B-157729, NOV. 8, 1965

B-157729: Nov 8, 1965

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WE HAVE NO LEGAL BASIS FOR OBJECTION TO THE PROMULGATION OF THE PROPOSED AMENDMENTS TO THE CITED REGULATIONS. WE ARE NOT CONVINCED. THAT SUBPART 1-5.502 (A) (4) OF THE PROPOSED REGULATIONS REQUIRING THAT CONTRACTORS AND SUBCONTRACTORS PROVIDE SUITABLE INDEMNIFICATION TO PROTECT THE GOVERNMENT AGAINST LOSS OR DAMAGE TO VEHICLES AND THIRD PARTY CLAIMS ARISING FROM A CONTRACTOR EMPLOYEE'S USE OR OPERATION OF A MOTOR POOL VEHICLE IS IN THE BEST INTEREST OF THE GOVERNMENT AS A WHOLE. WE HAVE MADE NO COST STUDIES IN THIS AREA. WE SUGGEST THAT CONSIDERATION BE GIVEN TO AMENDING FPMR 101 39.8 MAKING THE CONTRACTING AGENCIES RESPONSIBLE FOR SUCH LOSSES IN THE SAME MANNER THEY ARE RESPONSIBLE WHEN MOTOR POOL VEHICLES ARE OPERATED BY THEIR OWN EMPLOYEES.

B-157729, NOV. 8, 1965

TO THE HONORABLE LAWSON B. KNOTT, JR., ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

BY LETTER DATED SEPTEMBER 17, 1965, THE ASSISTANT GENERAL COUNSEL, REGULATIONS AND GENERAL LAW DIVISION, REQUESTED OUR COMMENTS ON PROPOSED AMENDMENTS TO THE FEDERAL PROCUREMENT REGULATIONS AND THE FEDERAL PROPERTY MANAGEMENT REGULATIONS. THESE AMENDMENTS WOULD MAKE POSSIBLE AND FACILITATE THE USE OF MOTOR POOL VEHICLES BY COST REIMBURSEMENT TYPE CONTRACTORS AND SUBCONTRACTORS.

WE HAVE NO LEGAL BASIS FOR OBJECTION TO THE PROMULGATION OF THE PROPOSED AMENDMENTS TO THE CITED REGULATIONS. WE ARE NOT CONVINCED, HOWEVER, THAT SUBPART 1-5.502 (A) (4) OF THE PROPOSED REGULATIONS REQUIRING THAT CONTRACTORS AND SUBCONTRACTORS PROVIDE SUITABLE INDEMNIFICATION TO PROTECT THE GOVERNMENT AGAINST LOSS OR DAMAGE TO VEHICLES AND THIRD PARTY CLAIMS ARISING FROM A CONTRACTOR EMPLOYEE'S USE OR OPERATION OF A MOTOR POOL VEHICLE IS IN THE BEST INTEREST OF THE GOVERNMENT AS A WHOLE, BUT WE HAVE MADE NO COST STUDIES IN THIS AREA. WE SUGGEST THAT CONSIDERATION BE GIVEN TO AMENDING FPMR 101 39.8 MAKING THE CONTRACTING AGENCIES RESPONSIBLE FOR SUCH LOSSES IN THE SAME MANNER THEY ARE RESPONSIBLE WHEN MOTOR POOL VEHICLES ARE OPERATED BY THEIR OWN EMPLOYEES. THERE IS ALSO FOR CONSIDERATION WHETHER THE SELF-INSURANCE POLICY OF THE FEDERAL GOVERNMENT SHOULD NOT BE APPLIED TO THESE RISKS, ESPECIALLY WITH RESPECT TO THE LOSS OR DAMAGE TO THE VEHICLES. IN THIS CONNECTION, SEE CLAUSE (G) ENTITLED "RISK OF LOSS" WHICH IS REQUIRED BY SECTION 13.703 OF THE ARMED SERVICES PROCUREMENT REGULATIONS TO BE INCLUDED IN DEPARTMENT OF DEFENSE COST REIMBURSED CONTRACTS WHEN THE CONTRACTOR USES GOVERNMENT-FURNISHED ..END :