figure can result if the costs of managing the investment program exceed the investment income earned. (d) Service charge. The service (see (e) Other items—(1) Mandatory statutory reserves. Charges for mandatory statutory reserves are not allowable unless specifically provided for in the contract. When the term "mandatory statutory reserve" is specifically identified as an allowable contract charge without further definition or explanation, it means a requirement imposed by State law upon the carrier to set aside a specific amount or rate of funds into a restricted reserve that is accounted for separately from all other reserves and surpluses of the carrier and which may be used only with the specific approval of the State official designated by law to make such approvals. The amount chargeable to the contract may not exceed an allocable portion of the amount actually set aside. If the statutory reserve is no longer required for the purpose for which if was created, and these funds become available for the general use of the carrier, a pro rata share based upon FEHBP's contribution to the total carrier's set aside shall be returned to the FEHBP in accordance with FPR 1-15.201-5. (2) Premium taxes. When the term "premium taxes" is used in the contract without further definition or explanation, it means a tax imposed by State or local statutes upon the carrier's gross or net premiums received. § 16-7.502-1 Definitions. Insert the clauses set forth in FPR 1-7.102-1. § 16-7.502-2 Disputes. Insert a clause conforming in substance to the following clause as set forth in Temporary Regulation 55, 45 FR 35815, dated May 28, 1980: DISPUTES CLAUSE (a) This contract is subject to the Contract Disputes Act of 1978 (Pub. L. 95-563). (b) Except as provided in the Act, all disputes arising under or relating to this contract shall be resolved in accordance with this clause. (c)(i) As used herein, "claim" means a written demand or assertion by one of the parties seeking as a legal right, the payment of money, adjustment or interpretation of contract terms, or other relief, arising under or relating to this contract. (ii) A voucher, invoice, or request for payment that is not in dispute when submitted is not a claim for the purposes of the Act. However, where such submission is subsequently not acted upon in a reasonable time, or disputed either as to liability or amount, it may be converted to a claim pursuant to the Act. (iii) A claim by the contractor shall be made in writing and submitted to the contracting officer for decision. A claim by the Government against the contractor shall be subject to a decision by the Contracting Officer. (d) For contractor claims of more than $50,000 the contractor shall submit with the claim a certification that the claim is made in good faith; the supporting data are accurate and complete to the best of the contractor's knowledge and belief; and the amount requested accurately reflects the contract adjustment for which the contractor believes the Government is liable. The certification shall be executed by the contractor if an individual. When the contractor is not an individual, the certification shall be executed by a senior official in charge at the contractor's plan or location involved, or by having overall responsibility for the conduct of the contractor's affairs. (e) For contractor claims of $50,000 or less, the Contracting Officer must render a decision within 60 days. For contractor claims in excess of $50,000 the Contracting Officer must decide the claim within 60 days or notify the contractor of the date when the decision will be made. (f) The Contracting Officer's decision shall be final unless the contractor appeals or files a suit as provided in the Act. (g) The authority of the Contracting Officer under the Act does not extend to claims or disputes which by statute or regulation other agencies are expressly authorized to decide. (h) Interest on the amount found due on a contractor claim shall be paid from the date the claim is received by the Contracting Officer until the date of payment. (i) Except as the parties may otherwise agree, pending final resolution of a claim by the contractor arising under the contract, the contractor shall proceed diligently with the performance of the contract in accordance with the contracting officer's decision. § 16-7.502-3 Equal opportunity. Insert the clause set forth in FPR 112.803-2. § 16-7.502-4 Officials not to benefit. Insert the clause set forth in FPR 17.102-17. § 16-7.502-5 Covenant against contingent fees. Insert the clause set forth in FPR 11.503. § 16-7.502-6 Pricing of adjustments. Insert the clause set forth in FPR 17.102-20. § 16-7.502-7 Employment of the handicapped. Insert the clause set forth in FPR 60-741.4 (Temporary Regulation 38, 41 FR 22817, dated June 7, 1976) in all contracts and subcontracts of $2,500 or more: EMPLOYMENT OF THE HANDICAPPED (a) The contractor will not discriminate against any employee or applicant for employment because of physical or mental handicap in regard to any position for which the employee or applicant for employment is qualified. The Contractor agrees to take affirmative action to employ, advance in employment, and otherwise treat qualified handicapped individuals without discrimination based upon their physical or mental handicap in all employment practices such as the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising; layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. (b) The contractor agrees to comply with the rules, regulations, and relevant orders of the Secretary of Labor issued pursuant to the Rehabilitation Act of 1973, as amended. (c) In the event of the contractor's noncompliance with the requirements of this clause, actions for noncompliance may be taken in accordance with the rules, regulations and relevant orders of the Secretary of Labor issued pursuant to the Act. (d) The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices in a form to be prescribed by the Director, Office of Federal Contract Compliance Programs, Department of Labor, provided by or through the contracting officer. Such notices shall state the contractor's obligation under the law to take affirmative action to employ and advance in employment qualified handicapped employees and applicants for employment, and the rights of applicants and employees. (e) The contractor will notify each labor union or representative of workers with which it has a collective bargaining agreement or other contract understanding, that the contractor is bound by the terms of section 503 of the Act and is committed to take affirmative action to employ and advance in employment physically and mentally handicapped individuals. (f) The contractor will include the provisions of this clause in every subcontract or purchase order of $2,500 or more unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 503 of the Act, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontractor or purchase order as the Director, Office of Federal Contract Compliance Programs, may direct to enforce such provisions, including action for noncompliance. § 16-7.502-8 Clean air and water. Insert the clause prescribed by FPR 1-1.2302-2. § 16-7.502-9 Examination of records by the Comptroller General. Insert the clause set forth in FPR 17.103-3. § 16-7.502-10 Confidentiality of records. Insert the following clause in all FEHBP contracts. CONFIDENTIALITY OF RECORDS (a) The Carrier shall use the personal data on employees and annuitants which is provided it by Agencies and OPM, including social security numbers, for only those routine uses stipulated for the data and published annally in the FEDERAL REGISTER as a part of OPM's notice of systems of records. (b) The Carrier shall also hold all medical recoras, and information relating thereto, of Federal subscribers and family members confidential except as follows: (1) As my be reasonably necessary for the administration of this contract; (2) As authorized by the patient or guardi an; (3) As disclosure is necessary to permit government officials having authority to investigate and prosecute alleged criminal actions; (4) To make audits of the contract; (5) As necessary to carry out the coordination of benefits provisions of this contract; (6) For bona fide medical research or educational purposes. If the carrier uses medical records for the administration of the contact, or for bona fide medical research or educational pur poses, it shall so state in the plan's brochure. § 16-7.502-11 Convict labor. Insert the clause set forth in FPR 112.204. § 16-7.502-12 Listing of employment openings. Insert the clause set forth in Temporary Regulation 39 (41 FR 33265-33267 dated Aug. 9, 1976). § 16-7.502-13 Preference for U.S. flag air carriers. Insert the clause set forth in FPR 11.323-2. § 16-7.503 Clauses to be used in experience rated contracts. The clauses set forth in this 16-7.503 shall be attached, included in, or incorporated by reference in all experience rated contracts. § 16-7.503-1 Price reduction for defective cost or pricing data. Insert the clause set forth in FPR 13.814-1(a). § 16-7.503-2 Audit and records. Insert the clause set forth in FPR 13.814-2. § 16-7.503-3 Subcontractor cost and pricing data. Insert the clause set forth in FPR 13.814-3 in all subcontracts specified in OPMPR 16-4.151-13. § 16-7.503-4 Cost accounting standards. Insert the appropriate contract clause set forth in FPR 1-3.1204-2. § 16-7.503-5 Subcontracts. Insert the clause set forth in OPMPR 16-3.903-50 as specified in OPMPR 16-3.903.2. § 16-7.503-6 Investment income. Insert the following clause: INVESTMENT INCOME (a) The carrier shall invest and reinvest all FEHBP funds on hand which are in excess of the funds needed to promptly discharge the obligations incurred under this contract. The carrier shall seek to maximize investment income with due consideration to the safety and liquidity of investments. (b) All investment income earned on FEHBP funds shall be credited to the Special Reserve on behalf of the FEHBP. (c) Where the Contracting Officer concludes that the carrier has failed to comply with paragraph (a) above, the Contracting Officer may direct the carrier to credit the Special Reserve for investment income that would have been earned had it not been for the carrier's lack of compliance. Failure to comply with paragraph (a) means failure to place excess funds in income producing investments and accounts. Interest income shall be due for the period from the date the Contractor failed to invest the funds until the date the Contractor invests such funds. (d) On charges for administrative expenses made by the Contractor which are subsequently determined to be unallowable, interest shall be charged from the date of the Contracting Officer's final decision. (e) If directed, the carrier shall credit the Special Reserve for income due in accordance with this clause. In calculating the amount of the interest credit due FEHBP, the semiannual rate determinations by the Secretary of the Treasury under authority of the Renegotiation Act of 1951 (50 U.S.C. App., para. 1211 et seq.) applicable to the period of noncompliance shall be used. Subpart 16-8.2-General Principles Applicable to Withdrawal of Approval of Health Benefits Carriers and Settlement of FEHBP Contracts § 16-8.250 Provisions for withdrawal of approval. (a) Section 8902(e), title 5, United States Code, provides as follows: "Approval of a plan may be withdrawn only after notice and opportunity for hearing to the carrier concerned without regard to subchapter II of chapter 5 and chapter 7 of this title." Within the limitations of this statute, the provisions of FPR 1-8.2 and 1-8.3 shall be applied. (b) Participating carriers which do not exhibit continuing ability to meet the requirements set out at 5 U.S.C. chapter 89, 5 CFR Part 890, and this Chapter 16, shall be notified by the contracting officer of their deficiency. Within 10 days of the receipt of such notification, the nonconforming carrier shall provide OPM with evidence concerning the asserted deficiency. If the carrier fails to provide evidence satisfactory to OPM of its ability to meet its obligations under the contract, OPM shall require the carrier to present detailed plans, in a form prescribed by the OPM, for correcting the asserted deficiency. The carrier shall submit the plans within 20 days following receipt of notification. Pending submission or implementation of plans required under this section, the OPM may institute action as it deems necessary to protect the interests of enrollees, including, but not limited to: (1) Suspending new enrollments under the contract; (2) advising enrollees of the asserted deficiencies and providing them an opportunity to transfer to another health plan. Failure to submit or to diligently implement plans which are required under this section shall constitute sufficient grounds for withdrawal of the approval of the health benefits plan in accordance with the provisions for withdrawal of approval of health benefits plans set out at 5 CFR 890.205. Upon withdrawal of approval, the Contracting Officer will terminate the contract. (c) Prior to withdrawal of approval of the health benefits plan, the contracting officer shall seek to enter into an agreement with the carrier that provides for a procedure which includes, but is not limited to: (1) The settlement of benefit claims incurred during the period of the contract and the administrative costs incurred in settling claims; (2) The transfer of subscribers to another FEHBP carrier, and the administrative costs related to transferring such subscribers; and (3) The immediate disposition of excess funds in the special reserve of experience rated contracts. Subpart 16-8.7-Clauses § 16-8.700 Applicability of subpart. Termination for default and/or convenience of the government clauses set out in FPR 1-8.7 are not consistent with the provisions of 5 U.S.C. 8902(e) pertaining to the withdrawal of ap § 16-11.5000 Taxes in connection with the performance of community rated contracts. Taxes to which community rated plans are subject at the time the community rate is set are reflected in the community rate which is fixed for the term of the contract and is not subject to redetermination. However, a state may impose a tax upon a community rated carrier during a contract period, the cost of which would not be reflected in the community rate. Accordingly, OPM may pay to the carrier from the contingency reserve the amount of any tax imposed during a contract period upon the carrier which is measured by the amount of subscription charges or by carrier's gross receipts, or any portion of either, limited to the portion of tax attributable to the contract. § 16-11.5001 Taxes in connection with the performance of experience rated contracts. Federal, state and local taxes on experience rated contracts present solely a question of allowability of costs and are treated in FPR 1-15. |