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Part 328--Bonds and Insurance

HHS Acquisition Regulation (HHSAR)

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Authority: 5 U.S.C. 301; 40 U.S.C. 121(c)(2).

Subpart 328.3--Insurance

328.301 Policy.

It is HHS policy to limit the Government's reimbursement, of its contractors' liability to third persons for claims not covered by insurance in cost-reimbursement contracts, to the Limitation of Funds or Limitation of Cost clause of the contract. In addition, the amount of the Government's reimbursement cannot exceed the final judgments or settlements approved in writing by the Government.

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

328.311-2 Agency solicitation provisions and contract clauses.

The Contracting Officer shall insert the clause in 352.228-7, Insurance – Liability to Third Persons, in lieu of the clause in FAR 52.228-7, Insurance – Liability to Third Persons, in solicitations and contracts when a cost-reimbursement contract is contemplated. The Contracting Officer shall insert Alternate I or II based on the conditions specified therein. This is an authorized FAR deviation.


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