because it relates to proposed deletion of 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 552.528-70.
• GSA is proposing to add 528.311, Solicitation provision and contract clause on liability insurance under cost-reimbursement contracts. The new language at 528.311-1 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 proposing to add 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 552.228-5 replaced the newly deleted 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. 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.

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 does not expect this proposed rule to 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. An Initial Regulatory Flexibility Analysis has, therefore, not been performed. We invite comments from small businesses and other interested parties. GSA will consider comments from small entities concerning the affected GSAR Parts 528 and 552 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 601, et seq. (GSAR Case 2006-G517), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act applies; 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: July 28, 2008.

Al Matera,

Director, Office of Acquisition Policy, U.S. General Services Administration.

Therefore, GSA proposes to amend 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).

528.202

[Amended]

2. Amend section 528.202 by removing the word “You” and adding the words “The contracting officer” in its place.

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.

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

4. Add section 528.311 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 (DATE)

(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. Section 552.228-70 is removed.