Bond forms applicable to NASA procurements are listed in § 18–16.805. Subpart 18-10.2-Sureties on Bonds § 18-10.201 General requirements of sureties.

Every bond required or used in connection with NASA procurements shall be supported by good and sufficient surety (corporate or individual).

§ 18-10.201-1 Corporate sureties.

In order to be acceptable, the corporate surety must have obtained from the Secretary of the Treasury authority to do business under the Act of August 13, 1894 (28 Stat. 279), as amended by the Acts of March 23, 1910 (36 Stat. 241), July 30, 1947 (61 Stat. 646), and the Act of August 9, 1955 (69 Stat. 620) (6 U.S.C. 6-13). A list of the corporations approved by the Secretary of the Treasury is published annually by the Treasury Department (T.D. Circular 570). This list indicates the maximum penal sum in which any corporate surety may underwrite any one obligation. Any corporation whose name is on this list is acceptable within the limits specified. The Director of Procurement will secure and distribute up-to-date copies of this list. When the bond is to be executed by two or more corporate sureties, Standard Form 25 should be used in the case of a performance bond, and Standard Form 25A in the case of a payment bond. Each corporate surety may limit its liability in the bond to a specified sum. The sureties must bind themselves "jointly and severally" for the purpose of allowing a joint action or actions against any or all of them.

[31 F.R. 650, Jan. 18, 1966]

§ 18-10.201-2

Individual sureties.

Individual sureties are acceptable for bid, performance or payment bonds: Provided, That (a) they are citizens of the United States, or, if given to secure a contract to be performed outside the United States, they shall be domiciled in such place, and (b) each individual surety will justify in an amount not less

than the penal sum of the bond. When individual sureties are used, there shall be at least two responsible individuals on each bond and the liability of each individual surety shall extend to the entire penal amount of the bond. In connection with any bond of which a corporation is the principal obligor, a stockholder of that corporation is acceptable as a co-surety on the bond, provided that his net worth exclusive of his stockholdings in the corporation is equal to the amount for which he justified and that such fact is expressly stated in his affidavit of justification. Standard Form 28 should be used in connection with the justification of an individual surety.

Date

Contract No.

Supplemental Agreement No.

Change Order No.

Attest:

This Subpart 18-10.3 sets forth the general principles and policy applicable to insurance under NASA contracts. § 18-10.301 General.

Insurance will be required where (a) it is mandatory by law, (b) it is considered desirable to utilize the facilities and services of the insurance industry, or (c), in special instances, it is considered necessary or desirable in connection with the performance of a contract. The Director of Procurement may authorize or require the purchase of insurance where commingling of property, circumstances of ownership, or degree of responsibility imposed by the contract makes the purchase of insurance reasonably necessary for the protection of the several interests concerned.

(Affix corporate seal)

(f) Employees' Group Insurance (Life, Hospitalization, Accident and Health, Surgical, etc.); and

(g) Extrahazardous Accident. § 18-10.302

change.

Notice of cancellation or

Where insurance is required by the contract, or required or approved under a contract by the Director of Procurement or his designee, the policies evidencing such insurance shall contain an endorsement to the effect that cancellation of, or any material change in, the policies which adversely affect the interests of the Government in such insurance shall not be effective unless a 30-day written notice of cancellation or change is given to the Director of Procurement. § 18-10.303 Responsibility for loss of

or damage to Government property. NASA's policy with respect to Government assumption of risk for loss of or damage to Government property in the possession of contractors is set forth in §§ 18-13.104-1 and 18-13.411. This policy is implemented by the Government property clauses set forth in Subpart 18-13.5, and the facilities contract clauses set forth in Subpart 18-7.7. Except for advertised fixed-price contracts, and except in accordance with § 1813.502-1 for fixed-price contracts under $25,000 where contractor responsibility for risk of loss or damage would not result in the inclusion of contingency charges in the contract, it is NASA policy to assume the risk of loss or damage. This policy is based on the principle that it is less costly for the Government to

act as a self-insurer than to permit the contractor to take out property damage insurance. However, when, due to the commingling of the Government's and the contractor's property, or for other reasons, relief of the contractor from liability will not result in a reduction of the contract price or contract cost to the Government, this policy may be waived and the contractor held fully responsible. Such a waiver, unless otherwise authorized by §§ 18–13.104 and 18-13.411, constitutes a deviation to be processed in accordance with § 18-1.109-3.

§ 18-10.304 Insurance against loss of

or damage to Government property. When insurance is required or approved to cover loss of or damage to Government property, such insurance may be provided either by specific insurance policies or by inclusion of such risks in the contractor's existing insurance policies. In either event, the insurance policies

shall make formal disclosure of the Government's interest in the property. § 18-10.305 Procedures to be followed in the event of loss of or damage to Government property.

Upon the happening of loss of or damage to any Government property for which the contractor is relieved of responsibility by contract provision, the procedures set forth in the applicable "Government-Furnished Property" clause of the contract involved shall be followed.

(a) The indemnification authority available to the Military Departments under 10 U.S.C. 2354, which applies to contracts for research or development, is not applicable to contracts of NASA. Furthermore, the exercise of the broad authority contained in Public Law 85-804 (50 U.S.C. 1431-1435) is by Executive Order 10789 (November 14, 1958) made subject to the availability of funds, and, accordingly, provides no broad indemnification authority. Although limited indemnification arrangements may be legally possible, provided they are made subject to the availability of appropriations, it is NASA policy to avoid indemnification provisions. Moreover, in view of the narrow indemnification coverage which may legally be made available by

NASA, there are few instances where providing such coverage is really of benefit to a contractor. No indemnification clause may be used in NASA contracts without the authorization of the Director of Procurement.

(b) An exception to the foregoing exists in connection with contracts employing nuclear material where, pursuant to a license obtained from the Atomic Energy Commission, indemnification authorized under the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq., as amended) may be extended to contractors engaged in work under the license. Subpart 18-10.4-Insurance Under

Fixed-Price Contracts

§ 18-10.400 Scope of subpart.

This Subpart 18-10.4 sets forth the policy of NASA with respect to insurance under fixed-price contracts of NASA. § 18–10.401

Policy.

Ordinarily, NASA is not concerned with the insurance programs of fixedprice contractors. However, NASA may be concerned with a contractor's insurance program where special circumstances exist. Examples of special circumstances are:

(a) Where the contractor is engaged principally in Government work;

(b) Where the contractor has a segregated operation which is engaged principally in Government work;

(c) Where Government-furnished property is involved;

(d) Where the work is performed within a Government establishment; and (e) Where the Government may desire to assume risks for which the contractor ordinarily obtains commercial insurance. § 18-10.402 Government-furnished

U.S.C. 901) to any employee engaged in public work outside the United States. As used in this § 18-10.403, a public work contract includes any contract for a fixed improvement or any project, whether or not fixed, involving construction, alteration, removal, or repair for the public use of the United States or its allies, including projects or operations under service contracts and projects in connection with the National Defense or with war activities, dredging, harbor improvements, dams, roadways, and housing, as well as preparatory and ancillary work in connection therewith at the site or on the project. The following clause shall be included in all construction contracts to be performed outside the United States. WORKMEN'S COMPENSATION INSURANCE (DEFENSE BASE ACT) (APRIL 1960)

The Contractor before commencing performance under this contract shall provide and theretafter maintain such Workmen's Compensation Insurance or security as is required by the Defense Base Act, as amended (42 U.S.C. 1651). The Contractor further agrees to insert in all subcontracts hereunder to which the Defense Base Act is applicable a clause similar to this clause, including this sentence, imposing on all such subcontractors a like requirement to comply with the Defense Base Act.

(b) Upon the recommendation of the Administrator, the Secretary of Labor may waive the applicability of the Act with respect to any contract, subcontract, or subordinate contract, work location under such contract, or classification of employees. Applications for waivers shall be submitted to the Administrator, through the Director of Procurement, together with an adequate statement justifying the need for such waiver.

Subpart 18-10.5-Insurance Under Cost-Reimbursement Type Contracts § 18-10.500 Scope of subpart.

This Subpart 18-10.5 sets forth the policy of NASA with respect to insurance under NASA cost-reimbursement type contracts.

§ 18-10.501 Policy.

The kinds of insurance listed in this § 18-10.501 shall ordinarily be required under cost-reimbursement type contracts and under those subcontracts where the

If

(b) Workmen's compensation is an obligation imposed upon an employer by the workmen's compensation law of a State or by the United States Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. 901). An employer subject to a workmen's compensation law can provide for his obligation by insuring either with a commercial insurance company or a State fund, or by self-insuring. In a few States, commercial insurance is not permitted and the State fund is the exclusive carrier. the employer desires to self-insure, he must qualify himself as a self-insurer with the appropriate State authority. However, such approval is only one of the elements considered by NASA in its approval of a self-insurance plan. Information may be required as to the procedures followed in operating the selfinsurance plan and the method of accruing the operating costs thereof prior to granting NASA approval of the selfinsurance plan.

(c) Occupational disease insurance is related to workmen's compensation insurance, and is usually required under applicable law. In jurisdictions where all occupational diseases are not compensable under applicable law, insurance for occupational diseases shall be required under the employers' liability section of the insurance policy. However, such additional insurance will not be required where contract operations are commingled with the contractor's commercial operations so that it would be impracticable to require such coverage.