§ 1828.305 - Overseas workers’ compensation and war-hazard insurance.

(a) Waiver of Defense Base Act. Applications for waivers under FAR 28.305(d) shall be submitted to the Administrator through the Associate Administrator for Procurement. The application shall include-

(1) The contractor's name;

(2) The contractor's business mailing address;

(3) The contract number;

(4) The date of award;

(5) The geographic location where the contract will be performed;

(6) The name of the insurance company providing the Defense Base Act coverage;

(7) The nationality of the employees to whom the waiver is to apply; and

(8) The reason for the waiver.

(b) When the Defense Base Act is waived. (1) The decision under FAR 28.305(e) as to whether (i) the costs of the liability or (ii) the reasonable costs of insurance against it shall be allowed as a cost under the contract may be made by the Associate Administrator for Procurement or by a designee.

(2) The Schedule of each contract containing the clause at 1852.228-77, Reimbursement for War-Hazard Losses, shall contain an estimated cost for war-hazard losses, derived in accordance with paragraph (b)(2)(i) of this section, and a statement similar to that set forth in paragraph (b)(2)(ii) of this section:

(i) The estimated cost for war-hazard losses shall be based on estimates arrived at in the light of experience, taking into account the number of the contractor's employees subject to protection for war-hazard risks, the level of benefits applicable to them, their location, and the nature of the risks to which they are exposed. The amount allotted to the contract shall initially be kept as small as reasonably feasible. As reports are received indicating any need to increase the allotment to the contract, they shall be evaluated and the allotment increased as necessary. When negotiating for the inclusion in the contract of provisions applicable to war-hazard risks, the contracting officer may include provisions concerning the types of foreign nationals employed by the contractor and the level of benefits applicable to them, and other pertinent provisions relating to the manner in which the program will function to the benefit of all concerned. Advance agreements under FAR 31.109 may also be advantageous with respect to the levels of proof considered acceptable to justify the contractor's commencing payments and being reimbursed for them before the contractor is able to settle its obligation.

(ii) “The portion of this contract providing for the contractor to afford protection to its employees and subcontractors to their employees against war-hazard risks (see the clauses at 52.228-4 of the Federal Acquisition Regulation (FAR) and 1852.228-77 of the NASA FAR Supplement) is on a cost-reimbursement, no-fee basis, notwithstanding the basis of the remainder of the contract.”