DBA Insurance Rate Agreement RFI.pdf

RFI Number: 19AQMM26N0098

SENSITIVE BUT UNCLASSIFIED

Dear Industry Partners, The Department of State (DoS) is conducting market research to explore innovative and commercially viable approaches for structuring Defense Base Act

(DBA) insurance coverage for U.S. Government contractors operating overseas

(See FAR 52.228-3 for more information). Our objective is to better understand how the insurance industry structures DBA programs, allocates risk, incentivizes efficiency, and balances pricing stability with long-term sustainability.

This Request for Information (RFI) is issued solely for market research purposes and does not constitute a solicitation or commitment by the Government. DoS is particularly interested in creative models that could improve value, transparency, risk management, and administrative efficiency while remaining commercially reasonable for insurers and insured entities.

For reference, DoS is attaching a draft proposed solicitation scope of work for

DBA insurance services. We welcome industry feedback on the structure, terms, and assumptions reflected in the draft and encourage respondents to suggest alternative approaches or improvements.

DoS is specifically interested in engaging with companies that have the authority and financial capacity to guarantee rates. Accordingly, DoS is not interested in working with brokers or intermediaries that cannot directly guarantee rates or bind coverage.

We invite industry respondents to provide input on the following questions:

• Are there other ways to price DBA insurance, besides a single flat rate, that could work well for a large Government-wide or multi-agency program?

• What are some practical ways the Government and the insurer could share risk, such as sharing profits, issuing rebates, or adjusting pricing when results are better or worse than expected?

• How can a contract be set up so contractors have stable, predictable rates, while still allowing insurers to manage risk over time?

• If claims turn out to be lower than expected, how could savings or extra profits be shared with the Government?

• If claims are higher than expected, how can that be handled in the middle of the coverage period or renegotiating the contract?

• How can claims handling, safety, and loss-prevention efforts be built into a

DBA insurance program to reduce injuries and costs?

• What kind of data and reporting works best to support fair pricing and give the Government confidence in how the program is being managed?

• What contract terms or program management approaches help support a strong, long-term relationship between a large buyer like the Government and an insurer?

• Has your organization used or seen any new or different approaches to insurance programs like this, either in the U.S. or internationally?

• Are there any risks, limits, or legal or regulatory issues the Government should consider when using alternative DBA insurance structures?

• Approximately how many DBA insurance policies has your organization issued each year over the past five years?

Responses may include narrative explanations, conceptual models, sample structures, comments on the draft solicitation, or other relevant insights. DoS welcomes both traditional and non-traditional approaches that could inform future acquisition strategies.

Please submit responses by 5:00pm EST 03/06/2026 to shadeal@state.gov.

Thank you for your engagement and willingness to share industry perspectives.

Your input will help DoS better understand the range of viable options for structuring DBA insurance in a manner that is fair, sustainable, and aligned with

Government and industry objectives.

Sample Solicitation SOW

SECTION B - SUPPLIES OR SERVICES/PRICES

B.1. PURPOSE:

The purpose of this award is to enter into a contract in which the contractor, hereafter referred to as the Insurer, will be the source of Worker's Compensation

Insurance as required by the Defense Base Act (DBA) for all Department of State

(DoS) managed contracts.

B.2 RESERVED

B.3. CONTRACT TYPE:

This is a No Cost Fixed Rate Type Contract.

B.4. RATE SCHEDULE:

The Insurer will use the following rates for this contract:

BASE – 2 years

CLIN Description Price Application

001A Services $TBD upon award

Per $100 of employee salary

001B Construction $TBD upon award

Per $100 of employee salary

001C Security $TBD upon

OPTION PERIOD 1 (1 YEAR)

● Scenario A. If, as of 3 months prior to Option Year 1 Inception, total loss ratio on the program is less than or equal to 32% (excluding any losses reimbursable through the War Hazard Compensation Act), the following rates apply

OPTION PERIOD 1– 1 year

CLIN Description Price Application

101A Services $TBD upon award

Per $100 of employee salary

101B Construction $TBD upon

101C Security $TBD upon

● Scenario B. If, as of 3 months prior to Option Year 1 Inception, total loss ratio on the program is greater than 32% (excluding any losses reimbursable through the

War Hazard Compensation Act), the following rates apply:

OPTION PERIOD 1– 1 year

CLIN Description Price Application

101D Services $TBD upon award

Per $100 of employee salary

101E Construction $TBD upon

101F Security $TBD upon

OPTION PERIOD 2 (1 YEAR)

● Scenario A. If Option Period 1, Scenario A is not exercised, but as of 3 months prior to Option Year 2 inception, total loss ratio on the program is less than or equal to 37% (excluding any losses reimbursable through the War Hazard

Compensation Act), the following rates apply:

OPTION PERIOD 2 – 1 year

CLIN Description Price Application

201A Services $TBD upon

Per $100 of employee salary

201B Construction $TBD upon

201C Security $TBD upon

● Scenario B. If Option Period 1, Scenario A is not exercised, but as of as of 3 months prior to Option Year 2 inception, total loss ratio on the program is greater than 37% (excluding any losses reimbursable through the War Hazard

Compensation Act), the following rates apply:

OPTION PERIOD 2 – 1 year

CLIN Description Price Application

201D Services $TBD upon award

Per $100 of employee salary

201E Construction $TBD upon

201F Security $TBD upon

● Scenario C. If Option Period 1, Scenario A is exercised, the following rates will apply, regardless of the incurred loss ratio:

OPTION PERIOD 2 – 1 year

CLIN Description Price Application

201G Services $TBD upon award

Per $100 of employee salary

201H Construction $TBD upon

201G Security $TBD upon

OPTION PERIOD 3 (1 YEAR)

● Scenario A. If Option Period 2, Scenario A or Scenario C are exercised, the following rates will apply, regardless of the incurred loss ratio

OPTION PERIOD 3 – 1 year

CLIN Description Price Application

301A Services $TBD upon award

Per $100 of employee salary

301B Construction $TBD upon

301C Security $TBD upon

● Scenario B. If Option Period 2, Scenario A or Scenario C are not exercised, but as of 3 months prior to Option Year 3 inception, total loss ratio on the program is less than or equal to 42% (excluding any losses reimbursable through the War

Hazard Compensation Act), the following rates apply:

OPTION PERIOD 3 – 1 year

CLIN Description Price Application

301D Services $TBD upon award

Per $100 of employee salary

301E Construction $TBD upon

Per $of employee salary remuneration

301F Security $TBD upon

● Scenario C. If Option Period 2, Scenario A or Scenario C are not exercised, but as of 3 months prior to Option Year 3 inception, total loss ratio on the program is greater than 42% (excluding any losses reimbursable through the War Hazard

Compensation Act), the following rates apply:

OPTION PERIOD 3 – 1 year

CLIN Description Price Application

301G Services $TBD upon award Per $100 of employee salary remuneration

301H Construction $TBD upon award

301I Security $TBD upon award

The Insurer shall categorize employees using the following descriptions:

SERVICES EMPLOYEES (excluding Security Employees, Construction

Employees, and Aviation Employees): Workers, either professional (e.g., registered professional engineers, licensed medical personnel, etc.) or non-professional, whose efforts are to accomplish discrete, often recurring, tasks that are not intended to result in an end-item of supply or a complete and useable facility. Such workers include, but are not limited to, information technology systems operators, consultants in any discipline, unarmed security personnel, architects, office administrators, researchers, cafeteria workers, nurses, maintenance personnel, drivers, housekeepers, medical technicians, groundskeepers, hospital administrators, doctors, nurses, etc.

CONSTRUCTION EMPLOYEES: Workers whose efforts are customarily associated with construction projects for complete and useable facilities or complete and useable alterations to existing facilities. Such workers include, but are not limited to, laborers, equipment operators, electricians, carpenters, painters, welders, concrete workers, steel workers, roofers, interior finishers, plumbers, glazers, etc.

SECURITY EMPLOYEES: Workers who are armed and charged with the security of specific persons; property and/or facilities, including movement or transportation of persons and/or property between secure locations.

AVIATION EMPLOYEES: For contracts that include aviation, ground crew shall be categorized as Construction, and flight crew shall be categorized as

Security.

NOTE 1: For purposes of Contract No. TBD, employee salary includes wages, meaning the money rate at which the service rendered by an employee is compensated by an employer under the contract of hiring in force at the time of the injury, including the reasonable value of any advantage which is received from the employer and included for purposes of any withholding of tax under subtitle C of the Internal Revenue Code of 1954 [26 USC §§ 3 1 01 et seq.] (relating to employee taxes). The term wages does not include fringe benefits, including (but not limited to) employer payments for or contribution to a retirement, pension, health and welfare, life insurance, training, social security or other employee or dependent benefit plan for the employee's or dependent's benefit, or any other employee's dependent entitlement.

NOTE 2: The Secretary of Labor’s current National Average Weekly Wage

(NAWW) shall be used as the maximum applicable salary to determine premium rates. DoS limits the maximum compensation rate to claimants to 200 percent of the NAWW. The current NAWW can be found at http://www.dol.gov/owcp/dlhwc/nawwinfo.html.

SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C.1. PURPOSE:

The purpose of this award is to enter into a contract in which the contractor, hereafter referred to as the Insurer, will be the source of Workers’ Compensation

Insurance as required by the Defense Base Act (DBA) for all DoS managed contracts.

Defense Base Act (42 U.S.C. 1651 “DBA”.) requires federal contractors and subcontractors working outside the continental United States to provide the equivalent of workers’ compensation insurance to their employees. The U.S.

Government reimburses DBA insurance carriers for claims paid in connection with injuries or deaths from war hazards.

http://www.dol.gov/owcp/dlhwc/nawwinfo.html

According to the Federal Acquisition Regulation (FAR 28.305), contracting officers must include DBA (workers’ compensation) insurance in each contract approved or financed under the Foreign Assistance Act of 1961, as amended

(Public Law 87-195) unless the Secretary of Labor approves a waiver of coverage.

C.2. STATEMENT OF WORK:

Under all Department of State (DoS) managed contracts involving any overseas performance, the Insurer is required by law to provide overseas employees with insurance coverage pursuant to the Longshoremen's and Harbor Workers'

Compensation Act (commonly called the "Defense Base Act" or DBA) (42 U.S.C.

1651 et seq.). DBA coverage applies to individuals employed under DoS contracts or subcontracts or subordinate contracts regardless of the duration of their assignment. Insurance coverage is required for employees of contractors (and their subcontractors) unless a waiver has been obtained from the U.S. Department of

Labor. However, the waiver does not apply to any employee who is:

1. Hired in the United States;

2. A resident of the United States; or.

3. A citizen of the United States.

All DoS contractors shall procure DBA Insurance through the Insurer (whether renewing coverage or obtaining new coverage) for every DoS funded contract.

DoS contracts for services with individuals working outside the United States are also subject to DBA coverage. However, personal services contractors (PSC's) are exempt from Defense Base Act coverage. PSC contractors are covered by the

Federal Employees Compensation Act.

DoS agrees to insert language into its contracts requiring eligible awardees under those instruments to procure DBA insurance exclusively from the Insurer.

The Insurer fully understands, acknowledges, accepts and agrees that the United

States Government is not liable for any payments whatsoever to the contractor of the DoS award under, or related to, or as a result of, this Agreement, including breach thereof.

The Insurer also fully understands, acknowledges, accepts and agrees that the

United States Government does not warrant the payment of insurance premiums

(to the Insurer by eligible contractors that purchase DBA insurance from the

Insurer).

No United States funds whatsoever are, or will be, obligated or expended by DoS under, or related to, or as a result of this Agreement, including breach thereof.

DoS does not make any representation as to the amount of premiums the Insurer will eventually collect from eligible contractors or the number of eligible contractors that will purchase insurance from the Insurer during the term of this

Agreement.

DoS will not order coverage on behalf of, or for, any contractor or subcontractor.

C.3 WAIVERS:

Waivers from Defense Base Act can be requested from the District Director, U.S.

Department of Labor, Longshore District Office 5, Norfolk at the following address:

U.S. Department of Labor

OWCP/DLHWC

Federal Building, Room 212

200 Granby Mall

Norfolk, VA 23510

Phone: (757) 441-3071

Fax: (757) 441-6909 http://www.dol.gov/owcp/dlhwc/lscontac.htm

Existing waivers can be found on the Department of Labor website

C.4 GRANTS AND COOPERATIVE AGREEMENTS:

DBA coverage is not required for grants and cooperative agreements. However, DBA coverage is required for contracts awarded under grants and cooperative agreements. Though DoS cannot compel recipients of grants and cooperative agreements to purchase DBA coverage, DoS encourages recipients of grants and cooperative agreements to purchase DBA coverage.

C. 5 SUBCONTRACTORS:

Insurance policies sold by the Insurer shall contain a provision that subcontractors of the DoS contractor under the same DoS contract shall be covered by the policy if those subcontractors have been scheduled on the policy, at issuance or later by endorsement, and for whom premiums have been paid.

C.6 MINIMUM PREMIUM:

The Insurer shall not assess minimum premiums. Insurer will apply the agreed upon rates regardless of number of employees on policy.

C.7 FIXED RATES:

The Insurer shall sell policies to eligible contractors at rates no higher than the fixed rates established under Section B.4 of this Contract.

C.8 WAR HAZARDS COMPENSATION ACT (WHCA):

The War Hazards Compensation Act (WHCA) completes the protection provided to Government contractors' employees and certain other selected employees performing work outside the United States. All liability for injury, death and detention benefits under the WHCA is assumed by the Federal Government and is paid from the Employees' Compensation Fund established by 5 U.S.C. 8147.

Under Section 104 of the WHCA, an insurance carrier, self-insured employer, or a compensation fund may claim reimbursement from the Employees' Compensation

Fund for benefits paid on cases approved under the Defense Base Act (DBA) if it can be shown that the injury or death was due to a war-risk hazard.

The U.S. Government assumes all liability for injury or death that results from a war-risk hazard. A claim for reimbursement filed by the Insurer will be denied if it is found that the benefits paid or payable were on account of injury, detention or death which arose from a war-risk hazard for which a premium (which included an additional charge or loading for such hazard) was charged; or where the Insurer has been reimbursed, paid, or compensated for the loss for which reimbursement is claimed.

The Insurer agrees and certifies that the rates in this contract are not loaded for war risk hazards or claim administration related to war-risk hazards.

C.9. HOLD HARMLESS CLAUSE:

The Insurance Carrier agrees to hold the Department of State harmless of any claims arising out of the DBA insurance coverage on DoS contracts.