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Safety Act Process Painful But Rx Planned

The government has been slow to implement the Safety Act of 2002, intended to grant liability protection to companies providing counterterrorism services and technologies, but that may be changing. Department of Homeland Security Secretary Michael Chertoff, speaking to the U.S. Chamber of Commerce, pledged to review the drawn-out approval process.

And even before Chertoff's remarks, there were some signs of progress. Earlier this year, Wackenhut Corp. received full certification as a seller of a qualified antiterrorism technology or service under the Safety Act, becoming the first guard service company to get that protection.

More recently, FirstLine Transportation Security and Covenant Aviation Security obtained partial protection under the act for their homeland-security-related services. These companies are two of the three private passenger and baggage screening firms in test projects at five U.S. airports.

That brings the total of products and services approved by DHS for coverage to 18 through the end of April, compared to three at the beginning of the year. The coverage applies to 14 organizations. (ASIS is among the organizations that have received Safety Act designations. It obtained the designation for its security guidelines program in late April.)

In Wackenhut’s case, certification for its guard services provides the company full liability protection under the “government contractor defense” in a court of law. It also shields Wackenhut’s customers and its entire supply chain from lawsuits. Wackenhut has also obtained approval for its consulting and risk management practices.

FirstLine Transportation and Covenant did not receive full certification. Both obtained what is called designation-level approval, the lesser type of protection available under the act. That means a cap on third-party liability claims that could be filed in the event of a terrorist attack. In other words, the exposure of each company is limited by its Safety Act protection to the amount of its insurance deductibles. The companies’ customers are similarly protected.

“It’s impossible right now to get certification for screening because TSA has not set up the standards that are required to measure the technology,” says John DeMell, president of FirstLine, which screens passengers and baggage at Kansas City International Airport.

Despite the successes of these companies in obtaining some protection, the principal complaint remains: Safety Act approval is not easy to obtain.

“It was quite a bit of back-and-forth” over a full year before final approval, says Marc Shapiro, Wackenhut’s vice president of strategic partnerships.

Gerry Berry, president of Covenant, says Safety Act protection should be expedited for companies already providing terrorism-related products and services in the war against terrorism. Covenant handles an $80 million annual contract to provide passenger and baggage screening at San Francisco International Airport.

“I see no reason why anybody actually doing the work, like we are, can’t have Safety Act protection,” Berry says, adding that his company endured a long process to get its coverage, beginning in June 2004. It was this bureaucratic pace that Chertoff promised to try to improve, stating: “I know that there have been issues with the application process. We have addressed some of those. We’re looking more comprehensively at what we can do to make the Safety Act program efficient and hospitable.”

By Eric Grasser, assistant editor