Q. What is “Homeland Security” and how might it impact government contracting?
A. The Homeland Security Act of 2002 created the Department of Homeland Security (“DHS”), and restructured the federal government to merge twenty-two government agencies under the DHS. Since September 11, 2002, the federal government has made sweeping plans to focus on increasing its acquisitions in products and services developed to fight terrorism and to promote homeland security, particularly those services and products in high technology industries. When it is in the interests of national security, the DHS and its subsidiary agencies have the authority to contract for products and services without observing many of the existing procurement laws and regulations. This new legislation and its implementing regulations create a great deal of confusion in the government contracts market, and contractors should seek legal advice concerning the full range of opportunities and consequences of the laws and regulations.
Because the DHS has enhanced contracting authority and may in many cases contract without the same regulatory constraints as other agencies, it will be substantially more difficult for rejected contractor bidders to successfully challenge procurement activities in bid protest and award protest actions.
The Homeland Security Act served to also establish and implement the Support Antiterrorism by Fostering Effective Technologies Act of 2002 (the “Safety Act”). The SAFETY Act limits the liability exposure of any contractor providing anti-terrorism goods and/or services to the federal government. If a contractor is sued by a third party for damages caused by the contractor’s development or production of anti-terrorism goods or services in the performance of a government contract, the SAFETY Act will either preclude or substantially limit the contractor’s liability for such damages. If the contractor is found to be liable, the SAFETY Act generally limits the contractor’s overall liability to the amount of any liability insurance policy carried by the contractor.
