Initiatives

IIGC

IAWG

Lessons Learned High-Risk Factors

Corporate Governance

Security and Insurance

Security and Insurance Initiative

Iraq’s unsettled security environment continues to present grave risks for contractors and employees. As of December 31, 2004, 232 civilians working on U.S. contracts in Iraq have been killed, according to the Department of Labor. The challenging security environment hinders the ability of contractors to perform daily work and complete projects on time. On January 12, 2005, the Project and Contracting Office reported that in central Iraq, 16.5% of IRRF construction projects are delayed for more than two weeks; in northern Iraq, 14.8% of reconstruction projects are delayed. Attacks on sites, employees, and convoys related to IRRF reconstruction projects averaged 22 per week in this reporting period ending January 3, 2005.
The continuing increase in project starts into 2005 highlights the need for:

personal protection

project site security

enforcement of legal requirements for workers’ compensation insurance for those employed directly and indirectly by U.S. funds

According to the Department of State, "Security costs for private security forces protecting construction sites, workers, and convoys have increased dramatically, therefore significantly adding to reconstruction overhead costs. The success of our reconstruction efforts and the longer-term political and economic development of Iraq depend upon establishing a secure environment."
The GAO is reviewing issues related to the insurance requirements of the Defense Base Act (DBA). The SIGIR continues to discuss these issues with the GAO but is not directly supporting the work.
The U.S. Army Corps of Engineers (USACE) formalized a solicitation for a contract pilot program on January 31, 2005, and set March 2, 2005, as the estimated response date. These are the goals of the USACE pilot program:

to address concerns about providing the best overall value to the nation in meeting the legal requirements of the DBA

to encourage effective competition and assured availability and affordability of DBA insurance

In promoting a centrally managed program, the USACE has identified several impediments to economically and efficiently providing DBA insurance. The CPA-IG’s July 30, 2004 Report highlighted many of the same concerns.
As of December 31, 2004, 1,778 DBA claims have been submitted for civilians working on U.S. contracts in Iraq. This number includes 232 deaths and 728 claims for employees missing more than four days of work. There have also been several hundred reported incidents in Kuwait, where companies involved in Iraq reconstruction have logistics and support operations. The source of this information is the U.S. Department of Labor, Division of Longshore and Harbor workers’ compensation.
Between September 29, 2004 and December 31, 2004:

The overall number of claims grew by 85%, to 1,778 claims.

The number of claims for those missing work more than four days rose 61.8%, to 728 claims.

The number of claims for death increased by 93.3%, to 232 deaths.