Safety Act rule to speed liability protection

The just-published final rule for the Homeland Security Department's Safety Act implementation sets up a speedier process for federal contractors to win liability protections made possible under the act.

But the expedited treatment probably won't be available to bidders on two huge upcoming procurements, the Secure Border Initiative and Integrated Wireless Network, according to two attorneys who are Safety Act experts.

Michelle Hylton, attorney with McKenna, Long & Aldridge, and Brian Finch, who will head the homeland security practice group at Dickstein, Shapiro, Morin & Oshinsky starting June 12, said the new procedures will be welcomed by contractors but are unlikely to affect Secure Border or IWN.

The final Safety Act rule allows expedited pre-qualification proceedings for technologies with specific, well-defined criteria. SBINet and IWN, on the other hand, are both extremely complex projects that do not fit that description, the attorneys said in separate interviews.

"I don't think it will happen for SBINet," Finch said. "DHS is more likely to hold off and look at the technology" for SBINet.

Under the Support Anti-terrorism by Fostering Effective Technologies Act of 2002, contractors with anti-terrorism products and services can apply for liability protection. The applications are reviewed by DHS officials who decide whether the company is eligible for such protection.

The final rule for the Safety Act was published in the Federal Register Thursday after DHS released it earlier this week.

Congress created the Safety Act to encourage contractors to create new anti-terrorism technologies. Under the act, approved products and services would face little or no liability if they fail in connection with a terrorist attack. To date, 52 products and services have received designation as anti-terrorism technologies, and 19 products and services have received a lower level of protection.

An interim rule for the act has been in place since October 2003, and industry representatives said they were generally pleased a final rule has been published.

"The final rule is a critical step forward and gives clear guidance to Department of Homeland Security officials, other government agencies, and the companies that are encouraged to promote the development and deployment of anti-terrorism technologies," Alan Chvotkin, senior vice president of the Professional Services Council, said in a news release.

One significant addition in the final rule is the process that for certain pre-qualified anti-terrorism procurements, the winning contractor would be presumed qualified for Safety Act designation, Hylton and Finch said.

At this time, the pre-qualification procedure is primarily for limited use in specific, well-defined procurements, Hylton and Finch said. Neither SBINet nor IWN fits into that category, they said.

Another significant development in the final rule is that the Safety Act protections will be available to acts of terrorism that occur outside the United States yet cause substantial harm here, including financial harm, Hylton said. However, liability protection would only apply only within the United States, she said.