Overview
FAR 37.403 prescribes the mandatory inclusion of a specific indemnification and insurance clause in contracts for nonpersonal health care services to manage legal and financial risks.
Key Rules
- Mandatory Clause: The Contracting Officer must insert FAR 52.237-7, "Indemnification and Medical Liability Insurance," in all solicitations and contracts for nonpersonal health care services.
- Discretionary Use: For simplified acquisitions under FAR Part 13, the Contracting Officer has the option to include this clause in bilateral purchase orders.
- Target Services: The rule applies specifically to "nonpersonal" health care services, where the government does not exercise direct supervision and control over the medical providers as if they were federal employees.
Practical Implications
- Risk Transfer: This section ensures that the financial burden of medical malpractice or negligence rests with the contractor rather than the federal government.
- Compliance Requirement: Contractors bidding on medical service requirements must factor the cost of professional liability insurance into their pricing to meet the requirements of the mandated clause.