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Is it safe to do business with the U.S. Department of Homeland Security? Not yet, say lawyers who specialize in guiding corporate clients to lucrative contracts with government agencies. These advisers say there are hundreds of companies anxious to pitch their products and services to the department. But many businesses remain frustrated by a lack of guidance from the agency on a crucial issue: their potential exposure to legal claims from victims of any future terrorist attacks. Homeland Security secretary Tom Ridge’s new domain seems to offer a bonanza for government contractors. The agency’s 2004 budget provides $809 million for the development, testing, and evaluation of antiterrorism technology. And in late March, President George Bush asked Congress to dole out another $1.5 billion to the department to cover “terrorism-related prevention, preparedness, or response requirements.” So far, say government contract experts, the Homeland Security contracting boom has yet to fully materialize. One key reason: fear of lawsuits. Under the law that breathed life into the department last November, companies that provide products and services may be eligible for a statutory shield against civil lawsuits based on terrorist acts. The trouble is that the department has yet to spell out exactly how companies will qualify for this protection. “There is a real need for expedition here to get the regulations and procedures out and start the process,” says James McCullough, a Washington, D.C., partner in Fried, Frank, Harris, Shriver & Jacobson’s litigation department. “It’s not clear how anyone is going to qualify.” The Homeland Security Act of 2002 includes a provision giving companies that sign on with the department protection from lawsuits that arise from antiterrorist products and services. Known as the Safety Act, the provision makes it clear that a product needs Ridge’s approval for inclusion on a list of antiterrorism technologies given liability protections. But the provision doesn’t explain how to apply for approval as a qualified antiterrorism technology � or spell out how the department will go about certifying the products. Qualified antiterrorism products could include technologies such as chemical weapons sensors, optical scanners, and explosives detectors. So in the meantime, lawyers are advising clients to wait to submit applications for security contracts until the questions are answered. When might that happen? The department’s general counsel is working on the regulations with its science and technology directorate, as well as the Office of Management and Budget. But at press time Homeland officials would not give a date.

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