PGI Part 228 - BONDS AND INSURANCE

PGI 228.3 -INSURANCE

PGI 228.304 Risk-pooling arrangements.

PGI 228.305 Overseas workers' compensation and war-hazard insurance.

PGI 228.370 Ground and flight risk.

PGI 228.370-2 General.

Parent topic: PGI Defense Federal Acquisition Regulation

PGI 228.3 -INSURANCE

PGI 228.304 Risk-pooling arrangements.

(1) The plan—

(i) Is implemented by attaching an endorsement to standard insurance policy forms for workers'

compensation, employer's liability, comprehensive general, and automobile liability. The

endorsement states that the instant policy is subject to the National Defense Projects Rating Plan.

(ii) Applies to eligible defense projects of one or more departments/agencies. For purposes of this

section, a defense project is any eligible contract or group of contracts with the same contractor.

(A) A defense project is eligible when—

(1) Eligible contracts represent, at the inception of the plan, at least 90 percent of the payroll for the

total operations at project locations; and

(2) The annual insurance premium is estimated to be at least $10,000.

(B) A contract is eligible when it is—

(1) Either domestic or foreign;

(2) Cost-reimbursement type; or

(3) Fixed price with redetermination provisions.

(2) Under construction contracts, include construction subcontractors in the prime contractor's plan

only when subcontractor operations are at the project site, and the subcontract provides that the

prime contractor will furnish insurance.

(3) Use the agreement in Table 28-1, Insurance Rating Plan Agreement, when the Government

assumes contractor premium payments upon contract termination or completion.

(4) The Federal Tort Claims Act provides protection for Government employees while driving
Government-owned vehicles in the performance of their assigned duties. Include the endorsement in

Table 28-2, Automobile Insurance Policy Endorsement, in automobile liability insurance policies

provided under the National Defense Projects Rating Plan.

TABLE 28-1, INSURANCE RATING PLAN RATING AGREEMENT

Special Casualty Insurance

Rating Plan

Assignment-Assumption of

Premium Obligations

It is agreed that 100

percent* of the return

premiums and premium

refunds (and dividends) due

or to become due the prime

contractor under the

policies to which the

National Defense Projects

Rating Plan Endorsement

made a part of policy

__________________ applies

are hereby assigned to and

shall be paid to the United

States of America, and the

prime contractor directs the

Company to make such

payments to the office

designated for contract

administration acting for

and on account of the

United States of America.

The United States of

America hereby assumes

and agrees to fulfill all

present and future

obligations of the prime

contractor with respect to

the payment of 100

percent* of the premiums

under said policies.
This agreement, upon

acceptance by the prime

contractor, the United

States of America, and the

Company shall be effective

from

_____________________________

Accepted_______________________

(Date)

_______________________ (Name

of Insurance Company)

By _____________________(Title of

Official Signing)

Accepted_______________________

(Date)

United States of America

By ____________________

(Authorized Representative)

Accepted_______________________

(Date)

_______________________ (Prime

Contractor)

By ____________________

(Authorized Representative)

*In the event the

Government has less than a

100 percent interest in

premium funds or

dividends, modify the

assignment to reflect the

percentage of interest and

extent of the Government's

assumption of additional

premium obligation.
TABLE 28-2, AUTOMOBILE INSURANCE POLICY ENDORSEMENT

It is agreed that insurance provided by the policy with respect to the ownership, maintenance,

or use of automobiles, including loading and unloading thereof, does not apply to the following

as insureds: The United States of America, any of its agencies, or any of its officers or

employees.

PGI 228.305 Overseas workers' compensation and war-hazard insurance.

(d) Submit requests for waiver through department/agency channels. Include the following in the

request:

(i) Name and address of contractor.

(ii) Contract number.

(iii) Date of award.

(iv) Place of performance.

(v) Name of insurance company providing Defense Base Act coverage.

(vi) Nationality of employees to whom waiver is to apply.

(vii) Reason for waiver.

PGI 228.370 Ground and flight risk.

PGI 228.370-2 General.

(a) Assignment of a Government flight representative. DFARS 252.228-7001, Ground and Flight

Risk, requires the assignment of a Government flight representative (GFR) to administer the

requirements of the combined instruction Contractor’s Flight and Ground Operations, (DCMA INST

8210.1, AFI 10-220, AR 95-20, NAVAIRINST 3710.1 (Series), and COMDTINST M13020.3). At the

time the solicitation is issued, contracting officers shall contact DCMA Aircraft Operations (AO) and

the appropriate military service to obtain technical advice and allow adequate lead time for

assigning a GFR. Make requests for assignment of a GFR to—

HQ DCMA: DCMA-AO

8000 Jefferson Davis Highway

Building 4A

Richmond, VA 23297

804–279-6322
Email: AOInbox@dcma.mil (include "Ground and Flight Risk Clause" on the subject line)

Army: HQ, Army Materiel Command

ATTN: AMCOL-CA

4400 Martin Road

Redstone Arsenal, AL 35898

256–450-7021

Navy: Commander, Naval Air Systems Command (AIR-09F)

22541 Millstone Road, Unit 10

Patuxent River, MD 20670-1601

301– 342–7233

Air Force: HQ AFMC/A3V

508 W. Choctawhatchee

Eglin AFB, FL 32542-5713

850– 882–7890

Workflow: afmc.a3v@us.af.mil

Coast Guard: Commanding Officer

Aviation Logistics Center

U.S. Coast Guard

1664 Weeksville Road, Building 63

Elizabeth City, NC 27909-6725

(c) Foreign military sales. The Government self-insures through the use of the clause at

252.228-7001, which requires risk-mitigation procedures in lieu of private-sector, commerciallyavailable hull insurance to cover the physical aircraft from damage or destruction, similar to the

comprehensive portion of automobile insurance. It does not address personnel liability. For

contracts falling under the exceptions at DFARS 228.371(b)(1)(iii), (iv), and (vi), review the

commercial insurance policy to determine what coverage exists on the contract aircraft. Commercial

hull insurance policies may contain various coverage exclusions, particularly for Governmentfurnished aircraft, which may mean the Government is at risk without the risk management

safeguards provided through the Combined Instruction.

(f) Damage to Government aircraft. Whenever damage to Government aircraft is reported,

particularly when the cost of repair exceeds the contractor’s share of loss provisions, the contracting

officer shall make a proper liability determination. For most situations, determining whether an

incident is an accident or mishap or a workmanship error can be made based on intent of the
employee(s) involved. Although each incident involving damage should be evaluated on its own

merits, use the following general rules and examples when determining if an incident constitutes an

accident or mishap (damage normally covered under the clause at 252.228-7001) or a workmanship

error (damage not normally covered under the clause at 252.228-7001).

(1) An accident or mishap is the result of a task, operation, or action that was not originally planned

or intended. For example, a mechanic was pushing a stand next to the aircraft and scratches the

inlet coating. The intent of the task was to move the stand, not to scratch the coating. This would be

considered accident or mishap damage to the aircraft, and a contractor should expect to be

reimbursed under the clause at 252.228-7001 (minus the appropriate contractor share of loss).

(2)(i) A workmanship error consists of damage that is the result of an incorrectly performed skillbased task, operation, or action that was originally planned or intended, but the end result was not

within allowable limits. For example, a mechanic was scraping coating off an inlet and removed too

much material. The intent of the task was to scrape the inlet coating, but too much was removed.

This would not be considered aircraft damage reimbursed under the clause at 252.228-7001.

(ii) Missing a step in a procedure or checklist item is not considered a skill-based error and therefore

is not considered workmanship error damage.