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Chip13

Cargo Insurance

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In 52.228-9 Cargo Insurance, the phrase "at the Contractor's expense" is used in the first sentence of the clause. I believe that phrase to mean, as did the DCAA auditor I spoke with, that the cost of the cargo insurance is an unallowable expense in a contract that includes the clause. I have never dealt with this clause in the past and am wondering if anyone else has any experience with it and if they agree with my interpretation?

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It it is an unallowable expense, you will find it in the Part 31 Cost Principles or the supplementary Cost Principles of the executive agency/department that is doing the buying.

I'm going to be surprised if you find it.

H2H

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In 52.228-9 Cargo Insurance, the phrase "at the Contractor's expense" is used in the first sentence of the clause. I believe that phrase to mean, as did the DCAA auditor I spoke with, that the cost of the cargo insurance is an unallowable expense in a contract that includes the clause. I have never dealt with this clause in the past and am wondering if anyone else has any experience with it and if they agree with my interpretation?

I don't think that the cost of such government required insurance is an unallowable expense. Some other clauses, e.g., 52.228-10 -- Vehicular and General Public Liability Insurance and 52.228-5 -- Insurance -- Work on a Government Installation, also use the phrase "at the Contractor's expense". I would think that if the Government meant "at no expense to the Government" or that it were specifically unallowable, it would say such. I think that the phrase simply means that the Contractor must personally pay the premiums or policy expense. I suggest asking the auditor where it is unallowable in Subpart 31.2 if the government directs the Contractor to purchase the insurance. See, for instance, 31.205-19 -- Insurance and Indemnification for some details and conditions.

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