Federal Acquisition Regulation; FAR Case 2006-023, SAFETY Act: Implementation of DHS Regulations, 2733-2739 [E9-577]

Agencies

• General Services Administration
• National Aeronautics and Space Administration
• DEPARTMENT OF DEFENSE

[Federal Register Volume 74, Number 10 (Thursday, January 15, 2009)]
[Rules and Regulations]
[Pages 2733-2739]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-577]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 7, 18, 28, 32, 33, 43, 50, and 52

[FAC 2005-30; FAR Case 2006-023; Item V; Docket 2007-0001; Sequence 8]
RIN 9000-AK75


Federal Acquisition Regulation; FAR Case 2006-023, SAFETY Act: 
Implementation of DHS Regulations

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed to convert the 
interim rule that published in the Federal Register at 72 FR 63027, 
November 7, 2007 to a final rule. The final rule amends the Federal 
Acquisition Regulation (FAR) to implement the Department of Homeland 
Security (DHS) regulations on the SAFETY Act.

DATES: Effective Date: February 17, 2009.

FOR FURTHER INFORMATION CONTACT: Mr. Edward N. Chambers, Procurement 
Analyst, at (202) 501-3221 for clarification of content. For 
information pertaining to status or publication schedules, contact the 
FAR Secretariat at (202) 501-4755. Please cite FAC 2005-30, FAR case 
2006-023.

SUPPLEMENTARY INFORMATION:

A. Background

    DoD, GSA, and NASA published an interim rule in the Federal 
Register at 72 FR 63027, November 7, 2007. Seven respondents submitted 
comments on the interim rule. All respondents generally supported the 
concepts of the FAR interim rule, but provided suggestions to improve 
clarity and better achieve the implementation of the SAFETY Act.
    1. Definitions.
    a. Pre-qualification designation notice (50.201 and associated 
clauses). In the definition ``pre-qualification designation notice'' 
one respondent suggested that the word ``successful'' prior to 
``offeror'' be deleted because the interim rule allows all offerors to 
submit streamlined SAFETY Act applications, not just the successful 
offeror.
    Response: The Councils have accepted this suggestion and the 
definition of ``pre-qualification designation notice'' has been 
modified throughout the final rule.
    b. ``Block designation and ``block certification.'' One respondent 
was concerned that there is no definition of the terms ``block 
designation'' and block certification.''
    Response: These definitions were embedded within the definition of 
``SAFETY Act designation'' and ``SAFETY Act certification.'' These 
terms are now separately defined, to make it easier to locate the 
definitions.
    2. General (50.203(a)).
    The respondent suggested that because SAFETY Act protections extend 
to purchasers and users of technologies that the phrase in 50.203(a)(2) 
be amended to reflect this.
    Response: Paragraph (a)(2) of the interim rule reads as follows:
    ``(2) Provide risk management and litigation management 
protections for sellers of QATTs and others in the supply and 
distribution chain.''
    Risk management and litigation management are addressed in section 
864 and 863 of the SAFETY Act respectively, and in 6 CFR 25.5 and 25.7 
of the DHS regulations. The required amount of liability insurance 
purchased by the seller must provide protection for contractors, 
subcontractors, suppliers, vendors, and customers of the Seller, as 
well as contractors, subcontractors, suppliers, and vendors of the 
customer, to the extent of their potential liability for involvement in 
the manufacture, qualification, sale, use, or operation of the QATT. 
See Section 864 of the SAFETY Act. Accordingly, the phrase, ``and 
others in the supply and distribution chain,'' accurately reflects this 
required coverage. Therefore, no change has been made to the rule as a 
result of this comment.
    3. Policy (50.204).
    a. Benefits to the Government. The respondent thought that because 
the SAFETY Act also benefits the Government with respect to its 
potential liability, the requiring activities should not only encourage 
contractors to submit SAFETY Act applications, but also support these 
applications.
    Response: The subject of any benefit the Government may ultimately 
enjoy with respect to a decreased liability is one that cannot be 
addressed in the context of this FAR case. The implications are too far 
reaching and would require a thorough analysis of many of the 
Government's waivers of sovereign immunity. However, to the extent that 
one of the criteria for the Department of Homeland Security (DHS) to 
determine whether to issue a designation is a determination made by a 
Federal, State, or local official that the technology is appropriate 
for preventing, detecting, identifying, or deterring acts of terrorism 
or limiting the harm such acts might cause, the FAR case has been 
amended to specifically reflect this possibility in 50.204(a) by 
changing the paragraph to read:
    50.204 Policy.
    (a) Agencies should--
    (1) Determine whether the technology to be procured is 
appropriate for SAFETY Act protections and, if appropriate, formally 
relay this determination to DHS for purposes of supporting 
contractor application(s) for SAFETY Act protections in relation to 
criteria (b)(viii) of 6 CFR 25.4, Designation of Qualified Anti-
Terrorism Technologies;
    b. Authorities and responsibilities. One respondent wanted to 
clarify that determination of whether the SAFETY Act is applicable is 
within the exclusive purview and discretion of DHS. The respondent 
therefore recommended that the policy at 50.204(a)(1) should be revised 
to replace ``should'' with ``shall consult with DHS to...''

[[Page 2734]]

    Response: It is not necessary in every circumstance to consult with 
DHS to determine whether the SAFETY Act is applicable. The procedures 
make it clear that in questionable cases the agency shall consult with 
DHS (50.205-1(a)).
    c. Soliciting contingent offer. Another respondent thought that the 
language of 50.204(b) concerning not soliciting offers contingent upon 
SAFETY Act designation or certification before contract award was 
incongruous with normal acquisition procedures to solicit offers before 
award.
    Response: ``Before contract award'' refers to ``SAFETY Act 
designation or certification'' not to ``shall not solicit offers.'' 
This can be clarified by adding a connecting word as follows:
    ``Agencies shall not solicit offers contingent upon SAFETY Act 
award designation or certification occurring before contract award, 
unless...''
    d. Responsibility to take action. One respondent requested that the 
policy should address another responsibility, the responsibility to 
take action once the determinations are made.
    Response: The additional language requested by the respondent is 
not appropriate in the Policy section. These actions are addressed 
under FAR 50.205 procedures.
    4. SAFETY Act considerations (50.205-1).
    a. SAFETY Act Applicability (50.205-1(a)).
    i. Several respondents questioned the use of the phrase ``requiring 
activity'' and some thought it reasonable to include a definition for 
``requiring activities.''
    Response: The use of this phrase is consistent with other uses in 
the FAR and defining the term is outside the scope of this case.
    ii. One respondent wondered if the statement that ``Requiring 
activities shall review requirements to identify potential 
technologies'' means that all requirements must be so reviewed. This 
respondent considered that it would be helpful if the FAR provided some 
guidance as to the types of requirements that must be so reviewed, and 
points to the summary of items at the beginning of FAC 2005-021, which 
provided examples of the goods and services to which FAR Subpart 50.2 
applies.
    Response: The Councils do not agree that it is advisable to provide 
such a list in the regulations. Any such list would never be complete, 
and could imply that technologies not on the list would not be covered 
by the SAFETY Act. There are some limited examples in the definition of 
Qualified Anti-Terrorism Technology (QATT), particularly of services 
and analyses that may be considered technology. In addition, examples 
of QATT are to be found on the SAFETY Act website identified at FAR 
50.203(c) (e.g., see SAFETY Act 101 Briefing and Active Procurement 
List).
    iii. One respondent recommended that the requiring activity's 
determination of the existence of a block designation or certification 
through discussions with DHS, must be mandatory (i.e., change 
``should'' to ``shall''). In the same sentence, the respondent 
recommended changing ``address through preliminary discussions'' to 
``ascertain through discussions''. The respondent considered that this 
change will ensure that if a block designation or certification exists, 
it will be used in the procurement process.
    Response: The Councils do not concur with the change from 
``should'' to ``shall'' because the FAR does not direct requiring 
activities.
    However, the Councils do concur with the change from ``address 
through preliminary discussions'' to ``ascertain through discussions,'' 
as being more precise. The existence of block designation or 
certification must be ascertained at this time, not at some time in the 
future. Therefore, these discussions are not preliminary.
    iv. One respondent recommended that the discussion not be limited 
to ``block designations'' or ``block certifications.'' The respondent 
stated that DHS regulations provide coverage for ``designated 
technology,'' ``certified technology,'' and for Developmental Testing 
and Evaluation Designation for any technology that is being developed. 
Each of these additional technology designations should be ``on the 
table'' when a Federal agency is considering whether a technology is 
appropriate for SAFETY Act coverage.
    Response: The block designations and block certifications are 
checked first because they are broader in scope, covering a class of 
technologies. There may be a block designation or block certification 
already in effect that can cover the planned acquisition.
    Although ``designated technology'' and ``certified technology'' are 
specific to a particular technology, these designations are still ``on 
the table.'' FAR 50.205-1(a)(2) directs the agencies to proceed to 
50.205-2, pre-qualification designation notice, if a block designation 
or block certification does not exist.
    With regard to the ``developmental testing and evaluation 
designation,'' the DHS regulations established this category to cover 
an anti-terrorism technology that is being developed, but that requires 
additional developmental testing and evaluation (6 CFR 25.4(f)). 
However, the determination to use this type of designation is one that 
DHS may apply to a technology at its sole discretion. The pre-
qualification designation notice process does not expressly include 
permitting a developmental testing and evaluation designation, but 
rather is limited to stating presumptively or affirmatively that a 
technology is a QATT. Therefore, while a developmental testing and 
evaluation designation may result from any application, the FAR 
language accurately reflects the different streamlined application 
process and streamlined review times made available to various vendors.
    v. One respondent also suggested that the language in 50.205-
1(a)(1), ``the requiring activity shall inform the contracting officer 
to notify offerors'', should be rewritten as ``the requiring activity 
shall request that the contracting officer notify offerors.''
    Response: The Councils have accepted this suggestion as being 
simpler and clearer.
    b. Early consideration of the SAFETY Act.
    i. One respondent recommended a cross reference to 7.105(b)(19) be 
placed in 50.205(b).
    Response: The Councils concur.
    ii. The same respondent also requested that the regulations should 
provide guidance on the lead time required for SAFETY Act coverage 
determinations.
    Response: The regulation states at 50.205-1(b) that processing 
times for issuing determinations on all types of SAFETY Act 
applications vary depending on many factors, including the influx of 
applications to DHS and the technical complexity of individual 
applications. This statement continues to be true, and more specific 
guidance is not possible.
    c. Reciprocal waiver of claims (d). One respondent supported the 
statement in the rule that the Government is not a customer from which 
a contractor must request a reciprocal waiver.
    Response: None required.
    5. Prequalification Designation Notice (PQDN) (50.205-2).
    a. PQDN after contract award. One respondent thought that the Pre-
Qualification Designation Notices (PQDNs) were not limited to any 
particular time in the acquisition cycle and therefore, thought that 
PQDNs should also be available after contract award.
    Response: In reviewing the DHS regulations on the issuance of 
PQDNs,

[[Page 2735]]

there is nothing to indicate that the procedure relates to anything 
other than the future procurement of a technology. See 6 CFR 
25.6(g)(2). Further, the time periods of seeking a PQDN and a 
contractor then applying under the streamlined rules versus simply 
having the contractor apply for SAFETY Act protections would not 
justify such a procedure. It would be far simpler for contractors to 
apply for SAFETY Act protections themselves. The period for an 
expedited review is 60 days. The review period for a PQDN is also 60 
days. When added together, this is equal to the 120 days for an entire 
SAFETY Act application. Of course, DHS may issue Block Designations 
and/or Certifications and, therefore, if contractors or requiring 
activities are interested in having DHS consider whether to issue a 
Block Designation or Certification, then they should write the Under 
Secretary of Science and Technology of DHS for this purpose.
    b. Specification changes after PQDN. One respondent thought that 
the FAR case needed to be clarified with respect to specifications or 
statements of work changing after a PQDN had been issued.
    Response: To the extent, that there may be confusion based on the 
wording in the interim rule, 50.205-2(a) has been amended to read:
    (a) Requiring activity responsibilities. (1) If the requiring 
activity determines that the technology to be acquired may qualify 
for SAFETY Act protection, the requiring activity is responsible for 
requesting a pre-qualification designation notice from DHS. Such a 
request for a pre-qualification designation notice should be made 
once the requiring activity has determined that the technology 
specifications or statement of work are established and are unlikely 
to undergo substantive modification. DHS will then ...
    c. Mandatory. With regard to the same paragraph (50.205-1(a)(1)), 
the respondent requested that the language should be mandatory, 
changing ``the requiring activity is responsible for requesting'' to 
``the requiring activity shall request.''
    Response: The FAR provides direction to the contracting officer and 
the contracting chain of command in an agency. The requiring activities 
do not look to the FAR for direction.
    d. Streamlined methodology for technology already being sold to 
Government. Several respondents felt that there should be a streamlined 
methodology to apply and obtain SAFETY Act protections if contractors 
are already selling existing technologies to the Government.
    Response: The DHS rules for applying for SAFETY Act protection do 
not provide for a streamlined methodology to apply and obtain SAFETY 
Act protection outside of the acquisition process. The FAR cannot 
provide for any additional methodology without DHS changing its rules 
on the manners in which to seek SAFETY Act protections. It should be 
emphasized though that contractors may, like any sellers of 
technologies, submit an application for SAFETY Act protections at any 
time. While the timelines for a traditional application are longer, the 
timelines are not expected to exceed an additional two months.
    6. Contingent offers (50.205-3 and Alt I to 52.250-3 and 52.250-4).
    a. Market research (50.205-3(a)(3)). One respondent thought the 
language in 50.205-3(a)(3) was unclear because this subparagraph did 
not specifically state who would perform the ``market research.'' The 
respondent thought the requirement for market research should be 
deleted because it would be difficult for contracting officers to 
obtain reliable information and because market research will be 
subjective and can result in widely divergent and inequitable 
implementation of the contingent and presumptive SAFETY Act clauses. 
Prior to submission of an offer, a company may not be in a position to 
make a categorical decision as to whether to supply technology without 
SAFETY Act coverage.
    Response: FAR Part 10 clearly requires that the market research be 
performed by the contracting officer. Therefore, no change is required 
to this subparagraph.
    It is Government policy to allow contingent offers only if market 
research shows that there will be insufficient competition without 
SAFETY Act protections or the subject technology would be sold to the 
Government only with SAFETY Act protections. With regard to 
subjectivity and widely divergent implementation, it is believed that 
the direction in FAR Part 10 provides enough guidance so as to protect 
against such a situation. However, it is recognized, as with any 
process, different employees will pursue a matter differently. This 
cannot be avoided.
    b. Block certification. One respondent would prefer that the 
regulations not limit contracting officers from authorizing offers 
contingent on obtaining a SAFETY Act certification unless a block 
certification applies to the solicitation. (Also at 50.205-4(b).)
    This respondent also recommended that the wording should be 
``applies to the technology'' rather than ``applies to the 
solicitation.''
    Response: DHS would not grant SAFETY Act certification unless a 
block certification existed, or unless the offeror already has applied 
for a SAFETY Act designation. Otherwise, DHS would first grant a 
designation, and subsequently grant a certification after the 
technology is proven, or simultaneously grant a designation and a 
certification, if requested by the applicant. In any event, a SAFETY 
Act designation will be part of any SAFETY Act protections conferred to 
a contractor. In virtually every circumstance, the Government will 
consider that to be sufficient protection to proceed to award.
    The Councils have changed the wording at 50.205-3(b) and 50.205-
4(b) to read ``applies to the class of technology to be acquired under 
the solicitation.''
    c. No conditions. Several respondents suggested, with respect to 
accepting contingent offers, that no conditions or very limited 
conditions should be placed on a contracting officer's ability to 
accept contingent offers.
    Response: Without analyzing the long-standing precedent of the 
Government not accepting contingent offers of any kind, the conditions 
placed on the acceptance of an offer contingent upon an offeror 
obtaining SAFETY Act designation or certification are very reasonable. 
The dual nature of the SAFETY Act application processes and the source 
selection processes makes it inherently risky for the Government to 
accept contingent offers. However, in light of the importance of using 
the SAFETY Act effectively, it was deemed worthwhile to accept the risk 
of permitting contingent offers, but only if certain conditions 
applied. Accordingly, this case had to mitigate the Government's risk 
in allowing contingent offers by including such conditions.
    d. Right of the Government to award. Several respondents were 
concerned that paragraphs (f)(2) and (f)(3) of Alternate I to 52.250-3 
and 50.250-4 are in conflict with each other, or at best, unclear.
    Response: The Councils have rewritten paragraphs (f)(2) and (f)(3) 
to clarify that the right of the Government to award prior to 
resolution of the offeror's application for SAFETY Act designation 
would be an award on another offer, not the contingent offer.
    7. Provision prescriptions (50.206).
    a. 52.250-2, SAFETY Act Coverage Not Applicable.
    i. One respondent recommended clarifying the coverage in FAR 
50.206(a)(2) by adding before the period in the sentence the following 
phrase: ``and no block designation or block

[[Page 2736]]

certification applies to the technology to be acquired. See 50.205-
1(a).''
    Response: It would not be possible to get to this point if there 
were a block designation or block certification. The first 
consideration to be checked under the procedures at FAR 50.205-1(a) is 
whether or not there is a block designation or block certification. It 
is only if one does not exist that the agency would enter into 
discussions with DHS as to whether this technology might be a good 
candidate for a PQDN.
    ii. The respondent also considered this clause prescription to be 
unclear, questioning whether 52.250-2 would be included if the agency 
based its determination of non-applicability of the SAFETY Act on its 
own, without DHS consultation, and wanting the FAR to make this clear. 
The respondent also reiterates that inclusion of a list of examples of 
items to which the SAFETY Act may be applicable would be helpful in 
determining whether to include the provision in the solicitation.
    Response: The Councils consider that the FAR has made it very clear 
that this clause would only be used after consultation with DHS--either 
as specified in FAR 50.206(a)(1) or (a)(2). As stated in section 4.a, 
there are various sources of examples of products that may be suitable 
for SAFETY Act protection. However, whenever there is any possibility 
of applicability, DHS must be consulted.
    b. 52.250-3, SAFETY Act Block Designation/ Certification. One 
respondent stated that it would be helpful to provide information on 
how to ascertain whether or not DHS has issued a block designation or 
certification.
    Response: When DHS grants a block designation or block 
certification, it will be listed on the SAFETY Act website (see 
50.203(c)). Even though there are currently no block designations or 
certifications, DHS has been requested to provide a place on the 
website now, so that it can be verified that there are currently no 
block designations or block certifications. The website is currently 
operational.
    c. 52.250-3 and -4, Alternate II. One respondent recommended 
revision of 50.206(b)(3) and (c)(3) so that contracting officers can 
only increase the 15 day time period for submission of SAFETY Act 
applications, not decrease it. For some companies, it may not be 
feasible to submit an application in less than 15 days.
    Response: The Councils concur and have revised the text 
accordingly.
    8. ``SAFETY Act Coverage not applicable'' (52.250-2).
    Two respondents thought that this provision should be eliminated. 
One respondent thought that the provision at 52.250-2 could lead to 
unintended consequences by not specifically limiting the provision to 
the products or services being acquired under the solicitation. The 
respondent felt that the wording of the provision might lead potential 
SAFETY Act applicants to believe that their technologies would never be 
appropriate for SAFETY Act protection. The respondent believed that 
this provision conflicts with the SAFETY Act, which confers exclusive 
authority on DHS to determine whether SAFETY Act application should be 
approved or denied. Another respondent stated that an offeror should 
still be precluded from seeking SAFETY Act coverage. If the provision 
is not removed, the respondent suggested narrowing of the applicability 
of the statements of inapplicability.
    Response: Offerors should be informed if DHS has advised the agency 
that the SAFETY Act is not applicable or has denied approval of a pre-
qualification designation notice. However, to the extent that the 
wording of the provision might cause some confusion, the Councils have 
reworded the provision as follows:
    ``The Government has determined that for purposes of this 
solicitation the product(s) or service(s) being acquired by this 
action are neither presumptively nor actually entitled to a pre-
determination that the products or services are qualified anti-
terrorism technologies as that term is defined by the Support Anti-
terrorism by Fostering Effective Technologies Act of 2002 (SAFETY 
Act), 6 U.S.C. 441-444. This determination does not prevent sellers 
of technologies from applying for SAFETY Act protections in other 
contexts. Proposals in which either acceptance or pricing is made 
contingent upon SAFETY Act designation as a qualified anti-terrorism 
technology or SAFETY Act certification as an approved product for 
homeland security of the proposed product or service will not be 
considered for award. See Federal Acquisition Regulation subpart 
50.2.''
    9. SAFETY Act Prequalification Designation Notice (52.250-4). One 
respondent suggested that the language in 52.250-4(d) be amended to 
more accurately reflect the difference between a determination granting 
a SAFETY Act application and solicitation specifications.
    Response: The language in 52.250-4(d) has been amended to more 
accurately reflect these differences. This amended language is set 
forth as follows:
    (d) All determinations by DHS are based on factors set forth in 
the SAFETY Act, and its implementing regulations. A determination by 
DHS to issue a SAFETY Act designation, or not to issue a SAFETY Act 
designation for a particular technology as a QATT is not a 
determination that the technology meets, or fails to meet, the 
requirements of any solicitation issued by any Federal, state, 
local, or tribal governments. Determinations by DHS with respect to 
whether to issue a SAFETY Act designation for technologies submitted 
for DHS review are based on the factors identified in 6 CFR Section 
25.4(b).
    10. Alternate II to 52.250-3 and 52.250-4.
    a. Insurance requirements and ``good faith''. One respondent 
suggested that the contractor should have the flexibility to negotiate 
the insurance requirements based on DHS's grant of a designation or 
certification.
    One respondent wanted the insurance requirement in the FAR removed 
for a different reason, as well as the requirement that the offeror 
pursues its application in ``good faith.'' The respondent is concerned 
that DHS has the exclusive statutory and regulatory authority for 
implementing the SAFETY Act, including establishment and enforcement of 
requirements for securing designation or certification, and provides 
consequences if the company does not agree to the insurance 
requirements. Furthermore, only DHS can address the question of whether 
a seller is pursuing an application in ``good faith.''
    Response: The respondent's comment cannot be addressed through 
regulations in the FAR. The insurance required by DHS is based in 
statute and the implementing DHS regulations. Any flexibility with 
regard to DHS's required amounts of insurance is a part of DHS's 
analysis when reviewing a particular SAFETY Act application and is not 
a subject of negotiation during a contract award.
    Although the Councils concur that DHS is the agency that imposes 
the insurance requirements and can determine if an application is being 
pursued in good faith, nevertheless, it would be irresponsible to award 
a contract to an offeror with a presumption that designation will be 
received, if these conditions are not met.
    b. Limited scope of SAFETY Act applications. Paragraph (f)(2) of 
Alternate II to 52.250-3 and 52.250-4 requires the offeror to file a 
SAFETY Act designation (or SAFETY Act certification) application, 
limited to the scope of the applicable block designation (or 
certification) or pre-qualification designation notice, in order to be 
eligible for award. The respondent was concerned that this limitation 
could have harsh results, precluding award where an offeror's 
technology may provide a more robust solution than definitively 
required. The

[[Page 2737]]

respondent considered that the potential exclusion of technologies 
outweighs the need to expedite the procurement process.
    Response: Alternate II puts the Government in the unusually risky 
position of awarding a contract presuming that SAFETY Act coverage will 
be granted after award, and agreeing to negotiate an equitable 
adjustment if that does not occur. The Government only agrees to this 
alternate when certain conditions are met, including the fact that DHS 
has already issued a block designation or a block certification, or a 
pre-qualification designation notice for the solicited technology. 
Considering the risk involved in these circumstances, the Government 
cannot afford the additional risk that would be generated if the 
offeror then proposes a technology that is outside or beyond the scope 
of the technologies that have been already block designated or 
certified by DHS or reviewed and either affirmatively or presumptively 
endorsed by DHS as technologies that meet the criteria of the SAFETY 
Act. Without these assurances in advance, the Government cannot afford 
the risk of presuming that SAFETY Act designation or certification will 
be granted after contract award.
    c. Before or after award. One respondent questioned why the clause 
at FAR 52.250-4, Alternate II, paragraph (f)(1) addresses submission of 
proposals presuming SAFETY Act coverage ``before or after'' award, but 
the heading at 50.205-4 states ``presuming SAFETY Act designation or 
certification after contract award.''
    Response: At the time proposals are submitted, it is not yet known 
if SAFETY Act coverage will be received before or after award. If 
SAFETY Act coverage is received before award, there is no issue. 
However, if award must be made and SAFETY Act coverage has not yet been 
granted, then the special conditions must apply because award must be 
made based on the presumption that SAFETY Act coverage will be granted 
after award.
    11. SAFETY Act--Equitable Adjustment (52.250-5).
    a. Several respondents suggested that as part of the equitable 
adjustment clause at 52.250-5 the contractor should be allowed to stop 
work unilaterally.
    Response: This suggestion is contrary to long standing Government 
procurement law and procedures and therefore, will not be considered 
further as part of this case. The contractor is not forced to submit an 
offer.
    b. One respondent had a concern that under Alternate II, award can 
be made and delivery required, prior to receipt of SAFETY Act coverage. 
The respondent suggested modification of 52.250-5 to allow delayed 
delivery, without penalty, until SAFETY Act coverage is granted.
    Response: This suggestion is inconsistent with the reasons for 
using this Alternate. The reason for proceeding to award under this 
alternate is based on a presumption of receiving SAFETY Act coverage 
after award. Therefore, the risk would have to be weighed against the 
urgency to award a contract. If delay would be acceptable, then there 
is no need to accept the risk of awarding a contract based on a 
contingency. In this case, it would be better to use Alternate I 
instead of Alternate II, and not make the award until the issue of 
SAFETY Act coverage is resolved.
    c. One respondent wanted clarification of the meaning of ``a 
dispute in accordance with the ``Disputes'' clause of this contract.''
    Response: The Councils consider that ``in accordance with the 
`Disputes' clause of this contract'' in paragraph (d)(3) of the clause 
is sufficiently clear.
    12. Comments on Subpart 50.1.
    a. One respondent made the statement that the changes in FAR 
50.102-3 to the procedures for an Agency to exercise the authority 
under paragraph 1A of E.O. 10789 would reduce the number of 
indemnifications granted.
    Response: This may well be true. However, these procedures 
implemented as part of this rule reflect the transfer and delegation of 
certain functions to, and other responsibilities vested in, the 
Secretary of DHS, which stem directly from Executive Order 13286 and 
therefore, cannot be changed by this case.
    b. The respondent also commented on other sections in Subpart 50.1.
    Response: The interim rule republished existing language because of 
the massive renumbering of the sections. Renumbering is not a 
substantive change. The intention of this rulemaking was to take 
comments solely relating to the Safety Act. Therefore, comments on 
sections containing existing language where only the numbering was 
changed are outside the scope of this case.
    13. SAFETY Act Block Designation/Certification (52.250-3). Two 
respondents suggested that the SAFETY Act Certification is not a 
certification provided by the contractor and thus the provisions of the 
case should be placed in Section L of contracts and not Section K.
    Response: This comment is accepted and the appropriate changes will 
be made in the clause matrix. A SAFETY Act Certification is a 
certification issued by DHS, not by the offerors.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., because this rule imposes no 
burdens on businesses. Instead, it allows businesses to more easily 
take advantage of a Department of Homeland Security regulation 
published June 8, 2006, at 6 CFR part 25. The Department of Homeland 
Security certified in their rule that there would be no significant 
impact on a substantial number of small entities. The Councils did not 
receive any comments on the Regulatory Flexibility Act or a perceived 
burden on small business.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply. These changes to the 
FAR do not impose additional information collection requirements to the 
paperwork burden previously approved under OMB Control Numbers 1640-
0001 through 1640-0006, under applications made to OMB by the 
Department of Homeland Security.

List of Subjects in 48 CFR Parts 1, 7, 18, 28, 32, 33, 43, 50, and 
52

    Government procurement.

    Dated: December 24, 2008.
Edward Loeb,
Acting Director, Office of Acquisition Policy.

0
Interim Rule Adopted as Final With Changes
0
Accordingly, the interim rule amending 48 CFR parts 1, 7, 18, 28, 32, 
33, 43, 50, and 52 which was published in the Federal Register at 72 FR 
63027 on November 7, 2007, is adopted as a final rule with the 
following changes:

0
1. The authority citation for 48 CFR parts 1, 7, 18, 28, 32, 33, 43, 
50, and 52 continues to read as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

[[Page 2738]]

PART 50--EXTRAORDINARY CONTRACTUAL ACTIONS AND THE SAFETY ACT

0
2. Amend section 50.201 by--
0
a. Adding, in alphabetical order, the definitions ``Block 
certification'' and ``Block designation'';
0
b. Amending the definition ``Pre-qualification designation notice'' by 
removing the word ``successful''; and
0
c. Revising the definitions ``SAFETY Act certification'' and ``SAFETY 
Act designation''.
0
The added and revised text reads as follows:


50.201  Definitions.

* * * * *
    Block certification means SAFETY Act certification of a technology 
class that the Department of Homeland Security (DHS) has determined to 
be an approved class of approved products for homeland security.
    Block designation means SAFETY Act designation of a technology 
class that the DHS has determined to be a Qualified Anti-Terrorism 
Technology (QATT).
* * * * *
    SAFETY Act certification means a determination by DHS pursuant to 6 
U.S.C. 442(d), as further delineated in 6 CFR 25.8 and 25.9, that a 
QATT for which a SAFETY Act designation has been issued is an approved 
product for homeland security, i.e., it will perform as intended, 
conforms to the seller's specifications, and is safe for use as 
intended.
    SAFETY Act designation means a determination by DHS pursuant to 6 
U.S.C. 441(b) and 6 U.S.C. 443(a), as further delineated in 6 CFR 25.4, 
that a particular Anti-Terrorism Technology constitutes a QATT under 
the SAFETY Act.

0
3. Amend section 50.203 by adding a sentence to the end of paragraph 
(c) to read as follows:


50.203  General.

* * * * *
    (c) * * * Included on this website are block designations and block 
certifications granted by DHS.

0
4. Amend section 50.204 by revising paragraph (a)(1); and amending 
paragraph (b) by removing the word ``certification'' and adding 
``certification occurring'' in its place. The revised text reads as 
follows:


50.204  Policy.

    (a) * * *
    (1) Determine whether the technology to be procured is appropriate 
for SAFETY Act protections and, if appropriate, formally relay this 
determination to DHS for purposes of supporting contractor 
application(s) for SAFETY Act protections in relation to criteria 
(b)(viii) of 6 CFR 25.4, Designation of Qualified Anti-Terrorism 
Technologies;
* * * * *

0
5. Amend section 50.205-1 by revising the introductory text of 
paragraph (a) and paragraph (a)(1); and amending paragraph (b) by 
removing the word ``possible'' and adding ``possible (see FAR 
7.105(b)(19)(v))'' in its place. The revised text reads as follows:


50.205-1  SAFETY Act Considerations.

    (a) SAFETY Act applicability. Requiring activities should review 
requirements to identify potential technologies that prevent, detect, 
identify, or deter acts of terrorism or limit the harm such acts might 
cause, and may be appropriate for SAFETY Act protections. In 
questionable cases, the agency shall consult with DHS. For acquisitions 
involving such technologies, the requiring activity should ascertain 
through discussions with DHS whether a block designation or block 
certification exists for the technology being acquired.
    (1) If one does exist, the requiring activity should request that 
the contracting officer notify offerors.
* * * * *

0
6. Amend section 50.205-2 by adding a new sentence after the first 
sentence in paragraph (a)(1) to read as follows:


50.205-2  Pre-qualification designation notice.

    (a)(1) * * * Such a request for a pre-qualification designation 
notice should be made once the requiring activity has determined that 
the technology specifications or statement of work are established and 
are unlikely to undergo substantive modification. * * *
* * * * *

0
7. Amend section 50.205-3 by revising paragraph (b) to read as follows:


50.205-3  Authorization of offers contingent upon SAFETY Act 
designation or certification before contract award.

* * * * *
    (b) Contracting officers shall not authorize offers contingent upon 
obtaining a SAFETY Act certification (as opposed to a SAFETY Act 
designation), unless a block certification applies to the class of 
technology to be acquired under the solicitation.

0
8. Amend section 50.205-4 by revising paragraph (b) to read as follows:


50.205-4  Authorization of awards made presuming SAFETY Act designation 
or certification after contract award.

* * * * *
    (b) Contracting officers shall not authorize offers presuming that 
SAFETY Act certification will be obtained (as opposed to a SAFETY Act 
designation), unless a block certification applies to the class of 
technology to be acquired under the solicitation.


50.206  [Amended]

0
9. Amend section 50.206 in paragraphs (b)(3) and (c)(3) by removing the 
word ``alter'' and adding the word ``increase'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
10. Amend section 52.250-2 by revising the date of the provision and 
the provision to read as follows:


52.250-2  SAFETY Act Coverage Not Applicable.

* * * * *

SAFETY ACT COVERAGE NOT APPLICABLE (FEB 2009)

    The Government has determined that for purposes of this 
solicitation the product(s) or service(s) being acquired by this 
action are neither presumptively nor actually entitled to a pre-
determination that the products or services are qualified anti-
terrorism technologies as that term is defined by the Support Anti-
terrorism by Fostering Effective Technologies Act of 2002 (SAFETY 
Act), 6 U.S.C. 441-444. This determination does not prevent sellers 
of technologies from applying for SAFETY Act protections in other 
contexts. Proposals in which either acceptance or pricing is made 
contingent upon SAFETY Act designation as a qualified anti-terrorism 
technology or SAFETY Act certification as an approved product for 
homeland security of the proposed product or service will not be 
considered for award. See Federal Acquisition Regulation subpart 
50.2.

    (End of provision)

0
11. Amend section 52.250-3 by--
0
a. Revising the date of the provision;
0
b. In paragraph (a) by--
0
1. Adding, in alphabetical order, the definitions ``Block 
certification'' and ``Block designation''; and
0
2. Revising the definitions ``SAFETY Act certification'' and ``SAFETY 
Act designation'';
0
c. Revising paragraph (d);
0
d. Amending paragraph (e) by removing the word ``room'' and adding the 
word ``Room'' in its place;
0
e. In Alternate I by revising the date of the alternate and paragraphs 
(f)(2) and (f)(3); and
0
f. In Alternate II by revising the date of the alternate; and amending 
paragraph (f)(2)(iii) by removing the

[[Page 2739]]

word ``any'' and adding ``the offeror's'' in its place.
0
The added and revised text reads as follows:


52.250-3  SAFETY Act Block Designation/Certification.

* * * * *

SAFETY ACT BLOCK DESIGNATION/CERTIFICATION (FEB 2009)

    (a) * * *
* * * * *
    Block certification means SAFETY Act certification of a 
technology class that the Department of Homeland Security (DHS) has 
determined to be an approved class of approved products for homeland 
security.
    Block designation means SAFETY Act designation of a technology 
class that the DHS has determined to be a Qualified Anti-Terrorism 
Technology (QATT).
* * * * *
    SAFETY Act certification means a determination by DHS pursuant 
to 6 U.S.C. 442(d), as further delineated in 6 CFR 25.9, that a QATT 
for which a SAFETY Act designation has been issued is an approved 
product for homeland security, i.e., it will perform as intended, 
conforms to the seller's specifications, and is safe for use as 
intended.
    SAFETY Act designation means a determination by DHS pursuant to 
6 U.S.C. 441(b) and 6 U.S.C. 443(a), as further delineated in 6 CFR 
25.4, that a particular Anti-Terrorism Technology constitutes a QATT 
under the SAFETY Act.
* * * * *
    (d) All determinations by DHS are based on factors set forth in 
the SAFETY Act and its implementing regulations. A determination by 
DHS to issue a SAFETY Act designation, or not to issue a SAFETY Act 
designation for a particular technology as a QATT is not a 
determination that the technology meets, or fails to meet, the 
requirements of any solicitation issued by any Federal, State, local 
or tribal governments. Determinations by DHS with respect to whether 
to issue a SAFETY Act designation for technologies submitted for DHS 
review are based on the factors identified in 6 CFR 25.4(b).
* * * * *

    Alternate I (FEB 2009). * * *

    (f)(1) * * *
    (2) If an offer is submitted contingent upon receipt of SAFETY 
Act designation (or SAFETY Act certification, if a block 
certification exists) prior to contract award, then the Government 
may not award a contract based on such offer unless the offeror 
demonstrates prior to award that DHS has issued a SAFETY Act 
designation (or SAFETY Act certification, if a block certification 
exists) for the offeror's technology.
    (3) The Government reserves the right to award the contract 
based on a noncontingent offer, prior to DHS resolution of the 
offeror's application for SAFETY Act designation (or SAFETY Act 
certification, if a block certification exists).

    Alternate II (FEB 2009). * * *
* * * * *

0
12. Amend section 52.250-4 by--
0
a. Revising the date of the provision;
0
b. In paragraph (a) by--
0
1. Adding, in alphabetical order, the definitions ``Block 
certification'' and ``Block designation'';
0
2. Removing from the definition ``Pre-qualification designation 
notice'' the word ``successful''; and
0
3. Revising the definitions ``SAFETY Act certification'' and ``SAFETY 
Act designation'';
0
c. Revising paragraph (d);
0
d. In Alternate I by revising the date of the alternate and paragraphs 
(f)(2) and (f)(3); and
0
e. In Alternate II by revising the date of the alternate; and amending 
paragraph (f)(2)(iii) by removing the word ``any'' and adding ``the 
offeror's'' in its place.
0
The added and revised text reads as follows:


52.250-4  SAFETY Act Pre-qualification Designation Notice.

* * * * *
    SAFETY ACT PRE-QUALIFICATION DESIGNATION NOTICE (FEB 2009)

    (a) * * *
* * * * *
    Block certification means SAFETY Act certification of a 
technology class that the Department of Homeland Security (DHS) has 
determined to be an approved class of approved products for homeland 
security.
    Block designation means SAFETY Act designation of a technology 
class that the DHS has determined to be a Qualified Anti-Terrorism 
Technology (QATT).
* * * * *
    SAFETY Act certification means a determination by DHS pursuant 
to 6 U.S.C. 442(d), as further delineated in 6 CFR 25.9, that a QATT 
for which a SAFETY Act designation has been issued is an approved 
product for homeland security, i.e., it will perform as intended, 
conforms to the seller's specifications, and is safe for use as 
intended.
    SAFETY Act designation means a determination by DHS pursuant to 
6 U.S.C. 441(b) and 6 U.S.C. 443(a), as further delineated in 6 CFR 
25.4, that a particular Anti-Terrorism Technology constitutes a QATT 
under the SAFETY Act.
* * * * *
    (d) All determinations by DHS are based on factors set forth in 
the SAFETY Act and its implementing regulations. A determination by 
DHS to issue a SAFETY Act designation, or not to issue a SAFETY Act 
designation for a particular Technology as a QATT is not a 
determination that the Technology meets, or fails to meet, the 
requirements of any solicitation issued by any Federal, State, local 
or tribal governments. Determinations by DHS with respect to whether 
to issue a SAFETY Act designation for Technologies submitted for DHS 
review are based on the factors identified in 6 CFR 25.4(b).
* * * * *

    Alternate I (FEB 2009). * * *

    (f)(1) * * *
    (2) If an offer is submitted contingent upon receipt of SAFETY 
Act designation prior to contract award, then the Government may not 
award a contract based on such offer unless the offeror demonstrates 
prior to award that DHS has issued a SAFETY Act designation for the 
offeror's technology.
    (3) The Government reserves the right to award the contract 
based on a noncontingent offer, prior to DHS resolution of the 
offeror's application for SAFETY Act designation.

    Alternate II (FEB 2009). * * *
* * * * *

0
13. Amend section 52.250-5 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a) by--
0
1. Adding the definitions ``Block certification'' and ``Block 
designation'' in alphabetical order; and
0
2. Revising the definitions ``SAFETY Act certification'' and ``SAFETY 
Act designation''.
0
The added and revised text reads as follows:


52.250-5  SAFETY Act--Equitable Adjustment.

* * * * *

SAFETY ACT--EQUITABLE ADJUSTMENT (FEB 2009)

    (a) * * *
* * * * *
    Block certification means SAFETY Act certification of a 
technology class that the Department of Homeland Security (DHS) has 
determined to be an approved class of approved products for homeland 
security.
    Block designation means SAFETY Act designation of a technology 
class that the DHS has determined to be a Qualified Anti-Terrorism 
Technology (QATT).
* * * * *
    SAFETY Act certification means a determination by DHS pursuant 
to 6 U.S.C. 442(d), as further delineated in 6 CFR 25.9, that a QATT 
for which a SAFETY Act designation has been issued is an approved 
product for homeland security, i.e., it will perform as intended, 
conforms to the seller's specifications, and is safe for use as 
intended.
    SAFETY Act designation means a determination by DHS pursuant to 
6 U.S.C. 441(b) and 6 U.S.C. 443(a), as further delineated in 6 CFR 
25.4, that a particular Anti-Terrorism Technology constitutes a QATT 
under the SAFETY Act.
* * * * *

[FR Doc. E9-577 Filed 1-14-09; 8:45 am]
BILLING CODE 6820-EP-S