FAR 28.311-1—Contract clause.
Plain-English Summary
FAR 28.311-1 tells contracting officers when they must include the clause at 52.228-7, Insurance—Liability to Third Persons, in a solicitation or contract. The section applies only when a cost-reimbursement contract is contemplated, and it expressly excludes construction contracts and architect-engineer (A-E) services contracts. It also makes the requirement subject to agency acquisition regulations, meaning an agency may have additional implementing rules or procedures that affect how the clause is used. In practice, this section is about protecting the Government and third parties by ensuring the contractor has appropriate liability insurance coverage when the Government is paying allowable costs under a cost-reimbursement arrangement. For contractors, it signals that insurance requirements may be mandatory and should be priced, planned, and verified early in the acquisition process. For contracting officers, it is a clause-coverage rule that must be checked during solicitation and contract preparation to avoid an omission that could create risk or require later correction.
Key Rules
Insert the required clause
When a cost-reimbursement contract is contemplated, the contracting officer shall insert FAR 52.228-7, Insurance—Liability to Third Persons, in the solicitation and contract. This is a mandatory clause-coverage requirement, not a discretionary one.
Applies only to cost-reimbursement
The rule is triggered by contemplated cost-reimbursement contracting. If the acquisition is not cost-reimbursement, this section does not require use of the clause.
Construction is excluded
The clause is not inserted for construction contracts. Construction acquisitions are handled under different insurance and risk-allocation rules.
Architect-engineer services are excluded
The clause is also not used for architect-engineer services contracts. Those services follow separate statutory and regulatory treatment, so this insurance clause does not apply here.
Subject to agency regulations
The requirement operates in accordance with agency acquisition regulations. Agencies may prescribe additional direction on when and how the clause is used, but they cannot override the basic FAR trigger and exclusions.
Responsibilities
Contracting Officer
Determine whether the contemplated contract is cost-reimbursement and whether any exclusion applies. If the acquisition falls within the rule, insert FAR 52.228-7 in the solicitation and contract, while also following any applicable agency acquisition regulations.
Agency
Issue acquisition regulations or procedures that implement this FAR section and provide any agency-specific guidance on use of the clause. Ensure contracting personnel understand when the clause is required and when the construction and A-E exclusions apply.
Contractor
Review the solicitation and contract for the required insurance clause, confirm that required liability coverage can be obtained, and account for the associated cost and compliance obligations in proposal preparation and contract performance.
Practical Implications
For cost-reimbursement buys, this clause check belongs in the early acquisition planning and solicitation review process; missing it can create compliance problems and may require a contract modification or solicitation amendment.
Contractors should treat the clause as a real cost and risk issue, because insurance premiums and compliance efforts may affect proposal pricing and performance planning.
Do not assume the clause applies to every contract type: it is specifically tied to contemplated cost-reimbursement contracts and does not apply to construction or architect-engineer services under this section.
Agency supplements matter. Even when FAR sets the baseline, agency acquisition regulations may add procedures or clarify when the clause must be used, so both COs and contractors should verify the agency-specific rules.
A common pitfall is confusing this third-party liability insurance clause with other insurance requirements in FAR Part 28; the clause here is specifically the one at 52.228-7 and only for the situations described in this section.
Official Regulatory Text
In accordance with agency acquisition regulations, the contracting officer shall insert the clause at 52.228-7 , Insurance-Liability to Third Persons, in solicitations and contracts, other than those for construction contracts and those for architect-engineer services, when a cost-reimbursement contract is contemplated.