Report identifies flaws in Army contractor workers’ comp program

Arlington, VA – The U.S. Army Corps of Engineers failed to provide strong oversight of the workers’ compensation programs for contract workers in Afghanistan, which led to higher insurance premium rates than necessary, according to a report (.pdf file) from the Office of Special Inspector General for Afghanistan Reconstruction.

The report, released July 28, found that the Army Corps of Engineers agreed to higher premium rates sought by Continental Insurance Co. – the sole provider of Defense Base Act insurance in Afghanistan. That resulted in $9.9 million in extra costs to the government.

In addition, the report said some contractors did not obtain insurance for their workers and the government may not have received up to $58.5 million it was owed because of failures in the billing process.

Some recommendations in the report include:

• Modify the contract to require an invoice for each contract showing the final amount paid for insurance.
• Remind subcontractors of the importance of purchasing DBA insurance.