ML20236F397
| ML20236F397 | |
| Person / Time | |
|---|---|
| Issue date: | 09/14/1988 |
| From: | Edgeworth P NRC OFFICE OF ADMINISTRATION & RESOURCES MANAGEMENT (ARM) |
| To: | Cole N MPR ASSOCIATES, INC. |
| Shared Package | |
| ML20236F214 | List: |
| References | |
| CON-NRC-04-88-086, CON-NRC-4-88-86, FOIA-98-182 NUDOCS 9807020146 | |
| Download: ML20236F397 (3) | |
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ATIN: Noman M. Cole, Jr.
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036 bear Mr. Cole:
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Subject:
Contract No. NRC-04-88-086, Information to Support Indemnification Request We have reviewed the information provided by you in your letter of August 29, 1988 to cover certain risks associated with work at Three Mile Island. You are hereby advised that we are prevented from taking any further action on your request for indemnification until MPR has furnished complete documentation on both MPR and.GPUN which demonstrates each element of its request (see the detailed guidance set forth under FAR 50.403-1 and as discussed below). It~is emphasized that MPR must fully document its own inability to bear the risk. This requirement is not avoided by MPR's decision to name only GPUN under the risk that NRC would indemnify, since MPR remains a pri,.ry beneficiary of the NRC indemnity. Each element under FAR 50.403-1, copy of which was furnished to you on August 22, 1988, must therefore be discusse in detail as it relates to MPR and GPUN.
FAR 50.403-1(a)(2) re Jires that the contractor identify and define the unusually hazardous or r aclear risks for which indemnifica ion is requested, with a statement indicating how the contractor would be exposed to them. To meet this requirement, MPR should to the maximum degree possible, estimate i the extent of the risk for which it seeks indemnification. You should therefore discuss both the probability of an indemnified event occurring and an estimate of the financial loss resulting from such an occurrence. You should discuss the actual work to be performed and provide an analysis of how those considerations relate to the overall assessment of risk. Your discussion should relate to both MPR and GPUN.
FAR 50.403-1(a)(3) requires a statement, executed by a corporate official with binding contractual authority, of all insurance coverage applicable to the risks to be defined in the contract as unusually hazardous or nuclear.
Subparagraphs (1) through (vi) elaborate upon the information to be furnished, 'You should refer to them in preparing your response. After review of your August 29, 1988 letter, it is believed that MPR may have misinterpreted subpart 50,403-1(a)(3) to mean that it need not submit i-information on insurance policies that exclude unusually hazardous or nuclear risks. However, subpart 50.403-1(a)(3)(v), requires information on exclusions for unusually hazardous or nuclear risks. Also, FAR f
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l 50.403-1(a)(3)(vi) reqeires information on worker's compensation insurance which it is presumed both MPR and GPUN maintain. Therefore, to satisfy the FAR, MPR must provide full particulars on all of MPR's and GPUN's professional, business risk, liability, and similar insurance, including any GPUN insurance coverage which has been exhausted by the Three Mile Island incident. To re-emphasize, FAR 50.403-1(a)(3)(ii) requires a description of the types of insurance provided (including the extent to which the contractor is self-insured or intends to self-insure) with emphasis on identifying the risks insured against and the coverage extended to persons ,
or property, or both. FAR 50.403-1(a)(3) requires that the insurance statement for GPUN be executed by a GPUN corporate official with binding contractual authority.
MPR must also address the other required information identified under FAR 50.403-1, subparagraphs (4), (5) and (6) as follows:
(4) The controlling or limiting factors for determining the amount of i financial protection the contractor is to provide and maintain, with information regarding availability., cost, and terms of additional insurance or other forms of financial protection.
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(5) Whether the contractor's insurance program has been approved or accepted by any Government agency; and whether the contractor has an indemnification agreement covering similar risks under any other Government program, and, it so, a brief description of any limitations.
(6) If the contractor is a division or subsidiary of a parent corporation, (i) a statement of any insurance coverage of the parent corporation that bears on the risks for which the contractor seeks indemnification and (ii) a description of the precise legal relationship between parent and subsidiary or division.
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In_ responding to the above subparagraphs, both MPR and GPUN should discuss the considerations that determine its overall financial protection as provided through private insurance or otherwise. In summary, MPR must '
supply information relating to the ability of MPR or GPUN to bear some or all of the risks, by submitting a statement identifying the af filiates of each firm, by documenting the unavailability of other means of protection, and by otherwise fully complying with the requirements identified in the nt i FAR. This should include documented evidence such as correspondence to MPR I and GPUN from an insurance company that normally deals in specialized risks, #
j that insurance is not available.
In addition to the above, your letter stated that MPR expects to assist GPUN I in any repair and_ recovery activities, if required. It is requested that l MPR expand on this issue especially as it relates to the conflict of interest provisions contained in the contract.
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!- Based on the foregoing, it is envisioned that your response back to us will ,
include information relating to MPR addressing all of the above actions as l I
well as a separate information package from GPUN likewise addressing the same items. It is requested that this information be furnished in a timely manner and in no event later than September 26, 1988. If there is any problem in supplying this information within the required time frame, please let us know.
Sincerely, I
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4,y9 1 Paul J Edgewo h, Contracting Officer !
Contract Admir( stration Branch Division of Contract and Property l l Management Office of Administration and Resources Management i
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