2025-09-09 Questions and Answers Solicitation 19C18025R0001.pdf

Solicitation 19C18025R0001 – Health Insurance U.S. Embassy Santiago.

Questions and Answers

1. Q: Considering Form W-14, issued by the U.S. Internal Revenue Service (IRS), which serves for foreign contracting parties receiving payments for federal acquisitions from the U.S. government to declare or request exemption, either full or partial, from the 2% tax established in Section 5000C of the Internal Revenue Code, it indicates that there is a 2% tax on payments to foreign contractors. There are exemptions, but Chile is not listed among them. Should we assume that 2% of the premium will be withheld? If the answer is yes, how is this withholding applied, and what does this 2% entail?

A: Tax withholding exemption under Section 5000C: Section 5000C imposes a 2% withholding tax on certain payments made to foreign contractors for goods or services provided under federal contracts. However, if the foreign vendor meets the requirements of a tax treaty between their country and the United States, they may be exempt from this tax. Form W-14 serves as proof that the foreign vendor qualifies for this exemption.

Official documentation: By signing the form, the foreign vendor certifies that they meet the necessary requirements for the exemption, including eligibility under an applicable tax treaty. This helps the U.S. government maintain clear records and avoid tax compliance issues.

Why is it important for the vendor to sign it?

• Avoid the 2% withholding: If the foreign vendor does not sign Form W-14, the U.S.

government may automatically apply the 2% withholding tax on payments made under the federal contract.

• Legal compliance: Signing the form ensures the vendor complies with applicable tax laws and provides a legal basis for the exemption.

• Facilitate payment processing: Signing the form can expedite payment processing by eliminating the need to apply withholding and make subsequent adjustments.

2. Q: Some coverage limits (e.g., dental coverage limits) are set in dollar amounts, while others are in UF (Unidad de Fomento). It is not feasible for us to manage two currencies in a single policy. Is it possible to define all coverage limits in UF to unify the policy under a single currency?

A: The contract must be in UF, at the time of awarding the contract, all benefit amounts will be set in UF (based on the value on the contract signing date).

3. Q: Updated FAR/DOSAR clauses include prohibitions on certain telecommunications equipment (FAR 52.204-25), cybersecurity, and sustainability.

What does the prohibition in federal environments entail? This is to determine, for example, whether marketing activities fall under the prohibition. Do these prohibitions refer to the use of servers employed by the insurer, or do they imply taking measures to block communication with insured parties using equipment from the specified brands?

A: Marketing activities and applicability: Marketing activities themselves are not inherently restricted under FAR 52.204-25 unless they involve the use of prohibited telecommunications equipment or services. For example:

• If marketing campaigns rely on servers or IT infrastructure that include prohibited equipment, this would violate the FAR clause.

• Communication with insured parties using prohibited equipment is not explicitly addressed in FAR 52.204-25. However, federal agencies and contractors must ensure their systems do not interact with or depend on prohibited equipment for critical operations.

Servers used by insurers: The prohibition applies to federal agencies and contractors, not private entities like insurers, unless they are subcontractors or suppliers to the federal government. If the insurer provides services to a federal agency, its servers must comply with FAR 52.204-25. This means:

• Insurers must ensure their IT infrastructure does not include prohibited equipment.

• Measures to block communication with insured parties using prohibited equipment are not explicitly required but may be necessary to ensure compliance with cybersecurity standards.

4. Q: We request details of reimbursed expenses per person for the last 36 months.

A: This information is personal, and details of benefits cannot be disclosed. The embassy cannot share medical information about its staff.

5. Q: We request a list of individuals (without identifying them) with their gender and date of birth.

A: Please review page 46 of the solicitation, which provides information on the number of employees, their age range, and gender. This information is also provided for insured spouses and children.

6. Q: We request the number of insured individuals per month for the last 36 months.

A: This is an annual contract, so the difference in the number of insured individuals per month is minimal. Such differences only occur when a new employee joins the embassy, an employee's contract ends, or a dependent is born. In the last year, this difference has been two insured individuals.

7. Q: Please confirm if the historical claims data provided under section J, Exhibit F includes claims from ORE staff.?

A: Includes ORE.

8. Q: Pease provide average insured member counts (employees + dependent child + dependent spouse) for Health Insurance for the last 5 years – 2024, 2023, 2022, 2021 & 2020. It is standard practice in the insurance industry (and in other

Department of State insurance solicitations) to provide this information to ensure equal/fair opportunity for all offerors in an open solicitation.

A: Same Answer as question #6.

9. Q: When is the plan likely to commence?

A: It is planned to start on November 1, 2025; however, this may be subject to change.