Rule2023-05673
Defense Federal Acquisition Regulation Supplement: Ground and Flight Risk (DFARS Case 2020-D027)
Primary source
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Published
March 22, 2023
Effective
March 22, 2023
Issuing agencies
Defense DepartmentDefense Acquisition Regulations System
Abstract
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to revise the requirements related to the assumption of risk associated with aircraft under DoD contracts. Revisions are required due to numerous changes in aircraft contract situations and the emergence of contracts for small, unmanned aircraft.
Full Text
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<title>Federal Register, Volume 88 Issue 55 (Wednesday, March 22, 2023)</title>
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[Federal Register Volume 88, Number 55 (Wednesday, March 22, 2023)]
[Rules and Regulations]
[Pages 17346-17354]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-05673]
[[Page 17346]]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 228, 242, and 252
[Docket DARS-2021-0024]
RIN 0750-AL13
Defense Federal Acquisition Regulation Supplement: Ground and
Flight Risk (DFARS Case 2020-D027)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to revise the requirements
related to the assumption of risk associated with aircraft under DoD
contracts. Revisions are required due to numerous changes in aircraft
contract situations and the emergence of contracts for small, unmanned
aircraft.
DATES: Effective March 22, 2023.
FOR FURTHER INFORMATION CONTACT: David E. Johnson, telephone 202-913-
5764.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 86 FR
67892 on November 30, 2021, to revise the DFARS requirements related to
the assumption of risk associated with aircraft under DoD contracts.
Three respondents submitted public comments in response to the proposed
rule.
II. Discussion and Analysis
DoD reviewed the public comments in the development of the final
rule. A discussion of the comments and the changes made to the rule as
a result of those comments is provided, as follows:
A. Summary of Significant Changes From the Proposed Rule
The final rule includes, in response to the comments, definitions
for ``aircraft,'' ``covered aircraft,'' ``crewmember,'' ``flight,'' and
``workmanship error'' at DFARS 228.370-1 and modified definitions at
DFARS clause 252.228-7001, Ground and Flight Risk, for ``covered
aircraft,'' ``flight,'' and ``workmanship error'' A change is made to
the clause prescription concerning the exception for commercial
derivative aircraft to clarify that the exception does not apply to
contracts requiring flights by contractor crewmembers. Paragraph (d)(7)
is removed from clause 252.228-7001, which provided an exclusion for
``exposure to unreasonable conditions''.
B. Analysis of Public Comments
1. Ambiguity in Terminology
Comment: Several respondents express concern about ambiguity. For
example, one respondent states that the new definition of ``Covered
aircraft'' in the proposed rule creates confusion regarding
applicability of the Government's assumption of risk and items
associated with the aircraft. One respondent requests maintaining the
existing definition. Another respondent suggests that the terms
``aircraft'' and ``flight'' be specifically defined for this rule.
Response: DoD partially concurs with the comments. DoD added a
definition of ``aircraft'' and amended the terms ``flight'' and
``covered aircraft'' in the final rule. This rule changes the concept
of aircraft ``in the open'' to ``covered aircraft'' to help clarify
that the covered aircraft is under the Government's assumption of risk.
``Covered aircraft'' describes those aircraft for which the Government
has assumed the risk of loss.
Comment: Another respondent states that including an alternate
meaning of the word ``commercial'' in proposed definitions conflicts
with existing definitions in regulations and private-insurance industry
terminology, and the terms appear to originate from different titles of
the U.S. Code. Similarly, the respondent states that the proposed rule
``incorporates terms from Title 49 of the U.S. Code, such as
`commercial,' `noncommercial purposes,' and `public aircraft' that are
inconsistent and cannot be fully harmonized with the Title 41
terminology.''
Response: DoD does not concur with the comment. The final rule
incorporates terms that are defined in the U.S. Code and that are
necessary for this rule.
Comment: A respondent states clause 252.228-7001, as amended by
this rule, includes a definition of ``crewmember'' that is too narrow.
Response: DoD does not concur with the comment. The final rule
contains the flexibility to modify the definition via the contract
Schedule. The definition provided in this final rule simply removes a
list of positions included in the definition of ``flight crew member''
that was never all inclusive and refers to those positions identified
in the flight manual.
2. Ambiguity in Clause Prescription
Comment: Several respondents comment on the prescription for clause
252.228-7001. One respondent states that the prescription appears to
unnecessarily narrow the scope of the exception at 228.371(b)(1)(iv),
relating to work performed by a certified Federal Aviation
Administration (FAA) repair station.
Response: DoD partially concurs with the comment. The phrase
``maintenance (ground operations only) for'' was added at DFARS
228.371(b)(1)(iv) in the proposed rule to convey that flight operations
by contractor personnel are not authorized, not to limit the contracts
to maintenance only. The language in the final rule has been updated to
clarify that it does not apply to contracts requiring flights by
contractor crewmembers.
Comment: Another respondent states that the prescription at
228.371(b)(1) for clause 252.228-7001 creates ambiguity because ``the
acquisition, development and production of aircraft would apply only to
the production of new aircraft, while the modification, maintenance,
repair, flight, and overhaul would apply to existing Government-owned
aircraft.''
Response: DoD does not concur with the comment. This rule applies
both to production and to existing Government-owned aircraft.
Comment: Another respondent states that, in the proposed rule, the
prescription at 228.371(c) appears ambiguous regarding proper selection
of DFARS 252.228-70XX instead of DFARS 252.228-7001.
Response: DoD does not concur with the comment. The new clause is
purposefully limited to certain, rather narrow contractual
applications, circumstances, or conditions specifically listed. The
list is inclusive and applies specifically to the actions described
depending on whether the aircraft is new production aircraft or
existing aircraft.
3. Unnecessary Language
Comment: A respondent states that the proposed rule includes
language at DFARS 228.370-2(d), describing the purpose of clause
252.228-7001, that is ``unwarranted'' and unnecessary. The respondent
suggests deleting this language.
Response: DoD does not concur with the comment. DoD will not delete
this language but has revised the language in the final rule to
describe the purpose of clause 252.228-7001.
4. Major Rule
Comment: Two respondents state that the rule might meet the
definition of a ``major'' rule, as defined at 5 U.S.C. 804.
[[Page 17347]]
Response: This rule is not a major rule as defined in 5 U.S.C. 804,
because it lacks elements of a major rule.
5. Preaward Survey of Aircraft
Comment: A respondent states that the proposed rule includes an
``ill-defined and impractical'' requirement at DFARS 228.370-2(a) for a
preaward survey of potential subcontractors performing ``any aircraft
work.'' The respondent suggests deleting the entire paragraph.
Response: DoD does not concur with the comment. This language
reflects a long-standing policy that is necessary to assist both the
Government and the prime contractor. This rule does not change this
long-standing policy, but it does add clarifying language. FAR part 42
contemplates preaward surveys of a contractor's or subcontractor's
facility at the discretion of the contracting officer. Finally, the
preaward survey process only applies to subcontractors working on the
aircraft itself, not to suppliers of aircraft parts.
6. Inconsistent With Defense Contract Management Agency (DCMA) Guidance
Comment: A respondent suggests deleting from the rule DFARS
228.370-2(e)(1), stating that the contracting officer shall make a
liability determination after damage to Government aircraft has already
occurred, because this is both possibly unfair to contractors and
inconsistent with DCMA Instruction 8210-1.
Response: DoD does not concur with the comment. The final rule
reflects that such determinations will be made under DFARS 228.370-
2(g), not the combined instruction. This determination is necessarily
made after an incident but also takes into account the exclusions
listed at 252.228-7001(d).
7. Compliance With the Combined Regulation/Instruction
Comment: A respondent states that in accordance with clause
252.228-7001(b), compliance with the combined regulation/instruction is
required from the time of contract award throughout the period of
performance of the contract, regardless of the Government's assumption
of risk under the contract and is contradictory to requirements for
creation and approval of the procedures, which require assignment of a
Government flight representative (GFR) and subsequent approval.
Response: DoD does not concur with the comment. The applicability
of the Combined Instruction accrues at time of award of the contract,
and the contractor is bound by contract terms, which include the
Combined Instruction throughout contract performance. Coverage under
the Combined Instruction is not triggered by assignment of a GFR or the
Government's assumption of the risk of loss. Any claim for Government-
caused delay would be addressed separately.
8. Treatment of Government-Furnished Property
Comment: A respondent states that the ``carve out'' at clause
252.228-7001(d)(3) of Government-furnished property from coverage under
the clause creates an ``undue burden'' on contractors.
Response: DoD does not concur with the comment. If the contract
anticipates transportation by common carrier, and the aircraft leaves
the contractor's facility, then the risk of loss may be determined
under other applicable terms and conditions of the contract.
9. Allowability of Costs for Insurance Costs and Premiums
Comment: A respondent states that while FAR part 31 addresses cost
principles, clause 252.228-7001(d)(4) nonetheless addresses
allowability of costs for insurance costs and premiums.
Response: DoD does not concur with the comment. Clause 252.228-
7001(d)(4) relates to insurance generally, and it is an exclusion to
coverage. Clause 252.228-7001(f) specifically makes the cost of
insurance premiums for the aircraft expressly unallowable.
10. Exclusion for Exposure to Unreasonable Conditions
Comment: A respondent states that language at clause 252.228-
7001(d)(7), which provides an exclusion for ``exposure to unreasonable
conditions,'' is unjustified.
Response: DoD concurs with the comment. DoD removed the exclusion
at 252.228-7001(d)(7) from the final rule. However, DFARS 228.370-2(h)
describes factors for the contracting officer to consider in
determining whether the contractor has failed to comply with the
Combined Instruction, including exposure of covered aircraft to
unreasonable conditions, which may result in revocation of the
Government's assumption of the risk of loss.
11. Use the Fifteen-Day ``Cure Period''
Comment: A respondent states that the ``cure period'' reflected in
clause 252.228-7001(e)(1) should specify a particular timeframe, and it
suggests retaining the fifteen-day ``cure period.''
Response: DoD partially concurs with the comment. The rule was
revised to include the term ``preliminary notice of revocation,'' which
allows the contracting officer flexibility in specifying an appropriate
time period. As a result, the contractor has the opportunity to respond
to the preliminary notice by proposing a timeline for resolution or
suggesting a solution. If the contracting officer finds that the
contractor has failed to address the conditions, then the contracting
officer may issue a formal notice of revocation. This is intended to
afford the contractor sufficient time to take corrective action.
12. Request for Equitable Adjustment
Comment: A respondent objects to language in the proposed rule
stating that the contractor may submit a request for equitable
adjustment to the contracting officer, noting such language departs
from existing language that a request for equitable adjustment shall be
made in connection with clause 252.228-7001.
Response: DoD concurs with the comment. DoD revised the final rule
accordingly.
13. Increase to Contractor's Share of Loss
Comment: A respondent states that the proposed doubling of the
contractor's share of loss from $100,000 to $200,000, reflected at
clause 252.228-7001(h), lacks a meaningful basis and represents an
excessive transfer of risk to the contractor.
Response: DoD does not concur with the comment. The cost-share
increase is not intended to track inflation; rather, this is a policy
decision based on risk of loss and cost sharing and is determined by
the Government as a fair and reasonable cost-share arrangement.
14. Flowdown Requirement
Comment: A respondent states that the requirement at clause
252.228-7001(k) to flow down this clause to commercial subcontractors
is both inconsistent with acquisition policy and practically
unworkable.
Response: DoD does not concur with the comment. The intent of the
rule is to apply the clause at 252.228-7001 to all contract levels.
However, there are exceptions provided in paragraph (k) of the clause.
These exceptions did not exist prior to this rule. Therefore, this rule
actually narrows the flowdown requirement.
C. Other Changes
This rule incudes minor changes not associated with public
comments. First, this rule adds a reference to PGI 228.370-2(e) at
228.370-2. Second, this rule adds the term ``incorrectly
[[Page 17348]]
performed skill-based'' to the definition of workmanship error and
reorganizes the definition of ``covered aircraft'' for ease of reading
at 228.370-1 and 252.228-7001(a). In addition, guidance to contracting
officers, concerning contracting officer determinations of liability
and exclusions from the Government's assumption of risk located in the
DFARS clause 252.228-7001 clause, is extrapolated from the clause and
also included in the text at 228.370-2(g) along with other similar
procedural subject matter. The text at 228.370-2(h), Notice of
revocation of the Government's assumption of risk, and DFARS clause
252.228-7001, paragraph (e), address the issuance of a preliminary
notice of revocation. Paragraph (a) is added to 228.370-2 to provide a
cross reference to procedures on assigning a Government flight
representative. At DFARS 228.371, the clause prescription in paragraph
(b)(2) included several factors for contracting officers to consider
when using the clause at 252.228-7001 under certain circumstances.
These factors have been relocated in new section 228.370-3, because
they were not part of the actual clause prescription. Also at DFARS
228.371, the prescription for 252.228-7007, Public Aircraft and State
Aircraft Operations--Liability, is moved to the end of the section.
In the clause at 252.228-7001, the definitions in paragraph (a) are
arranged in alphabetical order. References to ``commercial items'' are
replaced with ``commercial products and commercial services'' or
``commercial products or commercial services'' as appropriate for the
context.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT), for Commercial Products, Including Commercially
Available Off-the-Shelf (COTS) Items, and for Commercial Services
This rule creates a new clause: DFARS 252.228-7007, Public Aircraft
and State Aircraft Operations--Liability. The clause DFARS 252.228-7007
is prescribed for use in solicitations and contracts that do not
include the clause at 252.228-7001 but involve public aircraft
operations or state aircraft operations. This rule also revises the
clause at DFARS 252.228-7001, Ground and Flight Risk. DoD intends to
apply both clauses to contracts at or below the simplified acquisition
threshold. Application to contracts at or below the SAT will prevent
contractors who have contracts valued below $200,000 from being liable
for the entirety of the loss or damages. This burden on these smaller
purchases is not commensurate with those of the larger dollar value
contracts and, therefore, discourages the contractors with lower value
contracts from working with the Government.
DoD does not intend to apply either clause to prime contracts for
commercial services or commercial products, including commercially
available off-the-shelf items, per DFARS 228.371. However, DFARS clause
252.228-7001 will apply to subcontracts for commercial products and
commercial services, with an exception for work subcontracted to a
Federal Aviation Administration (FAA) part 145 repair station
performing work pursuant to their FAA license. DFARS clause 252.228-
7001 provides for self-insurance to avoid reliance on commercial
insurance for military aircraft. Application of DFARS 252.228-7001 to
subcontracts, including those for commercial products and commercial
services, provides a mechanism to require subcontractor compliance with
the combined regulation/instruction, which provide the terms and
conditions for the Government's self-insurance.
IV. Expected Impact of the Rule
This rule is not expected to have a significant impact on the
Government or industry. The rule updates and expands procedures and
guidelines on use of DFARS clause 252.228-7001. The change in the
calculation of the contractor's share of loss is viewed as a positive
incentive in reducing the magnitude of the risk of loss for
contractors. Although the dollar amount for contractor liability is
increased from $100,000 to $200,000 in this rule, the addition of
reasonable alternatives that recognize the low cost of aircraft, such
as drones, will mean that a contractor's share of loss may be much
lower. The rule also provides a new clause 252.228-7007, Public
Aircraft and State Aircraft Operations--Liability, to use when
conditions for use of 252.228-7001 are not met, but the acquisition
involves public aircraft operations or state aircraft operations. It is
expected that contract clause 252.228-7007 will be used very
infrequently, fewer than 10 times annually.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993.
VI. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States. A
major rule under the Congressional Review Act cannot take effect until
60 days after it is published in the Federal Register. The Office of
Information and Regulatory Affairs has determined that this rule is not
a major rule as defined by 5 U.S.C. 804.
VII. Regulatory Flexibility Act
A final regulatory flexibility analysis (FRFA) has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
The FRFA is summarized as follows:
DoD is amending the Defense Federal Acquisition Regulation
Supplement (DFARS) to update the ground and flight risk policy and
associated clause at DFARS 252.228-7001. The language is outdated and
needs revision to clarify applicability to numerous changes in aircraft
contract situations and emergence of contracts for small, unmanned
aircraft.
DoD received no comments in response to the initial regulatory
flexibility analysis.
The rule will apply to all small entities that will be awarded
contracts for the acquisition, development, production, modification,
maintenance, repair, flight, or overhaul of aircraft. According to data
from the Federal Procurement Data System for fiscal years 2017 through
2019, DoD made approximately 6,287 awards per year on average for these
types of acquisitions for a total of 18,861 awards. Approximately 7,757
of these awards were made to 2,185 unique small businesses.
This rule does not include any new reporting, recordkeeping, or
other compliance requirements for small entities.
There are no known, significant, alternative approaches that would
accomplish the objectives of the rule.
[[Page 17349]]
VIII. Paperwork Reduction Act
This rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Parts 228, 242, and 252
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 228, 242, and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 228, 242, and 252 continues
to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 228--BONDS AND INSURANCE
228.370 [Redesignated as 228.371]
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2. Redesignate section 228.370 as section 228.371.
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3. Add new section 228.370 and sections 228.370-1, 228.370-2, and
228.370-3 to read as follows:
228.370 Ground and flight risk.
228.370-1 Definitions.
As used in this section--
Aircraft means, unless otherwise provided in the contract Schedule,
any item, other than a rocket or missile, intended for flight (e.g.,
fixed-winged aircraft, blended wing/lifting bodies, helicopters,
vertical take-off or landing aircraft, lighter-than-air airships, and
unmanned aerial vehicles), including emerging technologies that would
commonly be considered aircraft. New production articles become
aircraft at a stage of manufacture or production when a wing, portion
of a wing, or engine is attached to a fuselage. Blended wing/lifting
bodies become aircraft at a stage of manufacture or production when the
center portion and a lifting surface become attached.
Civil aircraft means an aircraft other than a public aircraft or
state aircraft.
Contractor managerial personnel means the contractor's directors,
officers, managers, superintendents, or equivalent representatives who
have supervision or direction of--
(1) All, or substantially all, of the contractor's business;
(2) All, or substantially all, of the contractor's operation at any
one plant or separate location; or
(3) A separate and complete major industrial operation.
Covered aircraft means an aircraft owned by or to be delivered to
the Government and, when determined by the contracting officer and
specifically identified as such in the contract Schedule, may include
contractor-furnished aircraft that are not intended for induction into
the DoD inventory, including--
(1) Aircraft furnished by the Government to the contractor under a
contract while in the contractor's possession, care, custody, or
control regardless of their location or state of disassembly or
reassembly;
(2) Items removed from a Government-furnished aircraft that are--
(i) Intended for reinstallation on that particular aircraft, which
retain their status as covered aircraft while awaiting installation;
and
(ii) Not intended for reinstallation on that particular aircraft,
which lose their status as covered aircraft once removal is complete;
(3) New production aircraft when wholly outside of buildings on the
contractor's premises or other places described in the contract
Schedule (e.g., hush houses, run stations, and paint facilities); and
(4) Commercial aircraft, to include commercially available off-the-
shelf aircraft, become covered aircraft when the commercial aircraft
arrives at the contractor's place of performance for modification under
the terms of the contract.
Crewmember means, unless otherwise provided in the contract
Schedule, personnel required in the flight manual, assigned for the
purpose of conducting any flight on behalf of the contractor. It also
includes any operator of an unmanned aerial vehicle.
Flight means any flight approved in writing by the Government
flight representative, to include taxi test made in the performance of
the contract, or flight for the purpose of safeguarding the aircraft.
All aircraft off the contractor's premises shall be considered to be in
flight when on the ground or water for reasonable periods of time
following emergency landings, landings made in performance of the
contract, or landings approved in writing by the contracting officer.
Public aircraft means an aircraft that meets the definition in 49
U.S.C. 40102(a)(41) and the qualifications in 49 U.S.C. 40125.
Specifically, a public aircraft means any of the following:
(1) An aircraft used only for the Government, except as provided in
paragraphs (5) and (7) of this definition.
(2) An aircraft owned by the Government and operated by any person
for purposes related to crew training, equipment development, or
demonstration, except as provided in paragraph (7) of this definition.
(3) An aircraft owned and operated by the government of a State,
the District of Columbia, or a territory or possession of the United
States or a political subdivision of one of these governments, except
as provided in paragraph (7) of this definition.
(4) An aircraft exclusively leased for at least 90 continuous days
by the government of a State, the District of Columbia, or a territory
or possession of the United States or a political subdivision of one of
these governments, except as provided in paragraph (7) of this
definition.
(5) An aircraft owned or operated by the armed forces or chartered
to provide transportation or other commercial air service to the armed
forces under the conditions specified by 49 U.S.C. 40125(c). In the
preceding sentence, the term ``other commercial air service'' means an
aircraft operation that--
(i) Is within the United States territorial airspace;
(ii) The Administrator of the Federal Aviation Administration
determines is available for compensation or hire to the public; and
(iii) Must comply with all applicable civil aircraft rules under
title 14, Code of Federal Regulations.
(6) An unmanned aircraft that is owned and operated by, or
exclusively leased for at least 90 continuous days by, an Indian Tribal
government, as defined in section 102 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122), except
as provided in paragraph (7) of this definition.
(7) As described in 49 U.S.C. 40125(b), an aircraft described in
paragraph (1), (2), (3), or (4) of this definition does not qualify as
a public aircraft in situations where the aircraft is used for
commercial purposes or to carry an individual other than a crewmember
or a qualified non-crewmember.
Public aircraft operation means operation of an aircraft that meets
the legal definition of public aircraft established in 49 U.S.C.
40102(a)(41) and the legal qualifications for public aircraft status
outlined in 49 U.S.C. 40125.
State aircraft means an aircraft operated by the Government for
sovereign, noncommercial purposes such as military, customs, and police
services. Military aircraft are afforded status as state aircraft. In
very rare circumstances, DoD-contracted aircraft may be designated, in
writing, by a
[[Page 17350]]
responsible Government official pursuant to DoD Directive 4500.54E, DoD
Foreign Clearance Program, to be operated in state aircraft status, and
States may choose to treat them as deemed state aircraft when they are
operating under a Government contract.
Workmanship error means damage to the aircraft that is the result
of an incorrectly performed skill-based task, operation, or action that
was originally planned or intended.
228.370-2 General.
(a) Assignment of a Government flight representative. See PGI
228.370-2(a) for procedures on assigning a Government flight
representative (GFR) when using the clauses at 252.228-7001 and
252.228-7007.
(b) Preaward survey. Before awarding any contract using the clause
at 252.228-7001, Ground and Flight Risk, the contracting officer should
obtain a preaward survey of the offeror's proposed aircraft flight and
ground operations facility. If the offeror proposed subcontracting any
aircraft work, the preaward survey should include a review of the
subcontractor's facility. For acquisitions falling under the exceptions
at 228.371(b)(1)(iii), (iv), and (vi), the contracting officer shall
review the documentation the offeror submitted with the proposal in
response to the DD Form 1423, Contract Data Requirements List, to
ensure the offeror's commercial insurance provides the appropriate
coverage required by the clause at 252.228-7001.
(c) Foreign military sales. The exception for foreign military
sales (FMS) contracts at 228.371(b)(1)(iii) only applies to FMS cases
where the FMS customer has explicitly refused assumption of risk of
loss. If the FMS customer has accepted the standard Letter of Offer and
Acceptance Standard Terms and Conditions, as described in DoD 5105.38-
M, Security Assistance Management Manual, they have assumed risk of
loss.
(d) Commercial derivative aircraft. The exception at
228.371(b)(1)(iv) for commercial derivative aircraft only applies if
the contractor is a licensed and certified Federal Aviation
Administration (FAA) repair station for the specific model of aircraft
under contract, when work is being performed pursuant to the FAA
license under 14 CFR part 145. The FAA's repair station search tool is
available at <a href="https://av-info.faa.gov/repairstation.asp">https://av-info.faa.gov/repairstation.asp</a>. All aircraft
flying public aircraft operations operate under airworthiness
certificates maintained by the military services. The FAA airworthiness
certificate in the exception in this paragraph (d) underlies the
military service certificate.
(e) Insurance. The clause at 252.228-7001, Ground and Flight Risk,
is intended to reduce acquisition costs by eliminating the costs of
commercial insurance premiums. This clause also is intended to
encourage the contractor to perform safe and effective operations
through inclusion of a contractor's share of loss (i.e., a deductible).
Additionally, the clause requires compliance with the combined
regulation/instruction entitled ``Contractor's Flight and Ground
Operations'' (Air Force Instruction 10-220, Army Regulation 95-20,
Naval Air Systems Command (NAVAIR) Instruction 3710.1 (Series), Coast
Guard Instruction M13020.3 (Series), and Defense Contract Management
Agency Instruction 8210-1 (Series)), which provides procedures to
mitigate the risk of loss to the Government. For this reason, paragraph
(e)(4)(ii) of the clause at 252.228-7001 specifies that insurance
premium costs are unallowable. In addition, paragraph (d)(4) of the
clause provides that the Government's assumption of risk does not apply
where the loss or damage is covered by available insurance.
(f) Damage to Government aircraft. (1) Whenever damage to
Government aircraft is reported, each incident should be evaluated on
its own merits. When the cost of repair exceeds the contractor's share
of loss provisions, the contracting officer shall make a liability
determination in accordance with paragraph (g) of this section.
(2) Contracting officers should consult with the requiring activity
and the assigned contract administration office on replacement, repair,
or beyond economic repair decisions.
(3) See PGI 228.370-2(f) for an example of accident or mishap
damage versus workmanship-error damage.
(g) Contracting officer determination of liability. (1) When making
a liability determination, the contracting officer should seek input
from the GFR and legal counsel, as needed.
(2) The Government's assumption of risk shall not extend to damage,
loss, or destruction of covered aircraft that--
(i) Is the result of willful misconduct or lack of good faith on
the part of the contractor's managerial personnel, including the
contractor's oversight of subcontractors;
(ii) Is sustained during flight if either the flight or the
crewmembers have not been approved in advance and in writing by the
GFR, who has been authorized in accordance with the combined
regulation/instruction entitled ``Contractor's Flight and Ground
Operations'';
(iii) Occurs in the course of transportation by rail, or by
conveyance on public streets, highways, or waterways, unless the
transportation is limited to the vicinity of the contractor's premises,
and incidental to work performed under the contract as described in the
Schedule;
(iv) Is covered by insurance;
(v) Occurs after the contracting officer has, in writing, revoked
the Government's assumption of risk; or
(vi) Is sustained due to workmanship errors.
(h) Notice of revocation of the Government's assumption of risk.
The liability provisions of the clause at FAR 52.245-1, Government
Property, do not apply to the aircraft impacted by a notice of
revocation.
(1) Preliminary notice of revocation. (i) When finding that
contractor managerial personnel have failed to comply with the combined
regulation/instruction, as required by paragraph (b) of the clause at
252.228-7001, including finding the covered aircraft are exposed to
unreasonable conditions, the contracting officer shall issue a
preliminary notice of revocation of the Government's assumption of risk
to the contractor and shall require the contractor to comply with
contract requirements. Factors for the contracting officer to consider
in determining exposure to unreasonable conditions include, but are not
limited to, the following:
(A) Lack of adequate hangar fire suppression or firefighting
vehicles;
(B) Failure to provide adequate procedures to the GFR; or
(C) Systemic failure to comply with approved procedures.
(ii) The preliminary notice of revocation will state the timeframe
for the contractor to correct the noncompliance or conditions.
(2) Notice of revocation. If the contractor fails to correct the
cited noncompliance or conditions within the specified timeframe, the
contracting officer shall issue to the contractor a notice of
revocation of the Government's assumption of risk for any covered
aircraft.
(i) Thereafter the contractor assumes the entire risk for damage,
loss, or destruction of the previously covered aircraft.
(ii) Any costs incurred by the contractor, including the costs of
the contractor's self-insurance, insurance premiums paid to insure the
contractor's assumption of risk, deductibles associated with such
purchased insurance, etc., to mitigate its risk are unallowable costs.
[[Page 17351]]
(iii) The notice of revocation does not relieve the contractor of
its obligation to comply with all other provisions of the clause at
252.228-7001, including the combined regulation/instruction entitled
``Contractor's Flight and Ground Operations.''
(iv) Within 3 days of receipt of the contractor's notice of
correction, the contracting officer shall notify the contractor whether
the Government will resume risk of loss. The contracting officer shall
determine that the noncompliance or cited conditions have been
corrected prior to resuming assumption of risk.
(v) Any disputes regarding the contracting officer's notice of
revocation shall be subject to FAR clause 52.233-1, Disputes.
(i) Procedures in the event of damage, loss, or destruction of
covered aircraft. (1) In the event of damage, loss, or destruction of
covered aircraft, except in cases covered by paragraph (j)(2) of this
section, the contracting officer shall evaluate the contractor's
statement of--
(i) The damaged, lost, or destroyed aircraft;
(ii) The time and origin of the damage, loss, or destruction;
(iii) All known interests in commingled property of which aircraft
are a part; and
(iv) The insurance, if any, covering the interest in commingled
property.
(2) If a new production aircraft is damaged, lost, or destroyed
before it has become a covered aircraft, the Government bears no
responsibility for risk of loss.
(3) If a new production aircraft is damaged, lost, or destroyed
after it has become a covered aircraft, the contracting officer shall
provide written direction to the contractor to take action in
accordance with the contracting officer's written direction that the
aircraft shall be--
(i) Replaced;
(ii) Repaired to the condition immediately prior to the damage; or
(iii) Considered beyond economic repair. The contracting officer
shall decide whether further actions are required under the contract.
(4) If a covered aircraft that has been furnished by the Government
to the contractor is damaged, lost, or destroyed while covered, the
contracting officer shall provide written direction to the contractor
that the aircraft shall be--
(i) Repaired; or
(ii) Considered beyond economic repair. The contracting officer
shall decide further actions required under the contract.
(5) The contracting officer shall make an equitable adjustment for
expenditures made in performing the obligations under paragraph (h) of
the clause at 252.228-7001.
(j) Contracting officer determination of the contractor's share of
loss. (1) The contractor's share of loss or damage to covered aircraft,
except for loss or damage caused by negligence of Government personnel,
is the least of--
(i) $200,000;
(ii) 20 percent of the price or estimated acquisition cost of
affected aircraft; or
(iii) 20 percent of the price or estimated cost of the contract,
task order, or delivery order.
(2) If the Government requires covered aircraft to be replaced or
repaired by the contractor, any resulting equitable adjustment shall
not include reimbursement of the contractor's share of loss.
(3) In the event the Government does not decide to replace or
repair the covered aircraft, the clause at 252.228-7001 requires the
contractor to credit the contract price or pay the Government, as
directed by the contracting officer, the least of--
(i) $200,000;
(ii) 20 percent of the price or estimated acquisition cost of
affected aircraft; or
(iii) 20 percent of the price or estimated cost of the contract,
task order, or delivery order.
(4) The costs incurred by the contractor for its share of the loss
and for insuring against that loss are unallowable costs, including but
not limited to--
(i) The contractor's share of loss under the Government's self-
insurance;
(ii) The costs of the contractor's self-insurance;
(iii) The deductible for any contractor-purchased insurance;
(iv) Insurance premiums paid for contractor-purchased insurance;
and
(v) Costs associated with determining, litigating, and defending
against the contractor's liability.
(k) Reimbursement from a third party. If the contracting officer
finds or has reason to believe that the contractor has been reimbursed
or otherwise compensated by a third party for damage, loss, or
destruction of covered aircraft and has also been compensated by the
Government, then the contracting officer shall demand an equitable
reimbursement. If the contracting officer requests that the contractor
provide reasonable assistance in obtaining recovery, such effort shall
be an allowable expense of the contractor.
228.370-3 Aircraft not owned by or to be delivered to the Government.
(a) When a contract involves aircraft not owned by or to be
delivered to the Government, the contracting officer may use the clause
at 252.228-7001 only if the contracting officer determines that it is
in the best interest of the Government.
(b) Potential factors for the contracting officer to consider when
deciding which course of action is in the best interest of the
Government include, but are not limited to, whether--
(1) The cost of hull insurance exceeds the replacement cost of the
aircraft;
(2) Insurance is not available (e.g., high-risk experimental
flights and operations of aircraft in a war zone); or
(3) Ground or flight activities that involve contractor-owned and
contractor-operated aircraft may pose risk to Government aircraft
(e.g., due to close proximity in flight).
0
4. Amend newly redesignated section 228.371 by revising paragraph (b)
and adding paragraph (f) to read as follows:
228.371 Additional clauses.
* * * * *
(b) Use the clause at 252.228-7001, Ground and Flight Risk, in
solicitations and contracts--
(1) For the acquisition, development, production, modification,
maintenance, repair, flight, or overhaul of aircraft owned by or to be
delivered to the Government, except those solicitations and contracts--
(i) That are strictly for activities incidental to the normal
operations of the aircraft (e.g., refueling operations, minor non-
structural actions not requiring towing such as replacing aircraft
tires due to wear and tear);
(ii) That are awarded for purchase under FAR part 12 procedures;
(iii) For which a non-DoD customer (including an FMS customer per
225.7305) has decided to allow the use of commercial insurance or other
self-insurance;
(iv) For commercial derivative aircraft with an FAA certificate of
airworthiness maintained to FAA standards. Performance under the
exception in this paragraph (b)(1)(iv) must be at a licensed and
certified FAA repair station rated for the type of aircraft and work to
be maintained. This exception does not apply to contracts requiring
flights with contractor crewmembers;
(v) Under which the aircraft are to be dismantled and removed from
the inventory; or
(vi) Under which the aircraft are classified as Group 1 or 2
unmanned aircraft systems per DoD Instruction (DoDI) 6055.07, Mishap
Notification, Investigation, Reporting, and Record
[[Page 17352]]
Keeping, and the purchase price of the air vehicle, including installed
Government-furnished equipment, is below the cost threshold for a Class
C mishap per DoDI 6055.07; or
(2) Involving aircraft not owned by or to be delivered to the
Government, only if the contracting officer decides that it is in the
best interest of the Government. See 228.371-3.
* * * * *
(f) Use the clause at 252.228-7007, Public Aircraft and State
Aircraft Operations--Liability, in solicitations and contracts that do
not include the clause at 252.228-7001 but involve public aircraft
operations or state aircraft operations.
PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES
0
5. Amend section 242.302 by adding paragraph (a)(56) to read as
follows:
242.302 Contract administration functions.
(a) * * *
(56) Within DoD, maintaining surveillance of aircraft flight and
ground operations is accomplished by incorporating into the contract,
task order, or delivery order the requirements of the applicable
version of the combined regulation/instruction entitled ``Contractor's
Flight and Ground Operations'' (Air Force Instruction 10-220, Army
Regulation 95-20, Naval Air Systems Command (NAVAIR) Instruction 3710.1
(Series), Coast Guard Instruction M13020.3 (Series), and Defense
Contract Management Agency Instruction 8210-1 (Series)). See PGI
242.302(a)(56).
* * * * *
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
6. Amend section 252.228-7000--
0
a. By revising the section heading; and
0
b. In the introductory text by removing ``228.370(a)'' and adding
``228.371(a)'' in its place.
The revision reads as follows:
252.228-7000 Reimbursement for War-Hazard Losses.
* * * * *
0
7. Revise section 252.228-7001 to read as follows:
252.228-7001 Ground and Flight Risk.
As prescribed in 228.371(b), use the following clause:
Ground and Flight Risk (Mar 2023)
(a) Definitions. As used in this clause--
Aircraft means, unless otherwise provided in the contract
Schedule, any item, other than a rocket or missile, intended for
flight (e.g., fixed-winged aircraft, blended wing/lifting bodies,
helicopters, vertical take-off or landing aircraft, lighter-than-air
airships, and unmanned aerial vehicles), including emerging
technologies that would commonly be considered aircraft. New
production articles become aircraft at a stage of manufacture or
production when a wing, portion of a wing, or engine is attached to
a fuselage. Blended wing/lifting bodies become aircraft at a stage
of manufacture or production when the center portion and a lifting
surface become attached.
Contractor's managerial personnel means the Contractor's
directors, officers, managers, superintendents, or equivalent
representatives who have supervision or direction of--
(1) All, or substantially all, of the Contractor's business;
(2) All, or substantially all, of the Contractor's operation at
any one plant or separate location; or
(3) A separate and complete major industrial operation.
Contractor's premises means those premises, including
subcontractors' premises, designated in the Schedule or in writing
by the Contracting Officer, and any other place the aircraft is
moved for safeguarding.
Covered aircraft means an aircraft owned by or to be delivered
to the Government and, when determined by the contracting officer
and specifically identified as such in the contract Schedule, may
include contractor-furnished aircraft that are not intended for
induction into the DoD inventory, including--
(1) Aircraft furnished by the Government to the Contractor under
this contract while in the Contractor's possession, care, custody,
or control regardless of their location or state of disassembly or
reassembly;
(2) Items removed from a Government furnished aircraft that
are--
(i) Intended for reinstallation on that particular aircraft,
which retain their status as covered aircraft while awaiting
installation; and
(ii) Not intended for reinstallation on that particular
aircraft, which lose their status as covered aircraft once removal
is complete;
(3) New production aircraft when wholly outside of buildings on
the Contractor's premises or other places described in the Schedule
(e.g., hush houses, run stations, and paint facilities); and
(4) Commercial aircraft, to include commercially available off-
the-shelf aircraft, become covered aircraft when the commercial
aircraft arrives at the Contractor's place of performance for
modification under the terms of the contract.
Crewmember means, unless otherwise provided in the Schedule,
personnel required in the flight manual, assigned for the purpose of
conducting any flight on behalf of the Contractor. It also includes
any operator of an unmanned aerial vehicle.
Flight means any flight approved in writing by the Government
flight representative, to include taxi test made in the performance
of this contract, or flight for the purpose of safeguarding the
aircraft. All aircraft off the Contractor's premises shall be
considered to be in flight when on the ground or water for
reasonable periods of time following emergency landings, landings
made in performance of the contract, or landings approved in writing
by the contracting officer.
Workmanship error means damage to the aircraft that is the
result of an incorrectly performed skill-based task, operation, or
action that was originally planned or intended.
(b) Combined regulation/instruction. The Contractor shall be
bound by the operating procedures contained in the combined
regulation/instruction entitled ``Contractor's Flight and Ground
Operations'' (Air Force Instruction 10-220, Army Regulation 95-20,
NAVAIR Instruction 3710.1 (Series), Coast Guard Instruction M13020.3
(Series), and Defense Contract Management Agency Instruction 8210-1
(Series) in effect on the date of contract award. Compliance with
the combined regulation/instruction is required from the time of
contract award throughout the period of performance of the contract,
regardless of the Government's assumption of risk under the
contract.
(c) Government as self-insurer. The Government self-insures and
assumes the risk of damage to, or loss or destruction of, covered
aircraft subject to the following conditions:
(1) The Contractor's liability to the Government for damage,
loss, or destruction of covered aircraft is limited to the
Contractor's share of loss as defined at paragraph (h) of this
clause, except when one of the exclusions at paragraph (d) applies.
(2) The liability provisions of this clause take precedence over
the liability provisions of Federal Acquisition Regulation (FAR)
clause 52.245-1, Government Property, with respect to covered
aircraft.
(3) The Contractor is not liable for loss, damage, or
destruction of covered aircraft as the result of normal wear and
tear, or intentional damage or destruction as required in the
Schedule.
(4) Conditions for Government assumption of risk in flight are
as follows:
(i) The Contractor's crewmembers are approved in writing by the
Government flight representative (GFR).
(ii) The flight is approved in writing by the GFR.
(d) Exclusions from the Government's assumption of risk. The
Government's assumption of risk under this clause shall not extend
to damage, loss, or destruction of covered aircraft which--
(1) Is the result of willful misconduct or lack of good faith on
the part of the Contractor's managerial personnel, including the
Contractor's oversight of subcontractors;
(2) Is sustained during flight if either the flight or the
crewmembers have not been approved in advance and in writing by the
GFR, who has been authorized in accordance with the combined
regulation/instruction entitled ``Contractor's Flight and Ground
Operations'';
(3) Occurs in the course of transportation by rail, or by
conveyance on public streets,
[[Page 17353]]
highways, or waterways, unless the transportation is limited to the
vicinity of the Contractor's premises, and incidental to work
performed under the contract as described in the Schedule;
(4) Is covered by insurance;
(5) Occurs after the Contracting Officer has, in writing,
revoked the Government's assumption of risk in accordance with
paragraph (e)(3) of this clause; or
(6) Is sustained due to workmanship errors.
(e) Revoking the Government's assumption of risk.
(1) The Contracting Officer, when finding that the Contractor's
managerial personnel have failed to comply with paragraph (b) of
this clause, will issue a preliminary notice of revocation requiring
the Contractor to comply with contract requirements within a
timeframe specified by the Contracting Officer. In determining
exposure to unreasonable conditions, the Contracting Officer will
consider factors including, but not limited to, the following: lack
of adequate hangar fire suppression or firefighting vehicles,
failure to provide adequate procedures to the GFR, or systemic
failure to comply with approved procedures.
(2) Upon receipt of the preliminary notice of revocation, the
Contractor shall promptly correct the noncompliance or cited
conditions, regardless of whether there is agreement that the
conditions are unreasonable.
(3) If the Contracting Officer finds that the Contractor failed
to correct the cited noncompliance or conditions within the
specified timeframe, the Contracting Officer will issue a notice of
revocation of the Government's assumption of risk for any covered
aircraft.
(4) If the Contracting Officer issues a notice of revocation
pursuant to the terms of this clause--
(i) The Contractor shall thereafter assume the entire risk for
damage, loss, or destruction of the previously covered aircraft;
(ii) Any costs incurred by the Contractor (including the costs
of the Contractor's self-insurance, insurance premiums paid to
insure the Contractor's assumption of risk, deductibles associated
with such purchased insurance, etc.) to mitigate its risk are
unallowable costs; and
(iii) The liability provisions of the clause at FAR 52.245-1,
Government Property, are not applicable to the aircraft impacted by
the notice of revocation.
(5) The Contractor shall promptly notify the Contracting Officer
when the noncompliance or cited conditions have been corrected.
Within 3 days of receipt of the Contractor's notice of correction,
the Contracting Officer will notify the Contractor whether the
Government will resume risk of loss. The Contracting Officer will
determine that the noncompliance or cited conditions have been
corrected prior to resuming assumption of risk.
(6) The notice of revocation does not relieve the Contractor of
its obligation to comply with all other provisions of this clause,
including the combined regulation/instruction entitled
``Contractor's Flight and Ground Operations.''
(7) Any disputes regarding the Contracting Officer's notice of
revocation shall be subject to FAR clause 52.233-1, Disputes.
(f) Contractor's exclusion of insurance costs. The Contractor
warrants that the contract price does not and will not include,
except as may be authorized in this clause, any charge or
contingency reserve for insurance (including the Contractor's share
of loss) covering damage, loss, or destruction of covered aircraft
when the risk has been assumed by the Government, even if the
assumption may be terminated for covered aircraft.
(g) Procedures in the event of damage, loss, or destruction.
(1) In the event of damage, loss, or destruction of covered
aircraft, the Contractor shall take all reasonable steps to protect
the aircraft from further damage, to separate damaged and undamaged
aircraft, and to put all aircraft in the best possible order. Except
in cases covered by paragraph (h)(2) of this clause, the Contractor
shall furnish to the Contracting Officer a statement of--
(i) The damaged, lost, or destroyed aircraft;
(ii) The time and origin of the damage, loss, or destruction;
(iii) All known interests in commingled property of which
aircraft are a part; and
(iv) The insurance, if any, covering the interest in commingled
property.
(2) If a new production aircraft is damaged, lost, or destroyed
before it has become a covered aircraft, the Government bears no
responsibility for risk of loss.
(3) If a new production aircraft is damaged, lost, or destroyed
after it has become a covered aircraft, the Contractor shall take
action in accordance with the Contracting Officer's written
direction that the aircraft shall be--
(i) Replaced;
(ii) Repaired to the condition immediately prior to the damage;
or
(iii) Considered beyond economic repair. The Contracting Officer
will decide whether further actions are required under the contract.
(4) If a covered aircraft that has been furnished by the
Government to the Contractor is damaged, lost, or destroyed while
covered, the Contractor shall take action in accordance with the
Contracting Officer's written direction that the aircraft shall be--
(i) Repaired; or
(ii) Considered beyond economic repair. The Contracting Officer
will decide further actions required under the contract.
(5) The Contracting Officer will make an equitable adjustment
for expenditures made in performing the obligations under this
paragraph (g).
(h) Contractor's share of loss.
(1) The Contractor's share of loss or damage to covered
aircraft, except for loss or damage caused by negligence of
Government personnel, is the least of--
(i) $200,000;
(ii) 20 percent of the price or estimated acquisition cost of
affected aircraft; or
(iii) 20 percent of the price or estimated cost of the contract,
task order, or delivery order.
(2) If the Government requires covered aircraft be replaced or
repaired by the Contractor, any resulting equitable adjustment shall
not include reimbursement of the Contractor's share of loss.
(3) In the event the Government does not decide to replace or
repair, the Contractor agrees to credit the contract price or pay
the Government, as directed by the Contracting Officer, the least
of--
(i) $200,000;
(ii) 20 percent of the price or estimated acquisition cost of
affected aircraft; or
(iii) 20 percent of the price or estimated cost of the contract,
task order, or delivery order.
(4) The costs incurred by the Contractor for its share of the
loss and for insuring against that loss are unallowable costs,
including but not limited to--
(i) The Contractor's share of loss under the Government's self-
insurance;
(ii) The costs of the Contractor's self-insurance;
(iii) The deductible for any Contractor-purchased insurance;
(iv) Insurance premiums paid for Contractor-purchased insurance;
and
(v) Costs associated with determining, litigating, and defending
against the Contractor's liability.
(i) Reimbursement from a third party. In the event the
Contractor is reimbursed or compensated by a third party for damage,
loss, or destruction of covered aircraft and has also been
compensated by the Government, the Contractor shall equitably
reimburse the Government. The Contractor shall do nothing to
prejudice the Government's right to recover against third parties
for damage, loss, or destruction. Upon the request of the
Contracting Officer or authorized representative, the Contractor
shall at Government expense furnish to the Government all reasonable
assistance and cooperation (including the prosecution of suit and
the execution of instruments of assignment or subrogation) in
obtaining recovery.
(j) Liability to third parties. Unless the flight and
crewmembers have been approved in writing by the GFR, the Contractor
shall not be reimbursed for liability to third parties for loss or
damage to property or for death or bodily injury caused by covered
aircraft during flight, even if the Government has accepted such
liability under any other provisions of the contract.
(k) Subcontracts. The Contractor shall incorporate the
requirements of this clause, including this paragraph (k), in
subcontracts to include subcontracts for commercial products and
commercial services, except--
(1) The Contractor shall not include paragraph (f) of this
clause in subcontracts for commercial products or commercial
services; and
(2) The Contractor shall not incorporate the requirements of
this clause in subcontracts with Federal Aviation Administration
(FAA) part 145 repair stations performing work pursuant to their FAA
license.
(End of clause)
0
8. Amend section 252.228-7003--
0
a. By revising the section heading; and
0
b. In the introductory text by removing ``228.370(c)'' and adding
``228.371(c)'' in its place.
[[Page 17354]]
The revision reads as follows:
252.228-7003 Capture and Detention.
* * * * *
0
9. Amend section 252.228-7005--
0
a. By revising the section heading; and
0
b. In the introductory text by removing ``228.370(d)'' and adding
``228.371(d)'' in its place.
The revision reads as follows:
252.228-7005 Mishap Reporting and Investigation Involving Aircraft,
Missiles, and Space Launch Vehicles.
* * * * *
0
10. Amend section 252.228-7006--
0
a. By revising the section heading; and
0
b. In the introductory text by removing ``228.370(e)'' and adding
``228.371(e)'' in its place.
The revision reads as follows:
252.228-7006 Compliance with Spanish Laws and Insurance.
* * * * *
0
11. Add section 252.228-7007 to read as follows:
252.228-7007 Public Aircraft and State Aircraft Operations--
Liability.
As prescribed in 228.371(f), use the following clause:
Public Aircraft and State Aircraft Operations--Liability (Mar 2023)
(a) Definitions. As used in this clause--
Civil aircraft means an aircraft other than a public aircraft or
state aircraft.
Public aircraft means an aircraft that meets the definition in
49 U.S.C. 40102(a)(41) and the qualifications in 49 U.S.C. 40125.
Specifically, a public aircraft means any of the following:
(1) An aircraft used only for the Government, except as provided
in paragraphs (5) and (7) of this definition.
(2) An aircraft owned by the Government and operated by any
person for purposes related to crew training, equipment development,
or demonstration, except as provided in paragraph (7) of this
definition.
(3) An aircraft owned and operated by the government of a State,
the District of Columbia, or a territory or possession of the United
States or a political subdivision of one of these governments,
except as provided in paragraph (7) of this definition.
(4) An aircraft exclusively leased for at least 90 continuous
days by the government of a State, the District of Columbia, or a
territory or possession of the United States or a political
subdivision of one of these governments, except as provided in
paragraph (7) of this definition.
(5) An aircraft owned or operated by the armed forces or
chartered to provide transportation or other commercial air service
to the armed forces under the conditions specified by 49 U.S.C.
40125(c). In the preceding sentence, the term ``other commercial air
service'' means an aircraft operation that--
(i) Is within the United States territorial airspace;
(ii) The Administrator of the Federal Aviation Administration
determines is available for compensation or hire to the public; and
(iii) Must comply with all applicable civil aircraft rules under
title 14, Code of Federal Regulations.
(6) An unmanned aircraft that is owned and operated, or
exclusively leased for at least 90 continuous days, by an Indian
Tribal government, as defined in section 102 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
5122), except as provided in paragraph (7) of this definition.
(7) As described in 49 U.S.C. 40125(b), an aircraft described in
paragraph (1), (2), (3), or (4) of this definition does not qualify
as a public aircraft when the aircraft is used for commercial
purposes or to carry an individual other than a crewmember or a
qualified non-crewmember.
Public aircraft operation means operation of an aircraft that
meets the legal definition of public aircraft established in 49
U.S.C. 40102(a)(41) and the legal qualifications for public aircraft
status outlined in 49 U.S.C. 40125.
State aircraft means an aircraft operated by the Government for
sovereign, noncommercial purposes such as military, customs, and
police services. Military aircraft are afforded status as state
aircraft. In very rare circumstances, DoD-contracted aircraft may be
designated, in writing, by a responsible Government official
pursuant to DoD Directive 4500.54E, DoD Foreign Clearance Program,
to be operated in state aircraft status, and such status cannot be
deemed without a written designation by an authorized Government
official.
(b) Combined regulation/instruction. Upon award, for contract
performance to be conducted as a public aircraft operation, the
Contractor shall be bound by the operating procedures contained in
the combined regulation/instruction entitled ``Contractor's Flight
and Ground Operations'' (Air Force Instruction 10-220, Army
Regulation 95-20, NAVAIR Instruction 3710.1 (Series), Coast Guard
Instruction M13020.3 (Series), and Defense Contract Management
Agency Instruction 8210-1 (Series)) in effect on the date of
contract award.
(c) Contractor liability for operations for contract performance
conducted as public aircraft operations or state aircraft
operations.
(1) The Contractor assumes responsibility for all damage or
injury to persons or property, including the Contractor's employees
and property, and Government personnel and property, occasioned
through the use, maintenance, and operation of the Contractor's
aircraft or other equipment by, or the action of, the Contractor or
the Contractor's employees and agents.
(2) The Contractor, at the Contractor's expense, shall maintain
adequate public liability and property damage insurance, including
hull insurance for the Contractor's aircraft, during the duration of
this contract, insuring the Contractor against all claims for injury
or damage.
(3) The Contractor shall maintain workers' compensation and
other legally required insurance with respect to the Contractor's
own employees and agents.
(4) The Government will in no event be liable or responsible for
damage or injury to any person or property occasioned through the
use, maintenance, or operation of any aircraft or other equipment
by, or the action of, the Contractor or the Contractor's employees
and agents in performing under this contract, and the Government
shall be indemnified and saved harmless against claims for damage or
injury in such cases.
(End of clause)
[FR Doc. 2023-05673 Filed 3-21-23; 8:45 am]
BILLING CODE 5001-06-P
</pre></body>
</html>Indexed from Federal Register on March 22, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.