County RFP lets us list exceptions to the sample contract. Will flagging the indemnity clause sink our proposal?

Flagging the indemnity clause on the county's own exceptions form won't get your proposal set aside. A narrow, specific exception is normal in an RFP, and a blanket one is what costs points.

The difference from a sealed bid matters here. In an invitation for bid, changing the contract terms makes the bid nonresponsive. An RFP that hands you an exceptions form is telling you the terms are open to negotiation, and the county's purchasing code or ordinance sets how exceptions get weighed.

I only speak for my own desk at a university, but our exceptions form goes to the buyer and to whoever does risk and contract review, not to the evaluators scoring the program narrative. The ones that cause trouble say things like "strike the entire section" or "subject to negotiation." The ones that read fine name the clause and offer replacement language.

For yours I'd write it this way:
- Keep the duty to defend and indemnify for claims caused by your organization's or your staff's negligence.
- Strike the part covering the county's own negligence, and say why: your liability policy doesn't cover it.
- Accept the additional insured requirement as written, so it's clear you're flagging one piece only.

Get the board to approve the replacement wording before you submit, so you aren't renegotiating your own exception after selection.

Listing an exception to an indemnity clause in a county RFP does not usually get a proposal marked down or set aside, as long as it is specific and well-reasoned. Kayla is right that an RFP process, especially with an exceptions form, allows for negotiation of terms, unlike a federal Invitation for Bid (IFB) where any deviation from the terms makes a bid nonresponsive. The key is to be precise with your exception. Your county's procurement office will review it. Be ready to explain your position, especially how your insurance limits your ability to indemnify the county for its own negligence. This is a common point of negotiation in state and local contracts.