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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: December 22, 2004

SUBJECT: Department of State Acquisition Regulation (DOSAR); Overseas Contracting

SOURCE: Federal Register, December 22, 2004, Vol. 69, No. 245, page 76660

AGENCIES: Department of State (DOS)

ACTION: Proposed Rule

SYNOPSIS: DOS is proposing to amend the DOSAR to (1) formalize policy regarding the application of the Small Business Act to contracts awarded by domestic contracting activities where contract performance takes place overseas; (2) address U.S. government support to contractors performing overseas; and, (3) clarify the application of the Defense Base Act insurance to local and third country nationals.

EDITOR'S NOTE: The DOSAR is Part 6 of Title 48 of the Code of Federal Regulations (CFR). It is available on the Internet at http://www.statebuy.state.gov/dosar/dosartoc.htm.

DATES: Comments on the proposed rule must be received by February 22, 2005.

ADDRESSES: Comments on this proposed rule may be submitted on the Federal eRulemaking Portal at http://www.regulations.gov; by e-mail to ginesgg@state.gov; by mail (paper, disk, or CD-ROM submissions) to Gladys Gines, Procurement Analyst, Department of State, Office of the Procurement Executive, 2201 C Street, NW, Suite 603, State Annex Number 6, Washington, DC 20522-0602; or by fax: 703-875-6155.

FOR FURTHER INFORMATION CONTACT: Gladys Gines, Procurement Analyst, Department of State, Office of the Procurement Executive, 2201 C Street, NW, Suite 603, State Annex Number 6, Washington, DC 20522-0602; or by e-mail: ginesgg@state.gov.

SUPPLEMENTAL INFORMATION: The following are the changes being proposed to the DOSAR:

• DOSAR 619.000, Scope of Part, would implement DOS policy by stating, "DOS contracts that are awarded domestically for performance overseas shall be subject to the Small Business Act as a matter of policy. Contracts awarded overseas should comply on a voluntary basis, where practicable." This clarifies the language in paragraph (b) of Federal Acquisition Regulation (FAR) 19.000, which states that FAR Part 19, Small Business Programs "applies only in the United States or its outlying areas" (except for FAR Subpart 19.6, Certificates of Competency and Determinations of Responsibility, which applies worldwide.) While the FAR 19.000(b) is clear with respect to contracts both awarded and performed in the United States (FAR Part 19 applies), and to contracts both awarded and performed outside the United States (FAR Part 19 does not apply), the application of FAR Part 19 to contracts awarded in the U.S. but performed overseas was unclear.
  
  DOS had followed an informal policy of applying FAR Part 19 to such contracts. This change would formalize the policy.
  
  
• DOSAR Subpart 625.71, Contractor Personnel Performing Under Department of State Contracts Outside the United States, would be added. It would consist of DOSAR 625.7101, Government Administrative, Logistical, and Security Support of Contractor Personnel, and the following subsections:
  
  
  • DOSAR 625.7101-1, Policy, which states, "Contractors shall provide their own in-country administrative, logistical, and security support for their personnel who are performing work at a diplomatic or consular mission outside the United States, unless otherwise specified in the contract...If the government authorizes the use of government-provided support, the government shall set forth the exact support to be authorized in the statement of work."
    
    
  • DOSAR 625.7101-2, Contract Clause, requires that DOSAR 652.225-72, Contractor Personnel Performing Under Department of State Contracts Outside the United States, be included in DOS contracts when "(1) the contract is in support of the operations/missions at one or more United States diplomatic or consular missions; and (2) the location of the United States diplomatic or consular mission at which the work is to be performed is designated as a contingency operation, as defined in FAR 2.101 [Definitions]." DOSAR 652.225-72 is optional for use "in contracts in support of the operations/missions at one or more United States diplomatic or consular missions in situations where a military contingency operation does not exist but a high risk to personnel or property is known or anticipated."
  
  DOSAR 652.225-72 would reiterate the policy statement in DOSAR 625.7101-1, then go on to require that the contractor meet the following requirements before sending an employee to the work site:
  
  
  • All applicable security and background checks are completed.
    
    
  • All personnel are medically and physically fit to endure the rigors of performance and have received all required vaccinations.
    
    
  • All personnel possess the required licenses to operate all vehicles or equipment necessary to perform the contract, if required by the position.
    
    
  • All personnel have all necessary passports, visas, entry permits, and other documents required for contractor personnel to enter and exit the foreign country.
    
    
  • All personnel have received a country clearance, if required by the Chief of Mission.
    
    
  • All personnel have received personal security training.
    
    
  • All personnel who are U.S. citizens are registered with the U.S. Embassy or Consulate with jurisdiction over the area of operations (personnel shall register on-line at http://www.travel.state.gov).
  
  Furthermore, contractor personnel would be prohibited from wearing military clothing or possessing privately-owned firearms unless specifically authorized by the contracting officer.
  
  
• DOSAR Subpart 628.3, Insurance, and the related clauses in DOSAR 652.228 would be revised to clarify the application of Defense Base Act (DBA) insurance to local and third country nationals.
  
  
  • The Department of Labor (DOL) has granted waivers to DOS to cover local and third country nationals. These waivers state that DOS contractors need not provide DBA insurance for those DOS contractor employees who are local or third country nationals; instead, the DOS contractors must provide workers' compensation benefits to local and third country nationals in accordance with local law of DBA insurance. DOS did not interpret the waivers as requiring DOS contractors to provide DBA insurance to local or third country national contractor employees in countries where no workers' compensation law existed. However, DOL recently stated that the absence of local workers' compensation laws in certain countries renders the waivers "ineffective," and where there is no local workers' compensation law, DOS contractors must provide local and third country national employees with the DBA insurance. Therefore, DOS would revise DOSAR 628.305, Overseas Workers' Compensation and War-Hazard Insurance, to clarify this issue: "(e)(2) If contract performance takes place in a country where there are no local workers' compensation laws, any local and third country national contractor employees are considered to be 'covered contractor employees', and the contractor shall acquire Defense Base Act insurance for those employees pursuant to the contract between the Department of State and the Defense Base Act insurance broker."
    
    
  • DOSAR 652.228-70, Defense Base Act -- Covered Contractor Employees, would be added to request information from prospective contractors on whether or not any covered contractor employees will be employed on the resultant contract.
    
    
  • DOSAR 628.305(f) and paragraph (g) of DOSAR 652.228-71, Workers' Compensation Insurance (Defense Base Act) -- Services, would be amended to exempt from coverage of the DBA revision includes language regarding a statutory exemption from the DBA contractor employees who perform work on an intermittent basis for not more than 90 days in a calendar year. This exemption is stated in Section 16 of the State Department Basic Authorities Act (22 U.S.C. 2680a).
    
    
  • Instead of having two separate provisions -- DOSAR 652.228-74, Defense Base Act Insurance Rates -- Limitation -- Fixed Price, and DOSAR 652.228-76, Defense Base Act Insurance Rates -- Limitation -- Cost Reimbursement, Labor-Hours, and Time-and-Materials -- DOSAR 652.228-76 would be removed and DOSAR 652.228-74 would be renamed “Defense Base Act Insurance Rates -- Limitation” and revised to cover all contract types.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953.

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