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Breakout Session # Contractors on the Battlefield Tom Abbott, McKenna Long & Aldridge, LLP Mark Lumer, U.S. Army, S

Contracting In the War Zone. Breakout Session # Contractors on the Battlefield Tom Abbott, McKenna Long & Aldridge, LLP Mark Lumer, U.S. Army, Space & Missile Defense Marty Rips, SAIC Glenn Sweatt, Environmental Chemical Corporation July 29, 2005 Time. Contracting In A War Zone.

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Breakout Session # Contractors on the Battlefield Tom Abbott, McKenna Long & Aldridge, LLP Mark Lumer, U.S. Army, S

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  1. 43rd AnnualAerospace and Defense Contracting Conference

  2. Contracting In the War Zone Breakout Session # Contractors on the Battlefield Tom Abbott, McKenna Long & Aldridge, LLP Mark Lumer, U.S. Army, Space & Missile Defense Marty Rips, SAIC Glenn Sweatt, Environmental Chemical Corporation July 29, 2005 Time 43rd AnnualAerospace and Defense Contracting Conference

  3. Contracting In A War Zone • Contractors in the battle space • Operations to secure Iraq/Afghanistan • Iraq reconstruction • Procurement issues (DFAR clause), contract administration, subcontractor issues, and security. 43rd AnnualAerospace and Defense Contracting Conference

  4. Outsourcing in Harm’s Way • Substantial outsourcing has occurred – 20,000 to 30,000 civilians performing traditional military functions, from maintaining weapons systems to guarding supply convoys. • Including foreigners involved in reconstruction and oil work, the total increases to 50,000 - 75,000. 43rd AnnualAerospace and Defense Contracting Conference

  5. Consequences of War Zone Presence • At least 180 killed and over 900 wounded contractor personnel to date in Iraq. • Adverse incidents and other irregularities have occurred • Alleged human rights violations by contractors (CACI and Titan); • Movement of contractor personnel without coordination with military commanders(Blackwater); 43rd AnnualAerospace and Defense Contracting Conference

  6. War Zone Contracting Concerns • Contractors’ performance of tactical functions. • Reporting and coordination between contractors and the military within the areas of operations. • Sufficient trained procurement specialists. • Rules and guides for contractors performing work in a war zone (General Order One). 43rd AnnualAerospace and Defense Contracting Conference

  7. Concerns (Cont.) • Audits and investigations have received public attention in the media, the agencies, and Congress • Halliburton audits on overcharging; • Custer Battles allegations of overcharging and false claims; • Vinnell Corp.’s training of Iraqi army recruits. 43rd AnnualAerospace and Defense Contracting Conference

  8. Concerns (Cont.) • Force protection in the theater of operations? • Orders of the area commander versus directives of the contracting officer? • Military commanders with contracting officer authority? • Procurement specialists be on site to direct and issue changes and task orders? 43rd AnnualAerospace and Defense Contracting Conference

  9. Concerns (Cont.) • Contractor personnel with personal weapons? • Geneva Convention status? • Contractor employees as “combatants”? 43rd AnnualAerospace and Defense Contracting Conference

  10. Concerns (Cont.) • What risks does a contractor assume when deployed to accompany the military force and what should or must be related to the contractor about such risks? • What insurance needs to be obtained or is required to be obtained for contractor employees working outside of the U.S.? • Is Defense Base Act Insurance and the protections under the War Hazards Compensation Act sufficient? 43rd AnnualAerospace and Defense Contracting Conference

  11. Concerns (Cont.) • Care of any Government-Furnished Property to the contractor in the war zone? Is it business as usual with respect to record keeping and traceability under the FAR? • Will the Capture and Detention Clause, DFARS 252-228-7003, be included in the solicitation or contract? 43rd AnnualAerospace and Defense Contracting Conference

  12. Concerns (Cont.) • Is there a Public Law 85-804, Extraordinary Contractual Relief, clause in the solicitation or contract? • Are there any stand-down clauses in the contract allowing the contractor to abandon work if hostilities arise in the specific area of work? 43rd AnnualAerospace and Defense Contracting Conference

  13. Concerns Cont. • Some of these concerns have been answered “in part” by the DFARS final rule and contract clauses issued on May 5, 2005, with the effective date of June 6, 2005 – “Contractor Personnel Supporting a Force Deployed Outside the United States (DFARS Subpart 225.74, Sections 7401 – 7403. 43rd AnnualAerospace and Defense Contracting Conference

  14. CONTRACTORS ON THE BATTLEFIELD:WHERE ARE WE? Mark J. Lumer Contracting Executive (256)955-3410 Mark.Lumer@smdc.army.mil

  15. CONTRACTORS ON THE BATTLEFIELD • NEW DFARS CLAUSE, EFFECTIVE JUNE 6, 2005 -- SPECIFICS OF DFARS 252.225-7040 • APPLIES OUTSIDE THE U.S. AND INVOLVES -- CONTINGENCY OPERATIONS -- HUMANITARIAN OR PEACEKEEPING OPERATIONS

  16. CONTRACTORS ON THE BATTLEFIELD -- OTHER OPERATIONS OR EXERCISES AS DESIGNATED BY A COMBATANT COMMANDER. • CONTRACTORS ACCEPTS THE RISK OF PERFORMANCE IN “DANGEROUS OR AUSTERE CONDITIONS. • MANDATORY FLOWDOWN FOR SUB- CONTRACTORS SUBJECT TO DEPLOYMENT.

  17. CONTRACTORS ON THE BATTLEFIELD • CONTRACTOR EMPLOYEES SHALL NOT UNDERTAKE ROLES WHICH COULD JEOPARDIZE THEIR STATUS. THEY SHALL NOT USE FORCE OR ENGAGE IN ACTS LIKELY TO CAUSE ACTUAL HARM TO “ENEMY ARMED FORCES” (NOTE – NO PROHIBITION AGAINST ILLEGAL COMBATANTS)

  18. CONTRACTORS ON THE BATTLEFIELD • COMBATANT COMMANDERS WILL PROVIDE SECURITY UNLESS THE CONTRACT SAYS OTHERWISE. • CONTRACTOR EMPLOYEES ARE AUTHORIZED LIMITED MEDICAL CARE AND TRANSPORTATION. THE CONTRACTOR WILL REIMBURSE UNCLE SAM FOR MEDICAL AND TRANSPORTATION COSTS (NOTE – DOESN’T SEEM TO FIT A COST TYPE CONTRACT)

  19. CONTRACTORS ON THE BATTLEFIELD • UNLESS SPECIFIED IN THE CONTRACT, THE CONTRACTOR IS RESPONSIBLE FOR ALL OTHER SUPPORT. • CONTRACTOR WILL COMPLY WITH: (1) U.S., HOST COUNTRY AND THIRD COUNTRY NATIONAL LAWS, (2) TREATIES AND INTERNATIONAL AGREEMENTS, (3) U.S. REGS. DIRECTIVES, POLICIES AND PROCEDURES, ETC. (4) COMBATANT COMMANDER ORDERS, DIRECTIVES, ETC.

  20. CONTRACTORS ON THE BATTLEFIELD • CONTRACTOR EMPLOYEES WILL HAVE: -- APPROPRIATE SECURITY AND BACKGROUND CHECKS. -- MEDICAL SCREENING AND CLEARANCE -- PASSPORTS/VISAS AND OTHER NECESSARY DOCUMENTS -- GENEVA CONVENTIONS ID CARD -- BEEN ENROLLED IN CIVTRACKS -- COUNTRY AND THEATER CLEARANCES -- A COMPLETED DD FORM 93, RECORD OF EMERGENCY DATA CARD, ON FILE

  21. CONTRACTORS ON THE BATTLEFIELD • CONTRACTING OFFICER CAN DIRECT CONTRACTOR TO REMOVE OR REPLACE ANY EMPLOYEE WHO JEOPARDIZES OR INTERFERES WITH MISSION; OR WHO FAILS TO COMPLY WITH THIS CLAUSE. -- CONTRACTORS WILL HAVE A REPLACEMENT PLAN ON FILE. • CONTRACTOR EMPLOYEES WILL NOT WEAR MILITARY CLOTHING UNLESS AUTHORIZED IN WRITING BY THE COMBATANT COMMANDER. IF SO AUTHORIZED, DISTINCTIVE PATCHES ARM

  22. CONTRACTORS ON THE BATTLEFIELD • BANDS, NAMETAGS OR HEAD GEAR MUST ALSO BE WORN, TO DISTINGUISH THEMSELVESA FROM SOLDIERS (NOTE: LIKE IT REALLY MATTERS TO THE BAD GUYS!) • REQUESTS FOR AUTHORITY TO CARRY WEAPONS WILL BE PROCESSED THROUGH THE CONTRACTING OFFICER TO THE COMBATANT COMMANDER. THE COMBATANT COMMANDER DECIDES WHICH WEAPONS, IF ANY, WILL BE AUTHORIZED.

  23. CONTRACTORS ON THE BATTLEFIELD CONTRACTOR EMPLOYEES CARRYING WEAPONS MUST (1) BE ADEQUATELY TRAINED. (2) NOT BE FELONS OR OTHERWISE BARRED BY 18 USC 922 (3) FOLLOW ALL COMBATANT COMMANDER RULES • CONTRACTOR PERSONNEL WILL HAVE ALL REQUIRED LICENSES TO OPERATE VEHICLES AND EQUIPMENT.

  24. CONTRACTORS ON THE BATTLEFIELD • IF THERE IS A MANDATORY EVACUATION, GOVERNMENT WILL PROVIDE ASSISTANCE TO CONTRACTOR PERSONNELTO THE EXTENT AVAILABLE. • IF THERE IS A NON-MANDATORY EVACUATION, CONTRACTOR PERSONNEL WILL CONTINUE TO PERFORM CONTRACTUAL OBLIGATIONS UNLESS OTHERWISE DIRECTED BY THE CONTRACTING OFFICER.

  25. CONTRACTORS ON THE BATTLEFIELD • MORTUARY SERVICES WILL BE HANDLED IAW DoD DIRECTIVE. • THE CHANGES CLAUSE IS EXPANDED TO GIVE THE CONTRACTING OFFICER UNILATERAL AUTHORITY TO MAKE CHANGES TO GFM, EQUIPMENT, FACILITIES, SERVICES OR SITE SUPPORT. • CONTRACTOR PERSONNEL WILL DEPLOY THROUGH THE CONUS REPLACEMENT CENTER (CRC) IF AT ALL POSSIBLE.

  26. CONTRACTORS ON THE BATTLEFIELD • CONTRACTOR PERSONNEL WILL BE ISSUED COMMON ACCESS CARDS (CAC). WHICH WILL SPECIFY INSTALLATION ACCESS, MEDICAL AND PX PRIVILEGES. • NEXT OF KIN NOTIFICATION IS A CONTRACTOR RESPONSIBILITY.

  27. CONTRACTORS ON THE BATTLEFIELD • THE MILITARY EXTRATERRITORIAL JURISDICTION ACT (MEJA) APPLIES TO CIVILIANS EMPLOYED BY OR ACCOMPANYING U.S. ARMED FORCES OUTSIDE THE U.S. • ALSO APPLIES TO THIRD PARTY FOREIGN NATIONALS (EXCEPT FOR HOST NATION NATIONALS – i.e. IRAQIS WORKING FOR US IN IRAQ NOT SUBJECT TO MEJA; IRAQIS WORKING FOR US IN AFGHANISTAN ARE)

  28. CONTRACTORS ON THE BATTLEFIELD • MEJA MAKES THESE CIVILIANS SUBJECT TO THE CRIMINAL JURISDICTION OF THE U.S. • APPLIES TO SUBCONTRACTORS • APPLIES TO NON-DoD CONTRACTORS TO THE EXTENT THEIR EMPLOYMENT SUPPORTS A DoD MISSSION • NOTICE TO CONTRACTORS REQUIRED BY 13 JULY 2005

  29. Offshore Criminal Activity • Commission of Crimes by Contractors • Previously, No Forum to Prosecute: • Uniform Code of Military Justice (UCMJ) does not apply unless Congress has declared “time of war” • No functioning legal system in Iraq to prosecute contractors 43rd AnnualAerospace and Defense Contracting Conference

  30. Offshore Criminal Activity (Cont.) • However, MEJA has never been used • MEJA was passed by Congress subject to the DOD’s prescription of uniform regulations regarding facilitation of proceedings and the apprehension, detention, delivery and removal of persons from their overseas locations • DOD Proposed Rule (69 Fed. Reg. 4890, 2/2/04) • Prescribes Purpose, Applicability and Scope, Definitions, Responsibilities, and Procedures 43rd AnnualAerospace and Defense Contracting Conference

  31. Offshore Criminal Activity (Cont.) • Proposed Rule Highlights: • DOD IG shall notify DSS DOJ of discovery of belief based on reasonable grounds that federal criminal law violation occurred • DOD IG, DSS DOJ, Combat Commanders, and Military Criminal Investigative Organizations (AF OSI, DCIS, etc.) shall all coordinate investigation • Secretaries of the Military Departments shall make defense counsel available for initial proceedings outside of the U.S. • Venue may lie where the person was first brought back to the U.S. or where they residing before leaving • FRCP principals shall be followed with regards to Notice of Compliant or Indictment and Arrest • Current Status • Final Rule Due Any Day; DODI published in March, 2005 May 17, 2005 17205014 43rd AnnualAerospace and Defense Contracting Conference

  32. 43rd AnnualAerospace and Defense Contracting Conference

  33. Open Issues • Does the DFARS clause answer all the questions? Probably not. • ABA Public Contracts Section Task Force on Contractors in the Battle Space • Formed in 2004 while CPA interim government in power in Iraq 43rd AnnualAerospace and Defense Contracting Conference

  34. Open Issues • Task Force is studying several areas and issues to be reported to the DOD and to the organized Bar: • Task Force has compiled an extensive bibliography for its study – statutes, regulations, treaties, agency reports, agency guidance, news articles, law reviews, case precedents, hearings, proposed legislation, and training initiatives. • Areas Under Review • Control of Contractor Personnel on the Battle Space • Training in Exploiting and Improving ExistingFlexibilities – • Disciplinary Control of Contractors 43rd AnnualAerospace and Defense Contracting Conference

  35. Open Issues • Force Protection Issues (Security, Firearms, Status of Contractor Employees Under the Law of Armed Conflict). • Insurance Adequacy (DBA/War Hazards,Compensation Act, and Longshore and Harbor Workers Compensation). • Continuity of Essential Support Services in a Hostile Environment. 43rd AnnualAerospace and Defense Contracting Conference

  36. War Risk Insurance Governing Statutes • Defense Base Act (“DBA”),42 U.S.C. § § 1651, et seq., and • The War Hazards Compensation Act (“WHCA”), 42 U.S.C. § § 1701,et seq. 43rd AnnualAerospace and Defense Contracting Conference

  37. Insurance (Cont.) • The Defense Base Act • Under the DBA, government contractors must provide to nearly all of their employees working outside the U.S. the workers’ compensation benefits that employers are required to provide by the Longshore and Harbor Workers Compensation Act, 33 U.S.C. § § 901, et seq., for death or injury arising out of or from their employment. 43rd AnnualAerospace and Defense Contracting Conference

  38. Insurance (Cont.) • Employer liability under the DBA is exclusive and supersedes all other liability, including liability under the law of torts. • If employer fails to provide the required coverage, the employee or his survivors may elect to sue the employer for tort damages. • No defense that the injury was caused by the negligence of a fellow employee, or that the employee assumed the risk of his employment. 43rd AnnualAerospace and Defense Contracting Conference

  39. Insurance (Cont.) • If a subcontractor at any tier does not secure payment for the required compensation, the contractor will be liable for, and required to secure the payment of, such benefits. • Employers who fail to secure the payment of the required compensation are guilty of a misdemeanor and may be punished by a fine of $10,000 or by imprisonment for not more than one year. 43rd AnnualAerospace and Defense Contracting Conference

  40. Insurance (Cont.) • War Hazards Compensation Act • Benefits for death or injury occurring as a result of certain “war risk hazards” are payable to certain contractor employees in circumstances in which the DBA does not apply because the event giving rise to the claim was outside the scope of the employee’s employment or because the injury or death was attributable to an act of war excluded from insurance coverage obtained pursuant to the DBA. 43rd AnnualAerospace and Defense Contracting Conference

  41. Insurance (Cont.) • The contractor employees are treated as federal civil servants and entitled to benefits under the Federal Employees’ Compensation Act, 5 U.S.C. § 8116. • In most cases, benefits payable under the WHCA are also payable under the DBA. 43rd AnnualAerospace and Defense Contracting Conference

  42. Insurance (Cont.) • Waivers • The DBA permits the Secretary of Labor to waive the application of the DBA upon the written request of the head of any department or other agency. • DOL’s policy is that the waiver does not apply to citizens or legal residents of the U.S. or to employees hired in the U.S. In addition, a condition of all waivers granted by DOL is that the contractor must provide alternative workers’ compensation benefits to the waived employees pursuant to applicable local law. 43rd AnnualAerospace and Defense Contracting Conference

  43. Insurance (Cont.) • Waivers are generally requested where the benefits provided under local law cost less than the benefits under the DBA would cost. This is problematic in Iraq. • The FAR Clauses • FAR 52.228-3, Workers’ Compensation Insurance (Defense Base Act). • FAR 52.228-4, Workers’ Compensation and War Hazard Insurance Overseas. 43rd AnnualAerospace and Defense Contracting Conference

  44. Insurance (Cont.) • Where a DOD agency uses FAR 52.228-4 and the head of the contracting agency makes a determination that the contractor may not buy insurance for war hazard losses, the Defense Federal Acquisition Regulation Supplement (“DFARS”) prescribes use of DFAR 252.228-7000, Reimbursement for War Hazard Losses. Clause makes war hazard benefits allowable costs under certain circumstances. 43rd AnnualAerospace and Defense Contracting Conference

  45. Insurance (Cont.) • DFARS 252.228-7003, Capture or Detention, may be inserted into contracts in circumstances in which the contractor’s employees are not covered by the WHCA. Clause provides that certain benefits payable under agreement with the employee or that would have been paid had the WHCA applied (whichever is less), are allowable costs. 43rd AnnualAerospace and Defense Contracting Conference

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