PART 1828

### BONDS AND INSURANCE

# TABLE OF CONTENTS

**SUBPART [1828.1](#OLE_LINK1) BONDS**

1828.101 Bid guarantees.

1828.101-70 NASA solicitation provision.

1828.103 Performance and payment bonds and alternative payment
protections for other than construction contracts.

1828.103-70 Subcontractors performing construction work under
nonconstruction contracts.

1828.103-71 Solicitation requirements and contract clauses.

1828.106 Administration.

1828.106-6 Furnishing information.

**SUBPART [1828.2](#subpart-1828.2--sureties) SURETIES**

1828.202 Acceptability of corporate sureties.

1828.203 Acceptability of individual sureties.

**SUBPART [1828.3](#subpart-1828.3--insurance) INSURANCE**

1828.307 Insurance under cost-reimbursement contracts.

1828.307-1 Group insurance plans.

1828.307-2 Liability.

1828.307-70 Insurance of industrial facilities.

1828.311 Solicitation provision and contract clause on liability
insurance under cost-reimbursement contracts.

1828.311-1 Contract clause.

1828.311-2 Agency solicitation provisions and contract clauses.

1828.311-270 NASA solicitation provisions and contract clauses.

1828.370 Fixed-price contract clauses.

1828.371 Clauses for cross-waivers of liability for Space Shuttle
services, Expendable Launch Vehicle (ELV) launches, and Space Station
activities.

1828.372 Clause for minimum insurance coverage.

**PART 1828**

## BONDS AND INSURANCE

**Subpart** []{#OLE_LINK1 .anchor}**1828.1\--Bonds**

**1828.101  Bid guarantees.**

**1828.101-70 NASA** **solicitation provision.**

The contracting officer shall insert the provision at
[**1852.228-73**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.228-73%231852.228-73),
Bid Bond, in construction solicitations where offers are expected to
exceed \$100,000 and a performance bond or a performance and payment
bond is required (see [**FAR
28.102**](http://www.arnet.gov/far/current/html/Subpart_28_1.html#1039331)
and
[**28.103**](http://www.arnet.gov/far/current/html/Subpart_28_1.html#1039366)).
The contracting officer may increase the amount of the bid bond to
protect the Government from loss, as long as the amount does not exceed
\$3 million.

**1828.103 Performance** **and** **payment** **bonds** **and alternative
payment protections** **for** **other than construction** **contracts.**

**1828.103-70 Subcontractors performing construction work under
nonconstruction contracts.**

\(a\) The contracting officer shall require prime contractors on
nonconstruction contracts to obtain the following performance and/or
payment protection from subcontractors performing construction work:

\(1\) Performance and payment bonds when the subcontract construction
work is in excess of \$100,000 and is determined by NASA to be subject
to the Miller Act.

\(2\) An appropriate payment protection determined according to FAR
28.102-1(b)(1) when the subcontract construction work is greater than
\$30,000 but not greater than \$100,000.

\(b\) The contracting officer shall establish the penal amount in
accordance with FAR 28.102-2 based on the subcontract value.

\(c\) The bonds shall be provided on SF 25, Performance Bond, and SF
25A, Payment Bond. These forms shall be modified to name the NASA prime
contractor as well as the United States of America as obligees.

**1828.103-71 Solicitation requirements and contract clauses.**

When performance and payment bonds or alternative payment protections
are required from subcontractors performing construction work under
nonconstruction prime contracts, the contracting officer shall follow
the procedures in [**FAR
28.102-3**](http://www.arnet.gov/far/current/html/Subpart_28_1.html#1039363).
When alternative payment protections are required, insert a clause
substantially the same as [**FAR
52.228-13**](http://www.arnet.gov/far/current/html/52_228_231.html#1106328),
Alternative Payment Protections, appropriately modified.

**1828.106 Administration.**

**1828.106-6  Furnishing information.**

\(c\) The contracting officer is the agency head's designee.

## Subpart 1828.2\--Sureties

**1828.202 Acceptability of corporate sureties.**

\(d\) Contracting officers may obtain access to Department of Treasury
Circular 570 through the internet at
[**http://www.fms.treas.gov/c570/index.html**](http://www.fms.treas.gov/c570/index.html).

**1828.203 Acceptability of individual sureties**.

\(g\) Notification of suspected criminal or fraudulent activities, with
all supporting documentation, shall be submitted to the Headquarters
Office of Procurement (Code HS).

#### Subpart 1828.3\--Insurance

**1828.307** **Insurance** **under** **cost-reimbursement**
**contracts.**

**1828.307-1 Group insurance plans**.

\(a\) The procurement officer is the approval authority.

**1828.307-2**  **Liability.**

(b)(2)**(A)** The procurement officer may approve a requirement for
property damage liability insurance when:

***(a)*** A commingling of operations permits property damage coverage
at a nominal cost to NASA under insurance carried by the contractor in
the course of its commercial operations; or

***(b)*** The contractor is engaged in the handling of high explosives
or in extra hazardous research and development activities undertaken in
populated areas.

**(B)** In all other circumstances, the Assistant Administrator for
Procurement (Code HS) is the approval authority.

**1828.307-70** **Insurance** **of** **industrial** **facilities.**

When industrial facilities are provided by the Government under a
facilities contract or a lease, the contract or lease shall require that
during the period of construction, installation, alteration, repair, or
use, and at any other time as directed by the contracting officer, the
contractor or lessee shall insure or otherwise provide approved security
for liabilities to third persons (including employees of the contractor
or lessee) in the manner and to the same extent as required in [**FAR
28.307-2**](http://www.arnet.gov/far/current/html/Subpart_28_3.html#1039648).

**1828.311 Solicitation provision and** **contract clause on liability
insurance** **under cost-reimbursement contracts.**

**1828.311-1  Contract clause.**

The contracting officer must insert the clause at [**FAR
52.228-7**](http://www.arnet.gov/far/current/html/52_228_231.html#1106251),
Insurance-Liability to Third Persons, as prescribed in [**FAR
28.311-1**](http://www.arnet.gov/far/current/html/Subpart_28_3.html#1039692)
unless \--

\(a\) Waived by the procurement officer: or

\(b\) The successful offeror represents in its offer that it is totally
immune from tort liability as a State agency or as a charitable
institution.

**1828.311-2 Agency solicitation provisions and**
**contract** **clauses.**

**1828.311-270  NASA solicitation provisions and contract clauses.**

\(a\) The contracting officer must insert the clause at
[**1852.228-71**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.228-71),
Aircraft Flight Risks, in all cost-reimbursement contracts for the
development, production, modification, maintenance, or overhaul of
aircraft, or otherwise involving the furnishing of aircraft to the
contractor, except when the aircraft are covered by a separate bailment.

\(b\) The contracting officer must insert the provision at
[**1852.228-80**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.html#5228.228-80),
Insurance\--Immunity from Tort Liability, in solicitations for research
and development when a cost-reimbursement contract is contemplated.

\(c\) The contracting officer must insert FAR clause 52.228-7 and the
associated clause at
[**1852.228-81**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.html#1852.228-81),
Insurance \-- Partial Immunity From Tort Liability, when the successful
offeror represents in its offer that the offeror is partially immune
from tort liability as a State agency or as a charitable institution.

\(d\) The contracting officer must insert the clause at
[**1852.228-82**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.html#1852.228-82),
Insurance\--Total Immunity From Tort Liability, when the successful
offeror represents in its offer that the offeror is totally immune from
tort liability as a State agency or as a charitable institution.

**1828.370**  **Fixed-price** **contract** **clauses.**

\(a\) The contracting officer shall insert the clause at
[**1852.228-70**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.228-70),
Aircraft Ground and Flight Risk, in all negotiated fixed-price contracts
for the development, production, modification, maintenance, or overhaul
of aircraft, or otherwise involving the furnishing of aircraft to the
contractor, except as provided in paragraph (b) of this section, unless
the aircraft are covered by a separate bailment. See the clause preface
for directions for modifying the clause to accommodate various
circumstances.

\(b\) The Government need not assume the risk of aircraft damage, loss,
or destruction as provided by the clause at 1852.228-70 if the best
estimate of premium costs that would be included in the contract price
for insurance coverage for such damage, loss, or destruction at any
plant or facility is less than \$500. If it is determined not to assume
this risk, the clause at 1852.228-70 shall not be made a part of the
contract, and the cost of necessary insurance to be obtained by the
contractor to cover this risk shall be considered in establishing the
contract price. In such cases, however, if performance of the contract
is expected to involve the flight of Government-furnished aircraft, the
substance of the clause at
[**1852.228-71**](http://www.hq.nasa.gov/office/procurement/regs/5227.htm#1852.227-71),
Aircraft Flight Risks, suitably adapted for use in a fixed-price
contract, shall be used.

\(c\) When the clause at 1852.228-70 is used, the term \"Contractor\'s
premises\" shall be expressly defined in the contract Schedule and shall
be limited to places where aircraft may be located during the
performance of the contract. Contractor\'s premises may include, but are
not limited to, those owned or leased by the contractor or those for
which the contractor has a permit, license, or other right of use either
exclusively or jointly with others, including Government airfields.

**1828.371 Clauses for cross-waivers of liability for Space Shuttle
services, Expendable Launch Vehicle (ELV) launches, and Space Station
activities.**

\(a\) In agreements covering Space Shuttle services, certain ELV
launches, and Space Station activities, NASA and other signatories (the
parties) agree not to bring claims against each other for any damage to
property or for injury or death of employees that occurs during the time
such a cross-waiver is in effect. These agreements involving NASA and
other parties include, but are not limited to, Memoranda of
Understanding with foreign Governments, Launch Services Agreements, and
other agreements for the use of NASA facilities. These agreements
require the parties to flow down the cross-waiver provisions to their
related entities so that contractors, subcontractors, customers, and
other users of each party also waive their right to bring claims against
other parties and their similarly related entities for damages arising
out of activities conducted under the agreements. The purpose of the
clauses prescribed in this section is to flow down the cross-waivers to
NASA contractors and subcontractors.

\(b\) The contracting officer shall insert the clause
[**1852.228-72**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.228-72),
Cross-waiver of Liability for Space Shuttle Services, in solicitations
and contracts of \$100,000 or more when the work to be performed
involves \"Protected Space Operations\" (applicable to the Space
Shuttle) as that term is defined in the clause. If Space Shuttle
services under the contract are being conducted in support of the Space
Station program, the contracting officer shall insert the clause
prescribed by paragraph (d) of this section and designate application of
that clause to those particular activities.

\(c\) The contracting officer shall insert the clause at
[**1852.228-78**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.228-78),
Cross-Waiver of Liability for NASA Expendable Launch Vehicle (ELV)
Launches, in solicitations and contracts of \$100,000 or more for the
acquisition of ELV launch services when the service is being acquired by
NASA pursuant to an agreement described in paragraph (a) of this
section. If, under a contract that covers multiple launches, only some
of the launches are for payloads provided pursuant to such agreements,
an additional clause shall be inserted in the contract to designate the
particular launches to which this clause applies. If a payload is being
launched by use of an ELV in support of the Space Station program, the
contracting officer shall insert the clause prescribed by paragraph (d)
of this section and designate its application to that particular launch.

\(d\) The contracting officer shall insert the clause at
[**1852.228-76**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.228-76),
Cross-Waiver of Liability for Space Station Activities, in solicitations
and contracts of \$100,000 or more when the work is to be performed
involves \"Protected Space Operations\" (relating to the Space Station)
as that term is defined in the clause.

\(e\) At the contracting officer\'s discretion, the clauses prescribed
by paragraphs (b), (c), and (d) of this section may be used in
solicitations, contracts, new work modifications, or extensions, to
existing contracts under \$100,000 involving Space Shuttle activities,
ELV launch services, or Space Station activities, respectively, in
appropriate circumstances. Examples of such circumstances are when the
value of contractor property on a Government installation used in
performance of the contract is significant, or when it is likely that
the contractor or subcontractor will have its valuable property exposed
to risk or damage caused by other participants in the Space Shuttle
services, ELV launches, or Space Station activities.

**1828.372** **Clause for minimum insurance** **coverage.**

In accordance with [**FAR
28.306(b)**](http://www.arnet.gov/far/current/html/Subpart_28_3.html#1039635)
and
[**28.307**](http://www.arnet.gov/far/current/html/Subpart_28_3.html#1039643),
the contracting officer may insert a clause substantially as stated at
[**1852.228-75**](http://www.arnet.gov/far/current/html/28.html#52.228-75),
Minimum Insurance Coverage, in fixed-price solicitations and contracts
requiring performance on a government installation and in
cost-reimbursement contracts. The contracting officer may modify the
clause to require additional coverage, such as vessel liability, and
higher limits if appropriate for a particular acquisition.