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• Open CRS (User submitted)
• Federation of American Scientists

Summary

Many overseas federal contractors are covered by the Defense Base Act (DBA), which mandates that they provide workers' compensation insurance for their employees. As the U.S. military has increased operations in Iraq, the size of the DBA program has grown, and in 2007 over $170 million in cash and medical benefits were paid to nearly 12,000 DBA claimants who were injured or killed while working under contract to the federal government. Congress has become increasingly concerned with the costs involved in the DBA program because the federal government usually reimburses its contractors for their DBA premiums. The Department of State (DOS) and the U.S. Agency for International Development (USAID) have seen some cost savings since adopting a single-source model for their DBA insurance in which contractors for each agency are required to purchase insurance from a single company selected by the agency. The U.S. Army Corps of Engineers (USACE) is currently testing such a model for its DBA system. For the rest of the Department of Defense (DOD), however, including the Army's large Logistics Civil Augmentation Program (LOGCAP) contract, individual contractors are free to select their own DBA insurers and negotiate their own rates. The House of Representatives has included a provision in its version of the FY2009 Defense Authorization bill that would require DOD to change the way its contractors provide DBA coverage for their workers. In addition, the House Committee on Oversight and Government Reform held hearings in 2008 on the DBA. Current DOD DBA policies have also been criticized by the Government Accountability Office (GAO) and the Army's own auditors. It is expected that cost issues associated with the DBA will continue to be the subject of congressional attention for the remainder of the 110th Congress and beyond. This report provides an overview of the DBA and the systems used to provide DBA insurance at DOS, USAID, DOD, and USACE. Also included are criticisms of the current DOD DBA policy raised by GAO and Army auditors as well as responses to those criticisms by DOD and USACE. The report concludes with a discussion of several DBA reform options suggested by the House of Representatives in recent legislation. This report will be updated to reflect any legislative changes. A list of acronyms used in this report is provided in the Appendix.

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