Infotech and the Law: Know the costs of doing business in Iraq

Devon Hewitt

Now that the government's efforts in constructing a physical infrastructure in Iraq are under way, it is moving toward erecting a communications and information architecture in the country. Many information technology companies now have opportunities to do business in Iraq.

Here are some important tips contractors should consider before sending employees to Iraq or any area of conflict.

Get insurance. The Defense Base Act requires contractors to obtain workers compensation insurance coverage or self-insure with respect to injury or death incurred in employment for contracts performed outside the continental United States.

Workers compensation benefits also are available under the War Hazards Compensation Act. Under this act, a person taken hostage or prisoner by a hostile force will be considered totally disabled and receive the commensurate compensation. A contractor also must ensure employees' health and life insurance benefits are maintained abroad.

Contractors can get more information about insurance and benefits from the Labor Department, which administers the requirements of the Defense Base Act.

Determine if the services are "mission essential." A contract should state if the contractor is expected to continue work during a crisis, which services must continue and whether the government will assume responsibility for performing the services if a crisis ensues.

If in an emergency the contractor must keep performing but an employee refuses, the contractor may be required to replace the employee immediately at its own expense or risk defaulting on the work. When an employee is in Iraq and the country is in chaos, this situation is more than just an inconvenience. If the contract states the government will take over performance, the contractor may be required to train federal personnel. It should ensure the contract has funding for such training.

Carefully price the work. Government employees deployed to other areas of conflict may be entitled to hazard or danger pay, and the government will reimburse contractors the costs of these pay premiums. The government generally compares the premiums paid by the contractor against those given by the State Department for its personnel posted overseas. The State Department publishes guidance on its Web site regarding danger pay and hardship post allowances, which range from 5 percent to 25 percent above basic compensation levels or per diem rates.

Determine how much support and protection you'll get. Contractors are responsible for ensuring the safety of their personnel abroad. They should explore whether the government will provide facilities and transport for medical emergencies, force protection, transport and evacuation in dangerous situations, special equipment, clothing, and medicine or training that might be needed in the environment.

For contracts in Iraq, the government has been providing various training, including using chemical and other protective kits, health and sanitation, security, area customs and operation security. The government also offers medical, force protection, transportation, evacuation and other services required for the safety of contractor support personnel.

Contractor employees get Geneva Convention identity cards that indicate they are noncombatants and, therefore, are accorded prisoner-of-war status and protections if captured. For more information, consult the Army Contractors Accompanying the Force Guidebook, dated Sept. 8, 2003.

Devon Hewitt is a partner of Government Practices at ShawPittman in McLean, Va. She can be reached at

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