Chapter 21-500: Federal Requirements

Federal requirements for bonding and insurance for contracts, grants, and cooperative agreements are set forth in Federal Acquisition Regulation (FAR) Part 28 and agency supplements and in 2 CFR Part 215.31 (formerly OMB Circular No. A-110), Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations. The FAR also contains indemnification clauses. These requirements are described in more detail in the "External Requirements -- Federal" section at the end of this chapter.

21-510 Contract Requirements

FAR Part 28 describes the federal contract bond and insurance requirements. Subpart 28.3 - Insurance sets forth the general insurance requirements for all government contractors including University research contracts. The National Aeronautics and Space Administration (NASA) has additional insurance requirements in the NASA FAR Supplement Subpart 1828.3, Insurance.

FAR clauses in FAR Part 52.228 related to risk management issues are inserted in the University's federal research and development contracts to cover federal liability and indemnification. The NASA FAR Supplement clauses at 1852.228 apply only to specific NASA contracts, which include space station, space shuttle, or expendable launch vehicle activities. These FAR requirements are described in 21-F01 in the end of this chapter.

21-511 Tort Liability

The FAR clause on liability to third persons applicable to the University is 52.228-7. (See External Requirements--Federal 21-F01.) The University is partially immune from tort liability to third persons under the Tort Claims Act as explained above in 21-440.

21-512 Liability, Indemnification, and Liquidated Damages in Other FAR Clauses

Other FAR clauses in University research and development contracts address liability and indemnification for patent infringement, defective cost or pricing data, and inspection of research and development and liquidated damages. These clauses described in 21-F02 protect the federal government against loss or damages caused by contractor or subcontractor practices in these areas.

21-520 Federal Grant and Other Agreement Requirements

The Federal bonding and insurance requirements for grants and other agreements are in the 2 CFR Part (formerly OMB Circular No. A-110,), Sections 215.21(c)-(e) and 215.31. The requirements in these sections are described in 21-F03.