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Laura Hoey

Conforming Auto Liability

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I am  Prime Contractor, with a Subcontractor who will not provide evidence of his auto liability insurance by way of the typical ACORD COI. He will only provide evidence of a personal insurance policy. It's my understanding that this type of personal policy wouldn't be permissible because it doesn't conform with requirements for Additional Insured, Waiver of Subrogation, and 30-day cancellation notice (among other things). He's pushing back saying "I've worked on this base for 10-years and never had this problem". Is Auto Liability exempt from these provisions? Thanks for your input. 

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What is the specific applicable contract requirement for insurance? 

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2 hours ago, joel hoffman said:

What is the specific applicable contract requirement for insurance? 

Joel, starting with FAR 52.228-5 Insurance - Work on Government Installations, and further 48 CFR 552.228-5 - Government as Additional Insured. 

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52.228-5   Insurance—Work on a Government Installation.

As prescribed in 28.310, insert the following clause:

surance—Work on a Government Installation (JAN 1997)

(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.

(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.

(c) The Contractor shall insert the substance of this clause, including this paragraph (c), in subcontracts under this contract that require work on a Government installation and shall require subcontractors to provide and maintain the insurance required in the Schedule or elsewhere in the contract. The Contractor shall maintain a copy of all subcontractors' proofs of required insurance, and shall make copies available to the Contracting Officer upon request.

(End of clause)

 

 
 
Quote

 

552.228-5 Government as Additional Insured.

As prescribed in 528.310, insert the following clause:

Government as Additional Insured (JAN 2016)

(a) This clause supplements the requirements set forth in FAR clause 52.228-5, 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.

 

Laura, what is the specific applicable contract requirement for type of insurance, as referred to in 52.228-5?  Does it specifically mention automobile liability insurance?

I can't speak for GSA or for your agency, if you are using a GSA contract vehicle.   However, generally, If automobile liability insurance "is required in the schedule or elsewhere in the contract", then no, there would generally be no exemption from requirements for "Additional Insured, Waiver of Subrogation, and 30-day cancellation notice (among other things)" , unless specifically exempted somewhere else in the contract. I doubt that local clauses would negate a general contract clause.

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Joel, the specific contract is in the 4th iteration of a sole source USACE SATOC (4 different contracts over 7 years). Over the years the CO's (there have been at least 3 different ones) have failed to include the specific insurance requirements, even at my request to provide them. That said, the Task Order Contracting Specialists (of course) require that I provide a COI, which of course includes standard Auto Liability coverage. My requirement to the Sub is based on the other USACE contracts we hold which do require "Auto Liability Insurance. This insurance shall be required on the comprehensive form of policy and shall provide bodily injury liability and property damage liability covering the operations of all automobiles used in connections with the performance of the subcontract......" . I know that ultimately the failure of the Gov to provide me with the specific requirements (on the contract in question), is no excuse for not flowing down contract requirements. 

Other than the fact that I can't evidence the specific contract requirements to the Sub, it sounds like my interpretation of the Regs, in general, is accurate. 

 

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Laura, thanks for the clarification.  So, apparently, contrary to the USACE contract specialists, your prime contract doesn’t require automobile liability insurance other than what the applicable State off-base insurance requirement might be. 

However, the terms of your contract with the subcontractor require automobile liability insurance, including those features required by the two contract clauses. I would agree then, that there is no exemption in the subcontract for those special features that are above and beyond off-base automobile liability policies. 

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Regardless of any specific prime contract requirements, in cases where licensed vehicles will be used in connection with performance of the work, I would have expected that your company's business practice would incorporate a subcontract requirement that a subcontractor carry and maintain Business Automobile Automobile Liability Insurance for bodily injury and property damage for a specified not less than dollar limit.

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1 hour ago, Neil Roberts said:

Regardless of any specific prime contract requirements, in cases where licensed vehicles will be used in connection with performance of the work, I would have expected that your company's business practice would incorporate a subcontract requirement that a subcontractor carry and maintain Business Automobile Automobile Liability Insurance for bodily injury and property damage for a specified not less than dollar limit.

We do have this requirement, that's not really at issue. What's at issue is the requirement for said insurance to comply with the FAR clauses I've noted above, and the unwillingness of the Sub to provide what I view as a conforming certificate of insurance. What doesn't make things any easier is the Subs insistence that he's worked on this base for 10 years without having to fulfill the regulatory requirement, and the PM's complaining that we can't be competitive if I "make such demands". The usual push-pull between Compliance and the Field. 

 

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I also expected that your company's business practice include a requirement for a Certificate of Insurance specifically for automobile insurance. It does not appear that your company's prime contract requires automobile insurance from your company or from subcontractors. And, I either overlooked or misinterpreted because I didn't read anything about a Certificate of Insurance being required by your company's contract for any party. Also, I am not aware that the definition of a Certificate of Insurance includes automobile insurance on a mandatory basis.Therefore, I am not following your "view." I definitely sympathize with your situation with the program office and the subcontractor. Unless this subcontractor is a mandatory source, you could consider disqualifying the subcontractor and go with the next qualified bidder if you included your "view" in the bidding document. I don't know if you are also the contract administrator for your company. If not, you should obtain the contract administrator's view as to the prime/subcontract requirement.  You could also consider documenting the procurement file with signature of the PM accepting the prime contract risk of non-compliance as determined by your view. You probably should escalate with your manager before you do that. Other possibilities is to ask for help from your company's cognizant attorney, whatever that process is and/or request that the subcontractor provide supporting documentation for its view i.e., a copy of any of the prime contract schedule and terms and conditions during the last 10 years under which work was performed and the corresponding contract terms and conditions from its customer. This assumes your "view" is reasonably sustainable by actual prime contract language.  

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Ok, Laura. You initially said that you are Prime Contractor with a Subcontractor...  This implies that the contract has been awarded to you and that you are now executing, using a signed subcontractor. 

Now, it appears that you are competing for an award of a contract.  There is a big difference between those scenarios. 

Your basic problem or dilemma appears to be that the government RFP doesn’t require what you think the contract administrators will require but the sub says he has worked on that base for ten years without it. 

You are under pressure from within to keep your price down because of competitive necessity. 

It wouldn’t surprise me if the local installation contracting office doesn’t require evidence of automobile liability insurance that includes the government’s special requirements. Perghaps the sub is referring to installation issued contracts. 

However, the USACE local RE Office should enforce those requirements. Maybe not. Especially if the District Office isn’t including the requirement in its RFP’s. 

You need to level the competitive playing field by insisting that, if such will be the requirement, then the RFP is patently in error by omitting it, thus affecting competition. 

By the way, how much extra cost is really involved here, anyway? I wouldn’t think that it could be a whole lot for the additional  coverage for a couple of vehicles.  If you think that the sub will cancel it’s insurance without notice, don’t hire them.  

Otherwise you could tell them to get a rider for this job. 

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19 hours ago, Laura Hoey said:

I know that ultimately the failure of the Gov to provide me with the specific requirements (on the contract in question), is no excuse for not flowing down contract requirements. 

Other than the fact that I can't evidence the specific contract requirements to the Sub, it sounds like my interpretation of the Regs, in general, is accurate. 

So the subcontract does not require insurance. Subcontractor says, "Get lost."

Oh. Well, case closed. 

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