FAR 28.304—Risk-pooling arrangements.
Plain-English Summary
FAR 28.304 addresses agency risk-pooling arrangements, which are cooperative insurance-related structures agencies may set up to manage risk more efficiently. The section covers two core subjects: the authority of agencies to establish these arrangements and the requirement that the responsible agency designate a single manager or point of contact for each arrangement. Its purpose is to help the Government obtain safety engineering support and claims handling services from the insurance industry at the lowest practical cost. In practice, this means agencies can pool resources or participate in arrangements that centralize insurance-related expertise, but they must also ensure clear internal governance so the arrangement has one accountable lead. For contracting officers and program officials, the section signals that these arrangements are permissible, but they must be organized and managed in a way that avoids confusion, duplication, and unnecessary administrative cost.
Key Rules
Agencies may establish pools
The FAR permits agencies to create risk-pooling arrangements. This is an authorization, not a mandate, so agencies may use this tool when it supports their risk management and cost objectives.
Insurance industry services
These arrangements are intended to leverage the insurance industry for safety engineering and claims handling. The focus is on obtaining specialized services that help manage risk and process claims efficiently.
Minimum Government cost
The arrangement should be structured to achieve the lowest reasonable cost to the Government. Cost efficiency is a central purpose of the rule, so agencies should avoid duplicative administration or unnecessary service fees.
Single point of contact
The responsible agency must appoint one manager or point of contact for each arrangement. This ensures clear accountability, streamlined communication, and consistent oversight of the pooled arrangement.
Responsibilities
Agency
May establish risk-pooling arrangements when appropriate and must ensure the arrangement is designed to use insurance-industry services efficiently and economically.
Responsible Agency
Must appoint a single manager or point of contact for each risk-pooling arrangement and maintain clear oversight of the arrangement.
Single Manager / Point of Contact
Serves as the central coordinator for the arrangement, handling communications, oversight, and coordination of safety engineering and claims-handling activities.
Contracting Officer / Acquisition Staff
Should recognize when a risk-pooling arrangement is being used, coordinate with the designated point of contact, and ensure procurement actions align with the arrangement’s structure and cost objectives.
Practical Implications
Agencies should not treat risk-pooling as an informal or ad hoc process; it needs a clear governance structure and a designated lead.
A single point of contact reduces confusion when multiple offices, insurers, or stakeholders are involved, especially in claims handling.
The cost objective matters in practice: agencies should evaluate whether the arrangement truly lowers total administrative and claims-related costs.
A common pitfall is fragmented communication, which can lead to inconsistent decisions, delayed claims processing, or duplicated services.
Contracting and program personnel should confirm who the responsible manager is before relying on the arrangement for safety engineering or claims support.
Official Regulatory Text
Agencies may establish risk-pooling arrangements. These arrangements are designed to use the services of the insurance industry for safety engineering and the handling of claims at minimum cost to the Government. The agency responsible shall appoint a single manager or point of contact for each arrangement.