Contractors on the Battlefield: Special Legal Challenges. Washington, D.C

Transcription

1 Contractors on the Battlefield: Special Legal Challenges Government Contracts Council April 24, 2003 Rand L. Allen Wiley Rein & Fielding LLP Washington, D.C

2 Contractors on the Battlefield Not a new phenomenon Three Categories Systems Support External Theater Support Theater Support 2

3 Examples (External Theater Support) Army Logistics Civil Augmentation Program (LOGCAP) Managed by AMC worldwide contract on a multiple-region basis First LOGCAP umbrella contract awarded in August 92; activated in December 92 in Somalia Since used in a dozen foreign countries LOGCAP III 97 award of CPAF contract for 1 base year and 9 option years to Halliburton KBR 3

4 Examples (External Theater Support) (contd.) Navy s Construction Capabilities Program (CONCAP) Awarded in June 2000 to Halliburton KBR for 1 base year and 4 option years CPAF Air Force Contract Augmentation Program (AFCAP) Current contract awarded in Feb. 02 to Readiness Management Support, LCC for 1 base year and 7 option years CPAF 4

5 Disclosure of Risks and Living Conditions Contractors must brief employees regarding potential dangers. Many contracts require the contractor to obtain employees written acknowledgment. 5

6 Disclosure of Risks and Living Conditions (contd contd) Contractor employees will generally eat, sleep, and work with and enjoy all privileges available to DoD civilian and military personnel (unless the contract with the Government specifically mandates or prohibits certain living conditions). During contingency deployments, employees may often be living under field conditions 6

7 Employee Management and Oversight Contractors must ensure that employees comply with applicable laws and regulations, and all guidance and general orders from the theater commander or his/her representative. General orders concern mission accomplishment, force protection, safety and unit cohesion. Contractors must replace unfit or departed employees. 7

8 Employee Management and Oversight (contd) Contractors must ensure adequate training and licensing for equipment and vehicles. Contractors must ensure that employees have proper passports, visas, and are responsible for those costs. Employees are also subject to customs regulations. Contractors may be deployed/redeployed through centralized deployment points. 8

9 Contractor Accounting For Personnel Contractors must keep track of employees, and may be required to report to the contracting officer the status of employees entering and leaving the area of operations. Accounting and tracking of employees may be critical for purposes of ensuring force protection and other provisions. 9

10 Assignment to Designated Units Contractor employees are typically assigned to a particular units or elements for purposes of accounting and coordination. Employees are under the administrative control of the unit or element to which they are assigned for purposes of receiving orders and instructions. 10

11 Medical Processing and Screening Contractors may be required to conduct or obtain physical and mental evaluations of employees prior to deployment. Employees must meet the same general fitness requirements as DOD civilians: Able to lift 40 pounds. Able to walk one mile in 20 minutes. Do not require medications that are unavailable in the theater. Do not require medical treatment or physical therapy that is not available in the theater. For areas requiring anthrax vaccination, must be between ages 18 to day supply of medication recommended. 11

12 Medical Processing and Screening (contd) Immunizations required prior to deployment. For identification purposes, the Army recommends that employees obtain a dental panograph and/or have a DNA specimen collected. 12

13 Force Protection and Other Services The Government acknowledges its responsibility to provide protection and services to contractor employees. Force protection commensurate with that provided to DOD civilian personnel. Employees are provided physical security and protection, emergency medical and dental care, and evacuation. 13

14 International Law and Status of Forces Agreements Under the Geneva Convention Relative to Prisoners of War (1949) authorized contractor personnel generally are entitled to POW status if captured by hostile forces. Contractors are neither combatants nor noncombatants, but instead are civilians accompanying the Armed Forces in the theater of operations as authorized members of that force. 14

15 International Law and Status of Forces Agreements (contd contd) The Army maintains that it is not a violation of the law of war for DoD civilians or contractor personnel to carry a weapon for personal selfdefense while accompanying a military force. Accordingly, capture by an opposing force while wearing a uniform or carrying a weapon does not deprive an individual accompanying a military force of status and protections. 15

16 International Law and Status of Forces Agreements (contd contd) Status of Forces Agreements ( SOFA ) are agreements between the U.S. and a foreign Government regarding the deployment of forces and various rights, obligations and immunities of different categories of individuals. Depending on the applicable SOFA, contractors may not be specifically defined, or may be defined as having different status than military or DoD civilian personnel. SOFAs take precedence over contract provisions in the event of a conflict. Contractors should clarify with contracting officer all of the relevant status issues for employees. 16

17 Employee Identification Three forms of identification are typically issued to contractor employees: DD Form 1173, Uniform Services Identification Card. DD Form 489, Geneva Convention Identity Card for Civilians Who Accompany the Armed Forces. Personal identification (i.e., dog tags ). Prior to deployment, contractors may be required to ensure that employees fill out DD Form 93 for next of kin notifications. 17

18 Clothing and Equipment Contractors must ensure that employees have proper equipment, clothing, and supplies to perform the contract. Generally, contractors are not required to wear battle uniforms, but may be required to present a uniform appearance, e.g. mess hall whites. The Government will provide all military-unique equipment, such as protective clothing (e.g. biological, chemical or radiological protective gear). Such equipment is governed by standard Government-furnished property regulations and clauses. 18

19 Weapons and Training The Government may authorize certain employees to carry firearms on a voluntary basis. The Government is responsible for issuance of firearms and training. Contractor-provided firearms are not permitted. Use of firearms will be governed by the same rules of engagement applicable to military personnel and DoD civilians. 19

20 Compensation for Employee Injury, Detention or Death Two federal statutes extend workers compensation for employees who are injured, captured or killed while working overseas on certain federal contracts. The Defense Base Act ( DBA ) 42 U.S.C et seq. War Hazards Compensation Act ( WHCA ) 42 U.S.C et seq. 20

21 Compensation for Employee Injury, Detention or Death (contd contd) The extension of workers compensation for overseas activities typically requires additional insurance coverage because of exclusions in standard policies. Contractors may recover the costs of insurance premiums as an expense under contracts, and contractors or their insurers may receive direct reimbursement for certain warrelated payments to employees. Contractors should consult with their insurance carriers to determine the coverage needed and whether any anticipated activities void coverage under existing policies. 21

22 Special Insurance Issue for Activities in Countries Under Sanctions Insurance carriers are prohibited by law from providing coverage for business operations in any country against which the United States has sanctions, e.g. Iraq. The Department of Treasury s Office of Foreign Asset Control ( OFAC ) may grant a license for transactions and assets for activities in countries and areas under sanctions. Currently, the Department of State ( DOS ) and USAID have agency-wide waivers from OFAC for contracts in Iraq. 22

23 The Defense Base Act Applies to employees on Government contracts overseas for public works. Requires contractors to provide workers compensation coverage by extending coverage of the Longshoreman s and Harbor Workers Compensation Act (thereby provides coverage under the substantive rules of workers compensation). A contract subject to the DBA must include the clause at Federal Acquisition Regulation ( FAR )

24 The Defense Base Act (contd) USAID and DOS have contracts with insurers to provide DBA coverage at standard rates. Employees (or their families) may receive compensation for injuries or death, including funeral and burial expenses, medical/hospital care, or other necessary care. Also provides coverage when an employee is injured or killed during travel to or from the place of employment when the contractor or Government provides for the cost of transportation. 24

25 The War Hazards Compensation Act Expands coverage of the DBA to provide coverage for war-related hazards, such as injury, death or capture resulting from combat. Unlike the DBA, which covers injuries sustained only during the course of an employee s performance of duties, the WHCA covers injuries sustained while present in a combat zone, whether or not the employee was engaged in the performance of the contract. 25

26 The War Hazards Compensation Act (contd contd) The WHCA broadly defines war risk hazards and is not limited to actual declarations of war. Employees (or their families) may receive compensation for injuries, capture and detention, or death, including funeral and burial expenses, medical/hospital care, or other necessary care. The WHCA also provides for compensation if an employee is captured or reasonably believed captured by hostile forces, or not returned to home or place of employment due to failure of the contractor or the Government. 26

27 Pay Incentives for Contractor Employees in Dangerous Areas Danger pay premiums Army February 2003 Memorandum: contracting officers may negotiate up to 15% increase in employee wages for the pre-war conditions, and a 25% increase during the war. The Army Memorandum followed the DOS Standard Regulations regarding the classification of danger pay posts and the levels of pay premiums authorized above basic compensation levels. 27

28 Pay Incentives for Contractor Employees in Dangerous Areas (contd contd) Additional amounts, such as danger pay, apply only to base hours, and not to overtime. The DOS regulations may be the basis for requesting danger pay in other areas where the Government has not specifically authorized danger pay. Generally, additional contract costs for danger pay are allowable and may be passed on to the Government. The FAR, however, counsels that advanced agreement and coordination with the contracting officer are strongly encouraged to verify the allowability of these costs. See FAR As with all costs, the additional danger pay amounts must be reasonable. 28

29 Other Issues Away from the Front Lines 29

30 Extended Military Leave Benefits October 2001 DOD Memorandum concerning the allowability of costs for additional fringe benefits paid by contractors to employees who are called up. Costs for continuation of fringe benefits such as health care and/or pay differential between employees salaries and their military duty salaries allowable. 30

31 Defenses to Contractor Liability Government Contractor Defense: A defense against liability for a contractor s or its employee s actions available to the extent that the employee was acting within the scope of a Government contract. See Boyle v. United States, 487 U.S. 500 (1987). Although the defense was first raised in the context of a contractor s liability for a manufacturing defect, courts have held that the defense applies to service contracting as well. 31

32 Extraordinary Contractual Relief Possible protection under Public Law But, relief is rarely granted, and only in extraordinary conditions. 32

33 Government Restriction Of Access to Worksites Restrictions on employee access due to heightened security at Government facilities. Depending on type of contract, the Government s action could be deemed a constructive partial suspension or stop work or a constructive partial termination, for which the contractor may be entitled to an equitable adjustment in the contract price or other contract terms. 33

34 Government Restriction Of Access to Worksites (contd) Communicate with CO early and often Keep detailed records of communications and activities concerning idled employees and resources, including efforts to mitigate the costs of having them on stand-by. 34

35 The Defense Priorities And Allocation System ( DPAS ) Rated orders that identify critical items and establish a hierarchy of priority for their production. A contractor must give rated orders priority over lower-rated orders and all non-rated orders. A contractor must fill rated orders regardless of the impact it may have on the non-rated or lowerrated orders of Government or commercial sector customers. Special provisions of the DPAS grant immunity from civil actions to contractors who accept rated orders. 35

36 Specific Clauses The DoD Acquisition Deskbook Supplement, Contractor Support in the Theater of Operations, lists topics discussed above and provides sample contract language to incorporate into contracts. 36

37 DoD Force Protection Clause DFARS requires contractors to obtain information necessary to ensure the safety of contractor personnel. The clause itself does not specify particular protections or guarantees available to contractors, but directs contractors to seek out information. Contractors are required to contact the DOS Overseas Security Advisory Council and inform the United States embassy of the presence of employees. Contractors must also provide employees with force protection awareness information commensurate with that provided to DOD civilian and military personnel and to ensure compliance with existing polices regarding force protection for contractors. 37

38 Defense Threat Reduction Agency (DTRA) Follows DFARS which provides more specific information regarding Contractor Area of Operations Support. Briefing of employees on potential dangers and field conditions and written acknowledgement from employees. Employees for deployment must have adequate ability to perform, e.g., mental and physical fitness. Mandatory medical conditions, such as immunization, must be met. 38

39 Defense Threat Reduction Agency (DTRA) (contd contd) Contractor must provide proper equipment, clothing, and supplies for employees (militaryspecific equipment, such as protective clothing, provided by Government) Government force protection commensurate with that provided to deployed DOD civilians. The Government may authorize weapons and provide training. No contractor-issued weapons are permitted. 39

40 Defense Threat Reduction Agency (DTRA) (contd contd) In-theater personnel support commensurate with that provided to deployed DOD civilians such as shelter, subsistence, medical and dental treatment, sanitary facilities, mail, laundry, and other available services. Specifies the chain of command for contractor employees deployed to an area of operations. Non-routine direct costs caused by performance, not incurred as overhead or a direct charge on another contract, may be a direct charge for this contract (all contract types). 40

41 Draft Army Clause Contractors Accompanying the Force (March 2003), AFARS Like the DTRA clause, the Army clause specifically identifies Government and contractor responsibilities regarding contractor employees who support Army activities. Sets forth notice of possible hazardous conditions. 41

42 Draft Army Clause (contd) Specifies that the clause applies to both contractor and subcontractor employees. Requires DD Form 93 regarding next of kin notification. Requires contractors to conduct security and background checks for employees prior to deployment. Requires medical screening, proper clothing and equipment, training and licensing, and travel documentation. 42

43 Conclusion Early and consistent communications with contracting officers Full disclosure to employees of risks and hardships involved in deployment, and all steps necessary to prepare employees prior to departure Understand applicable regulations and clauses, and the respective obligations and rights of the Government and contractor employees 43

44 Sources of Information Contingency Contracting and Contractor On The Battlefield Policy, Guidance, Doctrine, and Other Relevant Information Contractor On the Battlefield Resource Library 45

45 Sources of Information (contd.) AMC-Contracts and Contractors Supporting Military Operations Contractors On The Battlefield, Army Field Manual (Jan., 2003)

46 Sources of Information (contd.) LOGCAP Technical Library, Policy and Doctrine DOD Acquisition Deskbook Supplement Contractor Support in the Theater of Operations (28 March 2001) Department of State Standardized Regulations 47