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Safety Act Process Needs Improvment

When Congress passed the Safety Act of 2002, security companies thought the law would give them what they needed: a cap on their liability exposure should the antiterrorism products and services they provided not completely prevent harm from an attack. The results have been disappointing.

Implementation has been slow and tortuous, say those who have braved the bureaucracy. For example, there is a 120-day-plus application process that is separate from the procurement process. As a result, at press time only 4 companies had received the Safety Act protection available since the program began accepting applications in September 2003.

The Department of Homeland Security (DHS) “has missed a great opportunity to enhance the security of our nation and get cutting-edge technology in the hands of first responders quickly by taking such a long time to implement the Safety Act,” says Andrew Howell, vice president of homeland security for the United States Chamber of Commerce (USCOC).

Now there is a move afoot to streamline the process so that the act can achieve its intended goal. For example, the USCOC wants to see DHS adopt a block designation approach in which programs, like US-VISIT, or types of equipment, such as chemical sensors, get the block designation.

In addition, the Chamber recommends linking the qualification of antiterrorism technologies and services with the procurement process. “From our perspective, it should be explicitly linked to procurement. You should make the decision when you’re procuring something whether or not you are going to offer it Safety Act protection if it meets certain standards,” Howell says.

Raymond Biagini, a partner with the Washington, D.C.-based McKenna Long & Aldridge law firm and one of the architects of the Safety Act, agrees. “They should literally build the Safety Act into the procurements so that they at least require companies who are going to sell them antiterror technology to represent that they will go seek Safety Act coverage.”

Some signs of faster processing are already evident. DHS’s Science and Technology Directorate is expected to approve more companies in the coming months, Biagini says. His firm has filed more than 20 Safety Act applications, including those for the four companies certified last June.

Before a company tries to navigate the Safety Act waters to become a qualified vendor, its management  should be educated on several important points of the application process, Biagini says. First, the company must prove that it would likely not provide its service or technology without the protection.

Second, DHS requires that qualified vendors maintain insurance in a specified amount that cannot “unreasonably distort” the price of the product. A company should be prepared to carry its own terrorism insurance going into the process, says Biagini.

Third, a company must prove its product is ready for deployment or mass production if it has not already been deployed. For applicants whose products have been deployed, companies should be aware that past performance of a product in the field may be weighed more heavily than other application criteria, Howell says.

Companies with technologies and services not ready for immediate deployment can undertake a pre-application process to obtain feedback from DHS on whether they merit Safety Act protection to gauge if they should go forward, says John Clerici, another partner with McKenna Long & Aldridge’s homeland security practice. Within 21 days, DHS rates the likelihood of a pre-application as “promising,” “doubtful,” or “uncertain.”

But “as long as your product or service is available or about to be immediately available, we strongly encourage people to make a full application because you don’t want to risk having DHS say no based upon incomplete information on a pre-application,” he says.

In the end, the benefit of the coverage is well worth the aggravation of going through the process to obtain liability protection in an act of terrorism, he says.

Ultimately, he notes, “the risk of not getting the coverage or passing up the opportunity to get the coverage definitely outweighs the frustrations we might have to deal with during the growing pains of the implementation of the statute.”

-By Eric Grasser, assistant editor