Agent Orange: Limited Information Is Available on the Number of  
Civilians Exposed in Vietnam and Their Workers' Compensation	 
Claims (22-APR-05, GAO-05-371). 				 
                                                                 
Concerns about difficulties civilian employees of the U.S.	 
government may have in obtaining workers' compensation benefits  
for medical conditions they developed as a result of their	 
exposure to Agent Orange in Vietnam led to GAO being asked to	 
determine (1) what is known about the number of civilians who	 
served in Vietnam, both those employed directly by the U.S.	 
government and those employed by companies that contracted with  
the government; (2) what is known about the number, processing,  
and disposition of claims filed by these civilians; and (3) what 
options are available if Congress chooses to improve access to	 
benefits for civilians exposed to Agent Orange in Vietnam who	 
developed illnesses as a result of their exposure, and what are  
their cost implications?					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-371 					        
    ACCNO:   A22357						        
  TITLE:     Agent Orange: Limited Information Is Available on the    
Number of Civilians Exposed in Vietnam and Their Workers'	 
Compensation Claims						 
     DATE:   04/22/2005 
  SUBJECT:   Americans employed abroad				 
	     Civilian employees 				 
	     Claims processing					 
	     Compensation claims				 
	     Cost analysis					 
	     Data collection					 
	     Data integrity					 
	     Hazardous substances				 
	     Health hazards					 
	     Workers compensation				 
	     Federal employees					 
	     Diseases						 
	     Agent Orange					 
	     Vietnam						 
	     Vietnam War					 

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GAO-05-371

United States Government Accountability Office

GAO

                       Report to Congressional Requesters

April 2005

AGENT ORANGE

 Limited Information Is Available on the Number of Civilians Exposed in Vietnam
                     and Their Workers' Compensation Claims

GAO-05-371

[IMG]

April 2005

AGENT ORANGE

Limited Information Is Available on the Number of Civilians Exposed in Vietnam
and Their Workers' Compensation Claims

  What GAO Found

While many federal agencies that were likely employers of civilian federal
and contract workers during the Vietnam War had little information on
these employees, a few provided us with limited information on federal
employees and the amounts of contracts for companies that provided
services to the military in Vietnam. We were unable to determine the
reliability of the data provided. However, we used these data for the
limited purpose of estimating that between 72,000 and 171,000 civilians
may have worked for the U.S. government in Vietnam between 1964 and 1974.
Our ability to provide more accurate information on the size of this
workforce was limited because most agency records maintained during this
period were not computerized, and because so much time has elapsed that
many paper records have been destroyed and many agency personnel
knowledgeable of the period are no longer working at these agencies.

For the 32 Agent Orange-related claims identified (12 from federal
civilians and 20 from contract employees), we found that these claimants
faced many difficulties and delays because of a lack of readily available
information on how to file a claim, their Vietnam era employers, and their
exposure to Agent Orange, as well as processing delays caused by
employers, insurance carriers, and Labor. Both Labor and private insurance
carriers had difficulty identifying the number of claims they had
received, largely because they do not assign a unique code to Agent Orange
claims that would enable easy identification. Most of the claims we
identified were filed in the past 10 years, and most have been denied.
Denials of the claims stemmed, in part, from the fact that under the laws
governing these claims, claimants must demonstrate a causal link between
their exposure to Agent Orange and their medical conditions, which is
difficult to prove so many years later.

If Congress chooses to address this issue, several legislative options
could be considered to attempt to improve access to compensation for
civilians who were exposed to Agent Orange and developed medical
conditions as a result, although they could have significant cost and
policy implications. Congress could amend current law authorizing benefits
for veterans to cover certain civilians or set up a separate program to
cover them. Another option is for Congress to amend the GI Bill
Improvement Act of 1977, which allows DOD to retroactively grant military
status and authorize full VA benefits to certain civilian groups that
support the military during armed conflicts. However, it is difficult to
assess the potential costs of these options because of the limited data
available on the number of civilians and their claims for compensation.
Despite the difficulty of assessing the potential costs, before any of
these options are pursued, their fiscal impact and the precedentsetting
implications for individuals involved in other wars and conflicts since
the Vietnam era should be carefully considered.

                 United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Because Information Is Limited, Our Estimate of the Number of

Federal and Contract Employees in Vietnam during Wartime Is Imprecise For
the Few Claims Identified, Claimants Faced Many Obstacles,

and to Date, Most Claims Have Been Denied Legislative Options Could Ease
Access to Benefits for Civilians Conclusions Recommendations for Executive
Action Agency Comments

                                       1

                                      2 5

                                       8

11 22 27 28 28

Appendix I Technical Appendix

Appendix II Comments from the Department of Labor

        Appendix III Comments from the Department of Veterans Affairs 36

  Appendix IV GAO Contacts and Staff Acknowledgments 41

GAO Contacts 41 Staff Acknowledgments 41

  Tables

Table 1: Timeline Showing Difficulties One Claimant Experienced

Locating His Former Employer's Insurance Carrier 17 Table 2: Criteria for
Acceptance under DOD Directive 1000.20 25 Table 3: Estimated Number of DOD
Federal Employees in Vietnam,

1964 to 1974 31 Table 4: Estimated Number of DOD Contract Employees in
Vietnam, 1966-1974 33

  Figures

Figure 1: Conditions VA Recognizes as Related to Agent Orange Exposure 6
Figure 2: Overview of the Workers' Compensation Claims Process for Federal
Employees 14 Figure 3: Overview of the Workers' Compensation Claims
Process for Contract Employees 15

Abbreviations

CIA Central Intelligence Agency

DBA Defense Base Act
DOD Department of Defense
FECA Federal Employees' Compensation Act
IOM Institute of Medicine
OWCP Office of Workers' Compensation Programs
VA Department of Veterans Affairs

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
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copyright holder may be necessary if you wish to reproduce this material
separately.

United States Government Accountability Office Washington, DC 20548

April 22, 2005

The Honorable Bill Nelson United States Senate

The Honorable Lane Evans House of Representatives

The Honorable Mark Foley House of Representatives

The Honorable Robert Wexler House of Representatives

During the Vietnam War, U.S. civilians, along with military personnel,
were in the country when Agent Orange, an herbicide containing dioxin, was
used as a defoliant. Civilians-both federal and contract employees-
performed a variety of jobs in support of the military, including
helicopter maintenance, road building, and cargo handling. After many
years of controversy, in 1991 Congress passed the Agent Orange Act to
provide military veterans who developed medical conditions related to
dioxin exposure in Vietnam with easier access to compensation, such as
payments for medical expenses. The act associates dioxin exposure with
latent illnesses, including several forms of cancer. The act also includes
several presumptions, including the presumed exposure to Agent Orange of
any military service member who was in Vietnam and developed a
dioxin-related disease. While civilians who worked for the U.S. government
in Vietnam are not covered under the Agent Orange Act, workers'
compensation programs are available to restore lost wages and pay medical
expenses of those who are disabled by an occupational illness. Federal
employees file claims for workers' compensation with their employing
agency, which refers the claims to the Department of Labor (Labor) under
the Federal Employees' Compensation Act (FECA). Workers' compensation
coverage for employees who work under contract to the U. S. government
outside the United States is provided under the Defense Base Act (DBA),
which extends the Longshore and Harbor Workers' Compensation Act. These
individuals file claims through their employers with the employers'
insurance carriers.

Concerned about difficulties civilian employees have had in obtaining
workers' compensation benefits for diseases that may be related to their

exposure to Agent Orange in Vietnam, you asked us to determine (1) what is
known about the number of civilians who served in Vietnam, both those
employed directly by the U.S. government and those employed by companies
that contracted with the government; (2) what is known about the number,
processing, and disposition of claims filed by these civilians; and (3)
what options are available to Congress if it chooses to improve access to
workers' compensation and benefits for civilians exposed to Agent Orange
in Vietnam who developed illnesses as a result of their exposure, and what
are their cost implications?

To determine the number of civilian employees working in Vietnam during
the war, we relied on interviews with and reports from the Departments of
Defense (DOD), State, Agriculture, and Treasury as well as the Central
Intelligence Agency (CIA), the Census Bureau, and the National Archives.
To determine the number and disposition of workers' compensation claims
filed by federal employees, we reviewed the policies and procedures of
Labor's Office of Workers' Compensation Programs (OWCP), interviewed
agency officials and claims examiners, and reviewed claim files. For
claims filed by contract employees, we contacted employers and the
insurance carriers that provided a majority of the workers' compensation
coverage during the Vietnam War to obtain information on the number of
claims filed and the disposition of these claims. We also interviewed
Labor officials and examined files for claims filed by contract employees
that were referred to Labor after being denied by the insurance carriers.
To identify options for improving access to workers' compensation and
other benefits for civilian employees, we reviewed relevant laws and
policies and discussed possible options and estimates of the potential
costs with Labor and Department of Veterans Affairs (VA) officials. We
conducted our work in accordance with generally accepted government
auditing standards between June 2004 and March 2005.

While many federal agencies that were likely employers of civilian federal
and contract workers during the Vietnam War had little information on
these employees, a few provided us with limited information on federal
employees and the amounts of contracts for companies that provided
services to the military in Vietnam. Although we were unable to determine
the reliability of this information, we used it for the limited purpose of
estimating the number of civilians that may have worked for the U.S.
government in Vietnam during the war. Using these data, we estimated that
between 72,000 and 171,000 civilians may have worked for the U.S.
government in Vietnam between 1964 and 1974. Our ability to more

  Results in Brief

accurately identify the size of this workforce was limited by the fact
that at that time, most records were not computerized, and many of the
paper records have either been destroyed or were not organized in a way
that would facilitate the identification of such personnel. For many other
agencies likely to have had federal civilian or contract workers in
Vietnam, officials with knowledge of the period were no longer there
because of retirements, reassignments, and other staff turnover.
Nevertheless, using numbers provided by two agencies that were able to
locate some records-the Department of State and DOD-we developed estimates
of the number of federal and contract employees in five agencies who may
have worked in Vietnam between 1964 and 1974.

For the 32 civilian workers' compensation claims for diseases associated
with Agent Orange exposure identified, we found that claimants faced many
obstacles and that to date, most of the claims have been denied. Neither
Labor nor private insurance carriers could readily identify the number of
claims they had received, largely because they did not have a unique code
to identify Agent Orange claims, and because some claims were not
accurately recorded in Labor's database. By asking claims examiners to
recall information about claims that may have been related to Agent Orange
exposure and conducting searches of their databases, Labor and the
insurance carriers identified 12 claims from federal civilians and 20
claims from contract employees, most of which were filed in the past 10
years. However, because we were unable to determine whether additional
claims that were not identified exist, the information we obtained about
these claims does not necessarily represent the nature or disposition of
all Agent Orange claims. Our review of these claims showed that claimants
faced a number of difficulties and delays because of a lack of readily
available information on how to file a claim, their Vietnam era employers,
and their exposure to Agent Orange, as well as processing delays caused by
employers, insurance carriers, and Labor. Labor's denial of 11 of the 12
claims filed by federal employees (1 claim was withdrawn by the claimant)
stemmed, in all but 1 case, from the fact that the claimants were unable
to establish a sufficient causal link between their employment-related
injury (exposure) and their medical conditions, as required under FECA.
This was the case even when the claimants established that they were
exposed to Agent Orange in connection with their employment and suffered
from a serious illness or disease. Establishing this causal link between
exposure and an illness or disease is difficult in cases involving cancer
and other illnesses that may have multiple causes and take many years to
develop. Of the 20 claims filed by contract employees, 9 were initially
denied by the insurance carriers and 1 was approved for payment. The
disposition of the other 10 claims is

unknown, because although Labor officials initially told us they were not
Agent Orange claims, with our assistance, they later discovered that they
were Agent Orange claims, but it was too late for us to include them in
our analysis. Of the 9 claims initially denied by the insurance carriers,
the claimants have taken no further action on 4 of them, 3 of the
claimants are awaiting hearings by an administrative law judge, and Labor
upheld the insurance companies' denial for 2 of the claims-1 because it
was not filed timely and the other because the claimant did not
sufficiently prove his exposure to Agent Orange. The claim that was
approved by Labor for payment involved a self-insured contractor to the
CIA that was no longer in business. Absent an employer or insurance
carrier, the CIA-acting in the role of the employer and the insurance
carrier-stated that it "had no objections" to paying the claim. Labor
reviewed the claim and accepted it for payment.

If Congress chooses to address this issue, several legislative options
could be considered to attempt to improve access to workers' compensation
or other benefits for civilian employees exposed to Agent Orange in
Vietnam who developed medical conditions as a result of their exposure.
Congress could amend the Agent Orange Act and related legislation
authorizing benefits for veterans to include civilians who worked in
Vietnam or authorize a separate program to specifically cover these
individuals. Another option is for Congress to amend the GI Bill
Improvement Act of 1977, which allows DOD retroactively to grant military
status and authorize providing full VA benefits to certain civilian groups
that support the military during armed conflicts. All of these options,
however, have cost and policy implications, as illustrated by the payments
VA makes for claims paid under the Agent Orange Act. Currently, for the
four most common medical conditions covered under the act, VA pays, on
average, $8,500 annually for disability compensation and $1,000 for
medical costs for each claim. Any consideration of these options should
include an assessment of their cost and policy implications, such as
whether they would set a precedent that could prompt other federal and
contract employees who have worked for the U. S. government in a war zone
since the Vietnam era to seek similar benefits. Such a precedent could
have significant cost implications because the U.S. military has employed
a much larger number of contractor personnel in recent wars and conflicts
than in Vietnam.

We are making several recommendations intended to improve Labor's
processing and management of workers' compensation claims from individuals
related to diseases associated with exposure to Agent Orange in Vietnam,
including improving the information used to track claims,

Background

maintaining better information on insurance carriers authorized by Labor
to provide coverage to contract employees, and providing better
information to claimants to use in filing their claims. In its written
comments on a draft of this report, Labor generally agreed with our
recommendations and provided details of actions it plans to take to
improve its handling of claims. In its written comments, VA stated serious
concerns about the policy and cost implications of the legislative options
we included in the report for easing civilians' access to workers'
compensation benefits. As noted in the report, we agree that the cost and
policy implications of these options should be carefully considered. DOD
provided only an informal technical comment on the report. Labor and VA
also provided a few technical clarifications, which we incorporated as
appropriate.

Agent Orange is one of several herbicides sprayed by the U.S. government
in Vietnam in the 1960s and 1970s as a defoliant. It contains
tetrachlorodibenzo-para-dioxin (dioxin), a chemical that the Environmental
Protection Agency and the Occupational Safety and Health Administration
have classified as highly toxic and carcinogenic. DOD sprayed an estimated
11 million gallons of Agent Orange in Vietnam during the war. In the
ensuing years, dioxin has been a focus of research and has been associated
with a number of latent illnesses, including cancer and most recently
diabetes, which have developed among people who have been exposed to the
chemical. The use of Agent Orange has also spawned much litigation over
the years, including suits against the manufacturers of the product and
against the United States.1

Until 1991, when Congress passed the Agent Orange Act, military veterans
who believed their illnesses were caused by dioxin exposure had limited
success in obtaining medical benefits and other compensation. Previously,
the VA had denied benefits to most veterans who claimed adverse health
effects from the herbicide because poor records made it difficult for many
of them to demonstrate where and when they had come into contact with the
chemical, and because VA had not accepted proof of a direct link between
certain illnesses and dioxin. The Agent Orange Act subsequently authorized
awards on the presumption that any veteran who served in Vietnam and who
develops certain diseases identified by the National

1See, e.g., Hercules, Inc. v. U. S., 516 U.S. 417 (1996); In Re: "Agent
Orange" Product

Liability Litigation, 818 F. 2d 194 (2d Cir. 1987), and No. 04-CV-400,
2005 U.S. Dist. LEXIS, 3644 (E.D.N.Y. Mar. 10, 2005); and Nehmer v. U. S.
Veterans Admin., 712 F. Supp. 1404 (N.D. CA 1989).

Academy of Sciences' Institute of Medicine (IOM) and accepted by VA had
been exposed to Agent Orange. The act also gave VA responsibility for
providing information to veterans about health conditions related to Agent
Orange exposure and assistance in preparing their claims.

Over time, the body of research on the health effects of dioxin exposure
has grown, and in recent years, research organizations such as IOM have
learned more about positive associations between exposure and certain
medical conditions. Further, both the National Institutes of Health and
the Environmental Protection Agency consider dioxin a carcinogen on the
basis of studies showing associations between exposure and medical
conditions such as lung cancer. Under the Agent Orange Act, IOM is
required to review and analyze all medical research on dioxin exposure
every 2 years and advise VA on the degree to which it believes Agent
Orange is associated with certain health conditions. On the basis of this
research, VA has accepted a number of medical conditions associated with
Agent Orange exposure. Most of these conditions are types of cancers, such
as non-Hodgkin's lymphoma and soft-tissue sarcomas, or skin disorders,
such as chloracne. More recently, prostate cancer and diabetes were added
to the list after research showed a higher than expected rate of these
conditions among those exposed to dioxin. (See fig. 1.)

Figure 1: Conditions VA Recognizes as Related to Agent Orange Exposure

o  Chloracne-a skin disorder resembling teenage acne

o  	Porphyria cutanea tarda-a skin disorder characterized by thinning and
blistering of the skin in sun-exposed areas

o  Acute or subacute transient peripheral neuropathy-a nerve disorder

o  Type 2 diabetes

o  	Cancers, including non-Hodgkin's lymphoma, chronic lymphocytic
leukemia, soft-tissue sarcoma, Hodgkin's disease, multiple myeloma,
prostate cancer, and respiratory cancers-including cancers of the lung,
larynx, trachea, and bronchus

o  Spina bifida and other birth defects among Vietnam veterans' children

Source: VA.

Federal employees and employees who worked under contract to the U.S.
government in Vietnam are not covered by the Agent Orange Act. Rather,
federal employees who are injured or become ill as a result of their
employment, including those who worked in Vietnam, may file a claim under
FECA, a comprehensive workers' compensation law for federal employees. To
obtain benefits under FECA, claimants must show that (1) they were
employed by the U.S. government, (2) they were injured (exposed) in the
workplace, (3) they have filed a claim in a timely manner,

(4) they have a disabling medical condition, and (5) there is a causal
link between their medical condition and the injury or exposure. Unlike
veterans, federal employees who file claims under FECA based on Agent
Orange exposure must demonstrate that they were personally exposed to
Agent Orange while in Vietnam and that their medical conditions were
"proximately caused" by this exposure, (i.e., that there was a causal link
between the exposure and their condition). Labor has primary
responsibility for processing all FECA claims and has assigned the
processing of special types of claims, such as those for Agent Orange
exposure, to specific OWCP offices. Labor also processes all appeals from
claimants regarding claims that were denied. Claimants have three levels
of appeal: (1) reconsideration by an OWCP claims examiner, (2) a hearing
or review of the written record by OWCP's Branch of Hearings and Review,
and (3) a review by the Employees' Compensation Appeals Board. Either a
request for reconsideration by a senior claims examiner not involved in
the initial decision or a hearing request is generally the first level of
appeal, followed by an appeal to the Employees' Compensation Appeals
Board. A decision of the Employees' Compensation Appeals Board is
final-claimants cannot appeal Labor's decisions in federal court. However,
if new evidence becomes available after the decision, the claimant can
request the claim be reopened for reconsideration and further review by
Employees' Compensation Appeals Board.

Workers' compensation coverage for employees who work under contract to
the U. S. government outside the United States is provided by the
employing contractor under DBA.2 Under DBA, individuals who can show that
they were harmed and that working conditions could have caused this harm
are entitled to a presumption that their claims are work-related and
valid. Claimants must also establish that their claim was filed timely and
show proof of employment, exposure to Agent Orange, a disabling medical
condition, and that their condition arose naturally out of employment
(i.e., that their condition was related to their employment in Vietnam).3
Under DBA, Labor is required to license the insurance carriers that
provide the

2DBA extends the provisions of the Longshore and Harbor Workers'
Compensation Act to certain contractor employees. In this report, when we
discuss claims filed under DBA, we are referring to claims filed under the
Longshore and Harbor Workers' Compensation Act as extended by DBA.

3For an occupational disease, the time for filing is 2 years from the date
the claimant became or should have become aware of the relationship
between the employment and the disease, or if later, 1 year from the date
of the last compensation.

employers' workers' compensation coverage.4 To prevent employers and
insurance carriers from an undue financial burden for insuring employees
during a time of armed conflict, Congress enacted the War Hazards
Compensation Act, which allows insurance carriers to obtain reimbursement
from Labor when a claim is paid for an injury or death caused by a
"war-risk hazard."5 Contract employees who are injured file workers'
compensation claims directly with their employers and their employers'
private insurance carriers. The insurance carrier may either accept or
"controvert" (deny) the claim.6 Claimants may request that OWCP review the
insurance carrier's decision and may ask for a hearing with one of Labor's
administrative law judges. The administrative law judge issues a decision
and order awarding or denying benefits. Claimants may appeal an
administrative law judge's decision to Labor's Benefits Review Board.
Claimants may also obtain review of the Benefits Review

                                       7

Board's decisions in federal court.

Many of the agencies we contacted were unable to locate records on federal
and contract workers employed in Vietnam, but on the basis of the limited
data available, we estimated that at least 72,000 civilian employees and
as many as 171,000 may have worked in Vietnam between 1964 and 1974. We
developed these estimates using data we obtained from the Department of
State and DOD but were unable to determine the reliability of the data.

  Because Information Is Limited, Our Estimate of the Number of Federal and
  Contract Employees in Vietnam during Wartime Is Imprecise

4Labor can allow employers to self-insure.

5As defined in the act, these hazards include "the discharge of any
missile (including liquids or gas) or the use of any weapon, explosive, or
other noxious thing by a hostile force or person in combating an attack or
imagined attack by a hostile force or person." 42 U.S.C. S: 1711(b)(1).

6In this report, we refer to DBA claims that were "controverted" by the
insurance carriers as claims that were denied by the insurance carriers.

7Employers and insurance carriers have the same rights of review and
appeal as the claimants throughout this process.

    Many Agencies Were Unable to Locate Records on Civilians Employed in
    Vietnam, but a Few Provided Some Estimates

Most of the federal agencies we identified as likely to have had employees
in Vietnam-DOD, CIA, and the Departments of State, Agriculture, and
Treasury-were unable to provide us with the exact number of civilian
employees they had working in Vietnam during the war. Agency officials
told us they had difficulty identifying these workers because personnel
records were kept solely on paper, as computers were not in common use at
that time. Agency officials told us that these paper records may have been
destroyed or, if such records still exist, were not indexed or organized
in searchable formats. In addition, the location of some records was
unknown because of the loss of institutional knowledge resulting from
staff turnover over the years.

Both the State Department and DOD located some historical data that we
used to develop estimates of the number of civilians who worked in
Vietnam. Three of the five agencies we contacted-CIA and the Departments
of Agriculture and Treasury-were unable to provide us with any data on the
number of federal and contract employees they had working in Vietnam
during the war. The Department of State was able to identify its federal
employees who worked in Vietnam between January 1964 through November 1965
and January 1967 through November 1974 from published quarterly lists of
employees, but the agency was unable to determine the number of employees
working for the agency in Vietnam under contract. Although DOD officials
were unable to locate data, we located historical reports of civilian
personnel strength by year at DOD's Directorate for Information,
Operations, and Reports but were not able to obtain an unduplicated count
of civilians who were in Vietnam between 1964 and 1974. This office later
located service contract amounts during the Vietnam War period published
in historical reports, from which we were able to estimate the number of
contract employees.

    Using Limited Data, We Estimated That There May Have Been as Many as 171,000
    Civilians Working in Vietnam during the War

Using data from the Department of State and DOD, we estimated that at
least 72,000 and as many as 171,000 civilian employees may have worked in
Vietnam during the war. From the quarterly lists of employees provided to
us by the Department of State, we estimated that the agency had about
6,000 employees in Vietnam between 1964 and 1974.

To estimate the number of DOD federal employees, we used annual civilian
personnel strength data from historical DOD reports and assumed a 2-year
rotation similar to that of military personnel to develop an unduplicated
count of about 4,600 employees. We obtained the personnel strength data
from published DOD reports but were unable to determine

how the data were collected; therefore, we were unable to determine the
reliability of these data.

To estimate the number of DOD contract employees, we obtained from DOD the
dollar amount of DOD service contracts, by year from 1966 to 1974, where
the workplace was Vietnam, and divided these annual amounts by a range of
"burdened labor rate" estimates to calculate the number of employees
represented by these contracts each year.8 However, DOD was unable to
provide us with information on the range of salaries paid to contract
employees in Vietnam. Therefore, for our analysis, we assumed annual
salaries of $7,500, $15,000 and $25,000--which represent a range of low,
middle, and high salaries of federal employees during that time-to obtain
burdened labor rates of $15,000, $30,000 and $50,000 per person. As with
the annual estimates of federal DOD employees, we assumed a 2-year
rotation to obtain an unduplicated count, which ranged from about 43,000
to 142,000 contract workers.

To determine the number of federal and contract employees from the CIA and
the Departments of Agriculture and Treasury, we used numbers from the
Department of State as a proxy, assuming that these agencies all had
roughly the same number of employees in Vietnam and would not have had as
many employees in Vietnam as the much larger number of DOD contract
employees needed to support military operations. On the basis of these
assumptions, we estimated that these four agencies may have had about
24,000 employees in Vietnam during the war. See appendix I for additional
information on the methods we used to develop these estimates.

8The "burdened labor rate" estimates include salary, subsistence, company
overhead, profit, insurance, travel, and other costs that would have been
included in the total contract amount. DOD advised us that doubling an
employee's annual salary would approximate this burdened labor cost.

  For the Few Claims Identified, Claimants Faced Many Obstacles, and to Date,
  Most Claims Have Been Denied

Although Labor's claims examiners and the insurance carriers we
interviewed had difficulty identifying claims, our review of the claims
identified showed that civilians faced difficulty in pursuing them because
of difficulty obtaining information about the claims process, their former
employers, and their employers' insurance carriers, and because of
processing delays. Labor denied 11 of the 12 claims filed by federal
employees (1 was withdrawn), primarily because the claimants were not able
to prove a direct relationship between exposure to Agent Orange and their
medical conditions, as required by FECA. Of the 20 claims filed by
contract employees, 9 were initially denied by the insurance carriers and
1 was approved for payment. We were unable to review the case files for
the remaining 10 cases to determine whether or not they were paid because
they were identified too late in our review to include them.

    Labor and the Insurance Carriers Could Not Readily Identify Agent Orange
    Claims through Their Databases

Claims from Federal Employees

Labor and the insurance carriers we contacted had difficulty identifying
Agent Orange claims using their databases but were able to identify 12
claims from federal employees and 20 claims from contract employees.
However, because we were unable to determine whether additional claims
that were not identified exist, the information we obtained about these
claims does not necessarily represent the nature of all Agent Orange
claims or their disposition. Most of the claims they identified were filed
in the past 10 years.

Because Labor does not assign a unique code to identify Agent Orange
claims in its database, the agency was unable to locate any of the claims
filed by federal employees under FECA by querying its database. Although
Labor has a code for injuries caused by exposure to chemicals and toxins,
this code is used for many claims involving toxins other than dioxin and
therefore was not useful in identifying Agent Orange claims. In addition,
this code was not used for several of the Agent Orange claims identified.
Unable to locate claims using Labor's database, we asked the claims
examiners in OWCP assigned to review Agent Orange claims from federal
employees if they could recollect how many of these claims they had
processed. They identified 12 claims using information from e-mails,
personal notes, and personal recollections of information about the
claims.9 However, we were unable to confirm that they had identified all

9The claims examiners also identified 3 claims from federal employees who
were exposed to Agent Orange while working at an Army depot in the United
States that serviced helicopters that had sprayed Agent Orange in Vietnam.
However, because these claimants were not exposed to Agent Orange in
Vietnam, we did not include their claims in our analysis.

Claims from Contract Employees

Agent Orange claims from federal employees. Of the 12 claims identified,
most were filed in the past 10 years, although 2 were filed in 1988 and 1
in 1991.

In addition, inaccurately coded claims and inconsistent coding procedures
prevented identification of Agent Orange claims. For example, for 9 of the
12 claims identified by the claims examiners, the "cause of injury" code
recorded in Labor's database was "99-cause unknown," a catch-all code used
to identify the type of injury when the cause of injury reported by the
claimant on the claim form is not clear.10 Other fields in the database,
such as the type of medical condition, were not useful in identifying
Agent Orange claims because such exposure could cause more than one type
of condition, and because most of the medical conditions associated with
Agent Orange exposure could also have other causes. One clerk who codes
the claims told us she was sometimes uncertain which codes should be used
for Agent Orange claims and that she received limited guidance on how to
code them. For example, two of the claims files showed that Labor coded
the same condition, diabetes, with two different nature of injury codes,
"cardiovascular disease-other" for one, and "blood disorder" for the
second claim. In addition, the agency has no procedures for checking for
data entry errors, and our review of Agent Orange claims identified
errors. For example, one claim coded as "exposure to chemicals and toxins"
was actually a heart condition. One Agent Orange claim for breast cancer
was coded "sprain/strain of ligament, muscle, tendon, not back." Claims
examiners told us that although they can request that the clerks who
entered the codes go back and correct coding errors, there is little
incentive for them to request that errors be corrected because it does not
affect their ability to process claims.

Labor and representatives from insurance carriers had difficulty
identifying Agent Orange claims filed by contract employees under DBA
largely because they did not have a unique code to identify these claims.
However, with our assistance, Labor was able to identify 20 claims. Ten of
the claims were initially identified by Labor using its database and
recollections of claims by Labor officials. Labor located 5 claims by-upon
our request-querying its database for claims where the date of injury was
during the Vietnam War (January 1, 1964, through December 31, 1975) and
the nature of the injury was an occupational disease, and then reviewing

10Clerks enter information on each claim in Labor's database when the
claims are first received.

the list of claims produced to identify claims they remembered as being
related to Agent Orange. In addition, Labor officials remembered the names
of 3 claimants that were not identified in their query of the database.
The insurance carriers we interviewed identified 2 additional Agent Orange
claims. Labor located 1 of these claims but was not able to find the other
claim because, according to Labor officials, it was not sent to the agency
by the insurance carrier, as required.11 All but 1 of these 10 claims was
filed in the past 10 years.

In addition, we assisted Labor in identifying 10 more claims from contract
employees. Although 7 of these claims appeared on the printout from their
initial database query, Labor officials initially told us they were not
Agent Orange claims. In addition, because the employer noted on the
printout for some of these claims was the same as the employer for 1 of
the Agent Orange claims we reviewed, we asked Labor to go back and review
the other claims to make sure that they were not Agent Orange claims. From
this second review, Labor identified 3 additional claims. However, because
they were identified so late in our review, we were not able to include
these 10 claims in our analysis of the disposition of the claims.

    Civilians Faced Difficulty in Pursuing Claims, in Part, because of
    Difficulty Obtaining Information about the Claims Process and Poor Records

Both federal and contract employees faced difficulties pursuing claims for
Agent Orange exposure because they lacked key information on the filing
process, had difficulty identifying responsible parties and obtaining
needed documentation, and experienced processing errors and delays. Our
review of the files showed that several claimants had little information
about the claims process because their first point of contact, their
former employer, was difficult to locate.

Although claims processing for both federal and contract employees begins
with their former employer, the process differs thereafter. As shown in
figure 2, federal employees obtain the appropriate forms and documentation
from their former employers and file claims with those agencies or
departments, which then forward the claims to Labor for a decision. As
shown in figure 3, contract employees also obtain the appropriate forms
and documentation from their former employers but file their claims with
their employer's insurance carriers.

11One carrier recalled 4 additional claims but, citing privacy concerns,
would not provide identifying information that would allow us to ask Labor
to locate the claims files. Therefore, we were unable to include these
claims in our analysis or determine whether they were already included in
the claims identified by Labor.

Figure 2: Overview of the Workers' Compensation Claims Process for Federal
Employees

Source: GAO analysis.

  Figure 3: Overview of the Workers' Compensation Claims Process for Contract
                                   Employees

                             Source: GAO analysis.

Our review of the claims files showed that federal and contract employees
sometimes filed their claims incorrectly because they were unable to
locate their former employers in order to obtain information about the
filing process. Although the first source of information in filing
workers' compensation claims is the employer, since the Vietnam War, some
employers have reorganized or are no longer in business. Of the claims we
reviewed, 6 claimants had difficulty locating their former employer. Even
federal employees can have difficulties locating their employer because of
the many government reorganizations over the 30 years since the end of the
Vietnam War. For example, one claimant who worked for DOD in Vietnam had
difficulty determining which office to send his claim to because the
workers' compensation office of his former employer, the U.S. Army Audit
Agency, had been renamed and relocated. He initially filed his claim with
his current DOD employer, the Defense Finance and Accounting Service,
which advised him to send the claim to the Department of the Army's
Personnel and Employee Services, the office that now handles claims for
former employees of the U.S. Army Audit Agency.

Our review of the claims files also showed that contract employees and
Labor had difficulty locating the responsible insurance carriers because
of industry mergers, changes in carriers over time, and lack of easily
accessible records. Some employers changed insurance carriers over time,
so their current carrier was not the one that had provided coverage during
the Vietnam War. Although Labor licensed the insurance carriers that
provided coverage for contract employees during the war, the agency does
not track information about the carriers in a format that is easily
researchable. Labor officials told us that they keep the information on
the licensed insurance carriers on handwritten 3 x 5 cards that are filed
by employer name in filing cabinets. Searching for a carrier is a
timeconsuming effort because there are hundreds of cards for multiple
policies covering various periods of time. In addition, Labor does not
track historical changes in the ownership of the insurance carriers over
time, and companies may have been acquired by other companies-a common
practice in the insurance industry, according to Labor officials. For
example, an insurance company that provided coverage for contract
employees for 3 of the claims we reviewed was purchased by another
company, which could not locate claims for these individuals from the old
company's records. Labor had no information about the company being
purchased by another company and had difficulty locating the insurance
carrier liable for payment.

Difficulties identifying insurance carriers can add up to extensive delays
for claimants. Of the 10 claims we reviewed from contract employees, 4
claimants had difficulty locating their insurance carrier. For example,
one contract employee's claim was delayed 13 months before the correct
carrier was identified. Initially, the claimant mistakenly sent his claim
directly to Labor instead of his employer and the employer's insurance
carrier. Once notified by Labor of the claim, the employer requested
Labor's assistance in locating the carrier. One of OWCP's district offices
searched its paper records (the 3 x 5 cards it retains on the carriers it
licenses) and identified the correct carrier. At the same time, however,
the employer asserted that another carrier was the responsible party. The
claim was filed with this carrier, who later denied the claim, asserting
that it was not the employer's carrier during the period when the claimant
worked for the employer. During the months that this carrier was deciding
the claim, another of OWCP's district offices, apparently unaware of the
other district office's efforts, identified yet a different carrier as the
responsible party. When presented with the claim, this carrier also denied
it because the carrier had not been the employer's carrier during that
time. Over a year since the claim was first filed, the employer correctly
identified the correct carrier. The claim was filed with the correct
carrier and was ultimately denied (see table 1).

  Table 1: Timeline Showing Difficulties One Claimant Experienced Locating His
               Former Employer's Insurance Carrier Date Activity

January 1996 	Claimant filed claim with OWCP's New York district office,
and his former employer requested Labor's assistance in locating the
insurance carrier.

February 1996 	OWCP's Seattle district office identified an insurance
carrier (#1) as the responsible party. At the same time, the claimant's
former employer asserted that another insurance carrier (#2) was the
responsible party and sent the claim to them.

March 1996 	OWCP's New York district office identified another insurance
carrier (#3) as the responsible party and notified the insurance carrier
of the claim.

April 1996 	Insurance carrier #3 denied the claim, stating that although
it provided coverage for this employer, it was not the responsible party
during the period when the claimant's alleged exposure occurred.

May 1996 	Insurance carrier #2 also denied the claim, stating that it had
not provided coverage during the period when the claimant's alleged
exposure occurred.

January 1997 Claimant's former employer identified the correct insurance
carrier (#1) and sent the claim to it.

       February 1997 The correct insurance carrier (#1) denied the claim.

Source: GAO analysis.

Employer and insurance carrier processing errors and difficulty locating
records further delayed employees' claims. For the claims we reviewed,
several employers had difficulty verifying the claimant's employment

because they were unable to locate personnel records for employees who had
worked in Vietnam. For example, one employer denied that the claimant had
been one of its employees, although the claimant provided copies of pay
stubs, employee identification documents, and several letters of
recommendation from the company. Eventually, Labor interceded on behalf of
the employee and insisted that the employer recognize the claimant as an
employee. Insurance carriers also had difficulty determining if they had
provided coverage to employers and claimants because of difficulties
locating old records. Even federal employees can experience difficulty
finding their employers and locating records. For example, one federal
employee's claim was delayed over 2 years while the Department of
Agriculture determined that he was an employee during the Vietnam War but
was on detail to the Department of State. In its reply to Labor regarding
the delay, the Department of Agriculture noted that it no longer had
records for the period in question. Another federal employee, who was
unable to obtain relevant medical records from his employer or the
National Personnel Records Center, eventually withdrew his claim stating
"at this time, I am under Hospice care and have not the energy to fight
you anymore."

Once claims were submitted to Labor, both federal and contract employees
faced additional delays because of processing errors at Labor, including
claims being sent to the wrong office and information on the claims forms
being typed incorrectly. For example, for one claim from a federal
employee, Labor incorrectly processed the claimant's request for
reexamination of the written record by Labor's Branch of Hearings and
Review (typically, a claimant's second level of appeal), instead sending
it to the Employees' Compensation Appeals Board (a claimant's final level
of appeal). This error created confusion and delayed processing of the
claim for 11 months while the error was identified and the claim sent to
the correct location. For the same claim, Labor continued to send notices
to the claimant's former federal employer at the wrong address for over a
year, even though the post office returned these letters stamped
"undeliverable" and the employer notified Labor of the correct address.

Claims Filed under FECA Of the 12 claims filed by federal employees for
medical conditions related Require Proof of a Causal to Agent Orange
exposure, Labor denied 11 of them for failure to meet at Link, and to
Date, Labor least one of FECA's five requirements, and 1 claim was
withdrawn by the Has Denied All but One claimant. Of the 11 claims that
were denied, Labor denied 10 of them

because the claimant failed to prove a causal link between his
medicalClaim condition and exposure to Agent Orange, and 1 claim was
denied because it was not filed within the time limits prescribed by FECA.

Furthermore, 5 of the claims denied by Labor were appealed by the
claimants. Of those that were appealed, Labor upheld the denial of 4
claims, and a decision is still pending on 1 claim. All of the claims that
were appealed were initially denied because of the claimants' failure to
prove a causal link between exposure and their medical conditions. Three
of the 5 claimants requested reconsideration of their claims by a claims
examiner. Labor upheld its initial denial after reconsidering 2 of these
claims, and to date, neither claimant has sought a hearing by OWCP's
Branch of Hearings and Review or a review by the Employees' Compensation
Appeals Board. The third claim for which a reconsideration was requested
is still pending. Of the 2 remaining claims that were appealed, one of the
claimants requested an oral hearing; the denial was upheld. The other
claimant sought redress through both a written review by the Branch of
Hearings and Review and an appeal to the Employees' Compensation Appeals
Board. The board upheld Labor's decision.

Almost all of these claims from federal employees-10 of the 11 claims-
were denied because the claimants failed to prove a causal link between
their medical conditions and exposure to dioxin. Under FECA, to prove
causation, claimants must provide "medical evidence establishing that the
employment factors identified by the claimant were the proximate cause of
the condition for which compensation is claimed, or, stated differently,
medical evidence establishing that ... the diagnosed condition is causally
related to the employment factors identified by the claimant." To
determine whether a claimant has shown proximate cause, Labor's claims
examiners and hearings representatives told us that they examine the
medical research and the "rationalized medical opinions" provided by the
claimants' doctors to demonstrate an explicit cause and effect
relationship between the medical conditions and alleged exposure. Claims
examiners and hearing representatives told us that the claimants' doctors
may use medical literature to support these rationalized opinions, but the
doctors must apply this research to the claimants' specific circumstances.

Claimants, however, have faced three challenges to proving a causal link
between their medical conditions and their exposure to dioxin. First, some
of the claimants' doctors are not familiar with the link between dioxin
exposure and the development of some illnesses. In one case file we
reviewed, one of the claimant's doctors stated: "I have very little
training in epidemiology and cannot tell you much about the coincidence of
Agent Orange exposure with the development of prostate cancer," and
another said he was "certainly unable to provide any kind of expert
opinion" on the relationship between Agent Orange and the development of
prostate cancer.

Second, according to Labor, some of the claimants' doctors relied on
general medical research to support their opinions without applying the
research to the individual claimant. For example, in one case, the
claimant's doctor stated that he had reviewed the research on Agent
Orange, relying primarily on the IOM biennial report that showed an
association between prostate cancer and exposure to dioxin to support his
opinion that the claimant's prostate cancer was related to his exposure to
Agent Orange. Labor denied the claim because the doctor failed to give his
opinion but rather inferred a connection by presenting an excerpt from an
article published by the National Academies Press.12 The decision letter
also stated that Labor has long established that causality cannot be
inferred and publications are of no evidentiary value, as they are not
case specific.

The third challenge the claimants faced is ruling out other factors that
could have caused their medical conditions. For long-latency illnesses,
such as the cancers associated with dioxin exposure, it is difficult for
the claimants' doctors to definitively rule out other factors that could
have caused the medical condition during the intervening years between
Agent Orange exposure and the development of the medical condition. For
example, in one case that was denied by Labor, five different doctors-
including one doctor to whom the claimant was referred by Labor- asserted
an association between the claimant's medical condition and his exposure
to Agent Orange. The doctor to whom the claimant was referred by Labor
stated that "it is reasonable to assume that his exposure to Agent Orange
and to other herbicides are the causative agent for his transitional cell
carcinoma [i.e., bladder cancer]." Another doctor provided his opinion
that the claimant's bladder cancer was a consequence of his exposure to
dioxin and other environmental toxins during his tenure in Vietnam. A
third doctor stated in his written opinion that "chemical exposures in the
course and scope of his duties as a federal employee are the cause of his
bladder cancer." However, the claim was denied because Labor determined
that the claimant failed to submit medical evidence that attributed his
bladder cancer to his exposure to herbicides in Vietnam. The decision
letter stated that although one of the doctors provided a medical opinion
stating a cause and effect relationship between the claimant's medical
conditions and his federal employment, the doctor "cannot state

12The National Academies Press publishes the IOM's biennial report on
dioxin exposure. This is the report VA uses to establish the diseases it
will recognize as associated with Agent Orange exposure under the Agent
Orange Act.

with certainty that non-work related factors have no connection to the
claimed conditions. Specifically, he admits that cigarette smoking and
exposure to asbestos are also bladder carcinogens. Therefore, his opinion
is considered speculative and equivocal in nature, and has little
probative value." The claimant requested four different reconsiderations
by OWCP's claims examiners, and after his death, his widow requested a
fifth reconsideration; Labor's decision was upheld each time.

    Labor Identified Few Claims from Contract Employees, but Insurance Carriers
    Initially Denied Most of the Claims Identified

Although Labor and the insurance carriers identified a total of 20 claims
from contractor employees, we were not able to include 10 of them in our
analysis of the disposition of the claims because Labor identified them
too late for us to include them. For the 10 claims we reviewed, 1 was
accepted and 9 were initially denied by the insurance carriers. Of the 9
claims denied, 5 of the claimants asked Labor to review the insurance
carriers' decisions, and 4 claimants took no further action on the claims.
Of the 5 claims that the claimants asked Labor to review, 3 claimants are
waiting for a hearing by one of Labor's administrative law judges. For the
other 2 claims, Labor upheld the insurance carriers' decisions-1 because
the claim was not filed within the 2-year time period allowed under the
law and the other because the claimant had not sufficiently proved that he
had been exposed to Agent Orange in Vietnam.

For the one claim accepted for payment, the claimant asked Labor to
intervene because his employer, a self-insured contractor for the CIA, was
no longer in business. Absent an employer or insurance carrier, the CIA-
acting in the role of the employer and the insurance carrier-stated that
it "had no objections" to paying the claim. In accepting the claim, Labor
referenced VA's policy regarding Agent Orange claims and an Environmental
Protection Agency report on the health effects of dioxin exposure to
justify its approval of compensation. Noting VA's presumption that any
veteran who served in Vietnam and developed certain medical conditions
associated with Agent Orange had been exposed, the claims examiner stated
that it would be difficult for Labor to take a contrary position. This
claim was also accepted for reimbursement under the War Hazards
Compensation Act. Under the act, an insurer who pays a claim for an injury
from a war risk may be reimbursed for the costs it bears in connection
with the claim. However, according to Labor officials, some insurance
carriers may not be aware that they can obtain reimbursement under the War
Hazards Compensation Act.

  Legislative Options Could Ease Access to Benefits for Civilians

If Congress chooses to address this issue, several legislative options
could provide more similar consideration of civilian claims as compared
with the claims of their veteran counterparts and improve civilian access
to workers' compensation or other benefits. However, these options have
cost implications, although the lack of data on the number of civilians in
Vietnam and the difficulty potential claimants have in locating the
information needed to file claims make it difficult to accurately assess
their potential costs. In addition, these options should be carefully
considered in the context of the current federal fiscal environment, as
well as the significant policy and cost implications any changes could
have for civilian employees involved in wars and conflicts since the
Vietnam era.

    Congress Could Amend the Agent Orange Act to Include Civilians or Set Up a
    Separate Program for Civilians Exposed to Agent Orange in Vietnam

Congress could amend the Agent Orange Act and related legislation that
authorizes benefits for veterans to include civilians. However, including
civilians under these laws may raise concerns for those who feel that
civilians should not be entitled to the same benefits as military
veterans.

Alternatively, Congress could create a separate program to cover claims
for medical conditions that civilians develop as a result of their
exposure to Agent Orange. In addition to the Agent Orange Act for
veterans, Congress has established programs for some special populations
exposed to toxic substances in the workplace that develop into serious
medical conditions after long latency periods. For example, Congress
passed the Radiation Exposure Compensation Act in 199013 to provide
payments to individuals who contracted certain cancers and other serious
diseases as a result of their exposure to radiation released during
nuclear weapons tests or as a result of their employment in the uranium
mining industry. More recently, Congress passed the Energy Employees
Occupational Illness Compensation Program Act of 2000, as amended,14 which
provides payments to contract employees working in Department of Energy
facilities who were exposed to radioactive and hazardous materials and
subsequently developed illnesses such as cancer and lung disease.

1342 U.S.C. S: 2210, note. 1442 U.S.C. S: 7384-85.

Some key components of these special programs are

o  	Providing restitution: The Radiation Exposure Compensation Act was
enacted to establish a procedure for making partial restitution to
individuals who became ill because of radiation exposure from aboveground
nuclear tests or uranium mining. Restitution payments range from $50,000
for testing victims to $100,000 for uranium miners. The Energy Employees
Occupational Illness Compensation Program Act also makes payments to
eligible claimants and provides medical coverage for specific illnesses.

o  	Creating eligibility criteria based on a less stringent standard of
proof for the causal link between exposure and medical conditions: Because
of the inherent difficulties of proving a link between exposure to
radiation or toxic substances and occupational diseases that occur after
long latency periods, other compensation programs rely on a less stringent
burden of proof than FECA or DBA. For example, the Energy Employees
Occupational Illness Compensation Program Act allows payments if
employment at an energy facility was "as least as likely as not" to have
caused, contributed to, or aggravated the claimed medical condition.

o  	Using ongoing research on conditions associated with exposure to
determine eligibility: On the basis of recent research findings, the
Radiation Exposure Compensation Act Amendments of 2000 expanded the list
of diseases that may qualify individuals for compensation and decreased
the level of radiation exposure that is necessary to qualify for
compensation. Under the Agent Orange Act, VA uses IOM's biennial review of
research on dioxin exposure and recommendations to add to its list of
accepted medical conditions related to Agent Orange exposure.

o  	Assisting claimants in processing their claims: The Energy Employees
Occupational Illness Compensation Program Act, as amended, created an
ombudsman position to provide information to claimants. According to the
Director of Labor's Energy Employees Occupational Illness Compensation
Division, the agency provides information and assistance to claimants in a
variety of ways, including resource centers located throughout the country
that assist claimants in completing claim forms and obtaining the
documentation needed to support their claims. He also stated that Labor
has provided pamphlets, public service announcements, and direct mailings
to potential claimants that explain the program, benefits available,
procedures for filing claims, and where they can obtain assistance. The
Radiation Exposure

Congress Could Amend an Congress could amend the GI Bill Improvement Act
of 1977,15 which allows Existing Statute to Grant DOD to retroactively
grant military status and authorize full VA benefits to Military Status to
Certain certain civilian groups that support the military during armed
conflicts. Civilians Women who served in the Women's Air Forces Service
Pilots during World

War II are the model for the statute, because they comprised a
quasi-Compensation Act also provides for outreach and information to
potential claimants. The Department of Justice administers this program
and has established an Internet Web site, conducts on-site visits to
groups and organizations to promote the program, and operates a toll-free
telephone line for program queries.

military group that rendered service to the United States during wartime,
but at the time, were excluded from joining the armed forces because of
their gender. In 1977, Congress specifically recognized the service of
that group as active military duty and directed DOD to issue regulations
under which similarly situated groups could be recognized. In 1987, a
federal court determined that DOD had failed to clarify the factors and
criteria used in implementing this statute. As a result, DOD clarified the
rules for accepting groups and issued DOD Directive 1000.20. Under this
directive, a group must submit an application showing that it meets the
criteria, including the criterion that it provided service to the U. S.
government during a period of armed conflict, was subject to military
control, and was integrated into the military organization (see table 2).
Groups do not, however, have to meet all of the criteria in order to be
accepted, but it remains unclear how many of the criteria must be met for
a group to be accepted.

1538 U.S.C. S: 106, note.

Table 2: Criteria for Acceptance under DOD Directive 1000.20

Criteria for application Criteria for acceptance

1. Have been similarly situated to the Women's 1. Uniqueness of service.
Civilian service during a period of armed conflict is not Air Forces
Service Pilots of World War II (a necessarily equivalent to active
military service, even when performed in a group of federal civilian
employees attached combat zone. Service must be beyond that generally
performed by civilian to the U.S. Army Air Force in World War II).
employees and must be occasioned by unique circumstances.

2. Have rendered service to the United States in what was considered
civilian employment with the U.S. armed forces either through formal civil
service hiring or less formal hiring if the engagement was created under
the exigencies of war, or as the result of a contract with the U.S.
government to provide direct support to the U.S. armed forces.

3. Have rendered that service during a period of armed conflict.

2. 	Organizational authority over the group. The concept of military
control is reinforced if the military command authority determines such
things as the structure of the civilian organization, the location of the
group, the mission and activities of the group, and the staffing
requirements to include the length of employment and pay grades of the
members of the group.

3. 	Integration into the military organization. Integrated civilian groups
are subject to the regulations, standards, and control of the military
command authority.

4. Consist of living persons to whom VA benefits 4. Subjection to military
discipline. During past armed conflicts, U.S. military

can accrue. commanders sometimes restricted the rights or liberties of
civilian members as if they were military members.

5. Not have already received benefits from the 5. Subjection to military
justice. Military members are subject to the military federal government
for the service in criminal justice system. During times of war, "persons
serving with or question. accompanying an Armed Force in the field" are
subject to the military criminal justice code. Those who were serving with
the U.S. armed forces may have been treated as if they were military and
subjected to court-martial jurisdiction to maintain discipline.

6. 	Prohibition against members of the group joining the armed forces.
Some organizations may have been formed to serve in a military capacity to
overcome the operation of existing laws or treaty or because of a
governmentally established policy to retain individuals in the group as
part of a civilian force.

7. Receipt of military training and/or achievement of military capability.
If a group

employed skills or resources that were enhanced as the result of military
training or equipment designed or issued for that purpose, this acts
toward recognition.

Source: 32 C.F.R. Part 47, DOD Directive 1000.20.

Although five groups of civilians who worked in Vietnam during the war
have applied for consideration under DOD Directive 1000.20, none has been
accepted. To date, Slick Airways, a division of Airlift International;
U.S. civil servants on temporary duty at Long Binh, Vietnam; U.S. and
foreign civilian employees of CAT, Inc.; U.S. civilian crewmembers of the
Flotilla Alaska Barge and Transport Company; and Vietnamese citizens who
served in Vietnam as commandos under contract with the U.S. armed forces
have applied for consideration under the directive. In its application,
one of these groups claimed to have met all seven criteria for acceptance.
In its decision, the DOD Civilian/Military Service Review

Board16 stated that the group met the "organizational authority over the
group" criterion, and that board members disagreed over whether the group
met the "uniqueness of service" criterion. In addition, the board
acknowledged that there was evidence of military command authority over
the group but asserted that the group was not integrated into the military
organization and was not subject to military discipline or military
justice. The application was denied.

    Easing Access to Benefits for Civilians Has Cost and Policy Implications

The options presented above could have significant cost and policy
implications. However, with little data available on the actual number of
civilians in Vietnam, their exposure levels, and the number of claims that
would be filed, it is difficult to estimate the costs of these options.

According to information provided to us by VA officials, of the 2.3
million living military veterans who were in Vietnam during the war
approximately 160,000 (less than 10 percent) are receiving disability
compensation benefits from VA for the four most common medical conditions
associated with Agent Orange exposure.17 VA's average annual cost of
providing workers' compensation and medical expenses to veterans receiving
benefits under the act for the four most common medical conditions is
about $8,500 for disability compensation and $1,000 for medical expenses.
Although these costs do not include the costs of administering the claims,
when VA added diabetes as a condition related to Agent Orange exposure, it
estimated that the administrative costs for each claim processed would be
about $350.18

Including civilian employees who worked in Vietnam under these options
also has policy implications. It could set a precedent that might prompt
other federal and contract employees who have worked for the U. S.
government in war zones since the Vietnam War-such as the Gulf War and the
current conflict in Iraq-to seek similar benefits. Such a precedent

16The Civilian/Military Service Review Board reviews and makes
recommendations concerning applications for veteran's status and consists
of representative from the Office of the Secretary of Defense and the
Departments of the Army, Navy, and Air Force and, when relevant, the Coast
Guard.

17DOD provided VA with a list of the names of military personnel who
worked in Vietnam during the war.

18VA estimated that the general operating expenses for the expected
179,000 claims for Agent Orange-related diabetes would be about $62
million for a 5-year period.

could prove costly because the U.S. military has employed a much larger
number of contractor personnel in recent wars and conflicts than in
Vietnam.

                                  Conclusions

The fact that Labor does not collect data on Agent Orange claims that
allow it to identify the claims using its database makes it difficult to
identify trends in the number and disposition of claims. The coding errors
in Labor's database also make it difficult to identify and track these
claims. In addition, while Labor is the licensor of insurance carriers for
government contract employees, it is difficult, without proper records, to
help claimants identify the insurance carriers or determine how well
insurers are following through on their obligations. Both Labor and
claimants are burdened by the difficulties the agency has in providing
information to claimants-particularly contract employees filing claims
under DBA-on how to file claims, locate their former employers, and
identify the employers' insurance carriers, difficulties that leave room
for delays and errors in processing claims.

Federal and contract employees who may have been exposed to Agent Orange
while working for the United States during the Vietnam War have clearly
had a different experience than their military counterparts in requesting
compensation under the Agent Orange Act. In short, these employees must
meet more stringent standards in pursuing claims under FECA and DBA. The
cost implications of options designed to increase access to compensation
for civilians exposed to Agent Orange should be carefully considered in
the context of the current and projected fiscal environment. The lack of
information available about the number of possible civilian Agent Orange
claims, however, makes it difficult for us to estimate the potential costs
were such options to be adopted. In addition, any consideration of these
options should include an assessment of the policy and cost implications
the changes could have for other civilian employees involved in wars and
conflicts since the Vietnam War, such as the war in Iraq. Setting a
precedent for expanding benefits to civilian employees could have a much
larger impact in the future as the U.S. military increases its reliance on
contract employees.

  Recommendations for Executive Action

Agency Comments

To improve the handling of civilian Agent Orange claims, the Secretary of
Labor should

o  	direct OWCP to assign a unique identifying code to Agent Orange claims
and develop procedures to ensure that these claims are coded correctly;

o  	provide better oversight of licensed DBA insurance carriers by
requiring the Office of Longshore and Harbor Workers to track the
information it retains on licensed insurance carriers for Vietnam era
employers in an easily searchable format, such as in an automated file,
and track changes in ownership for each licensed carrier in order to be
able to determine liability for payments; and

o  	direct the appropriate offices to provide contract employees with the
information needed to file Agent Orange claims by taking such measures as
posting information on Labor's Web sites or developing informational
brochures that include information on how to file a claim under DBA, such
as which forms to use, and information on Vietnam era contractors with the
names of their insurance carriers licensed by Labor.

We provided a draft of this report to Labor, DOD, and VA for comment.
Labor and VA provided written comments on the draft, which are reproduced
in appendixes II and III.

Labor generally agreed with our recommendations. The agency agreed to
improve its handling of civilian Agent Orange claims by developing a
unique code to use in identifying these claims, improving its oversight of
licensed DBA insurance carriers, and assisting contract employees in
obtaining information on filing claims by enhancing the information on its
Web site. Regarding our recommendation to develop a better system for
tracking information on licensed DBA insurance carriers, Labor stated that
it does not have the funding needed to create a relational database or the
resources to enter these data into such a database. However, it also
stated that a current evaluation of its processes may provide some
recommendations for enhancing its data capability in this area. Given the
availability of easy to use, off-the-shelf database packages, we continue
to believe that Labor could implement this recommendation with relatively
little expense and that data entry could be phased in over time or
contracted out.

VA expressed serious concerns about the legislative options for easing
civilians' access to workers' compensation benefits. It highlighted the
additional costs and administrative burdens associated with the options.
VA also expressed concern about the precedent-setting implications these
options could have for civilian employees involved in other wars and
conflicts since the Vietnam War. As noted in the report, we agree that the
cost and policy implications of these options should be carefully
considered.

DOD provided only an informal technical comment on the report. Labor and
VA also provided a few technical clarifications, which we incorporated as
appropriate.

We will send copies of this report to the Secretaries of Labor, Defense,
Veterans Affairs, and other interested parties. We will also make copies
available to others upon request. In addition, the report will be
available at no charge on GAO's Web site at http://www.gao.gov.

Please contact me or Revae Moran on (202) 512-7215 if you or your staff
have any questions about this report. Other contacts and staff
acknowledgments are listed in appendix IV.

Robert E. Robertson Director, Education, Workforce, and Income Security
Issues

                         Appendix I: Technical Appendix

  Estimating the Number of Civilian Employees

Many of the agencies we contacted were unable to locate records on federal
and contract workers employed in Vietnam, primarily because of the age of
the records and the fact that they were not automated. However, using the
limited historical data provided to us by the Department of State and the
Department of Defense (DOD), we developed estimates of the number of
civilian employees who worked in Vietnam during the war.

The Department of State was not able to provide the total number of
contract employees who had worked in Vietnam but was able to identify the
names of federal employees who had worked there between January 1964
through November 1965 and January 1967 through November 1974 from its
quarterly Foreign Service reports. As these are historical reports, we
were unable to assess the reliability of these data for several reasons:
Most records were not computerized in the 1960s or 1970s, most paper
records have either been destroyed or were not organized in a way that
would facilitate the identification of personnel, and most officials who
were knowledgeable about employees in Vietnam are no longer with the
agency. We entered the names from these quarterly lists into an automated
file, sorted out likely duplicates, and counted the remainder. On the
basis of our analysis, we estimated that about 6,000 employees of the
Department of State worked in Vietnam during the war.

In the absence of information from the Central Intelligence Agency (CIA)
and the Departments of Agriculture and Treasury, we used the Department of
State estimate as a proxy for the number of federal and contract employees
each agency employed in Vietnam. We also assumed that these agencies did
not have as many employees in Vietnam as the much larger number of DOD
contract employees needed to support the military operations. On the basis
of these assumptions, we estimated that these four agencies employed about
24,000 workers in Vietnam during the war.

Although DOD officials were unable to locate information on the number of
federal employees who had worked for the agency during the Vietnam War, we
located historical reports of civilian personnel strength by year at DOD's
Directorate for Information, Operations, and Reports and used these data
to develop estimates of the number of federal civilian employees who
worked for DOD in Vietnam. These data provide a count of the number of
employees for one point in time during the year. However, DOD officials
told us that civilians likely stayed in Vietnam for a 2-year rotation
before returning to the United States, so totaling these annual counts
would overestimate the total number of employees. To obtain an
unduplicated count, we used the annual civilian personnel

Appendix I: Technical Appendix

strength data and assumed a 2-year rotation. For example, in 1964 DOD had
44 federal employees in Vietnam, but in 1965 had 51 employees-an addition
of 7 new employees. In 1966, DOD had a total of 444 federal employees.
However, assuming the 44 employees from 1964 had completed their 2-year
rotation and returned home, they would not be included in this count.
Therefore, the 444 is composed of the 7 employees who arrived in 1965 and
437 new employees who arrived in 1966. Using this methodology, we
estimated that about 4,600 DOD employees were in Vietnam during the war
(see table 3). We obtained the personnel strength data from published DOD
reports but were unable to assess the reliability of the data for several
reasons: Most records were not computerized in the 1960s and 1970s, most
paper records have either been destroyed or were not organized in a way
that would facilitate the identification of personnel, and most officials
who were knowledgeable about employees in Vietnam are no longer with the
agency.

Table 3: Estimated Number of DOD Federal Employees in Vietnam, 1964 to
1974

                   Annual federal employee    Estimated number of DOD federal 
                   personnel strength data    employees entering Vietnam each 
             Year           provided by DOD  year, assuming a 2-year rotation 
             1964                        44 
             1965                        51 
             1966                       444                               437 
             1967                     1,240                               803 
             1968                     1,427                               624 
             1969                     1,522                               898 
             1970                     1,133                               235 
             1971                       868                               633 
             1972                       646 
             1973                       811                               798 
             1974                       919                               121 
             1975             Not available                     Not available 
            Total                                                       4,613 

Source: DOD and GAO analysis.

DOD was unable to provide information on the number of contract employees
it had working in Vietnam during the war. However, from DOD's Directorate
for Information, Operations, and Reports we were able to obtain the annual
dollar amount of DOD service contracts provided to companies between 1966
and 1974 for work in Vietnam, and we used these

Appendix I: Technical Appendix

data to develop estimates of the number of contract workers. DOD officials
told us that service contracts were the most likely type of contract to be
used to pay salaries to contract workers, as opposed to other types of
contracts that would have been used to purchase items such as equipment
and supplies. We were unable to assess the reliability of these data for
reasons similar to those noted for the data we obtained for federal
employees. In addition, the data are further limited because we were
unable to determine if the service contracts would have been for salaries
to U.S. citizens or foreign nationals and because 3 years of data (1964,
1965, and 1975) were not available.

Using the limited data available, we divided these annual amounts by a
range of "burdened labor rates" to estimate the number of employees
represented by these contracts each year. DOD officials told us the
burdened labor rate--salary, subsistence expenses, company overhead,
profit, insurance, travel, and other costs that would have been included
in the total contract amount--could vary among contracts. However, a DOD
official with experience administering contracts advised us that doubling
an employee's annual salary would approximate this burdened labor rate.

However, DOD was unable to provide us with information on the range of
salaries paid to contract employees in Vietnam. Therefore, to estimate
annual salaries for contract employees, we obtained available salary
scales for federal employees from 1964 to 1975 and selected a range of
low, middle, and high salaries. For our analysis, we assumed annual
salaries of $7,500, $15,000, and $25,000 and doubled them to obtain
burdened labor rates of $15,000, $30,000, and $50,000 per person. We
divided these burdened labor rates into the annual contract amounts to get
an estimated number of contract employees employed in Vietnam each year.
As with the annual estimates of federal DOD employees, we assumed a 2-year
rotation to obtain an unduplicated count, which ranged from about 43,000
to 142,000 contract employees (see table 4).

                         Appendix I: Technical Appendix

Table 4: Estimated Number of DOD Contract Employees in Vietnam, 1966-1974
Estimated number of DOD contract employees entering Vietnam each year, assuming
                               a 2-year rotation

            Assuming a burdened    Assuming a burdened    Assuming a burdened 
                          labor                  labor                  labor 
Year     rate of $15,000 per    rate of $30,000 per    rate of $50,000 per 
                         person                 person                 person 
1964           Not available          Not available          Not available 
1965           Not available          Not available          Not available 
1966                  47,253                 23,627                 14,176 
1967                   4,123                  2,062                  1,237 
1968                  29,823                 14,912                  8,947 
1969                  11,667                  5,833                  3,500 
1970                  27,203                 13,602                  8,161 
1971                  14,287                  7,143                  4,286 
1972                   2,060                  1,030 
1973                   8,233                  4,117                  2,470 
1974                 -2,460a                -1,230a                  -738a 
1975           Not available          Not available          Not available 
Total                142,190                 71,095                 42,657 

Source: DOD and GAO analysis.

aThe negative numbers near the end of the war indicate departures from
Vietnam that were dictated by the conclusion of the war rather than the
completion of average time of service there.

Appendix II: Comments from the Department of Labor

Appendix II: Comments from the Department of Labor

Appendix III: Comments from the Department of Veterans Affairs

Appendix III: Comments from the Department of Veterans Affairs

Appendix III: Comments from the Department of Veterans Affairs

Appendix III: Comments from the Department of Veterans Affairs

Appendix III: Comments from the Department of Veterans Affairs

Appendix IV: GAO Contacts and Staff Acknowledgments

GAO Contacts

  Staff Acknowledgments

(130384)

Revae E. Moran, (202) 512-3863 Karen A. Brown (202) 512-7240

Nina E. Horowitz made significant contributions to this report. In
addition, Margaret L. Armen, Susan C. Bernstein, Benjamin A. Bolitzer,
Christina Cromley, and Jean L. McSween provided key technical and legal
assistance throughout the engagement.

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