The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) agreed on an interim rule, effective November 7, 2007, amending the FAR to implement the Department of Homeland Security (DHS) regulations regarding the Support Anti-Terrorism by Fostering Effective Technologies Act of 2002 (SAFETY Act), 6 U.S.C. §§ 441-444.
Those who have attended the various SAFETY Act workshops and seminars, including the November 16 workshop hosted by DHS and the October 10 workshop co-sponsored by six industry associations, know that while the SAFETY Act has the potential to provide companies with tremendous protections against liability, industry continues to voice numerous concerns regarding its shortfalls. These concerns include the lack of precedent in DHS's application of the definition of an "act of terrorism," inadequate treatment of "false positives" when trying to safeguard against terrorism, and nonexistent procedures to renew near-expired SAFETY Act approvals. In addition to providing DHS with solicited feedback through these interactive workshops, all interested parties are encouraged to submit comments on the Councils' interim rule to be considered when forming the final rule.
The SAFETY Act aims to ensure that the threat of liability does not deter companies from developing, deploying and commercializing life-saving anti-terrorism technologies. The SAFETY Act provides incentives for the development and deployment of anti-terrorism technologies by creating "risk management" and "litigation management" systems.
To benefit from SAFETY Act protections, companies must apply with the SAFETY Act Office for DHS designation and certification that their technology is a Qualified Anti-Terrorism Technology (QATT). Companies are afforded the greatest protection for those technologies receiving certification (rather than designation) as an approved product because DHS certification establishes a rebuttable presumption that sellers are entitled to the "government contractor defense" and cannot be held liable for any design defects.
DHS's regulations established streamlined review for certain categories of technologies, known as "block designations" and "block certifications" as well as streamlined procedures in which an agency can request a preliminary determination of SAFETY Act applicability —called a "pre-qualification designation notice"— for a technology to be procured by the Government. Both of these streamlined processes are addressed in the interim rule.
The interim rule adds a new FAR Subpart 50.1, Extraordinary Contractual Actions, which primarily addresses transfer and delegation of certain duties to the Secretary of DHS, including those involving the SAFETY Act, based on Executive Order 13286.
More important, the new FAR Subpart 50.2, SAFETY Act, contains statements on overall policy and SAFETY Act considerations that are to be an integral part of agency acquisition planning procedures. Additionally, FAR 50.205-1 requires consideration of, as well as incorporation into, solicitations and advance public notice to potential offerors of DHS block designations or block certifications. If no block designation or certification exists, FAR 20.205-2 requires the agency to request a pre-qualification designation notice from DHS. And if DHS does issue such notice, the contracting officer incorporates it into the solicitation or advance public notice to potential offerors.
For those cases where DHS denies a request for pre-qualification designation notice, or where the agency—after consultation with DHS—otherwise determines that SAFETY Act protection is not applicable to the procurement, contracting officers must insert the clause at FAR 52.250-2, SAFETY Act Coverage Not Applicable. Likewise, contracting officers are required to appropriately use FAR Clause 52.250-3, SAFETY Act Block Designation/Certification, or Clause 52.250-4, SAFETY Act Pre-qualification Designation Notice, when DHS issues a block designation/certification or pre-qualification designation notice, respectively. Two alternate clauses allow offerors to submit offers contingent on DHS issuing a SAFETY Act designation or certification under certain limited circumstances.
FAR 50.250-5, Equitable Adjustment, sets forth circumstances under which a contractor may be entitled to an equitable adjustment when pricing for items covered by a pre-qualification designation notice, block designation, or block certification was established presuming that DHS would issue a SAFETY Act designation and DHS, in fact, ultimately denies the designation application. Under the specified circumstances, the contracting officer shall either approve an equitable adjustment or terminate the contract for convenience in lieu of providing an equitable adjustment. Written comments responding to this interim rule are due no later than January 7, 2008.