The Defense Base Act (DBA): The Federally Mandated Workers' Compensation System for Overseas Government Contractors

Many overseas federal contractors are covered by the Defense Base Act DBA, which mandates that they provide workers compensation insurance for their employees. As the U.S. military has increased operations in Iraq, the size of the DBA program has grown, and in 2007 over 170 million in cash and medical benefits were paid to nearly 12,000 DBA claimants who were injured or killed while working under contract to the federal government. Congress has become increasingly concerned with the costs involved in the DBA program because the federal government usually reimburses its contractors for their DBA premiums. The Department of State DOS and the U.S. Agency for International Development USAID have seen some cost savings since adopting a single-source model for their DBA insurance in which contractors for each agency are required to purchase insurance from a single company selected by the agency. The U.S. Army Corps of Engineers USACE is currently testing such a model for its DBA system. For the rest of the Department of Defense DOD, however, including the Armys large Logistics Civil Augmentation Program LOGCAP contract, individual contractors are free to select their own DBA insurers and negotiate their own rates.