Understanding OCONUS Contracts

Geopolitical shifts are driving the need for increased support within OCONUS (Outside of Continental United States) government contracting. New government programs mean more primary and sub-contracted employers will be called upon to support the US military and its operations abroad. Involved in a bid? Here’s what you need to know.

What is OCONUS?

Overseas government contracting is not a new business sector. In fact, civilian companies have supported overseas operations for the US government for several decades. In 1941 the Defense Base Act (DBA) was passed, mandating health cover for workers on military bases outside of Outside of Continental United States (OCONUS).

In 1941 the Defense Base Act (DBA) was passed, mandating health cover for workers on military bases outside of Outside of Continental United States (OCONUS).¹

Since then the DBA has been amended and expanded to include mandatory coverage for just about all non-military projects and other enterprises involving United States national security. Today, almost any contract for work outside the US, whether military in nature or not, with an agency of the US government, likely requires DBA coverage.

Non-military support required by DBA

• Science, technology, research and development
• Aircraft and satellites
• Systems implementation and maintenance
• Augmentation
• Supplies and food
• Entertainment
• Logistics
• Infrastructure development
• Construction and maintenance
• Power, water, facilities, and waste management

The need for OCONUS coverage has fluctuated, due to political changes around the world. The current United States administration has increased military spending to support operations overseas.² The resulting boon will provide a tremendous opportunity for a variety of industries, all of which will need to provide suitable health benefit coverage for their contracted civilian employees working overseas.

Understanding OCONUS bidding requirements

In 2019, the US Army will launch a new series of Logistics Civilian Augmentation Programs (LOGCAP) contracts for contingency support. This increased defense spending means more employers will be called upon for overseas contracts.

The 2019 Logistics Civilian Augmentation Programs (LOGCAP) contract involves over 1000 subcontractors and an anticipated nearly $82 billion of contracts.³

Health care coverage is a critical component of contracts being awarded. Before bidding there are some key questions to ask your insurer/health services company to ensure they’ll meet the contract needs.

• What Overseas government contracting/OCONUS experience do they have – both in the past and currently? Support for employers working within this segment may present complexities to which new entrants to the market may not be savvy.
• How flexible are their dates and coverage? Overseas government contracting can experience periods of unpredictability, requiring a high degree of flexibility, agility and adaptability from health service providers.
• How quickly can they produce task order pricing? The industry moves fast and delays can cost contracts and money.
• What provision do they have for mental health as well as physical?
• What is their local presence? Local knowledge and resources are critical to ensuring delivery of consistent and locally compliant solutions to contracted employees.

Have you been awarded a contract?

Federal contracting is highly regulated, and providing group benefits to federal contractors may seem challenging. Benefit programs need to reflect the realities of different parts of the world and help to mitigate the distinct risks into which expatriate employees are deployed.

As a result, DBA standards may present gaps in coverage that Cigna can work with you to resolve, ensuring comprehensive benefits coverage for contracted workers, minimal disruptions and enhanced peace of mind.

Why Cigna can help, and what we provide?

With more than 25 years’ experience supporting overseas government contractors, and the carrier of choice to over 250 OCONUS contractors, Cigna is uniquely qualified to provide regionally relevant and compliant benefit solutions for contracted employees positioned around the world.⁴

Cigna has strong familiarity with US Military standards. We ‘speak the language’, meaning delivery of services and information when you need it. For those putting together bids or managing contracts, the key benefits are:

• Flexibility with effective date and license base
• Predictability in pricing task orders and holding rates through ramp-up and revisit at renewal
• Capability to provide access to quality care and negotiating discounts for members, while helping to avoid fraud and waste
• Responsiveness with quick turnaround time (averaging 24 hours⁵) for pricing
• Transparency with member communications and market trends

Cigna offers contractors comprehensive resources to support physical and mental health and well being. Our employee assistance programs (EAP) and wellness programs are embedded as part of our unique proposition and designed to support our customers to help them remain well – and working, with the goal of minimizing costly assignment disruptions.

For assistance with bids, or more information on how Cigna can support your OCONUS contract, contact us.

 

¹ Congressional Research Service June 2, 2010. The Defense Base Act : The Federally Mandated Workers’ Compensation System for Overseas Government Contractors. Retrieved from https://www.everycrsreport.com/reports/RL34670.html

² Center for Strategic and International Studies January 31, 2019. What to Look for in the FY 2020 Defense Budget Request. Retrieved from https://www.csis.org/analysis/what-look-fy-2020-defense-budget-request

³ Professional Overseas Contractors, LLC April 12, 2019. Contract Award: U.S. Army has chosen 4 companies for the $82 billion LOGCAP V global logistics contract. Retrieved from https://www.your-poc.com/contract-award-u-s-army-has-chosen-4-companies-for-the-82-billion-logcap-v-global-logistics-contract/

⁴ IV Figures based on analysis of CGHB book of business as of January 2018, subject to change.

⁵ Average response time based on internal data June 2019 Cigna Global Underwriting and Actuarial. Some exclusions may apply.

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