Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

Tierney and Cummings Seek Administration Help on Legislation to Save Taxpayers Billions on Defense Base Act Insurance


Washington, DC (Sept. 11, 2012)— September 17, 2012

Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and Rep. John F. Tierney, Ranking Member of the Subcommittee on National Security, Homeland Defense and Foreign Operations, sent a letter to the Office of Management and Budget requesting support for, and input on, H.R. 5891, The Defense Base Act Insurance Improvement Act of 2012.

“This is a common-sense bill that would save the American taxpayers billions of dollars,” said Tierney. “Numerous government audits have concluded that we are paying too much for workers’ compensation insurance for overseas government contractors, and that these workers aren’t getting what they deserve. It’s time to fix this program.”

The legislation would transition the existing Defense Base Act (DBA) insurance program to a government self-insurance program. According to a 2009 Pentagon study, this change could save as much as $250 million a year. The study found: “In the long run, the self-insurance alternative may have the greatest potential for minimizing DBA insurance costs, and it has several administrative and compliance advantages as well.”

“We are sponsoring this legislation because several audits of the current DBA program have documented enormous unnecessary costs incurred by taxpayers,” Cummings and Tierney wrote.

The existing system has been a boondoggle for private insurance companies, which have reaped enormous profits under the program. According to an Oversight Committee investigation, insurance companies providing DBA insurance in Iraq and Afghanistan have made enormous underwriting profits that are significantly higher than those of traditional workers’ compensation insurers.

The letter from Tierney and Cummings requests support for the legislation and notes that “OMB may be evaluating similar options.”

September 18, 2012 Posted by | Afghanistan, AIG and CNA, Civilian Contractors, Contractor Casualties, Contractors Kidnapped, Contractors Missing, Defense Base Act, Department of Defense, Follow the Money, Private Military Contractors, Private Security Contractor | , , , , , , , | Leave a comment

New Procurement Process for DBA Insurance State Department Contracts

Clements Worldwide Cautions Contractors about New Procurement Process for DBA Insurance

See also Defense Base Act Insurance State Department Solicitation (Cancelled)

See also Documents showed that CNA reported the highest profits margins, taking in nearly 50 percent more in premiums than it paid out in benefits.

Clements Worldwide, leading provider of international insurance solutions, reports the U.S. State Department’s pre-negotiated agreement with insurer CNA for the provision of Defense Base Act (DBA) coverage has been suspended. As a result, all DBA policies with renewal dates of July 22, 2012 or later must be placed on an open market basis. Consequently, contractors may be subject to:
• Higher rates: o Minimum premiums now apply, which could be significantly more expensive for
contractors with operations in Iraq or Afghanistan.

• More complex procurement: o Brokers must now present risk in order to obtain quotes.
o Insurers will now require claims experience information in order to rate individual

• Varying limits: o Although basic coverage will remain the same, certain extensions (such as evacuation)
may have varying limits depending on the insurer.

“Failure to obtain DBA insurance for all covered employees not only subjects an organization to the risk of potential lawsuits by its employees, it also exposes the company and its officers individually to possible Labor Department fines and criminal actions,” says Smita Malik, assistant vice president at Clements. “DBA cover is therefore not only an important requirement of any robust compliance program, but also an important step in mitigating potential liability arising from covered employee activities.”

Malik urges all U .S. government contractors and subcontractors to promptly consult with an authorized DBA insurance expert to ensure proper compliance with the State Department’s new requirements.

August 7, 2012 Posted by | Afghanistan, Civilian Contractors, Defense Base Act, Iraq, State Department, USAID | , , , , | Leave a comment

Defense Base Act Coverage for US Government Contractors Working in Japan

OWCP News Release March 24, 2011

In the aftermath of the devastating earthquake and tsunami in Japan on March 11, 2011, various agencies of the United States may utilize the services of private contractors to provide humanitarian and other assistance as part of the global relief effort there. Workers for such private contractors are covered under the Defense Base Act (DBA) (except for certain specified instances where the Department of Labor has granted a waiver). Agency contracting personnel and private contractors should ensure that the proper DBA insurance is in place before workers are deployed overseas.

DoD and DoS contracts have been granted a waiver for non US employees.

Please keep in mind that while you must purchase this insurance it cannot be depended on to provide the stated benefits.  The Department of Labor administrates the program but has no authority over the insurance companies.  Employees may go for many years or forever without medical care and compensation.

As this insurance is normally cost reimbursable to the contract, not an expense to the contract company,  we highly recommend no one go on one of these contracts without supplemental insurance being provided. 

See our Defense Base Act Compensation Blog to read about the battle injured contractors and widows must fight for the most basic benefits as stated in the Act.

March 25, 2011 Posted by | Civilian Contractors, Defense Base Act, Department of Defense, Government Contractor, Japan, State Department | , , , , , , , | Leave a comment

One Small Step for Transparency, One Giant Step for the U.S. State Department

by David Isenberg cross posted from The Huffington Post

In the past I have been critical of both private security contractors and the government for not being more transparent about the details of the contracts that PSC undertake for various U.S. government departments and agencies. Although, in all fairness, the government deserves a bigger share of the blame as it often, if not always, inserts a clause in its contracts saying the PSC can’t talk to the media without first getting permission from the government.

So, imagine my surprise and delight to find that the U.S. State Department, of all places, has posted online portions of some of its actual past contracts. While not all the contract language is there and much of the information is generic, as in specifying the various parts of U.S. law that a contractor must comply with, it is worthwhile to know the requirements with which a PSC is supposed to comply.

Consider, for example, S-AQMPD-05-D-1098. This was the contract the State Department had with Blackwater under the Worldwide Personal Protective Services contract, the mother of all security contracts for State, as it provides for protection of U.S. diplomats around the world.

It is useful to peruse this as it shows that, at least when it comes to drafting a contract, the government does take some pains to specify what a contractor can and cannot do. The section on contract clauses covers everything from anti-kickback procedures, payment for overtime premiums, workers compensation insurance, and cost account standards, to name just a few clauses.

In case you wondered how much the State Department pays to provide contractors with Defense Base Insurance, as required by federal law, the amount is:

(a) The Department of State has entered into a contract with an insurance carrier to provide DBA insurance to Department of State contractors at a contracted rate. The rates for this insurance are as follows:Services @ $3.87 per $100 of compensation; or

Construction @ $5.00 per $100 of compensation.

Or consider the equipment the U.S. government agreed to provide ArmorGroup for the contract it had to protect the U.S. Embassy in Kabul. ArmorGroup was the PSC in the news back in 2009 when the party antics of some of its staff, such as drinking vodka shots off someone’s butt, made headlines around the world. That, by the way, would seem to be a violation of this contract provision:

H.2.4 CONTRACTOR COMPLIANCE. Contractor personnel shall adhere to the following rules, regulations, and policies of the U.S. Chief of Missions, Kabul, Afghanistan.
• Contractor personnel shall be expected to perform and conduct themselves with proper decorum, subject to the U.S. Chief of Mission.

The Sate Department obviously wanted the security contractors to stay in shape, which is why it paid for such gym equipment as elliptical bicycle, table tennis table, curl machine, chest press, shoulder press, bench press, abdominal bench, and DVD player, to name a few.

Or see S-AQM-PD-05-C-1103, which is the contract DynCorp held for providing aviation services for anti-drug work in Colombia. Those Colombian citizens who have been concerned about the possible health effects of the chemicals used to destroy coca crops will be interested to know that the contract calls for:

Written records for each scheduled spray mission that includes: mission ID, pilot ID, date, time, aircraft number, aircraft type, duration of flight, hectares sprayed, flow through spray total amount of herbicide dispensed, type of crop sprayed, geographic location of spray mission, reason for abort of aborted missions. Identify as Del Norte or non- Del Norte spray mission.

By the way, since contractors are not shy about claiming that they are usually more cost-effective than the government you should note that the contract states that the contractor shall provide “an overall effectiveness rate report of the aerial eradication program for the calendar year. This shall be compared to ground verification data (if the ground verification is performed). Raw data captured for this report shall be provided to a USG representative.”

I’m sure we would all love to see that report

December 12, 2010 Posted by | ArmorGroup, Blackwater, Civilian Contractors, Contingency Contracting, Contractor Oversight, DynCorp, Private Security Contractor, State Department | , , , , , | Leave a comment