PART 25—REGULATIONS TO SUPPORT ANTI-TERRORISM BY FOSTERING EFFECTIVE TECHNOLOGIES Authority: Subtitle G, of Title VIII, Public Law 107-296, 116 Stat. 2238 (6 U.S.C. 441-444). Source: 71 FR 33159, June 8, 2006, unless otherwise noted. § 25.1 Purpose. This part implements the Support Anti-terrorism by Fostering Effective Technologies Act of 2002, sections 441-444 of title 6, United States Code (the “SAFETY Act” or “the Act”). § 25.2 Definitions. Act of Terrorism (1) Is unlawful; (2) Causes harm, including financial harm, to a person, property, or entity, in the United States, or in the case of a domestic United States air carrier or a United States-flag vessel (or a vessel based principally in the United States on which United States income tax is paid and whose insurance coverage is subject to regulation in the United States), in or outside the United States; and (3) Uses or attempts to use instrumentalities, weapons or other methods designed or intended to cause mass destruction, injury or other loss to citizens or institutions of the United States. Certification Contractor Designation Loss Noneconomic damages Office of SAFETY Act Implementation Physical harm Qualified Anti-Terrorism Technology or QATT SAFETY Act or Act SAFETY Act Application Kit http://www.safetyact.gov SAFETY Act Confidential Information Secretary Seller Technology Under Secretary § 25.3 Delegation. All of the Secretary's responsibilities, powers, and functions under the SAFETY Act, except the authority to declare that an act is an Act of Terrorism for purposes of section 865(2) of the SAFETY Act, may be exercised by the Under Secretary for Science and Technology of the Department of Homeland Security or the Under Secretary's designees. § 25.4 Designation of qualified anti-terrorism technologies. (a) General. (b) Criteria to be Considered. (i) Prior United States Government use or demonstrated substantial utility and effectiveness. (ii) Availability of the Technology for immediate deployment in public and private settings. (iii) Existence of extraordinarily large or extraordinarily unquantifiable potential third party liability risk exposure to the Seller or other provider of such anti-terrorism Technology. (iv) Substantial likelihood that such anti-terrorism Technology will not be deployed unless protections under the system of risk management provided under sections 441-444 of title 6, United States Code, are extended. (v) Magnitude of risk exposure to the public if such anti-terrorism Technology is not deployed. (vi) Evaluation of all scientific studies that can be feasibly conducted in order to assess the capability of the Technology to substantially reduce risks of harm. (vii) Anti-terrorism Technology that would be effective in facilitating the defense against acts of terrorism, including Technologies that prevent, defeat or respond to such acts. (viii) A determination made by Federal, State, or local officials, that the Technology is appropriate for the purpose of preventing, detecting, identifying or deterring acts of terrorism or limiting the harm such acts might otherwise cause. (ix) Any other factor that the Under Secretary may consider to be relevant to the determination or to the homeland security of the United States. (2) The Under Secretary has discretion to give greater weight to some factors over others, and the relative weighting of the various criteria may vary depending upon the particular Technology at issue and the threats that the Technology is designed to address. The Under Secretary may, in his discretion, determine that failure to meet a particular criterion justifies denial of an application under the SAFETY Act. However, the Under Secretary is not required to reject an application that fails to meet one or more of the criteria. The Under Secretary may conclude, after considering all of the relevant criteria and any other relevant factors, that a particular Technology merits Designation as a Qualified Anti-Terrorism Technology even if one or more particular criteria are not satisfied. The Under Secretary's considerations will take into account evolving threats and conditions that give rise to the need for the anti-terrorism Technologies. (c) Use of Standards. (d) Consideration of Substantial Equivalence. (1) It has the same intended use as the Predicate Technology; and (2) It has the same or substantially similar performance or technological characteristics as the Predicate Technology. (e) Pre-Application Consultations. (f) Developmental Testing & Evaluation (DT&E) Designations. § 25.5 Obligations of seller. (a) Liability Insurance Required. (1) Assist in determining the amount of liability insurance required; or (2) Show that the Seller or any other provider of Qualified Anti-Terrorism Technology otherwise has met all of the requirements of this section. (b) Amount of Liability Insurance. (i) The particular Technology at issue; (ii) The amount of liability insurance the Seller maintained prior to application; (iii) The amount of liability insurance maintained by the Seller for other Technologies or for the Seller's business as a whole; (iv) The amount of liability insurance typically maintained by Sellers of comparable Technologies; (v) Information regarding the amount of liability insurance offered on the world market; (vi) Data and history regarding mass casualty losses; (vii) The intended use of the Technology; and (viii) The possible effects of the cost of insurance on the price of the product, and the possible consequences thereof for development, production, or deployment of the Technology. (2) In determining the appropriate amounts and types of insurance that a particular Seller is obligated to carry, the Under Secretary may not require any type of insurance or any amount of insurance that is not available on the world market, and may not require any type or amount of insurance that would unreasonably distort the sales price of the Seller's anti-terrorism Technology (c) Scope of Coverage. (i) Contractors, subcontractors, suppliers, vendors and customers of the Seller. (ii) Contractors, subcontractors, suppliers, and vendors of the customer. (2) Notwithstanding the foregoing, in appropriate instances the Under Secretary will specify in a particular Designation that, consistent with the Department's interpretation of the SAFETY Act, an action for the recovery of damages proximately caused by a Qualified Anti-Terrorism Technology that arises out of, relates to, or results from an Act of Terrorism may properly be brought only against the Seller and, accordingly, the liability insurance required to be obtained pursuant to this section shall be required to protect only the Seller. (d) Third Party Claims. (e) Reciprocal Waiver of Claims. (f) Information to be Submitted by the Seller. (1) Names of insurance companies, policy numbers, and expiration dates; (2) A description of the types and nature of such insurance (including the extent to which the Seller is self-insured or intends to self-insure); (3) Dollar limits per occurrence and annually of such insurance, including any applicable sublimits; (4) Deductibles or self-insured retentions, if any, that are applicable; (5) Any relevant exclusions from coverage under such policies or other factors that would affect the amount of insurance proceeds that would be available to satisfy third party claims arising out of, relating to, or resulting from an Act of Terrorism; (6) The price for such insurance, if available, and the per-unit amount or percentage of such price directly related to liability coverage for the Seller's Qualified Anti-Terrorism Technology deployed in defense against, or response to, or recovery from an Act of Terrorism; (7) Where applicable, whether the liability insurance, in addition to the Seller, protects contractors, subcontractors, suppliers, vendors and customers of the Seller and contractors, subcontractors, suppliers, vendors and customers of the customer to the extent of their potential liability for involvement in the manufacture, qualification, sale, use or operation of Qualified Anti-terrorism Technologies deployed in defense against, response to, or recovery from an Act of Terrorism; and (8) Any limitations on such liability insurance. (g) Under Secretary's Certification. (h) Seller's Continuing Obligations. § 25.6 Procedures for designation of qualified anti-terrorism technologies. (a) Application Procedure. http://www.safetyact.gov (b) Initial Notification. (1) The application is complete and will be reviewed and evaluated, or (2) That the application is incomplete, in which case the missing or incomplete parts will be specified. (c) Review Process. (i) Request additional information from the Seller; (ii) Meet with representatives of the Seller; (iii) Consult with, and rely upon the expertise of, any other Federal or non-Federal entity; (iv) Perform studies or analyses of the subject Technology or the insurance market for such Technology; and (v) Seek information from insurers regarding the availability of insurance for such Technology. (2) For Technologies with which a Federal, State, or local government agency already has substantial experience or data (through the procurement process or through prior use or review), the review may rely in part upon such prior experience and, thus, may be expedited. The Under Secretary may consider any scientific studies, testing, field studies, or other experience with the Technology that he deems appropriate and that are available or can be feasibly conducted or obtained, including test results produced by an independent laboratory or other entity engaged to test or verify the safety, utility, performance, in order to assess the effectiveness of the Technology or the capability of the Technology to substantially reduce risks of harm. Such studies may, in the Under Secretary's discretion, include, without limitation: (i) Public source studies; (ii) Classified and otherwise confidential studies; (iii) Studies, tests, or other performance records or data provided by or available to the producer of the specific Technology; and (iv) Proprietary studies that are available to the Under Secretary. (3) In considering whether or the extent to which it is feasible to defer a decision on a Designation until additional scientific studies can be conducted on a particular Technology, the Under Secretary will bring to bear his expertise concerning the protection of the security of the United States and will consider the urgency of the need for the Technology. (d) Action by the Under Secretary. (1) Approve the application and issue an appropriate Designation to the applicant for the Technology, which shall include the insurance certification required by § 25.5(h) of this part; (2) Notify the applicant in writing that the Technology is potentially eligible for a Designation, but that additional specified information is needed before a decision may be reached; or (3) Deny the application, and notify the applicant in writing of such decision. The Under Secretary may extend the 90-day time period for up to 45 days upon notice to the Seller. The Under Secretary is not required to provide a reason or cause for such extension. The Under Secretary's decision shall be final and not subject to review, except at the discretion of the Under Secretary. (e) Content of Designation. (i) Describe the Qualified Anti-Terrorism Technology (in such detail as the Under Secretary deems to be appropriate); (ii) Identify the Seller(s) of the Qualified Anti-Terrorism Technology; (iii) Specify the earliest date of sale of the Qualified Anti-Terrorism Technology to which the Designation shall apply (which shall be determined by the Under Secretary in his discretion, and may be prior to, but shall not be later than, the effective date of the Designation); (iv) Set forth the insurance certification required by § 25.5(g); and (v) To the extent practicable, include such standards, specifications, requirements, performance criteria, limitations, or other information as the Department in its sole and unreviewable discretion may deem appropriate. (2) The Designation may, but need not, specify other entities that are required to be covered by the liability insurance required to be purchased by the Seller. The failure to specify a covered person, firm, or other entity in a Designation will not preclude the application or applicability of the Act's protections to that person, firm, or other entity. (f) Term of Designation; Renewal. http://www.safetyact.gov (g) Government Procurements Overview. (2) Procedure. http://www.safetyact.gov (3) Actions. (i) Approve the Procurement Pre-Qualification Request and issue an appropriate Pre-Qualification Designation Notice to the requesting agency that it may include in the government contract or in the solicitation materials, as appropriate; or (ii) Notify the requesting agency in writing that the relevant procurement is potentially eligible for a Pre-Qualification Designation Notice, but that additional information is needed before a decision may be reached; or (iii) Deny the Procurement Pre-Qualification Request and notify the requesting agency in writing of such decision, including the reasons for such denial. (4) Contents of Notice. (i) A detailed description of and detailed specifications for the Technology to which the Pre-Qualification Designation Notice applies, which may incorporate by reference all or part of the procurement solicitation documents issued or to be issued by the requesting agency; (ii) A statement that the Technology to which the Pre-Qualification Designation Notice applies satisfies the technical criteria to be deemed a Qualified Anti-Terrorism Technology and that the Selected Vendor(s) may presumptively or will qualify for the issuance of a Designation for such Technology upon compliance with the terms and conditions set forth in such Pre-Qualification Designation Notice and the approval of the streamlined application; (iii) A list of the portions of the application referenced in § 25.6(a) that the Selected Vendor(s) must complete and submit to the Department in order to obtain Designation and the appropriate period of time for such submission; (iv) The period of time within which the Under Secretary will take action upon such submission; (v) The date of expiration of such Pre-Qualification Designation Notice; and (vi) Any other terms or conditions that the Under Secretary deems to be appropriate in his discretion. (5) Review of Completed Applications. (h) Block Designations. http://www.safetyact.gov (i) Approve the application and notify the applicant in writing of such approval, which notification shall include the certification required by § 25.5(g); or (ii) Deny the application, and notify the applicant in writing of such decision, including the reasons for such denial. (2) If the application is approved, commencing on the date of such approval the applicant shall be deemed to be a Seller under the applicable Block Designation for all purposes under the SAFETY Act, this part, and such Block Designation. A Block Designation shall be valid and effective for a term of five to eight years (as determined by the Under Secretary in his discretion) commencing on the date of issuance, and may be renewed or extended by the Under Secretary at his own initiative or in response to an application for renewal submitted by a qualified Seller under such Block Designation in accordance with § 25.6(h). Except as otherwise specifically provided in this paragraph, a Block Designation shall be deemed to be a Designation for all purposes under the SAFETY Act and this part. (i) Other Bases for Expedited Review of Applications. Federal Register. (j) Transfer of Designation. http://www.safetyact.gov (k) Application of Designation to Licensees. http://www.safetyact.gov (l) Significant Modification of Qualified Anti-terrorism Technologies. (2) A Seller shall promptly notify the Department and provide details of any change or modification to a QATT that causes the QATT no longer to be within the scope of the Designation or Certification by submitting to the Department a completed “Notice of Modification to Qualified Anti-Terrorism Technology” form issued by the Under Secretary (a “Modification Notice”). A Seller is not required to notify the Department of any change or modification of a particular Qualified Anti-Terrorism Technology that is made post-sale by a purchaser unless the Seller has consented expressly to the modification. The Under Secretary shall make an appropriate form available at http://www.safetyact.gov (i) Inform the submitting Seller that the QATT as changed or modified is consistent with, and is not outside the scope of, the Seller's Designation or Certification; (ii) Issue to the Seller a modified Designation or Certification incorporating some or all of the notified changes or modifications; (iii) Seek further information regarding the changes or modifications and temporarily suspend the 60-day period of review; (iv) Inform the submitting Seller that the changes or modifications might cause the QATT as changed or modified to be outside the scope of the Seller's Designation or Certification, and require further review and consideration by the Department; (v) Inform the submitting Seller that the QATT as changed or modified is outside the scope of the subject Seller's Designation or Certification, and require that the QATT be brought back into conformance with the Seller's Designation or Certification; or (vi) If the Seller fails to bring the subject QATT into conformance in accordance with the Under Secretary's direction pursuant to paragraph (l)(2)(v) of this section, issue a public notice stating that the QATT as changed or modified is outside the scope of the submitting Seller's Designation or Certification and, consequentially, that such Designation or Certification is not applicable to the QATT as changed or modified. If the Under Secretary does not take one or more of such actions within the 60-day period following the Department's receipt of a Seller's Modification Notice, the changes or modifications identified in the Modification Notice will be deemed to be approved by the Under Secretary and the QATT, as changed or modified, will be conclusively established to be within the scope of the description of the QATT in the Seller's Designation or Certification. (3) Notwithstanding anything to the contrary herein, a Seller's original QATT Designation or Certification will continue in full force and effect in accordance with its terms unless modified, suspended, or terminated by the Under Secretary in his discretion, including during the pendency of the review of the Seller's Modification Notice. In no event will any SAFETY Act Designation or Certification terminate automatically or retroactively under this section. A Seller is not required to notify the Under Secretary of any change or modification that is made post-sale by a purchaser or end-user of the QATT without the Seller's consent, but the Under Secretary may, in appropriate circumstances, require an end-user to provide periodic reports on modifications or permit inspections or audits. § 25.7 Litigation management. (a) Liability for all claims against a Seller arising out of, relating to, or resulting from an Act of Terrorism when such Seller's Qualified Anti-Terrorism Technology has been deployed in defense against, response to, or recovery from such act and such claims result or may result in loss to the Seller shall not be in an amount greater than the limits of liability insurance coverage required to be maintained by the Seller under this section or as specified in the applicable Designation. (b) In addition, in any action for damages brought under section 442 of Title 6, United States Code: (1) No punitive damages intended to punish or deter, exemplary damages, or other damages not intended to compensate a plaintiff for actual losses may be awarded, nor shall any party be liable for interest prior to the judgment; (2) Noneconomic damages may be awarded against a defendant only in an amount directly proportional to the percentage of responsibility of such defendant for the harm to the plaintiff, and no plaintiff may recover noneconomic damages unless the plaintiff suffered physical harm; and (3) Any recovery by a plaintiff shall be reduced by the amount of collateral source compensation, if any, that the plaintiff has received or is entitled to receive as a result of such Acts of Terrorism that result or may result in loss to the Seller. (c) Without prejudice to the authority of the Under Secretary to terminate a Designation pursuant to paragraph (h) of § 25.6, the liability limitations and reductions set forth in this section shall apply in perpetuity to all sales or deployments of a Qualified Anti-Terrorism Technology in defense against, response to, or recovery from any Act of Terrorism that occurs on or after the effective date of the Designation applicable to such Qualified Anti-Terrorism Technology, regardless of whether any liability insurance coverage required to be obtained by the Seller is actually obtained or maintained or not, provided that the sale of such Qualified Anti-Terrorism Technology was consummated by the Seller on or after the earliest date of sale of such Qualified Anti-Terrorism Technology specified in such Designation and prior to the earlier of the expiration or termination of such Designation. (d) There shall exist only one cause of action for loss of property, personal injury, or death for performance or non-performance of the Seller's Qualified Anti-Terrorism Technology in relation to an Act of Terrorism. Such cause of action may be brought only against the Seller of the Qualified Anti-Terrorism Technology and may not be brought against the buyers, the buyers' contractors, or downstream users of the Technology, the Seller's suppliers or contractors, or any other person or entity. In addition, such cause of action must be brought in the appropriate district court of the United States. § 25.8 Government contractor Defense. (a) Criteria for Certification. (b) Extent of liability. (c) Establishing applicability of the government contractor defense. § 25.9 Procedures for certification of approved products for Homeland Security. (a) Application procedure. http://www.safetyact.gov (b) Initial notification. (1) The application is complete and will be reviewed, or (2) That the application is incomplete, in which case the missing or incomplete parts will be specified. (c) Review process. (1) Request additional information from the Seller; (2) Meet with representatives of the Seller; (3) Consult with, and rely upon the expertise of, any other Federal or non-Federal entity; and (4) Perform or seek studies or analyses of the Technology. (d) Action by the Under Secretary. (i) Approve the application and issue an appropriate Certification to the Seller; (ii) Notify the Seller in writing that the Technology is potentially eligible for a Certification, but that additional specified information is needed before a decision may be reached; or (iii) Deny the application, and notify the Seller in writing of such decision. (2) The Under Secretary may extend the time period one time for 45 days upon notice to the Seller, and the Under Secretary is not required to provide a reason or cause for such extension. The Under Secretary's decision shall be final and not subject to review, except at the discretion of the Under Secretary. (e) Designation is a pre-condition. (f) Content and term of certification; renewal. (i) Describe the Qualified Anti-Terrorism Technology (in such detail as the Under Secretary deems to be appropriate); (ii) Identify the Seller(s) of the Qualified Anti-Terrorism Technology; (iii) Specify the earliest date of sale of the Qualified Anti-Terrorism Technology to which the Certification shall apply (which shall be determined by the Under Secretary in his discretion, and may be prior to, but shall not be later than, the effective date of the Certification); and (iv) To the extent practicable, include such standards, specifications, requirements, performance criteria, limitations, or other information as the Department in its sole and unreviewable discretion may deem appropriate. (2) A Certification shall be valid and effective for the same period of time for which the related Designation is issued, and shall terminate upon the termination of such related Designation. The Seller may apply for renewal of the Certification in connection with an application for renewal of the related Designation. An application for renewal must be made using the “Application for Certification of an Approved Product for Homeland Security” form issued by the Under Secretary. (g) Application of Certification to licensees. http://www.safetyact.gov (h) Transfer of Certification. (i) Issuance of Certificate; Approved Product List. (j) Block Certifications. http://www.safetyact.gov (i) Approve the application and notify the applicant in writing of such approval; or (ii) Deny the application, and notify the applicant in writing of such decision, including the reasons for such denial. (2) If the application is approved, commencing on the date of such approval, the applicant shall be deemed to be a Seller under the applicable Block Certification for all purposes under the SAFETY Act, this part, and such Block Certification. A Block Certification shall be valid and effective for the same period of time for which the related Block Designation is issued. A Block Certification may be renewed by the Under Secretary at his own initiative or in response to an application for renewal submitted by a qualified Seller under such Block Certification in accordance with § 25.9(g). Except as otherwise specifically provided in this paragraph, a Block Certification shall be deemed to be a Certification for all purposes under the SAFETY Act and this part. § 25.10 Confidentiality and protection of Intellectual Property. (a) General. (b) Non-disclosure. (1) Disclose SAFETY Act Confidential Information (as defined above) to any person, firm, or other entity, or (2) Use any SAFETY Act Confidential Information for his, her, or its own benefit or for the benefit of any other person, firm, or other entity, unless the applicant has consented to the release of such SAFETY Act Confidential Information. (c) Legends.