[Federal Register Volume 69, Number 217 (Wednesday, November 10, 2004)]
[Rules and Regulations]
[Pages 65090-65091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24865]
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DEPARTMENT OF DEFENSE
48 CFR Part 228
[DFARS Case 2003-D037]
Defense Federal Acquisition Regulation Supplement; Insurance
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
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SUMMARY: DoD has issued a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to update text pertaining to
insurance requirements. This rule is a result of a transformation
initiative undertaken by DoD to dramatically change the purpose and
content of the DFARS.
EFFECTIVE DATE: November 10, 2004.
FOR FURTHER INFORMATION CONTACT: Mr. Thaddeus Godlewski, Defense
Acquisition Regulations Council, OUSD (AT&L) DPAP (DAR), IMD 3C132,
3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-
2022; facsimile (703) 602-0350. Please cite DFARS Case 2003-D037.
SUPPLEMENTARY INFORMATION:
A. Background
DFARS Transformation is a major DoD initiative to dramatically
change the purpose and content of the DFARS. The objective is to
improve the efficiency and effectiveness of the acquisition process,
while allowing the acquisition workforce the flexibility to innovate.
The transformed DFARS will contain only requirements of law, DoD-wide
policies, delegations of FAR authorities, deviations from FAR
requirements, and policies/procedures that have a significant effect
beyond the internal operating procedures of DoD or a significant cost
or administrative impact on contractors or offerors. Additional
information on the DFARS Transformation initiative is available at
http://www.acq.osd.mil/dpap/dfars/transf.htm.
This final rule is a result of the DFARS Transformation initiative.
The rule deletes DFARS text in the areas addressed below. This text has
been relocated to the new DFARS companion resource, Procedures,
Guidance, and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi.
DFARS 228.304, Risk-pooling arrangements. In the early
1950's, DoD teamed with the insurance industry to develop a program
that would minimize the cost of workers' compensation and contractor
liability charged to Government contracts. The objective was to provide
an optional insurance plan to be used if it provided a better deal than
what could be purchased on the open market. The team's solution was the
National Defense Projects Rating Plan (NDPRP). The NDPRP defined
premiums via a formula based upon average workers' compensation rates
throughout the country and adjusted for experience pooled from Defense
contractors. This produced premiums without loadings, e.g.,
commissions, and eliminated the burden of negotiating premiums every
year with insurance carriers. Today, there is little cost difference
between the NDPRP and the states' workers' compensation program,
because the states have adopted the same premium algorithm as the NDPRP
and many contractors have adopted self-insurance. The text at DFARS
228.304 may be beneficial in the event of a prolonged surge in Defense
contract activity, and should be retained as guidance. Accordingly, DoD
has removed this text from the DFARS and relocated it to the new DFARS
companion resource, PGI.
DFARS 228.305, Overseas workers' compensation and war-
hazard insurance. The Defense Base Act (42
[[Page 65091]]
U.S.C. 1651 et seq.) extends the Longshoremen's and Harbor Workers'
Compensation Act (33 U.S.C. 901) to various classes of employees
working outside the United States. When the agency head recommends a
waiver to the Secretary of Labor, the Secretary may waive the
applicability of the Defense Base Act to any contract, subcontract,
work location, or classification of employees. DFARS 228.305 provides
the procedures within DoD for submitting such requests for waiver. DoD
has removed this procedural text from the DFARS and relocated it to the
new DFARS companion resource, PGI.
DoD published a proposed rule at 69 FR 8153 on February 23, 2004.
DoD received no comments on the proposed rule. Therefore, DoD has
adopted the proposed rule as a final rule without change.
This rule was not subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
DoD certifies that this final rule will not have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
because the rule deletes DFARS text addressing procedural matters, but
makes no significant change to contracting policy.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the rule does
not impose any information collection requirements that require the
approval of the Office of Management and Budget under 44 U.S.C. 3501,
et seq.
List of Subjects in 48 CFR Part 228
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
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Therefore, 48 CFR part 228 is amended as follows:
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1. The authority citation for 48 CFR part 228 continues to read as
follows:
Authority: 41 U.S.C. 421 and 48 CFR chapter 1.
PART 228--BONDS AND INSURANCE
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2. Sections 228.304 and 228.305 are revised to read as follows:
228.304 Risk-pooling arrangements.
DoD has established the National Defense Projects Rating Plan, also
known as the Special Casualty Insurance Rating Plan, as a risk-pooling
arrangement to minimize the cost to the Government of purchasing the
liability insurance listed in FAR 28.307-2. Use the plan in accordance
with the procedures at PGI 228.304 when it provides the necessary
coverage more advantageously than commercially available coverage.
228.305 Overseas workers' compensation and war-hazard insurance.
(d) When submitting requests for waiver, follow the procedures at
PGI 228.305(d).
[FR Doc. 04-24865 Filed 11-9-04; 8:45 am]
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