DHS' umbrella insurance plan

Homeland Security Department officials have granted four companies that sell antiterrorism technologies liability protection from lawsuits that might result from terrorist attacks.

Lockheed Martin Corp., Northrop Grumman Corp., Teledyne Technologies Inc. and Michael Stapleton Associates (MSA) are the first companies to have specific products designated and certified under the landmark Support Anti-terrorism by Fostering Effective Technologies Act of 2002, better known as the Safety Act.

If the companies' antiterrorism products malfunction during a terrorist attack, company officials would not be held responsible, for the most part. Congress passed the act to encourage companies to develop and deploy innovative homeland security products that they otherwise might not attempt because they fear liability lawsuits.

Several experts said DHS' June 18 announcement granting liability protection to the four companies' anti-terrorism products is welcome news for other companies.

"I think it's going to provide certainty to those people who are deciding whether or not it was worth undertaking the process and provide some clarity on what protections are provided," said John Clerici, an attorney at McKenna Long & Aldridge LLP, which helped write the act and represents Teledyne and MSA. "I do think it's going to open up the floodgates."

Although there was a rush to provide the government with homeland security technologies after Sept. 11, 2001, many companies with a lot of government business were nervous about the lack of liability protections, said Peter Kant, senior vice president of Jefferson Consulting Group LLC.

He said the announcement is a major step forward, but he added that some of his clients seeking Safety Act coverage are still concerned about the department's slow pace. He said a few clients are also concerned about providing proprietary information about their companies to DHS.

"My hope is ... that by starting with these four [applications] — so complex in the certification needs and evaluation — other ones will now flow much more quickly," he said. "I'm optimistic, hopeful, not necessarily convinced that's going to be happening."

Some House lawmakers shared vendors' concerns and sent a three-page letter to DHS Secretary Tom Ridge in May calling for a more streamlined process.

Clerici said DHS issued interim regulations last year and has solicited extensive feedback to improve the process. DHS is expected to issue new regulations in the next 60 to 90 days, which would be available for public comment.

Since October 2003, when DHS' Office of Safety Act Implementation opened, 91 preapplications and 19 full applications have been submitted.

Lockheed Martin won approval for its risk assessment platform, a computer system that provides near-real-time terrorism threat analysis, and the U.S. Postal Service is using Northrop Grumman's biohazard detection system in mail-sorting facilities nationwide.

MSA officials have liability protection for the company's explosives-detection services and SmartTech System, which helps first responders view images of suspicious items.

Teledyne's WaterSabre product is a remotely operated ultra-high-pressure water stream that cuts through various types of containers.

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