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Permitted Contract Drivers
OAR 125-155-0400(4): The vehicle rules allow Contractors, under limited situations, to drive state vehicles. Use of a state vehicle does not make the Contractor an "agent" of the state. The Contractor must agree to hold the state harmless and indemnify the state for any loss or damage to, or liability arising out of the use of,any state vehicle in their care, custody, or control.
 
PROCEDURES:
 
Agencies may permit a Contractor to use a state vehicle by following OAR 125-155-0400(4), (a) through (d).
 
THE AGENCY MUST:
  • Justify furnishing a vehicle to the Contractor. This justification should be in writing. Include answers: Why is it necessary to allow the Contractor to use the state vehicle? What is the benefit to the state? The answers should be something an Agency executive could defend in the media or before the legislature.
  • Obtain permission from the vehicle owner. This permission should be in writing. The "owner" may be a state agency motor pool such as DAS Motor Pool. For agency owned vehicles, the "owner" would probably be that agency´s fleet manager.
  • Contract Contents. Independent Contractors must sign a contract with the state to become a "permitted contract driver." The contract shall include the statements, clauses, and insurance requirements listed below. Note: Other clauses or insurance coverage may apply to the activities of the Contractor.
1. Compliance with State Vehicle Use and Access Rules: The Contractor agrees to comply with the Vehicle Use and Access Rules, OAR 125-155-0000 through 0900.
 
2. Statement of the allowed uses of the state vehicle: This statement needs to be detailed regarding the exact allowed uses of the state vehicle, and be specific to each contract.
 
3. Responsibility Statement: The Contractor agrees to furnish adequate primary vehicle liability and property insurance for the state vehicles within their care, custody, or control while performing duties outlined in the contract. The Contractor agrees to drive state vehicles lawfully, safely, and courteously. The Contractor will promptly investigate and respond in writing to citizen complaints. The Contractor will be responsible for any violations, citations, tickets, fines, or charges related to the unlawful operation or use of the vehicle. The Contractor will garage the vehicle in a safe and secure location. The Contractor will be responsible for any misuse of the vehicle while it is in their possession or control. The Contractor will return the vehicle in good repair and working condition.
 
4. Insurance, Indemnity, Supplementary Insurance and Non-Insurance Risk Transfer Recommendations: See applicable sections of the Smart Contracting Toolkit for wording of each clause.
 
5. Special Contract Clauses: Use these clauses only when you have completed the approval process for a Permitted Contract Driver.
a. Indemnity/Hold Harmless Clause for Independent Contractors using a State Vehicle as a Permitted Contract Driver. The State of Oregon, Department of (name) agrees to allow (Name of the Independent Contractor) to access and use state vehicles as a "permitted contract driver" as allowed in the Vehicle Use And Access Rules, OAR 125-155-0400 (4) (a-d). The Independent Contractor shall be responsible for and will reimburse the State, upon demand - regardless of negligence, for all loss or damage to, or liability arising out of the use of, any state vehicle in their care, custody, or control. The Independent Contractor shall indemnify, defend and hold harmless the State of Oregon and the Department of (name), its officers, employees and agents from all claims, suits or actions of any nature arising out of its use of the state vehicle.
 
Notes:
  • This clause states that an Independent Contractor who is authorized as a permitted contract driver of a state vehicle will follow all rules associated with driving the vehicle, and indemnify the state for any loss or damage to, or liability arising out of the use of, any state vehicle in their care, custody, or control.
b. Automobile Liability. Contractor shall obtain at Contractor´s expense, and keep in effect during the term of the Contract, Commercial Automobile Liability Insurance covering all owned, non-owned, or hired vehicles, as applicable. This coverage shall extend to all Contractor employees, agents and officers while operating state vehicles in their care, custody, or control performing duties outlined in the contract. This coverage may be written in combination with the Commercial General Liability Insurance (with separate limits). Combined single limit per occurrence shall not be less than $(indicate dollar amount).
 
Notes:
  • This coverage defends and pays Contractor´s liability for property damage and bodily injury to others while operating owned, non-owned, or hired vehicles.
  • The state should be named as an Additional Insured under Automobile Liability coverage.
c. Automobile Property or a Self-Insurance Equivalent. Contractor shall obtain, at Contractor´s expense and keep in effect during the term of the contract, physical damage coverage (collision and comprehensive coverage) or its self-insurance equivalent on state vehicle(s) in the Contractor´s care, custody, or control. This insurance shall be primary over, and non-contributory with, any other applicable insurance or self-insurance. The insurance limits shall be sufficient to cover the actual cash value of any vehicle(s) in the Contractor´s care, custody, or control.
 
Notes:
  • Insurance limits shall be sufficient to cover the actual cash value of any state vehicle(s) that the Contractor will have in their care, custody, or control.
  • To ensure coverage for loss or physical damage (collision and comprehensive) to the state vehicle(s) in the Contractor´s care, custody, or control, require non-owned physical damage insurance. 
  • The state should be named as a Loss Payee under any non-owned physical damage coverage. Coverage shall be primary and non-contributory with any other insurance and self-insurance.
  • If a Contractor presents self-insurance coverage, contact the Risk Management Division for consultation.
Revised 4/04