[Federal Register Volume 71, Number 116 (Friday, June 16, 2006)]
[Rules and Regulations]
[Pages 34836-34842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-9502]


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DEPARTMENT OF STATE

48 CFR Parts 601, 611, 619, 622, 628, and 652

[Public Notice 5444]
RIN 1400-AB90


Rule Title: Department of State Acquisition Regulation

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: This rule makes final a proposed rule issued on December 22, 
2004, with several revisions. 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; and, revises the coverage regarding 
Defense Base Act insurance. The final rule also contains several 
miscellaneous amendments and corrections not published on December 22, 
2004, as outlined below. The Department received public comments from 
three sources on the proposed rule, which are discussed below.

DATES: Effective Date: This rule is effective June 16, 2006.

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: The Department published a proposed rule, 
Public Notice 4938 at 69 FR 76660, December 22, 2004, with a request 
for comments, amending Parts 619, 625, 628, and 652 of Title 48 of the 
Code of Federal Regulations. The rule made three changes to the DOSAR: 
(1) Formalized policy regarding the application of the Small Business 
Act to contracts awarded by domestic contracting activities where 
contract performance takes place overseas; (2) added language to deal 
with U.S. Government support to contractors performing overseas; and 
(3) revised the coverage regarding Defense Base Act insurance. The 
proposed rule was discussed in detail in Public Notice 4938. The 
Department is now promulgating a final rule with changes from the 
proposed rule.
    In particular, the Department is not finalizing that part of the 
proposed rule dealing with U.S. Government support to contractors 
performing overseas. The Department of Defense published a final rule 
on May 5, 2005 (70 FR 23790). That final rule contained a clause for 
use in

[[Page 34837]]

DOD contracts that require contractor personnel to deploy with, or 
otherwise provide support in the theater of operations, to U.S. 
military forces deployed outside the United States in contingency 
operations, humanitarian or peacekeeping operations, or other military 
operations or exercises designated by the combatant commander. The 
State Department's proposed rule language was, in part, based on this 
DOD rule. However, in the interim, the FAR Council has determined that 
coverage for DOD, State, and other agencies regarding contractor 
support outside the United States is necessary for those services that 
are not in direct support of a deployed military force, e.g., 
reconstruction efforts. A FAR case is being developed to deal with U.S. 
Government support to contractors operating overseas. The Department of 
State intends to follow the FAR language when promulgated; therefore, 
separate DOSAR language will not be required.
    The final rule also contains several amendments and corrections 
that were not published as part of the proposed rule. They are as 
follows:
     DOSAR 601.106 is revised to add the information collection 
number and burden estimate for Department of State Form DS-4053, 
Department of State Mentor-Prot[eacute]g[eacute] Program Application.
     DOSAR 601.603-70(b) is revised to add an additional DOS 
office that has been delegated limited procurement authority.
     DOSAR 611.502 is corrected to read 611.501. The FAR 
citation of 11.502(d) is corrected to read FAR 11.501(d).
     DOSAR 619.803-71(b) is revised to change the reference to 
the Small Business Administration's PRO-Net database to the Central 
Contractor Registration (CCR) database. The CCR database is now the 
official source of vendor data for the Government.
     DOSAR 619.811-3 is revised to remove the reference to 
Alternate III of FAR clause 52.219-18, Notification of Competition 
Limited to Eligible 8(a) Concerns. There is no Alternate III to FAR 
52.219-18.
     DOSAR 622.604-2 is revised to correct a citation.
    These amendments and corrections do not affect the public, and 
therefore good cause exists to publish the amendments for effect 
without first soliciting public comment because prior public comment is 
unnecessary. The amendments are for the purpose of implementing 
internal changes and making minor corrections.
    Analysis of Comments: The proposed rule was published for comment 
on December 22, 2004 (69 FR 76660). The comment period closed on 
February 22, 2005. The Department received comments from three sources. 
The following is a synopsis of the Department's response to the public 
comments and any changes made to the rule as a result. The comments are 
grouped by topic.

I. Comments Regarding the Application of the Small Business Act

    1. Comment: One commentator disagreed that the language of FAR 
19.000(b) is ambiguous, and questioned the Department's policy of 
applying the Small Business Act to contracts awarded domestically and 
performed overseas. The commentator pointed out that no other agency 
has made such an interpretation.
    Response: Nonconcur. The Department does consider the language of 
FAR 19.000(b), which states that FAR Part 19, with the exception of 
Subpart 19.6, applies ``only in the United States or its outlying 
areas'', to be ambiguous. The application of the Small Business Act to 
contracts awarded domestically for performance overseas has been a 
longstanding practice at the Department of State; this rule merely 
formalizes that practice.
    2. Comment: One commentator stated that if the Department 
implemented the proposed language, it should adopt a regime that 
reflects the realities of work in a contingency operation or high risk 
location and that is directly related to the instant procurement 
requirement.
    Response: Partially Concur. The Department already does this. DOSAR 
619.201(d)(5) requires that the Office of Small and Disadvantaged 
Utilization (A/SDBU) review requests for acquisitions exceeding the 
simplified acquisition threshold ($100,000), and task and delivery 
orders exceeding $2 million. The capabilities and capacities of small 
businesses to perform on any given acquisition, including those in 
contingency or high risk locations, are taken into consideration by A/
SDBU when making set-aside recommendations. Since this requirement is 
already in the DOSAR, no change to the rule is necessary.
    3. Comment: One commentator expressed confusion regarding what the 
Department meant by the term ``legislatively specified categories''.
    Response: Concur. The term ``legislatively specified categories'' 
refers to the small business programs under the Small Business Act, 
namely, small business concerns, HUBZone small business concerns, 
service-disabled veteran-owned small business concerns, 8(a) concerns, 
women-owned small business concerns, small disadvantaged business 
concerns, and veteran-owned small business concerns. However, to avoid 
confusion, this term has been removed from the final rule.
    4. Comment: One commentator recommended revising the last sentence 
of proposed 619.000(b) to state: ``Contracts that are both awarded and 
performed outside the United States should comply on a voluntary 
basis.''
    Response: Concur. The sentence has been revised accordingly.
    5. Comment: One commentator questioned the practicality of the 
proposed rule, citing the requirement for subcontracting plans and 
goals and questioning how goals will be negotiated. The commentator 
questioned how the Department would reconcile these small business 
subcontracting goals with U.S. treaty obligations and the frequent U.S. 
foreign policy goal of requiring U.S. contractors to use host country 
businesses and resources.
    Response: Nonconcur. As indicated previously, this policy is not 
new. In point of fact, the Department has not experienced difficulties 
in implementing this policy. FAR 19.702(b) states that subcontracting 
plans are not required for contracts that will be performed entirely 
outside of the United States, so contracts that are performed overseas 
are already exempted from the subcontracting plan requirements. 
Additionally, the Omnibus Diplomatic Security and Antiterrorism Act 
(Public Law 99-399) stipulates that ten percent of the monies 
appropriated for diplomatic security should, to the extent practicable, 
be awarded to minority owned business concerns, and another 10 percent 
to small businesses. In making any set-aside recommendations, A/SDBU 
takes into account all of the issues raised by the commentator, 
including any limitations that foreign governments may impose. No 
change to the rule is therefore necessary.
    6. Comment: One commentator suggested that, instead of applying the 
policy, the Department use small business performance as a competitive 
evaluation factor in appropriate solicitations.
    Response: Partially Concur. The Department already does this. DOSAR 
619.705-3 encourages contracting officers to consider the adequacy of 
subcontracting plans and/or past performance in achieving negotiated 
goals, as part of the overall evaluation of proposals. Since this 
requirement is already in the DOSAR, no change to the rule is 
necessary.

[[Page 34838]]

    7. Comment: One commentator recommended that the Department conduct 
a public meeting to discuss the rule, as well as separate this revision 
from the other parts of the proposed rule.
    Response: Nonconcur. The Department does not see the need for a 
public meeting, nor to separate this from the rest of the rule. As 
indicated previously, this has been a longstanding practice and the 
Department has not experienced any difficulties in its implementation.

II. Comments Regarding Defense Base Act (DBA) Insurance

    1. Comment: One commentator expressed concern about how vendors 
would know, at the time of the solicitation, whether a country has a 
workers' compensation law.
    Response: Concur. The Department agrees that this information 
should be provided by the Government in the solicitation. The 
solicitation provision at 652.228-70 has been revised so that the 
contracting officer will check a block to indicate if a country does or 
does not have such laws.
    2. Comment: One commentator requested that the rule be revised so 
that contractors would be allowed to purchase their own Defense Base 
Act insurance rather than use the insurance broker that the Department 
has under contract.
    Response: Nonconcur. The contract with the insurance broker is a 
requirements contract. This means that the Department has an obligation 
to require that its contractors purchase all of their DBA insurance 
from the insurance broker. In addition, the Department has negotiated 
more favorable rates since the contractor has been assured of the 
volume of work. Since the cost of the DBA insurance premiums is a 
direct reimbursable cost under the Department's contracts, contractors 
do not incur additional costs in procuring the DBA insurance from the 
Department's contractor.
    3. Comment: All commentators, including the Department of Labor 
(DOL), expressed concern regarding the coverage on Section 16 of the 
State Department Basic Authorities Act. This statutory provision 
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 on an intermittent 
basis for not more than 90 days in a calendar year. Specifically, 
commentators pointed out that the rule did not address how to request a 
waiver, under what circumstances a waiver would be approved, how the 
Department would notify exempted individuals, and what workers' 
compensation coverage these exempted employees would have.
    Response: Concur. The Department agrees that more detail is 
required. The language in the State Department Basic Authorities Act 
was added in the early 1980s, before the Department had a contract with 
an insurance broker for DBA insurance. At that time, contractors that 
had short-term contracts with the Department for overseas performance 
were paying relatively high DBA insurance premiums. However, State 
worker's compensation programs protected workers based in that State 
when they performed short out-of-state assignments, even foreign 
assignments. Since the workers had the protection of the State's 
workers' compensation law, additional DBA insurance was not needed for 
these short-term assignments.
    In response to these comments, the Department has revised the 
language of the proposed rule to: (1) List the information that a 
contractor must submit in order for a waiver to be considered; (2) 
conditioned the waiver on the contractor's presentation of evidence of 
alternative workers' compensation coverage (e.g., from the State); and 
(3) limited the waiver to U.S. citizens and residents, not local or 
third country nationals. We believe that these changes address the 
concerns raised regarding what coverage these exempted employees would 
have. We also have added language that the contracting officer will 
provide the contractor with the original of any approved waivers, 
thereby addressing the concern of how contractors will be notified. The 
Department believes that since we now have a contract with an insurance 
broker for DBA insurance at reasonable rates, requests for waivers 
should be rare.
    To further clarify DBA coverage, we have added language, based on 
guidance from DOL, that individuals who are self-employed (i.e., are 
not incorporated) do not meet the definition of an employee; therefore, 
no DBA insurance is required when contracting with these individuals. 
The language was added because the Department does contract with 
individuals (e.g., eligible family members) to perform tasks (e.g., 
prepare a monthly embassy newsletter), and the question was raised as 
to whether these individuals needed to procure DBA insurance.
    4. Comment: The paragraph numbering of proposed DOSAR 628.305 is 
incorrect. The paragraphs are numbered (b) through (f) instead of (a) 
through (e).
    Response: Nonconcur. The DOSAR follows the FAR numbering 
convention. We are implementing paragraphs (b) through (e) of the FAR, 
but not implementing paragraph (a) of FAR 28.305, since that paragraph 
(a) is merely a definition of ``public-work contract.''
    5. Comment: DOL supports the new definition of ``covered contractor 
employees'', as well as the acknowledgement that local and third 
country nationals are covered by DBA if there is no local workers' 
compensation law.
    Response: Concur. No revision is necessary.
    6. Comment: One commentator recommended that in the clause 
prescriptions at DOSAR 628.309-70(a) and (b), we retain the reference 
to 628.309(b) only in both instances, as opposed to (b)(1). By only 
referring to (b)(1), we have unintentionally excluded the recognized 
exceptions to coverage that are cross-referenced in 628.305(b)(2).
    Response: Concur. We have revised the section accordingly.
    7. Comment: One commentator recommended that we either delete the 
repetitious definition of ``covered contractor employee'' in the 
provision at 652.228-74 and simply provide a cross-reference to the 
language at 628.305(a), or add at the end of paragraph (a) of 652.228-
74 a new sentence that recognizes the exception for intermittent 
employees where the Procurement Executive has granted a waiver.
    Response: Nonconcur. We believe that it is important to have the 
definition of ``covered contractor employee'' in the solicitation 
provision so that vendors will not have to refer back to other parts of 
the regulation. At the time of the solicitation, vendors will not know 
whether they will have any exempted employees, since any waiver is 
approved after contract award. They will need to include the DBA 
insurance costs for those employees in terms of preparing their cost 
proposal. Should a waiver be approved after contract award, the 
contractor simply would not request reimbursement for any employees 
that are exempted under the waiver, since the DBA insurance costs are a 
direct reimbursable cost under the contract.
    8. Comment: One commentator recommended that the Department conduct 
a public meeting to discuss the rule, as well as separate this revision 
from the other parts of the proposed rule.

[[Page 34839]]

    Response: Nonconcur. The Department does not see the need for a 
public meeting, nor to separate this from the rest of the rule. As 
indicated, most of the comments regarding the DBA coverage center 
around the waiver for intermittent employees, and the Department 
believes that these waivers will be a rare occurrence.

III. Comments Regarding U.S. Government Support to Contractors Overseas

    The Department received numerous comments regarding this section of 
the proposed rule. However, since the Department is rescinding this 
part of the proposed rule, and will adopt the FAR language, no 
discussion of the comments is required. The public will have an 
opportunity to comment on the FAR language.

Regulatory Findings

Administrative Procedure Act

    The Department is publishing this rule as a final rule with changes 
after it was published as a proposed rule on December 22, 2004 (see 
Supplementary Information).

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 $1 
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.

Executive Order 12866: Regulatory Review

    This regulation has been reviewed by the Office of Management and 
Budget.

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. The information and recordkeeping 
requirements for Form DS-4053, Department of State Mentor-
Prot[eacute]g[eacute] Program Application, have been approved by OMB 
under OMB Control Number 1405-0161.

List of Subjects in 48 CFR Parts 601, 611, 619, 622, 628, 652

    Government procurement.

0
Accordingly, for the reasons set forth in the preamble, title 48, 
chapter 6 of the Code of Federal Regulations is amended as follows:

0
1. The authority citation for 48 CFR parts 601, 611, 619, 622, 628, and 
652 continues to read as follows:

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

Subchapter A--General

PART 601--DEPARTMENT OF STATE ACQUISITION REGULATION SYSTEM

0
2. Section 601.106 is amended by adding the following sentence at the 
end:


601.106  OMB approval under the Paperwork Reduction Act.

    * * * The information and recordkeeping requirements for Form DS-
4053, Department of State Mentor-Prot[eacute]g[eacute] Program 
Application, have been approved by OMB under OMB Control Number 1405-
0161; the burden estimate is 294 hours.

0
3. Section 601.603-70 is amended by adding a new paragraph (b)(8) to 
read as follows:


601.603-70  Delegations of authority.

* * * * *
    (b) * * *
    (8) Bureau of Administration, Office of Operations. The authority 
to enter into and administer simplified acquisition transactions for 
emergency or contingency operations necessary to protect life or 
federal property. This authority is limited to cases when a contracting 
officer in the Office of Acquisitions Management is unavailable.

Subchapter B--Competition and Acquisition Planning

PART 611--DESCRIBING AGENCY NEEDS


611.502  [Redesignated as 611.501] and 611.501 [Amended]

0
4. Section 611.502 is redesignated as section 611.501. New section 
611.501 is amended by correcting the citation at the end of paragraph 
(d) to read ``FAR 11.501(d).''

Subchapter D--Socioeconomic Programs

PART 619--SMALL BUSINESS PROGRAMS

0
5. A new section 619.000 is added to read as follows:


619.000  Scope of part.

    (b) It is the Department's policy to provide maximum opportunities 
for U.S. small businesses to participate in the acquisition process. 
DOS contracts that are awarded domestically for performance overseas 
shall be subject to the Small Business Act as a matter of policy. 
Contracts that are both awarded and performed overseas should comply on 
a voluntary basis.


619.803-71  [Amended]

0
6. Section 619.803-71 is amended by removing the words ``SBA's PRO-Net 
database on the Internet (http://www.sba.gov)'' and inserting the words 
``Central Contractor Registration database (http://www.ccr.gov)'' in 
their place in paragraph (b).


619.811-3  [Amended]

0
7. Section 619.811-3 is amended by removing the words ``with its 
Alternate III'' in paragraph (d)(3).

PART 622--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS


622.604-2  [Amended]

0
8. Section 622.604-2 is amended by revising the citation to read ``FAR 
22.604-2(b)(1)'' at the end.

[[Page 34840]]

Subchapter E--General Contracting Requirements

PART 628--BONDS AND INSURANCE

0
9. Subpart 628.3 is revised to read as follows:
Subpart 628.3--Insurance
Sec.
628.305 Overseas workers' compensation and war-hazard insurance.
628.309 Contract clauses for workers' compensation insurance.
628.309-70 DOSAR provisions and clauses.

Subpart 628.3--Insurance


628.305  Overseas workers' compensation and war-hazard insurance.

    (b)(1) Acquisitions for services, including construction but 
excluding personal services contracts, requiring 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. Sections 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) Individuals who are self-employed (i.e., they have not 
incorporated) do not meet the definition of an employee. No Defense 
Base Act insurance is required when contracting with these individuals.
    (3) 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 provide the contractor with the name of the 
insurance broker from which the contractor must acquire the Defense 
Base Act insurance.
    (d) The authority to recommend a waiver from the Defense Base Act, 
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 to 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 local workers' compensation laws.
    (2) In cases where a contract is performed in a country where there 
are no local workers' compensation laws, 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)(1) 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 employees hired by companies under contract with 
the Department. The Procurement Executive has the authority to issue 
the waivers for employees who work on an intermittent or short-term 
basis. Waivers may be issued only for employees who are U.S. citizens 
and residents, and only where the contractor provides evidence of 
alternative workers' compensation coverage for those employees. Waivers 
may not be issued for local or third country nationals.
    (2) The contractor shall submit waiver requests to the contracting 
officer. The request shall contain the following information:
    (i) Contract number;
    (ii) Name of contractor;
    (iii) Brief description of the services to be provided under the 
contract and country of performance;
    (iv) Name and position title of individual(s);
    (v) Nationality of individual(s) (must be U.S. citizen or 
resident);
    (vi) Dates (or timeframe) of performance at the overseas location; 
and
    (vii) Evidence of alternative workers' compensation coverage for 
these employees (e.g., evidence that the State workers' compensation 
program covers workers on short-term foreign assignments).
    (3) The contracting officer shall review the request for 
completeness and accuracy. If the request is complete and accurate, the 
contracting officer shall forward the request to the Procurement 
Executive. If the contractor does not provide complete and accurate 
information, the contracting officer shall return the request to the 
contractor with an explanation as to what additional information is 
required.
    (4) The Procurement Executive shall review requests for waiver 
forwarded by the contracting officer and either approve or disapprove 
the request. The Procurement Executive shall return the request 
indicating his/her approval or disapproval to the contracting officer. 
Any request that is not approved shall describe the reason(s) why the 
request was not approved. The contracting officer shall provide the 
contractor with the original of the approved or disapproved document 
and maintain a copy in the contract file.


628.309  Contract clauses for workers' compensation insurance.


628.309-70  DOSAR provisions and clauses.

    (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). 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). If the contracting 
officer is unsure as to whether offers will include covered contractor 
employees, the contracting officer shall insert the provision.

[[Page 34841]]

Subchapter H--Clauses and Provisions

PART 652--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
10. 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                                           --------------------
 performance takes place in a                                               Third country nationals:
 country where there are no local                                           --------------------
 workers' compensation laws.
(4) Local nationals or third         .....................................  Local nationals:
 country nationals where contract                                           --------------------
 performance takes place in a                                               Third country nationals:
 country where there are local                                              --------------------
 workers' compensation laws.
----------------------------------------------------------------------------------------------------------------

    (b) The contracting officer has determined that for performance 
in the country of [contracting officer insert country of performance 
and check the appropriate block below]
    [squ] Workers' compensation laws exist that will cover local 
nationals and third country nationals.
    [squ] Workers' compensation laws do not exist that will cover 
local nationals and third country nationals.
    (c) If the bidder/offeror has indicated ``yes'' in block (a)(4) 
of this provision, the bidder/offeror shall not purchase Defense 
Base Act insurance for those employees. However, the bidder/offeror 
shall 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.
    (d) 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)

0
11. Section 652.228-71 is revised to read as follows:


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)(1) 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. ``Persons'' includes individuals 
hired by companies under contract with the Department. The 
Procurement Executive has the authority to issue the waivers for 
Contractor employees who work on an intermittent or short-term 
basis.
    (2) The Contractor shall submit waiver requests to the 
contracting officer. The request shall contain the following 
information:
    (i) Contract number;
    (ii) Name of Contractor;
    (iii) Brief description of the services to be provided under the 
contract and country of performance;
    (iv) Name and position title of individual(s);
    (v) Nationality of individual(s) (must be U.S. citizen or U.S. 
resident);
    (vi) Dates (or timeframe) of performance at the overseas 
location; and,
    (vii) Evidence of alternative workers' compensation coverage for 
these employees (e.g., evidence that the State workers' compensation 
program covers workers on short-term foreign assignments).
    (3) The contracting officer shall provide to the Contractor the 
original of the approved or disapproved document and maintain a copy 
in the contract file.

    (End of clause)
    Alternate I. (MO/YR) If the contract is for construction, as 
prescribed in 628.309-70(b), 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.

0
12. 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

[[Page 34842]]

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. Bidders/offerors shall include the 
estimated DBA insurance costs in their proposed total fixed price or 
estimated cost. However, the DBA insurance costs shall be identified 
in a separate line item in the bid/proposal.


(End of provision)


652.228-75 and 652.228-76   [Removed]

0
13. Sections 652.228-75 and 652.228-76 are removed.

    Dated: June 6, 2006.
Corey M. Rindner,
Procurement Executive, Bureau of Administration, Department of State.
[FR Doc. E6-9502 Filed 6-15-06; 8:45 am]
BILLING CODE 4710-24-P