FAR 37.402—Contracting officer responsibilities.
Plain-English Summary
FAR 37.402 addresses the contracting officer’s responsibility to verify medical liability insurance in service contracts where that coverage is required. It covers two separate proof points: first, evidence that the apparent successful offeror is insurable before award, and second, evidence that the contractor actually has the required insurance coverage before performance begins. The section is designed to protect the Government by reducing the risk that a contractor will be unable to meet medical liability exposure associated with the work. In practice, this means the contracting officer must not rely on assumptions, verbal assurances, or post-award promises; the file must contain documentation showing both insurability and actual coverage at the right times. The rule is especially important for health-related, medical, or other professional service acquisitions where liability exposure can be significant and where lack of coverage could create operational, financial, or patient-safety risks. Although the text is brief, it imposes a clear sequencing requirement: verify insurability before award, then verify coverage before work starts.
Key Rules
Verify insurability before award
The contracting officer must obtain evidence of insurability concerning medical liability insurance from the apparent successful offeror before making award. This is a pre-award responsibility and is meant to confirm that the offeror can obtain the required insurance.
Verify actual coverage before performance
The contracting officer must obtain evidence of insurance showing the required coverage before contract performance begins. It is not enough that the offeror is insurable; the Government must have proof that the coverage is in place before work starts.
Use documentary evidence
The rule requires evidence, not informal assurances. The contracting officer should place documentation in the contract file that clearly shows the offeror’s insurability and later the contractor’s active insurance coverage.
Sequence matters
The section creates a two-step timing requirement: insurability first, coverage second. Award should not proceed without the first proof, and performance should not begin without the second proof.
Applies to required medical liability coverage
This provision is triggered when medical liability insurance is required under the acquisition. The contracting officer must ensure the evidence matches the coverage level and terms required by the solicitation or contract.
Responsibilities
Contracting Officer
Obtain evidence of insurability from the apparent successful offeror before award, then obtain evidence of insurance showing the required medical liability coverage before performance begins. The contracting officer must ensure the documentation is adequate and timely.
Apparent Successful Offeror
Provide evidence that it is insurable for the required medical liability insurance before award. The offeror must also be prepared to furnish proof of actual coverage if selected for award.
Contractor
Maintain the required medical liability insurance and provide evidence of coverage before starting performance. The contractor must keep the coverage in force as required by the contract.
Agency
Support contracting personnel with acquisition planning and oversight so that required insurance checks are built into the award and start-work process. The agency should ensure internal procedures prevent performance from starting without proof of coverage.
Practical Implications
Contracting officers should treat this as a hard gate: no award without insurability evidence, and no start of work without proof of coverage.
A common pitfall is confusing a broker quote, application, or intent to insure with actual evidence of insurability or coverage; the documentation must be specific and reliable.
If the contractor cannot show coverage before performance, the Government should delay start, because allowing work to begin without insurance can expose the agency to avoidable risk.
The contract file should clearly show both checkpoints were satisfied, since missing documentation can create audit and protest vulnerabilities.
Contractors should plan early for medical liability insurance because obtaining coverage can take time, especially for specialized services or higher-risk work.
Official Regulatory Text
Contracting officers shall obtain evidence of insurability concerning medical liability insurance from the apparent successful offeror prior to contract award and shall obtain evidence of insurance demonstrating the required coverage prior to commencement of performance.