[Federal Register Volume 69, Number 245 (Wednesday, December 22, 2004)]
[Proposed Rules]
[Pages 76660-76664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27990]


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DEPARTMENT OF STATE

48 CFR Parts 619, 625, 628, and 652

[Public Notice 4938]
RIN 1400-AB90


Department of State Acquisition Regulation

AGENCY: State Department.

ACTION: Proposed rule.

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SUMMARY: This proposed rule makes three changes to the DOSAR. It 
revises the DOSAR to: Formalize Department policy regarding the 
application of the Small Business Act to contracts awarded by domestic 
contracting activities where contract performance takes place overseas; 
add language to deal with U.S. Government support to contractors 
performing overseas; and, revise the coverage regarding Defense Base 
Act insurance.

DATES: The Department will accept comments from the public up to 60 
days from December 22, 2004.

ADDRESSES: You may submit comments, identified by any of the following 
methods:
     E-mail: [email protected]. You must include the RIN in the 
subject line of your message.
     Mail (paper, disk, or CD-ROM submissions): 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.
     Fax: 703-875-6155.
    Persons with access to the Internet may also view this notice and 
provide comments by going to the regulations.gov Web site at: http://www.regulations.gov/index.cfm.

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; e-mail address: [email protected].

SUPPLEMENTARY INFORMATION: As indicated in the Summary, the proposed 
rule makes three changes to the DOSAR, as follows:
     DOSAR 619.000 is added to formalize the Department's 
policy regarding the application of the Small Business Act to contracts 
awarded by domestic contracting activities (i.e., those located in the 
United States) where contract performance takes place overseas. 
Currently, FAR 19.000(b) states that part 19, with the exception of 
subpart 19.6, applies ``only in the United States or its outlying 
areas.'' This language is ambiguous and subject to interpretation. 
While the application is clear with respect to contracts both awarded 
and performed in the United States (it applies) and to contracts both 
awarded and performed outside the United States (it does not apply), 
the gray area is its applicability to contracts awarded by contracting 
offices located in the United States but where contract performance 
takes place overseas. The Department has subsequently followed an 
informal policy of applying part 19 to such contracts. This DOSAR 
change, therefore, states this policy in explicit terms.
     A new DOSAR subpart 625.71 is added to address the issue 
of the Department's administrative, logistical, and security support of 
contractor personnel performing overseas in locations where a 
contingency operation is ongoing or in high-risk locations. 
Essentially, the policy requires that contractors furnish their own in-
country non-U.S. Government administrative, logistical, and security 
support. If the Department authorizes the use of U.S. Government-
provided support, that support shall be set forth in the Statement of 
Work. An associated contract clause is added at 652.225-72. The clause 
is mandatory in Department contracts when the contract is in support of 
the operations/missions at one or more U.S. diplomatic or consular 
missions, and the location of the U.S. diplomatic or consular mission 
at which the work is to be performed is designated as a contingency 
operation, as defined in FAR 2.101. The clause is optional for use in 
contracts in support of the operations/missions at one or more U.S. 
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.
     Subpart 628.3 is revised to clarify the application of 
Defense Base Act (DBA) insurance to local and third country nationals. 
The Department of

[[Page 76661]]

Labor (DOL) has granted the Department of State (DOS) waivers 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. However, the DOL 
waivers state that in lieu of DBA insurance, the DOS contractors must 
provide workers' compensation benefits to local and third country 
nationals in accordance with local law. The Department of State did not 
interpret the waivers as a DOL requirement for DOS contractors to 
provide DBA insurance to local or third country national contractor 
employees in countries where no workers' compensation law existed. 
Nevertheless, DOL recently stated that the absence of local workers' 
compensation laws in certain countries renders the DOL waivers 
``ineffective'', and that where there is no local workers'' 
compensation law, DOS contractors must provide local and third country 
national employees with the DBA insurance. As a result, the Department 
is revising Subpart 628.3 to clarify this issue. In addition, the 
revision includes language regarding a statutory exemption from the DBA 
for 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), as amended. The DOSAR clause at 652.228-71 is revised 
accordingly. In addition, a new solicitation provision is added at 
652.228-70. The purpose of the provision is to request information from 
prospective contractors on whether or not any covered contractor 
employees will be employed on the resultant contract. Finally, in 
looking at appropriate revisions to the DOSAR provisions at 652.228-74 
and 652.228-76, it was determined that one provision to cover all types 
of contracts could be used. DOSAR 652.228-76 is therefore removed and 
652.228-74 is revised to cover all contract types as opposed to just 
fixed-price.

Regulatory Findings

Administrative Procedure Act

    In accordance with provisions of the Administrative Procedure Act 
governing rules promulgated by federal agencies that affect the public 
(5 U.S.C. 552), the Department is publishing this proposed rule and 
inviting public comment.

Regulatory Flexibility Act

    The Department of State, in accordance with the Regulatory 
Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and, by 
approving it, certifies that this rule will not have a significant 
economic impact on a substantial number of small entities.

Unfunded Mandates Act of 1995

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any year and it will not significantly or uniquely 
affect small governments. Therefore, no actions were deemed necessary 
under the provisions of the Unfunded Mandates Reform Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Act of 1996. This rule will not 
result in an annual effect on the economy of $100 million or more; a 
major increase in costs or prices; or significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of United States-based companies to compete with foreign 
based companies in domestic and import markets.

Executive Order 13132

    This regulation will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with section 6 
of Executive Order 13132, it is determined that this rule does not have 
sufficient federalism implications to require consultations or warrant 
the preparation of a federalism summary impact statement.

Paperwork Reduction Act

    Information collection requirements have been approved under the 
Paperwork Reduction Act of 1980 by OMB, and have been assigned OMB 
control number 1405-0050.

List of Subjects in 48 CFR Parts 619, 625, 628, 652

    Government procurement.

    Accordingly, for the reasons set forth in the preamble, title 48, 
chapter 6 of the Code of Federal Regulations is proposed to be amended 
as follows:
    1. The authority citation for 48 CFR parts 619, 625, 628, and 652 
continues to read as follows:

    Authority: 40 U.S.C. 486(c); 22 U.S.C. 2658.

Subchapter D--Socioeconomic Programs

PART 619--SMALL BUSINESS PROGRAMS

    2. A new section 619.000 is added to read as follows:


619.000  Scope of part.

    (b) Notwithstanding FAR 19.000(b), it is the Department's policy to 
provide maximum opportunities for U.S. small businesses in all 
legislatively specified categories to participate in the acquisition 
process. Therefore, 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.

PART 625--FOREIGN ACQUISITION

    3. A new Subpart 625.71, consisting of sections 625.7101, 625.7101-
1, and 625.7101-2, is added to read as follows:

Subpart 625.71--Contractor Personnel Performing Under Department of 
State Contracts Outside the United States

Sec.
625.7101 Government administrative, logistical, and security support 
of contractor personnel.
625.7101-1 Policy.
625.7101-2 Contract clause.

Subpart 625.71--Contractor Personnel Performing Under Department of 
State Contracts Outside the United States


625.7101  Government administrative, logistical, and security support 
of contractor personnel.


625.7101-1  Policy.

    (a) This subpart does not apply to personal services contracts with 
individuals.
    (b) 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 (see paragraph (c) of this 
section). For the purposes of this subpart, ``at a diplomatic or 
consular mission'' is defined as any location under the span of 
influence of a specific diplomatic or consular mission.
    (c) 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.
    (d) Contracting officers shall document the contract file with the 
basis for the decision to provide support.

[[Page 76662]]

625.7101-2  Contract clause.

    (a) The contracting officer shall insert the clause at 652.625-72, 
Contractor Personnel Performing Under Department of State Contracts 
Outside the United States, in solicitations and contracts for services 
or construction, when the following conditions are met:
    (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.
    (b) The contracting officer may insert the clause at 652.625-72 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.

Subchapter E--General Contracting Requirements

PART 628--BONDS AND INSURANCE

    4. Subpart 628.3 is revised to read as follows:

Subpart 628.3--Insurance


628.305  Overseas workers' compensation and war-hazard insurance.

    (b)(1) It is the Department's policy that acquisitions for 
services, including construction but excluding personal services 
contracts, that require contractor personnel to perform work outside of 
the United States, shall include the contractual obligation for 
coverage under the Defense Base Act (42 U.S.C. 1651-1654, as amended), 
for covered contractor employees. For the purposes of this section, 
``covered contractor employees'' includes the following individuals:
    (i) United States citizens or residents;
    (ii) Individuals hired in the United States or its possessions, 
regardless of citizenship; and
    (iii) Local nationals and third country nationals where contract 
performance takes place in a country where there are no local workers' 
compensation laws.
    (2) Exceptions are discussed in paragraphs (e)(1) and (f) of this 
section.
    (c) The Department of State has entered into a contract with an 
insurance broker and carrier to provide Defense Base Act insurance, at 
a fixed rate for services and construction, to cover DOS contracts that 
require performance overseas by covered contractor employees. Upon 
award of a contract that requires Defense Base Act insurance, the 
contracting officer shall notify the contractor of the name of the 
insurance broker from which the contractor must acquire the Defense 
Base Act insurance.
    (d) The authority to request a waiver from the Secretary of Labor 
of a particular country, as set forth in FAR 28.305(d), is reserved to 
the Secretary of State.
    (e)(1) The Secretary of Labor has waived the applicability of the 
Defense Base Act for all DOS service contracts, including construction, 
for contractor employees who are local nationals or third country 
nationals. This waiver is conditioned on the requirement for the 
contractor to provide workers' compensation benefits against the risk 
of work injury or death and assume liability toward the employees and 
their beneficiaries for war-hazard injury, death, capture, or detention 
as prescribed by the applicable local laws.
    (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.
    (f) Section 16 of the State Department Basic Authorities Act (22 
U.S.C. 2680a), as amended, provides that the Defense Base Act shall not 
apply with respect to such contracts as the Secretary of State 
determines are contracts with persons employed to perform work for the 
Department of State on an intermittent basis for not more than 90 days 
in a calendar year. The Department of State has established that 
``persons'' includes individuals hired by companies under contract with 
the Department. The Procurement Executive has the authority to issue 
the waivers for these individuals. However, as required by FAR 
28.305(e), the contractor shall provide workers' compensation coverage 
against the risk of work injury or death and assume liability toward 
the employees and their beneficiaries for war-hazard injury, death, 
capture, or detention.


628.309  Contract clauses for workers' compensation insurance.


628.309-70  DOSAR provisions and clause.

    (a) The contracting officer shall insert the provision at 652.228-
70, Defense Base Act--Covered Contractor Employees, in all 
solicitations for services and construction to be performed outside of 
the United States.
    (b) The contracting officer shall insert the clause at 652.228-71, 
Workers' Compensation Insurance (Defense Base Act)--Services, in 
solicitations and contracts for services to be performed outside of the 
United States when there is a reasonable expectation that offers will 
include covered contractor employees, as defined in 628.305(b)(1). If 
the contracting officer is unsure as to whether offers will include 
covered contractor employees, the contracting officer shall insert the 
clause. If the contract is for construction, the contracting officer 
shall insert the clause with its Alternate I.
    (c) The contracting officer shall insert the provision at 652.228-
74, Defense Base Act Insurance Rates--Limitation, in solicitations for 
services or construction to be performed outside of the United States 
when there is a reasonable expectation that offers will include covered 
contractor employees, as defined in 628.305(b)(1). If the contracting 
officer is unsure as to whether offers will include covered contractor 
employees, the contracting officer shall insert the provision.

Subchapter H--Clauses and Provisions

PART 652--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    5. Section 652.225-72 is added to read as follows:


652.225-72  Contractor Personnel Performing Under Department of State 
Contracts Outside the United States.

    As prescribed in 625.7101-2, insert the following clause:

    Contractor Personnel Performing Under Department of State 
Contracts Outside the United States (MO/YR)
    (a) Definition. For the purposes of this clause, ``at a 
diplomatic or consular mission'' is defined as any location under 
the span of influence of a specific diplomatic or consular mission.
    (b) General. Performance of this contract may require that 
contractor personnel work at locations outside the United States in 
support of one or more United States diplomatic or consular 
missions. Contract performance in support of such missions may be 
inherently dangerous.
    (c) Support. (1) Unless specified elsewhere in the contract or 
as provided in paragraph (c)(2) of this clause, the Contractor is 
responsible for all administrative, logistical, and security support 
required for contractor personnel engaged in this contract.
    (2) The Government may authorize or may require the use of 
certain Government-provided administrative, logistical, security, or 
in-country support.
    (d) Personnel data. If requested by the contracting officer, the 
Contractor shall maintain and provide to the designated Government 
official(s) a current list of all

[[Page 76663]]

employees in the area of performance. The contracting officer shall 
indicate if this list must also contain each employee's next-of-kin 
notification information. The contracting officer shall designate 
the Government official to receive this data and the method for 
submission.
    (e) Pre-performance requirements. The Contractor shall ensure 
that the following requirements are met before sending an employee 
to the work site. Specific requirements for each category will be 
set forth in the Statement of Work. The Contractor shall ensure 
that--
    (1) All applicable specified security and background checks are 
completed;
    (2) All personnel are medically and physically fit to endure the 
rigors of performance and have received all required vaccinations;
    (3) All personnel possess the required licenses to operate all 
vehicles or equipment necessary to perform the contract, if required 
by the position;
    (4) All personnel have all necessary passports, visas, entry 
permits, and other documents required for contractor personnel to 
enter and exit the foreign country, including those required for in-
transit countries;
    (5) All personnel have received a country clearance, if required 
by the Chief of Mission;
    (6) All personnel have received personal security training. The 
training must at a minimum cover safety and security issues facing 
employees overseas; identify safety and security contingency 
planning activities; and identify ways to utilize safety and 
security personnel and other resources appropriately; and,
    (7) 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.
    (f) Processing and departure points. The Contractor and its 
employees shall use a point of departure and transportation mode 
when directed by the contracting officer.
    (g) Military clothing and protective equipment. Contractor 
personnel are prohibited from wearing military clothing unless 
specifically authorized by the contracting officer. However, 
contractor personnel may wear specific items required for safety and 
security such as ballistic, nuclear, biological, or chemical 
protective clothing.
    (h) Weapons. (1) Contractor personnel may not possess privately 
owned firearms unless specifically authorized by the contracting 
officer.
    (2) If the contracting officer authorizes the carrying of 
firearms in accordance with the Statement of Work, the Regional 
Security Officer may issue weapons and ammunition to the Contractor 
for issuance to specified contractor employees. The Contractor shall 
ensure that its personnel who receive weapons are adequately 
trained, are not barred from possession of a firearm by 18 U.S.C. 
922(d)(9) or (g)(9), and adhere to all guidance and orders issued by 
the Regional Security Officer regarding possession, use, safety, and 
accountability of weapons and ammunition. Upon a revocation by the 
contracting officer of a contractor's authorization to issue 
firearms, the Contractor shall ensure that all Government-issued 
weapons and unexpended ammunition are returned as directed by the 
contracting officer. Whether or not weapons are Government-issued, 
all liability for the use of any weapon by contractor personnel 
rests solely with the Contractor.
    (i) Next of kin notification. The Contractor shall be 
responsible for in-person notification of the employee-designated 
next of kin and notification as soon as possible to the U.S. consul 
responsible for the area in which the event occurred in the 
following circumstances:
    (1) Death of the employee;
    (2) An injury to the employee requiring evacuation;
    (3) The employee is missing, i.e., the employee's location is 
unknown after a reasonable amount of time and search efforts are 
unsuccessful; or,
    (4) The employee is captured.
    (j) Return of remains. In the event of the death of a contractor 
employee, the Contractor is responsible for the return of the 
remains from the point of identification to the location specified 
by the employee or next of kin, as applicable. The Contractor shall 
also be responsible for the return of all personal effects of 
deceased or missing contractor personnel, if appropriate, to next of 
kin.
    (k) Evacuation. If the Chief of Mission orders a mandatory 
evacuation of some or all personnel, the level of assistance 
provided to employees of the Contractor shall be the same as the 
level of assistance provided to other private United States 
citizens. In the event of a non-mandatory evacuation order, the 
Contractor shall maintain personnel on location sufficient to meet 
contractual obligations under this contract until instructed to 
evacuate by the contracting officer, Contracting Officer's 
Representative, or Chief of Mission.
    (l) Changes in emergencies. The contracting officer or the 
Contracting Officer's Representative may issue oral instructions to 
the Contractor in cases of emergencies, e.g., enemy or terrorist 
activity or natural disaster that causes an immediate possibility of 
death or serious injury to contractor personnel. Such oral 
instructions shall be confirmed in writing in 48 hours, or as soon 
as practicable after the emergency incident has subsided.
    (m) Subcontracts. The Contractor shall incorporate the substance 
of this clause, including this paragraph (m), in all subcontracts 
that require subcontractor employees to provide services at a United 
States diplomatic or consular mission outside the United States.
    (End of clause)

    6. Section 652.228-70 is added to read as follows:


652.228-70  Defense Base Act--Covered Contractor Employees.

    As prescribed in 628.309-70(a), insert the following provision:

    Defense Base Act--Covered Contractor Employees (MO/YR)
    (a) Bidders/Offerors shall indicate below whether or not any of 
the following categories of employees will be employed on the 
resultant contract, and, if so, the number of such employees:

----------------------------------------------------------------------------------------------------------------
              Category                        Yes/No                                Number
----------------------------------------------------------------------------------------------------------------
(1) United States citizens or
 residents
(2) Individuals hired in the United
 States, regardless of citizenship
(3) Local nationals or third         .......................  Local nationals: ------------.
 country nationals where contract                             Third Country Nationals: ------------.
 performance takes place in a
 country where there are no local
 workers' compensation laws.
(4) Local nationals or third         .......................  Local nationals: ------------.
 country nationals where contract                             Third Country Nationals: ------------.
 performance takes place in a
 country where there are local
 workers' compensation laws.
----------------------------------------------------------------------------------------------------------------

    (b) If the bidder/offeror has indicated ``yes'' in block (a)(4) 
of this provision, the bidder/offeror shall submit, as part of its 
offer, a statement that indicates that such local nationals and/or 
third country nationals will be provided workers' compensation 
coverage against the risk of work injury or death under a local 
workers' compensation law. For those employees, the bidder/offeror 
shall also assume liability toward the employees and their 
beneficiaries for war-hazard injury, death, capture, or detention, 
in accordance with the clause at FAR 52.228-4.
    (c) If the bidder/offeror has indicated ``yes'' in blocks 
(a)(1), (2), or (3) of this provision, the bidder/offeror shall 
compute Defense Base Act insurance costs covering those employees 
pursuant to the terms of the contract between the Department of 
State and the Department's Defense Base Act insurance carrier at the 
rates specified in DOSAR 652.228-74, Defense Base Act Insurance 
Rates `` Limitation. If DOSAR provision 652.228-74 is not included 
in this solicitation, the bidder/offeror shall notify the 
contracting officer before the closing date so that the solicitation 
can be amended accordingly.
    (End of provision)

    7. Section 652.228-71 is revised to read as follows:

[[Page 76664]]

652.228-71  Workers' Compensation Insurance (Defense Base Act)--
Services.

    As prescribed in 628.309-70(b), insert the following clause:

    Workers' Compensation Insurance (Defense Base Act)--Services 
(MO/YR)
    (a) This clause supplements FAR 52.228-3. For the purposes of 
this clause, ``covered contractor employees'' includes the following 
individuals:
    (1) United States citizens or residents;
    (2) Individuals hired in the United States or its possessions, 
regardless of citizenship; and
    (3) Local nationals and third country nationals where contract 
performance takes place in a country where there are no local 
workers' compensation laws.
    (b) The Contractor shall procure Defense Base Act (DBA) 
insurance pursuant to the terms of the contract between the 
Department of State and the Department's DBA insurance carrier for 
covered contractor employees, unless the Contractor has a DBA self-
insurance program approved by the Department of Labor. The 
Contractor shall submit a copy of the Department of Labor's approval 
to the contracting officer upon contract award, if applicable.
    (c) The current rate under the Department of State contract is 
[contracting officer insert rate] of compensation for services.
    (d) The Contractor shall insert a clause substantially the same 
as this in all subcontracts. The Contractor shall require that 
subcontractors insert a similar clause in any of their subcontracts.
    (e) Should the rates for DBA insurance coverage increase or 
decrease during the performance of this contract, the contracting 
officer shall modify this contract accordingly.
    (f) The Contractor shall demonstrate to the satisfaction of the 
contracting officer that the equitable adjustment as a result of the 
insurance increase or decrease does not include any reserve for such 
insurance. Adjustment shall not include any overhead, profit, 
general and administrative expenses, etc.
    (g) Section 16 of the State Department Basic Authorities Act (22 
U.S.C. 2680a), as amended, provides that the Defense Base Act shall 
not apply with respect to such contracts as the Secretary of States 
determines are contracts with persons employed to perform work for 
the Department of State on an intermittent basis for not more than 
90 days in a calendar year. ``Persons'' includes individuals hired 
by companies under contract with the Department. The Procurement 
Executive has the authority to issue the waivers for these 
Contractor employees. For those employees, the Contractor shall 
provide workers' compensation coverage against the risk of work 
injury or death and assume liability toward the employees and their 
beneficiaries for war-hazard injury, death, capture, or detention.
    (End of clause)
    Alternate I. (MO/YR) If the contract is for construction, as 
prescribed in 628.309-70(a), substitute the following paragraph (c) 
for paragraph (c) of the basic clause:

    (c) The current rate under the Department of State contract is 
[contracting officer insert rate] of compensation for construction.

    8. Section 652.228-74 is revised to read as follows:

652.228-74  Defense Base Act Insurance Rates--Limitation.

    As prescribed in 628.309-70(c), insert the following provision:

    Defense Base Act Insurance Rates--Limitation (MO/YR)
    (a) The Department of State has entered into a contract with an 
insurance carrier to provide Defense Base Act (DBA) insurance to 
Department of State covered contractor employees at a contracted 
rate. For the purposes of this provision, ``covered contractor 
employees'' includes the following individuals:
    (1) United States citizens or residents;
    (2) Individuals hired in the United States or its possessions, 
regardless of citizenship; and
    (3) Local nationals and third country nationals where contract 
performance takes place in a country where there are no local 
workers' compensation laws.
    (b) In preparing the cost proposal, the bidder/offeror shall use 
the following rates in computing the cost for DBA insurance:
    Services @ [contracting officer insert current rate] of 
compensation; or
    Construction @ [contracting officer insert current rate] of 
compensation.
    (c) Bidders/offerors shall compute the total compensation 
(direct salary plus differential, but excluding per diem, housing 
allowance and other miscellaneous allowances) to be paid to covered 
contractor employees and the cost of the DBA insurance in their bid/
offer using the foregoing rate. The DBA insurance cost shall be 
included in the total fixed price or estimated cost. The Department 
shall reimburse the DBA insurance costs directly to the Contractor.
    (End of provision)

    9. Section 652.228-76 is removed.

Corey M. Rindner,
Procurement Executive, Bureau of Administration, Department of State.
[FR Doc. 04-27990 Filed 12-21-04; 8:45 am]
BILLING CODE 4710-24-P