Changes to the FAR affecting the DBA

Proposed Changes To The Federal Acquisition Regulations

Defense Base Act

It’s Spring, officially at least, though the snow in Connecticut still lies roundabout and we are still collecting logs, (not pine logs), hither for the evening fire.  And suddenly among the snowdrops, crocuses and daffodils, up pops a regulation that affects the Longshore and Harbor Workers' Compensation Act, and from an unlikely source, the Federal Acquisition Regulations, embedded in the Federal Register, Vol. 78, No. 54, March 20, 2013, pages 17176 to 17178.  Your comments are due on or before May 20^th.  Go to http://www.regulations.gov, “FAR case 2012-016”.

The change is not at first sight either revolutionary or problematic.  It simply requires contractors to arrange insurance or self-insurance before commencing performance under the contract, and to file the required reports, including the LS-202, and pay compensation timely as required, and to “insert the substance of this clause in all subcontracts to which the Defense Base Act applies”.  The proposal states: “The objective of the rule is to amend FAR clause 52.228-3, Workers’ Compensation Insurance (Defense Base Act) to clarify the responsibilities of contractors under the Defense Base Act, including the requirement to include flow down of this clause to all subcontractors to which the Defense Base Act applies.”   And, we might add, there’s nothing wrong with that particularly for contractors who are domiciled overseas and probably need some guidance.

However, paragraph (b) reads: “The actions set forth under paragraphs (a)(2) through (a)(8) may be performed by the contractor’s agent or insurance carrier”.  Paragraph (a)(2) reads: “Within 10 days of an employee’s injury or death or from the date the Contractor has knowledge of the injury or death, submit form LS-202 (Employee’s First Report of Injury or Occupational Illness) to the Department of Labor…” But this particular form is one that the Employer has to file, not the carrier.  Indeed, at least one major insurer makes this clear in CAPITAL LETTERS on their policies.  The regulation, whether by accident or on purpose, makes a major change, which affects both the Defense Base Act and the Longshore and Harbor Workers' Compensation Act.

I would respectfully suggest that it is inappropriate to redefine the statutory provision other than by an amendment to the Act or the regulations issued thereunder by the Department of Labor.  Paragraph (b) should be amended allow only actions under (a)(3) through (8) to be performed by the insurance carrier.  If the Department of Labor wishes to amend its regulations, it should do so.  Employers and carriers under the Longshore and Harbor Workers' Compensation Act, the Nonappropriated Fund Instrumentalities Act and the Outer Continental Shelf Lands Act should not have to seek the meaning of the Act under the FAR.