Apply now for liability protection under the Safety Act

Richard Rector

On July 11, the Department of Homeland Security proposed regulations offering guidance on applying for Safety Act coverage. The agency will begin processing applications for protection Sept. 1.

The regulations are subject to change, but companies with anti-terrorism products and services would be wise to proceed with the application process using what's proposed as a guide. Some key points are:

  • Beginning Sept. 1, Homeland Security will make application forms available on its Web site (http://www.dhs.gov).

  • Tom Ridge, Homeland Security Secretary, has delegated Safety Act authority to the undersecretary for science and technology and his designees.

  • The agency separately and simultaneously will consider applications for designation as qualified anti-terrorism technology (QATT) and for certification and placement on the Approved Product List for Homeland Security, which would allow a company to obtain the additional protection of the "government contractor defense." QATT designation is a prerequisite for certification as an approved product for homeland security.

  • The agency may consult with other entities and rely upon their expertise when reviewing Safety Act applications. In addition, the Homeland Security Department will coordinate its Safety Act review with federal agency procurements.

  • A duly authorized corporate representative must state the company's required insurance information.

  • The Homeland Security Department may specify in the QATT certification what companies are covered by the protections, such as a non-exclusive list of specific contractors, subcontractors, suppliers, vendors and customers.

  • For anti-terrorism technology substantially equivalent to other technologies that have been previously designated as QATT, the Homeland Security Department will take into consideration this equivalence in its review and approval process.

  • The department will provide feedback to contractors developing new anti-terrorism technologies during design, testing and prototyping stages regarding whether the new technology will meet QATT requirements, while protecting the contractor's intellectual property and trade secrets.

The regulations also describe the department's review and approval process, which will occur separately for QATT designation and for certification as an approved product for homeland security. Both types of review and approval involve two steps: first at the assistant secretary level, and second at the undersecretary level.

The assistant secretary will review the application and, within 90 days, either request more information or recommend approval or disapproval to the undersecretary. If approval is suggested, the assistant secretary will include a recommendation regarding the appropriate level of insurance coverage the company should maintain for the anti-terrorism technology. Notably, the assistant secretary may extend the 90-day deadline without reason or cause.

Within 30 days of receiving the assistant secretary's recommendation, the undersecretary may approve the application, request additional information or deny the application. The undersecretary may extend the 30-day deadline without reason or cause, and the decision is final and not subject to review except at the undersecretary's discretion.

The application process is relatively complex, and most companies will need to involve legal counsel to ensure the application is properly completed. Nonetheless, it's a critical step for companies selling anti-terrorism technology, and it's a step that should be taken as soon as possible.

Richard Rector is a partner in the Government Contracts Group of Piper Marbury Rudnick & Wolfe LLP in Washington. His e-mail address is richard.rector@piperrudnick.com.

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