<DOC> [108th Congress House Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:91553.wais] IMPLEMENTING THE SAFETY ACT: ADVANCING NEW TECHNOLOGIES FOR HOMELAND SECURITY ======================================================================= HEARING before the COMMITTEE ON GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS FIRST SESSION __________ OCTOBER 17, 2003 __________ Serial No. 108-96 __________ Printed for the use of the Committee on Government Reform Available via the World Wide Web: http://www.gpo.gov/congress/house http://www.house.gov/reform ______ 91-553 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 2003 ____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512ÿ091800 Fax: (202) 512ÿ092250 Mail: Stop SSOP, Washington, DC 20402ÿ090001 COMMITTEE ON GOVERNMENT REFORM TOM DAVIS, Virginia, Chairman DAN BURTON, Indiana HENRY A. WAXMAN, California CHRISTOPHER SHAYS, Connecticut TOM LANTOS, California ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland DOUG OSE, California DENNIS J. KUCINICH, Ohio RON LEWIS, Kentucky DANNY K. DAVIS, Illinois JO ANN DAVIS, Virginia JOHN F. TIERNEY, Massachusetts TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri CHRIS CANNON, Utah DIANE E. WATSON, California ADAM H. PUTNAM, Florida STEPHEN F. LYNCH, Massachusetts EDWARD L. SCHROCK, Virginia CHRIS VAN HOLLEN, Maryland JOHN J. DUNCAN, Jr., Tennessee LINDA T. SANCHEZ, California JOHN SULLIVAN, Oklahoma C.A. ``DUTCH'' RUPPERSBERGER, NATHAN DEAL, Georgia Maryland CANDICE S. MILLER, Michigan ELEANOR HOLMES NORTON, District of TIM MURPHY, Pennsylvania Columbia MICHAEL R. TURNER, Ohio JIM COOPER, Tennessee JOHN R. CARTER, Texas CHRIS BELL, Texas WILLIAM J. JANKLOW, South Dakota ------ MARSHA BLACKBURN, Tennessee BERNARD SANDERS, Vermont (Independent) Peter Sirh, Staff Director Melissa Wojciak, Deputy Staff Director Rob Borden, Parliamentarian Teresa Austin, Chief Clerk Philip M. Schiliro, Minority Staff Director C O N T E N T S ---------- Page Hearing held on October 17, 2003................................. 1 Statement of: Albright, Parney, Assistant Secretary for Plans, Programs and Budgets, Department of Homeland Security................... 12 Miller, Harris N., president, Information Technology Association of America; Stan Z. Soloway, president, Professional Services Council; and John M. Clerici, esq., on behalf of the U.S. Chamber of Commerce.................. 36 Letters, statements, etc., submitted for the record by: Albright, Parney, Assistant Secretary for Plans, Programs and Budgets, Department of Homeland Security, prepared statement of............................................... 15 Clerici, John M., esq., on behalf of the U.S. Chamber of Commerce, prepared statement of............................ 69 Cummings, Hon. Elijah E., a Representative in Congress from the State of Maryland, prepared statement of............... 122 Davis, Chairman Tom, a Representative in Congress from the State of Virginia, prepared statement of................... 4 Maloney, Hon. Carolyn B., a Representative in Congress from the State of New York, prepared statement of............... 30 Miller, Harris N., president, Information Technology Association of America: Application kit.......................................... 79 Prepared statement of.................................... 39 Ruppersberger, Hon. C.A. Dutch, a Representative in Congress from the State of Maryland, prepared statement of.......... 22 Soloway, Stan Z., president, Professional Services Council, prepared statement of...................................... 60 Waxman, Hon. Henry A., a Representative in Congress from the State of California, prepared statement of................. 8 IMPLEMENTING THE SAFETY ACT: ADVANCING NEW TECHNOLOGIES FOR HOMELAND SECURITY ---------- FRIDAY, OCTOBER 17, 2003 House of Representatives, Committee on Government Reform, Washington, DC. The committee met, pursuant to notice, at 10:10 a.m., in room 2154, Rayburn House Office Building, Hon. Tom Davis (chairman of the committee) presiding. Present: Representatives Tom Davis of Virginia, Ose, Schrock, Duncan, Carter, Waxman, Maloney, Cummings, Ruppersberger, and Bell. Staff present: Peter Sirh, staff director; Melissa Wojciak, deputy staff director; Keith Ausbrook, chief counsel; John Hunter and David Young, counsels; David Marin, director of communications; John Cuaderes, senior professional staff member; Teresa Austin, chief clerk; Brien Beattie, deputy clerk; Corinne Zaccagnini, chief information officer; Michelle Ash, minority counsel; Jean Gosa, minority assistant clerk; and Cecelia Morton, minority office manager. Chairman Tom Davis. Good morning. A quorum being present, the Committee on Government Reform will come to order. I want to welcome everybody to today's hearing on the implementation of the Support Antiterrorism by Fostering Effective Technologies Act of 2002 [SAFETY Act]. The private sector is an important partner in providing for the security of our homeland. To ensure that private sellers, manufacturers and service providers contribute to homeland security by developing potentially life-saving technologies without having the fear of crippling or frivolous lawsuits, the government needs to provide litigation and risk management frameworks to adequately prepare for terrorist attacks. As part of the Homeland Security Act of 2002, Public Law 107-296, Congress enacted the SAFETY Act to provide incentives for the development and deployment of antiterrorism technologies by creating systems of risk management and litigation management. The SAFETY Act seeks to ensure that the threat of liability does not deter manufacturers or sellers of antiterrorism technologies from developing and commercializing technologies that could save lives. The act creates certain frameworks for ``claims arising out of, relating to or resulting from an act of terrorism'' where qualified antiterrorism technologies are deployed. The act does not limit liability for harms caused by antiterrorism technologies when no acts of terrorism have occurred. The SAFETY Act directs the Department of Homeland Security to adopt regulations to implement the liability protections conferred by the act for qualified antiterrorism technologies. Under the statute, these qualified technologies would receive several protections, including limiting lawsuits filed under the act to the Federal courts, prohibiting a plaintiff from recovering punitive damages, or permitting recovery of noneconomic damages such as damages for physical or emotional pain, and reducing any recovery from the seller by the amount of any collateral sources such as insurance payments. Some technologies qualified under the act may also qualify for a rebuttable ``government contractor defense.'' The government contractor defense could provide sellers and manufacturers immunity from product liability altogether when the qualified technology is deployed for the purposes of defending against or responding to a terrorist act. Under the act DHS can certify that the seller or manufacturer will receive this rebuttable defense if DHS determines that the technology will perform as intended, conforms to the seller's specifications and is safe for the use it's intended. But the defense will not protect sellers and manufacturers against charges of fraud or willful misconduct. The act requires DHS to adopt rules to implement the protections in the act. The timely adoption and implementation of those rules is the reason for our hearing today. On July 11, 2003, DHS announced the draft regulations implementing the SAFETY Act that were published in the Federal Register for public comment. Over 40 private firms and private sector associations submitted comments. An interim final rule has been released to the public. By passing the SAFETY Act, Congress acted quickly to resolve uncertainty over liability concerns so that the full power of the American technology could be unleashed in the war on terrorism. We gave DHS responsibility to develop a transparent process to accomplish these objectives. It is imperative that DHS begin qualifying existing and new technologies so that they can be placed in the hands of those who need them now, especially for those high-priority homeland security procurements that have been on hold pending the qualification of antiterrorism technologies already selected for use. For its part, when DHS issued the draft regulations in July, it stated it would begin accepting applications for SAFETY Act protections on September 1st, but the actual form to be used for private firms to qualify antiterrorism technologies wasn't approved by OMB until this week. Also the interim final rule was only issued by DHS this week. As a result of these bureaucratic delays, private firms have waited to submit applications until they have some finality in the application process and implementing regulations. It's imperative that DHS now mobilize its efforts to accomplish the critical purposes set out in the SAFETY Act. In so doing, DHS must identify and implement a clear strategy for prioritizing the many applications it will receive for the qualification of antiterrorism technologies. Congress did not intend for the SAFETY Act to be used solely as a means for the development of ``new'' antiterrorism technologies. While developing new technology is essential, I believe DHS needs to focus on qualifying ``existing'' antiterrorism technologies that are ready to be deployed to protect our civilian population. I urge the Department to make as its No. 1 priority the identification, prioritization and qualification of existing antiterrorism technologies that are now being sought by Federal and non-Federal entities. It's imperative that we protect the highest-priority facilities and critical infrastructures in high-risk locations. In addition, DHS must be careful that its implementing regulations and processes are not so complicated that they defeat the very purpose of the SAFETY Act. They should allow for the rapid deployment of antiterrorism technology necessary to protect the American people rather than create burdensome red tape and bureaucracy. Wherever possible, decisions regarding the suitability of antiterrorism technology should rest with those entities charged with the responsibility of acquiring the technology. It's also imperative that DHS adheres to a disciplined time schedule for processing applications. Through this hearing the committee intends to learn about the interim final rule promulgated by DHS and whether the rule effectuates the congressional intent of the act. The committee hopes this open discussion will result in effective implementation of the act. We have assembled an impressive group of witnesses to help us understand the statute, the proposed rules and the private sector concerns about the proposed rules. I want to thank all of our witnesses for appearing before the committee. I look forward to their testimony, and I now yield to Mr. Waxman. [The prepared statement of Chairman Tom Davis follows:] [GRAPHIC] [TIFF OMITTED] T1553.146 [GRAPHIC] [TIFF OMITTED] T1553.147 [GRAPHIC] [TIFF OMITTED] T1553.148 Mr. Waxman. Thank you very much, Mr. Chairman. I agree that the private sector can and should develop new and innovative technologies to respond to the ever-changing threats to the American people. I support all efforts to make the people of the United States safer, and I believe that the private sector has a role to play. I'm glad that the representatives of the private sector are here today to discuss their intentions to create these new technologies. However, the SAFETY Act, which we are discussing today, is a disappointment and moves in the wrong direction. This law is not about encouraging innovation, but rather its goal is to limit the legal liability of the defense contractors and other manufacturers of antiterrorism products and, in many circumstances, to give them absolute immunity. Even in those cases where there may be limited liability, the law bars access to State courts, eliminates punitive damages, eliminates joint liability, limits all forms of liability to the cost of, ``reasonably priced,'' insurance, and reduces judgments by the amount of insurance or other collateral source benefits. And while limiting or eliminating the liability of manufacturers, the law also severely restricts the ability of claimants to recover damages for their injuries, because it fails to provide for any alternative form of compensation or indemnification. This act is ironically called the SAFETY Act, when in reality the only safety it provides is to corporate wrongdoers. Corporations that sell defective products will now have nothing to fear. They will either have very limited liability or no liability at all. Let me give an example. Suppose the Homeland Security Department approves a process designed to test the water supply for contamination. The sellers of this service later discover that their process is ineffective, but continue to earn huge profits by falsely promising the safety of the water supply. If terrorists exploit this weakness, and citizens are poisoned by contaminated water, the sellers of the service are totally immune from all forms of liability if the product was certified for the government contractor defense. This is true even though their misconduct was intentional. This makes absolutely no sense. Why would we want to give corporations protection for intentional, knowing misbehavior? Mr. Chairman, as you know, I supported the Turner amendment to the Homeland Security Act extending indemnification protections to antiterrorism technologies. I believe Mr. Turner's amendment would have appropriately mitigated the seller's risk of proposal liability. Unfortunately, the Turner amendment lost in the House by 1 vote, and thus we are left with the SAFETY Act--immunity instead of indemnity. Although I did not support the SAFETY Act, I will agree that the SAFETY Act, like all laws, should be properly enforced by the administration. Therefore, I appreciate that we are having this oversight hearing today, and I look forward to hearing and reading the testimony on how the administration intends to implement this act. Chairman Tom Davis. Well, thank you very much. [The prepared statement of Hon. Henry A. Waxman follows:] [GRAPHIC] [TIFF OMITTED] T1553.001 [GRAPHIC] [TIFF OMITTED] T1553.002 [GRAPHIC] [TIFF OMITTED] T1553.003 [GRAPHIC] [TIFF OMITTED] T1553.004 Chairman Tom Davis. Mr. Ose, any opening statement? Any other Members wish to make an opening statement? Well, let's move to our first panel. I want to thank the honorable Parney Albright, the Assistant Secretary for Plans, Programs and Budgets of the Department of Homeland Security. It's the policy of this committee to swear people in before they testify. Would you rise and raise your right hand? [Witness sworn.] Chairman Tom Davis. We have your whole statement in the record. We have a light in front of you; when it turns orange, you'll be 4 minutes into your statement; red, 5 minutes, and if you could sum up about that time. Thanks for being with us. STATEMENT OF PARNEY ALBRIGHT, ASSISTANT SECRETARY FOR PLANS, PROGRAMS AND BUDGETS, DEPARTMENT OF HOMELAND SECURITY Mr. Albright. Thank you, Mr. Chairman, Mr. Waxman, committee members. I'm pleased to appear before you today to discuss the Department of Homeland Security's implementation of the Support Antiterrorism by Fostering Effective Technologies Act of 2002 [SAFETY Act]. As you may know, the SAFETY Act provides incentives for the development and deployment of qualified antiterrorism technologies by creating a system of ``risk management'' and a system of ``litigation management.'' The SAFETY Act is part of the Homeland Security Act of 2002, which is the organic legislation of the Department of Homeland Security. With the creation of the Department of Homeland Security, President Bush envisioned an organization that would engage entrepreneurs and tap America's inventive spirit in the war on terrorism. The Science and Technology Division of the Department is specifically tasked with marshalling the intellectual capital of the engineering and scientific communities to develop fresh and effective approaches to safeguard the American public from terrorist attacks. The SAFETY Act is an important vehicle for removing obstacles to the deployment of these capabilities to the field. Now, the purpose of the SAFETY Act is to ensure that the threat of liability does not deter potential manufacturers of qualified antiterrorism technologies from developing and commercializing technologies that could significantly reduce the risks or mitigate the effects of large-scale terrorist events. The act does create certain liability limitations for ``claims arising out of, relating to, or resulting from an act of terrorism'' where qualified antiterrorism technologies have been deployed. The act does not limit liability for harms caused by antiterrorism technologies when no act of terrorism has occurred, as was pointed out by the chairman. Clearly, the issue Congress is addressing concerns the uncertain risk environment born out of the threat of terrorism. The potential risks and liabilities that stem from the technologies deployed in our war against terrorism are very difficult to quantify. As a result, in many cases insurance has been largely unattainable or so costly as to leave the technologies in question without a market. It is hardly surprising that companies are unwilling to bet their existence by developing and deploying services and products in this uncertain climate. This means that key capabilities needed to secure the homeland may not be available for deployment. The SAFETY Act does serve to encourage the development and deployment of antiterrorism technologies that will significantly enhance the protection of the Nation by providing certain liability protections to allow the vast resources of the national research and development enterprise to be engaged for securing the homeland. Given the significance and complexity of this groundbreaking statute, the Department of Homeland Security decided to develop and publish a regulation setting forth the Department's policies and procedures for its implementation. The Department solicited comments on the proposed SAFETY Act regulation this summer and published an interim final rule that was signed by Secretary Ridge on October 10th, incorporating suggestions from many of the thoughtful comments provided by almost 45 organizations and individuals during the first public comment period. Under the interim rule, we will continue to accept and entertain comments as we begin the process of executing the act. The Department is, under the rule, implementing the SAFETY Act within the Science and Technology Division and I, as Assistant Secretary, am responsible for evaluating applications and recommending to the Under Secretary for Science and Technology whether antiterrorism technologies should be approved or rejected for a designation or certification under the authority delegated to him by the Secretary under the regulation. Users of a technology designated as a qualified antiterrorism technology under the SAFETY Act enjoy significant liability protection. Specifically, liability is limited in scope to only the seller of the technology and is limited to an amount where the requisite insurance coverage does not unreasonably distort the price of the technology. The statute provides for a very broad definition of ``technology,'' including tangible products, software and services, including support services. The seven criteria specified in the statute for designation of a technology seek, in essence, three kinds of information. The first is technical. Does the technology work? Does it provide useful levels of performance in scenarios of interest? Is it mature? What specific threats does the technology address? What is the level of risk exposure to the public if the technology is not deployed? And then there are economic and actuarial issues. How does the risk of liability affect demand for the product toward its deployability? What are the liability risks? There are additional criteria associated with certification. In particular, detailed safety and hazard data are required in the statute in order for a technology to qualify for the government contractor defense presumption. This presents a very complex and unusual analytic challenge. We are striving for consistent and equitable methodologies that implement the intent of Congress while retaining flexibility to assess the vast array of potential technologies within a constantly changing threat environment. To do this we have created a SAFETY Act Office to house permanent Federal staff to oversee the effort. We have over 100 government scientists and engineers in the Science and Technology Directorate along with the vast resources of our national labs to help evaluate the required data and perform the requisite analyses. We have, to assist us in these efforts, the support of Mr. Joe Whitley, the DHS General Counsel. He and his staff have played a pivotal role during the rulemaking process and are available to address legal policy issues as they arise. We have contracted with an FFRDC--or actually, we are in the process of contracting with an FFRDC to provide analytic support, and they bring a broad-capacity performing requisite, proven objectivity and ability to access both classified and proprietary data. They also provide a broad and deep capacity for performing the requisite economic analyses and have supplemented their expertise with specialists from a number of academic institutions. We're also working with academia, in particular Georgia State University, the University of Georgia and others to evaluate actuarial data. And then finally, we have contracted with Integrated Data Systems to develop and implement a Web-based application and evaluation tracking process. This is intended to provide an online tracking capability so that businesses can check the status of their applications and for the government to efficiently evaluate, monitor and archive the application. We've implemented a pre-application process to assist particularly small businesses in this process so they can get an initial read on their application without having to go through the trouble and expense of filling the full application out. Recently, I and my SAFETY Act team went on the road and held seminars and fielded questions in Dallas, Los Angeles, Atlanta, Chicago and, just this past Tuesday, in Washington, DC, to inform the American business community about the act and its implementation. The interim rule is in place. The application kit is available. The information seminars are complete. We are now initiating implementation of the act. Thank you for the opportunity to address this important issue with you today, and I look forward to your questions. Chairman Tom Davis. Thank you. [The prepared statement of Mr. Albright follows:] [GRAPHIC] [TIFF OMITTED] T1553.005 [GRAPHIC] [TIFF OMITTED] T1553.006 [GRAPHIC] [TIFF OMITTED] T1553.007 [GRAPHIC] [TIFF OMITTED] T1553.008 [GRAPHIC] [TIFF OMITTED] T1553.009 [GRAPHIC] [TIFF OMITTED] T1553.010 Chairman Tom Davis. Mr. Ruppersberger, I know you had to make---- Mr. Ruppersberger. Thank you for letting me go, Mr. Chairman. First I applaud the committee and you, Mr. Chairman, for holding this hearing today on implementing the SAFETY Act. It is refreshing to be assessing the progress of implementation as that process is underway. It seems these issues often occur and come to our attention after a problem arises. As one who was not a Member of Congress when this legislation passed--and I understand the liabilities debate that took place--I think this oversight hearing is extremely important at this point in the process. I'm encouraged that Congress is working with the Department of Homeland Security and the other stakeholders to acquire the technology and tools we need so desperately to protect our country. Technology is an integral part of our world today. It is a critical tool to solve both business and government problems. Never has the need for advanced technology solutions been more important than in the war on terror. I agree with the research incentives the SAFETY Act provided to encourage the private sector to find the best tools available to help us achieve this victory but, as we all know, technology is not perfect, and there are inherent difficulties. Balancing the good with the problematic is the difficult challenge the Department of Homeland Security faces today. Balancing the realities of indemnity versus immunity is a difficult challenge for Congress. I commend the Department for making the rule process so open and public, and I hope that the comments offered will be carefully reviewed and incorporated into the final rule. Thank you. Chairman Tom Davis. Thank you very much. [The prepared statement of Hon. C.A. Dutch Ruppersberger follows:] [GRAPHIC] [TIFF OMITTED] T1553.143 [GRAPHIC] [TIFF OMITTED] T1553.144 Chairman Tom Davis. Let me ask, what has taken so long to get this thing up? Mr. Albright. Well, Mr. Chairman, we--as you know, the Department--the SAFETY Act in principle was signed into law on January 24th. The departmental resources became available on March 1st, and we published a draft rule, as you pointed out, this summer. As you well know, this is normally an 18-month process to get---- Chairman Tom Davis. But we're fighting a war on terrorism, and we want to get these products in there. If it's business as usual in terms of moving things through, we're not going to accomplish the mission. Now, we had a huge fight on the Hill whether to take Mr. Turner's indemnification or to take this. The administration wanted this. I actually prefer Mr. Turner's, but I gave deference to the administration in terms of the way we do this. This act was passed so that we could encourage companies who have products that can help us fight the war on terrorism to participate in the government procurement process. These are companies that traditionally don't do it. That is the goal of this legislation, and we have companies out there screaming and not knowing what is going on. And, you know, the faster we get these products up and running, the safer we are. And I think that has been the purpose of it. I mean, Mr. Waxman talked about--his example really I don't think is correct under the law. My understanding is a SAFETY Act designation isn't valid if the technology doesn't perform as it's stated when it's approved by DHS. DHS will put the criteria around each approved designation. If the criteria aren't met, then there's liability. If the criteria are met, then you obviously don't have the same vulnerability. That was the purpose of this. Mr. Albright. Mr. Chairman, I would agree with you. This is not a situation where we want to perform business as usual. As I started to say, what we've done is we have taken a process that normally takes 18 to 24 months, and we've compressed it to 7. This is an extraordinarily complex piece of legislation. It's short in the act, but it's very complex, and the complexities of the implementation are what led us to, in fact, publish a rule--have the desire to publish a regulation in the first place. And then as I pointed out in my opening comments, we've got a lot of very thoughtful responses from industry and from individuals about the draft rule that we felt it important to carefully consider and include where relevant in the draft interim rule. So actually I'm actually very proud of the fact that this Department has managed to get, as I said, a very lengthy regulatory process compressed to an extraordinarily short period of time. I do agree with your point. Let me just add that technologies that don't work, we intend, for example, to fully look at the set of technical data that is available for technologies and the test and evaluation data that's available, and look at the scenarios that are relevant to those technologies, and assess whether or not it, in fact, is effective. And if it turns out that it is not effective, then I would agree with you. I think that would then cause the technology to fall outside the contours of the designation---- Chairman Tom Davis. Let me ask you this. Since this process is so complicated, since it's highly interactive, it's specific to each individual application, do we have any internal appeal process of the decision by the Secretary? Then it makes sense to provide some review process within DHS rather than subject applicants in the Department to a court review, which is what you get otherwise. Mr. Albright. I think actually the way you stated the question, that actually is a rationale for why we have not included a formal appeal process in this. This is, as you said, an extraordinarily complex and nuanced process with a great deal of interaction that occurs between the applicant fix and the reviewers. To put in an appeals process by someone who really hasn't been exposed to that very complex review of technical and financial and actuarial data would leave us open, frankly, to capriciousness, we think, and second-guessing. Or the person who would be conducting the appeal would be in a situation where they would just simply ask the Under Secretary for their opinion again, and they would get it again. So it either would fall into the category of a pro forma appeal or, I think, lead us down the path toward a capricious implementation of the act. Chairman Tom Davis. Well, let me ask you this. Do you think you're taking into account the users of the technology and their needs as opposed to what you think they need? I mean, do you have any conversations---- Mr. Albright. Absolutely. Of course we're going to consider and provide considerable weight to the needs of the user community when considering the efficacy of the technology in question. There's a wide variety of such needs, and very different threat environments, large differences in the availability of existing countermeasures, and all of those things drove the need to maximize the flexibility of the implementation of the act and to avoid a one-size-fits-all implementation, as you're implying in your statement--in your question. It's important to know, however, that translating a user's effectiveness needs into measurable technical performance parameters is a complex and often difficult process, and as I would expect very close interaction between the scientists and engineers who must review the technical performance data and the user community, which, of course, is--they just want something that works. Chairman Tom Davis. Thank you. Mr. Bell. Mr. Bell. Thank you, Mr. Chairman. And thank you for your testimony here today. Since the Department is now seeking further comment on the interim rule, I'm curious as to when we could expect any new regulations from the Department coming forward. Mr. Albright. Let's see. The comment period is open for an additional 60 days, and at that time we would have to assess and review the comments and determine what changes are necessary in the finalization of the rule, if any, and then we would begin the process of finalizing the rule at that time. Mr. Bell. How long do you think the review process of the comments will take? Mr. Albright. It clearly depends on the complexity of the comments, but I would expect--in the last case it took a few weeks--so I would expect that to be the case this time around as well. Mr. Bell. As far as a timeline goal, do you have one as we---- Mr. Albright. Let's see. You know, I always hesitate to nail myself down to a date, but let's say that--as I said, a comment period closes in 60 days; that's mid-December. So there's no reason why after the holidays you wouldn't see a final rule, say mid-January, something like that. Mr. Bell. As the Chair pointed out, it is a rather complex process, and I'm curious as to what is in place to protect the proprietary information throughout the entire process. Mr. Albright. It is our belief and the belief of our general counsel that current FOIA exemptions protect the proprietary nature of the information that would be provided in the application. And then, of course, there's also the Federal Trade Secrets Act which provides for criminal penalties for those who unlawfully disclose proprietary information to the public. So that is our belief at this time. We are, of course, continuing to review that. As you know, that is a comment we have received. We've received quite a few comments on that issue, and so we're continuing to review that, and should we find that, in fact, there is a need for additional protection of proprietary information, we will certainly work with Congress to make that happen. Having said that, I should point out that a Federal regulation can't trump FOIA, and so that's a statute. So if there is, in fact, a need for a change in law, then we would have to work with you to make that happen. But otherwise, it is our belief at this time that the current regulations, in fact, do provide adequate protection. Mr. Bell. What are some of the additional protections that have been discussed as possibilities? Mr. Albright. Well, the exemptions that exist today within FOIA, there's two of them. I think it's Exemption 4, which is disclosure of proprietary information, and then there's Exemption 1, which has to do with national security information. And as I pointed out, there's the Federal Trade Secrets Act. As I said, at this time we don't believe we need additional statutory relief in order to further protect the data. However, if, in fact, additional legal analysis indicates that there may, in fact, be an issue there, then we would have to come back to you with some specific proposals, I would suspect. We don't have those right now, though. Mr. Bell. And would that be after the comment period if that kind of recommendation---- Mr. Albright. Actually, we are looking at this issue now as we speak. Mr. Bell. How did the Department determine that liability should only be against the seller? Mr. Albright. That was in the statute. Mr. Bell. And how does the Department decide that the designation should only be valid for a term of 5 to 8 years? Mr. Albright. OK. Good question. There is no magic to the 5- to 8-year period. That was a judgment that we came to based on our understanding of the technology, the technological cycle and the potential changes in the threat environment. It's important to understand, though, that the period of designation just tells you that period over which you can sell technologies that, in fact, have these kinds of protections. A technology that is sold during the period over which the designation is applicable, those protections exist in perpetuity. I mean, we are rendering certain the protections granted to the seller for a particular technology. However, every 5 to 8 years, depending on the technology, they've got to come back and ask us if they can continue to sell that technology and continue to get that kind of protection. Mr. Bell. Thank you very much. Thank you, Mr. Chairman. Chairman Tom Davis. Thank you very much. The gentleman from Tennessee. Mr. Duncan. Thank you, Mr. Chairman. Mr. Secretary, I'm curious about how much interest there is in this so far. Do you have any idea, a rough guess, as to how many applications or any indications as to how many applications you might be receiving on this? Mr. Albright. Sir, that's an excellent question. So far we've received a very small number of applications. We hear anecdotally there is pent-up demand, but I couldn't tell you if we're going to get 50, 500 or 5,000. Mr. Duncan. How many people from the private sector have been showing up at these seminars or meetings that you've been holding? Mr. Albright. The one we had in Washington, DC, for example, had over 200 people present. Mr. Duncan. What about outside of Washington? Mr. Albright. Outside of Washington it ranged from 50 to 75 typically. Mr. Duncan. And how many comments have you received thus far roughly? Mr. Albright. During the rulemaking process we received comments from 45 organizations. The total number of comments I don't have off the top of my head. It was---- Mr. Duncan. And have almost all of these comments been favorable or supportive, or have some of the comments pointed out problems or questions about the law thus far? Mr. Albright. You're referring to the comments we got when we were out on the road in places around the country? I would say that the vast majority of comments we got were extraordinarily favorable. In fact, a uniform comment we got was they couldn't believe the Federal Government was doing this, going out and reaching out to the community in the way we were. But still this is a very complex rule, and it is something that needed to be explained. No, I don't recall any direct negative comments on the rule. Mr. Duncan. All right. Thank you very much. Chairman Tom Davis. Thank you very much. Mr. Schrock, questions? Mr. Schrock. Thank you, Mr. Chairman. Mr. Secretary, in putting forth the rules to implement this act, has DHS found specific statutory limitations that in your estimation hinder the full realization of the act, and if so, what recommendations do you have to the committee for potential changes to this act? Mr. Albright. That's an---- Mr. Schrock. Is it going to be substantive enough for people to say, ``OK, we trust the government?'' Because as you said, whenever the government shows up with a briefcase and says, ``I'm here to help,'' people are automatically suspicious. Mr. Albright. Well, we've done everything we can to try to change that attitude with the private sector. I would say that I think it's premature to discuss any potential changes to the act. I think, as with anything that's as groundbreaking as this legislation is, I would not be at all surprised that as we get into the implementation process and start to execute the act, we're going to find a lot of issues that we may at some point come back to you and ask for some statutory relief. But right now I think it would be premature for me to say that there's anything that leaps out at us as being problematic. Mr. Schrock. I can certainly understand why the private sector would be hesitant to produce anything that might be put in place that they could get sued over. You know, suing is a national pastime in this country. Until last night we thought baseball was. I think that worries me, because we've got some wonderful technology out there, and I'm afraid we're going to stymie those folks who would come up with the technology, because they're scared to death they will get sued. I really worry about that. Mr. Albright. We couldn't agree with you more. We've heard anecdotally that contractors are having riders attached to their insurance forms that don't apply to--I mean, you're absolutely right. So we are obviously on board with this landmark legislation, and our job is to implement it as efficiently as we possibly can. Mr. Schrock. Thank you. Chairman Tom Davis. Thank you very much. Mr. Carter, any questions? Mr. Carter. Thank you, Mr. Chairman. Mr. Secretary, will the DHS utilize an expedited renewal process for applications? Mr. Albright. A renewal process for applications? Yeah. I think the answer is yes. Mr. Carter. Expedited? Mr. Albright. Sure. If the technology hasn't substantially changed, if the insurance regime that they are operating in hasn't substantially changed, and the threat environment hasn't substantially changed, then I would imagine it would be fairly straightforward. Mr. Carter. And how do you intend to deal with new developments to a particular antiterrorism technology that occur after it has received the designation to ensure that these developments are covered and can be deployed expeditiously? Mr. Albright. Well, there's two answers to that. Let me first start by saying that the SAFETY Act doesn't alter the competitive environment that the private industry operates in. So, for example, if you have a particular technology, and you have received SAFETY Act designation, and I have a technology that performs more or less the same function but can do it better, then I ought to be encouraged by the fact that you have, in fact, already received SAFETY Act designation and will go out and develop that product and apply for SAFETY Act designation and will compete with you in the marketplace. Mr. Carter. That is not what I really intended. What I intended was, let's say I have a product that's been approved, and because my company does--continues, we come up with a better mouse trap, we've got a better idea, a way to improve what we've already had approved by you. Can you--is that going to be the--redo the whole process, or will there be a method where you can shorten the process to add the technology? Mr. Albright. No. In fact, we have in the rule in our implementation process--what we have done is we have set the system whereby any substantial change, a significant change or modification to the device--actually, we are requiring, much like the FDA does, that people who make substantial changes to a device or a technology come to us and tell us about it, and then we will issue a certificate that says that, in fact, this is OK, that you can do this. And so we see that there's a significant benefit to that, which is what you just articulated, and that is that it prevents the developer or the seller from having to go through the process all over again. They can just simply come in and say, ``Hey, look, I've decided to quit making this out of plastic, I'm going to make it out of steel now,'' and we'll do a quick review of it to make sure there aren't any other changes and just simply issue them a certificate that allows them to keep their designation. Mr. Carter. Thank you. That answered my question. Thank you, Mr. Chairman. Chairman Tom Davis. Thank you very much. Mrs. Maloney, any questions? Mrs. Maloney. Thank you for having the hearing, and if I could place my opening comments in the record. Chairman Tom Davis. Absolutely. Without objection. [The prepared statement of Hon. Carolyn B. Maloney follows:] [GRAPHIC] [TIFF OMITTED] T1553.011 Mrs. Maloney. I think this is a very serious issue and one that needs balance. Just from New York City, we're still reeling from some of the aftermath of really being supportive to the contractors who rushed to the scene to save the lives of others, and now they're facing certain liability issues, when all they were trying to do was save the lives of others selflessly. So it's a very important area and one that needs review, and I am glad that we're having it. I'm interested in the new technologies you're seeing. In New York the telephones didn't work, the radios didn't work, and to this day they still don't work. Are you seeing new technologies on radios that could be implemented around the country for homeland security? Being a New Yorker, I'm concerned about the power grid. We just had a power grid shortage, and fortunately it was in the middle of the summer so we didn't lose any lives. If it had happened in the middle of the winter, people would have frozen to death. And I'm wondering, are you seeing new technologies for a power grid, and how we can protect this? Actually, Mr. Chairman, I think it might be interesting new technologies that we're seeing for homeland security, that you may be reviewing or seeing in the application process; it might be something that we might want to look at that we could take to our districts. And I would just like some comments on what new technologies are you seeing that you think would really be helpful to the country? Chairman Tom Davis. Mrs. Maloney, I think one of the problems is a lot of these technologies are hesitant to come forward until we get these regulations nailed down in a way the companies are willing to come forward and not incur a lot of liability. I mean, that is the issue. There are a lot of them out there. I'm sure you've seen a part of it, but there are---- Mr. Albright. We've seen an enormous flood of people with excellent ideas, and they come from not just the people you'd expect them to come from, the big companies, the Lockheed Martins, those sorts of people. We see them from people-- inventors in garage shops, and there's been a flood of technology that has been coming at us over the past year and a half. I was at the Office of Homeland Security prior to my current position, and I saw a lot then, and I'm seeing a lot now. With regard to communications, I'd be happy to arrange to have a briefing with this committee on Project SAFECOM, which is managed by the Science and Technology Directorate in the Department. It is focused entirely on developing and implementing new technologies and standards for those technologies, not just for interoperable communications, which, of course, was one of the big issues that you had in New York right after September 11. We're all familiar, for example, with the story that the police department couldn't warn the fire department to get out of the second building. But also robust communications, your point is very well taken that when we talk to the user community, which we do spend a lot of time doing, their No. 1 priority is--obviously they're interested in interoperable communications, but they also want the communications that they have just within their own particular organization to work and continue to work in a robust fashion. So, yes, the answer is there's lots of ideas out there. We have programs in place to develop them, and I would be happy at some point to brief you on them. Mrs. Maloney. I'd like to say that during September 11, not only could they not talk--the police talk to the fire, but the fire couldn't even talk to each other. Mr. Albright. Exactly. Mrs. Maloney. So they couldn't even warn people that they were getting calls in from people in the buildings that had phones or cells or Blackberries or whatever, and they couldn't communicate to the people on the site where to go. And I want to share with my colleagues, when I went to the police station, they said the No. 1 thing they needed was radios. And so I thought, ``Who's got radios?'' The Defense Department. So I called Bill Young, and Bill Young organized a shipment of radios from the Defense Department to come into the fire and police so that they could communicate at Ground Zero. So that's one thing that this Congress organized the day after September 11. But I'm told they still can't communicate, and I would like to ask if the chairman could arrange that for Members that might be interested in it. I feel that if you can't communicate with each other, how can you solve a problem, a crisis? And regrettably, that is the world we live in now, and I look forward to working with you and with the other members of the committee on coming forward with a balanced solution that protects the individuals and protects the companies. So I thank you for your work. Chairman Tom Davis. Thank you very much. Let me just ask one last question. Once a company's product or service receives SAFETY Act designation certification, it's conceivable that this company could then have a very competitive advantage in the marketplace. As you adopt the rules, how do you view that? Is that a concern? Is it just the way it happens? Are there any specific provisions you've included in the interim rule to guard against a potential competitive advantage? Mr. Albright. No. Well, we certainly have thought about that, but, again, the SAFETY Act is not designed--we're not going to try to necessarily level the playing field among various technologies. In other words, if you have a contractor that sells a particular technology for a particular threat environment fix, and they happen to hustle up there and apply for SAFETY Act designation and get SAFETY Act designation, and then another competitor who chose--who sells perhaps substantially the same technology in the same threat environment, they may be--but doesn't hustle to get that application, then they may be a bit behind the power curve. However, having said that, we also in the regulation talked about the fact that we'll give great weight to what are called ``substantially equivalent technologies.'' So if you have a technology that is basically the same as one that has already been approved, you will almost certainly get an expedited review. Chairman Tom Davis. Mr. Schrock. Mr. Schrock. Mr. Chairman, let me just ask one more thing. Can technology that already exists be designated as a qualified antiterrorism technology under the interim final rule? And can you explain the difference between technology that has been previously sold versus technology that has been previously deployed? I think the commercial folks are asking that and want to know the answer to that. Mr. Albright. The term ``deployment'' in the SAFETY Act is a purely technical matter, and what it means, in effect, is that something that has been fielded proximate to an act of terrorism, either--so technologies that have been--technologies that receive anti--the SAFETY Act designation will only get that designation if they have been deployed prior to the term over which the designation applies, and there's an important reason for that. We do not want to go backward in time and unravel causes of action that may have already accrued, you know, due to a prior event, for example. But having said that, we also understand that there are technologies that have been sold and fielded that pass all the technical criteria and meet all the various criteria associated with the SAFETY Act. And so the Under Secretary can, in fact, designate technologies that have been sold past a point, past a date of sale that is prior to when the designation is actually granted. And what that does is that relieves you of--let me give you an example of the situation where you could get an absurd result if you didn't do that. You may have technologies, for example, that are not widely deployed, they're extremely expensive, and the reason they're so expensive is because the cost of risk mitigation for them is very, very high. So you may have a jurisdiction, like, for example, Fairfax County, that can afford those technologies, and you may have other jurisdictions that cannot. And the Department of Homeland Security may decide that it's in the best interest of the Nation to assure a more wide deployment of that technology. OK. So that would then make that technology eligible for SAFETY Act protection. That would be if it passes all the other criteria. And we would so designate it. Having done that, the technologies that were sold in my example in Fairfax would fall into that category and would also receive the designation. Mr. Schrock. So people who have technology already before the next attack comes, are you saying they need to get to DHS to get the DHS stamp of approval? Mr. Albright. You've got to be a little bit careful, because, for example, the purpose of the SAFETY Act, as the chairman, for example, pointed out, is to assure that the technologies that would not otherwise be deployed to the extent that they need to be deployed are deployed. If we have technologies that are out there, and they are deployed to the extent they want to be deployed, and the insurance regime is acceptable to them, then it's hard to imagine that it was the intent of Congress to somehow indemnify them when, in fact, the purposes of the act have already been achieved, they have, in fact, been deployed. Now, of course, insurance environments change. There's a lot of stuff that was out there before September 11 that now can't get insurance. They've had riders attached to their policies, for example, and so, yeah, under those circumstances we would have to go back in and look carefully at the technology, review it and see if it should, in fact, receive the designation. Mr. Schrock. The premiums on these things, the insurance has to be out of sight. Mr. Albright. That's right. And so, again, prior deployment doesn't necessarily preclude designation. However, it doesn't form the decision. Mr. Schrock. Thanks. Thank you. Chairman Tom Davis. Mr. Carter, any additional questions? Mr. Carter. Thank you, Mr. Chairman. You've indicated that the application process will be interactive between DHS and the applicant. What assurances can you give us that the applicants will not be faced with information requests that are burdensome and will delay the certification of the product? Mr. Albright. We have an application. It's available on the Web today. We don't think it's burdensome. It's been through the regulatory process at OMB. They don't think it's particularly burdensome. I guess what I would say is that we have a set of criteria the statute requires us to evaluate, and that's our job to do what Congress told us to do in this case. We have asked for what was, in our view, the minimal amount of information needed in order to do what Congress told us to do. As I said in my opening statement, we are asking for whatever available data there may be to show that the technology is technically effective. We're asking contractors to tell us what the liability regime--what their risks are, what they feel their risks are, what the scenarios are that they think that this technology is going to be applicable for. And we're asking them to tell us something about what it takes to produce--what is the actual basis for the cost of the technology. After all, we are supposed to set the price of the liability risk--the risk insurance to be at a level that doesn't unnecessarily distort the price of the technology. To do that, we have to know the price of the technology, and so--and know the basis for that price. As I said, we have a heavy burden here to bear. I mean, after all, at the end of the day we are granting designation and, in effect, limiting the liability for people who might want to recover damages at some point. That's a burden that we're bearing, and we have to, I think, be very diligent in our review of the data to--and our request for data to assure that we have the information we need to have to evaluate the criteria. Mr. Carter. Well, I understand that, and that's talking about your application. It's been estimated by someone that it would take about 108 hours to fill out that application, but in an interactive situation where the developer or applicant is dealing interactively with a member of your organization, which means that other requests could be made of him, we need additional information, I'm just asking that could easily become burdensome, especially if someone had just got up on the wrong side of the bed some morning. They can make that very burdensome. Is there going to be some kind of criteria that keep that from being burdensome? And I can tell you from personal experience that I've dealt with Federal bureaucrats that if they got up on the wrong side of the bed could make life burdensome. Mr. Albright. Let me try and answer the question--maybe I can answer the question this way. Did you say someone told you it was 100 hours or days to fill out the application? Mr. Carter. They said hours. If it's days, that's pretty rough. Hours is rough. Mr. Albright. 100 hours is rough, but it's not overly rough, I would say. The way I would put it is that the Department of Homeland Security wants this legislation to succeed. We want this to work. As I've said, we've been very open. We've published this regulation with a comment period. We have, in fact, delayed release of the act from the date we originally said we would in order to assess those comments. We have an interim final rule where we are meeting for open comment. We've gone out on the road all over the country. I personally have done that with all of my staff to get input from the private sector, and we will continue to do that, because we really want this to work. And so if, in fact, it turns out to be the case that the balance between the burden on the seller and our ability to perform due diligence in the review of the application has gotten out of whack, then we will be the first people to try to go and fix that. Mr. Carter. And on the previous question, just out of curiosity for me, I'm making some assumptions, but I want to see if I've got them right. On a situation where there's existing technology that is deployed, the previous question that was asked, and they apply for the SAFETY Act, and the SAFETY Act assurances are granted, do you see that as grandfathering in all the previous implementation or not grandfathering it in? Mr. Albright. No, not grandfathering in all the previous implementation. For example, a lot of technologies have been deployed for purposes that have nothing to do with counterterrorism. Military technology is a perfect example of that. And the requirements threat, the set environment is very, very different. So, no, we're not going to grandfather things in. However, having said that, you know, if the insurance regime has--if you have a bunch of technology that is already out there and has been deployed, it's even been deployed for counterterrorism purposes, and the insurance regime that they are operating in has changed dramatically, so now they're literally taking the technology off the street, for example, in order to protect themselves, then you can bet we're going to look at that and expeditiously review those applications and make sure that doesn't happen. Mr. Carter. Thank you, Mr. Chairman. Chairman Tom Davis. Thank you very much. I don't see any other questions at this point. Thank you very much for being with us. We'll continue the dialog. We will take just a 2- minute break while we get our next panel up here. [Recess.] Chairman Tom Davis. We are ready to start our second panel. We've got Harris Miller, the president of the Information Technology Association of America; Stan Soloway, the president of the Professional Services Council; and John Clerici, representing the U.S. Chamber. It's the policy of the committee that we swear you in before you testify, so if you would rise with me and raise your hands. [Witnesses sworn.] Chairman Tom Davis. Thank you very much. Harris, we will start with you; then Mr. Soloway; and then, John, you will be able to clean that up. Thank you all for being with us. STATEMENTS OF HARRIS N. MILLER, PRESIDENT, INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA; STAN Z. SOLOWAY, PRESIDENT, PROFESSIONAL SERVICES COUNCIL; AND JOHN M. CLERICI, ESQ., ON BEHALF OF THE U.S. CHAMBER OF COMMERCE Mr. Miller. Mr. Chairman, members of the committee, many thanks for having me here today to allow ITAA to testify on the implementation of the SAFETY Act. This important legislation, as you noted, Mr. Chairman, is intended to facilitate the rapid development and deployment of technologies and services that offer remarkable potential to improve homeland security. I'm the ITAA president. ITAA is the Nation's leading and oldest trade association focusing on the diverse IT industry. It provides global public policy and national leadership to promote its continued rapid growth. We represent virtually every major Federal contractor and count among our membership a wide range of companies from the largest enterprise solutions providers to the smallest IT startups. We also serve as the co- sector coordinator for the ICT sector as designated by DHS. I submitted my program statement for the record, Mr. Chairman, and I assume it will be included in the hearing record. I would like to extend my appreciation, Mr. Chairman, for your holding this important hearing today, one that was postponed while DC grappled with something even the SAFETY Act could not prevent during Hurricane Isabel. Let's be clear what this legislation is about. The citizens of this country look to government to protect our homeland. Government, in turn, wants to partner with industry to find the best technologies to fight terrorism. Effective implementation of the act is absolutely essential; on the other hand, poor implementation would inhibit access to great technologies. In Spring 2002, soon after September 11, I began to hear extremely serious concerns from member companies, large and small, about some Federal agencies wanting successful bidders on key contracts to indemnify the government against the risk of loss if an unforeseen problem arose on an antiterrorism technology solution under consideration by DHS. Insurers did not know what to make of such requests and were not prepared to insure against such requests. These requests for indemnification made CEOs and our member companies stop in their tracks and ask themselves whether they were willing to literally bet the company on a decision to obtain a Federal contract. There had to be a better solution than having the private sector self-insure and indemnify the government against loss. Your leadership and that of Congressman Turner were instrumental in focusing attention on this important issue, and eventually led to implementation and passage of the SAFETY Act, which, as you've correctly pointed out, is meant to limit, but not eliminate, the insurance risk and litigation costs to companies that do have qualifying technologies. ITAA has been very involved in the regulatory process to implement the SAFETY Act. We were one of the organizations that Dr. Albright referred to that provided extensive comments on the proposed rule, and we have been participating in the various parts of the road show that he described. We filed comments back in August. Frankly, we were pretty pleased with where DHS was heading, and we are still pleased with the overall positive approach. However, I would slightly disagree with something Dr. Albright said during his comments. I think industry is pleased that DHS is doing it. I think the concerns we have are how DHS is doing it, and that's what we're going to focus on today. For example, we are concerned with how DHS is going to go about prioritizing the application process. Congressman Duncan asked about how many applications they are likely to receive. I agree with Dr. Albright, no one really knows. But we have seen a tremendous amount of interest among membership. Programs that ITAA has done, including the program with you, Mr. Chairman, and Congresswoman Maloney in New York City recently, a program I did as recently as yesterday, in which I, explaining opportunities at DHS, time and time again questions came up about liability concerns. So, certainly, there are a lot of companies out there, technology companies, that are concerned about how this act is going to be implemented. So, I suspect it's going to be very important that the DHS come up with a clear policy to prioritize the application process. A second concern we have is that at times in the interim final rule, it suggests that the only group to benefit from this rule are going to be government contractors, rather than the American people. That is not true. Yes, it is true that getting the designation is a privilege, but the whole point of the act, as you pointed out, Mr. Chairman, and as DHS itself says, is to encourage a partnership; but you're not going to have a partnership if the partners do not start from the same premises. Let me give you an example. The Department's proposed rule says that the insurance of critical technologies to aid the war on terrorism could end up actually coming full circle. We started down this legislative road because the government was asking private companies to indemnify and, if necessary, to self-insure to sell to the government. The SAFETY Act, as you pointed out, is meant to solve this problem, but what happens if insurance cannot be obtained for technology at any cost that does not distort the price of the technology in ways the act protects against? What happens if that uninsurable technology is still needed by the government? As outlined in the interim final rule, DHS still wants the company to self-insure, so it seems we are back to the same place. A third concern has to do with the volume and kind of information that would be required. Congressmen in the last panel were asking about the number of hours that go into an application. DHS is estimating 180 hours, Congressman. Our companies looking at these applications think they may be closer to 1,000 hours. Now, that's an extremely heavy burden for a large company. It's a virtually impossible burden for a small to medium-sized company. We think we need to cut down this application process and make it much more manageable if we are really going to get the kind of applications we need to help protect the American people against terrorist attacks. The last issue I want to mention, Mr. Chairman, is the issue of confidentiality. We respectfully disagreed with the assessment of DHS that the current FOIA legislation gives adequate protection to the extremely sensitive data companies are going to have to share, and we have devised specific suggestions to DHS as to how to provide adequate protection, including using the FOIA exemption that you helped to pass through the Congress last year, or 2 years ago rather, as part of the DHS legislation, so we think that this issue of providing information and giving adequate protection needs to be tightened. Final point, Mr. Chairman: We don't think that DHS would further delay the implementation process, but the application kit which just became available yesterday is daunting. So basically what we are saying, Mr. Chairman, is, we hope DHS, on the one hand, will move ahead right away and begin accepting applications, but should it turn out that this application is too difficult to use, as we believe it is, we hope that DHS would quickly modify it down the road and not be locked into the application kit which was published yesterday. Thank you very much, Mr. Chairman. I look forward to questions from you and your colleagues. Chairman Tom Davis. Thank you very much. [The prepared statement of Mr. Miller follows:] [GRAPHIC] [TIFF OMITTED] T1553.012 [GRAPHIC] [TIFF OMITTED] T1553.013 [GRAPHIC] [TIFF OMITTED] T1553.014 [GRAPHIC] [TIFF OMITTED] T1553.015 [GRAPHIC] [TIFF OMITTED] T1553.016 [GRAPHIC] [TIFF OMITTED] T1553.017 [GRAPHIC] [TIFF OMITTED] T1553.018 [GRAPHIC] [TIFF OMITTED] T1553.019 [GRAPHIC] [TIFF OMITTED] T1553.020 [GRAPHIC] [TIFF OMITTED] T1553.021 [GRAPHIC] [TIFF OMITTED] T1553.022 [GRAPHIC] [TIFF OMITTED] T1553.023 [GRAPHIC] [TIFF OMITTED] T1553.024 [GRAPHIC] [TIFF OMITTED] T1553.025 [GRAPHIC] [TIFF OMITTED] T1553.026 [GRAPHIC] [TIFF OMITTED] T1553.027 [GRAPHIC] [TIFF OMITTED] T1553.028 [GRAPHIC] [TIFF OMITTED] T1553.029 Chairman Tom Davis. Stan, welcome. Mr. Soloway. Thank you, Mr. Chairman. The professional Services Council is pleased to respond to your invitation to testify this morning on the SAFETY Act. PSC is the leading national trade association representing the professional and technical services companies doing business with the Federal Government, and our members are among the leaders in the provision of homeland security and national security technologies and related services. As we know, effective prosecution of the war on terror requires that the U.S. Government and others have access to the full range of technologies and technology-based solutions. For many of these solutions, the potential for aiding in this crucial battle are quite significant, but so too are the liabilities. As such, providing an appropriate degree of protection against those liabilities is vital. Such liability protection for other technology areas is both common and accepted; for example, the Defense Department has long had the authority to address extraordinary risks in its contracts. The security provided is essential to both contracting parties. These and related liability protections are not designed to protect companies from their day-to-day responsibility for performance. Rather, they exist to provide a reasonable degree of protection in the event of an occurrence that is anything but routine. Our ability as a Nation to capture and utilize needed technology for homeland security requires us to understand and address this fundamental reality. As such, PSC and others have been actively involved in the discussions over the acquisition policy and liability protection provisions of the legislation creating the Department of Homeland Security and under the SAFETY Act. Mr. Chairman, you and others on this committee immediately recognized the importance of this issue and proposed legislation to extend indemnification protections to antiterrorism technologies, similar to the ``extraordinary relief'' provisions afforded to defense technologies. We supported that proposal and continue to believe it is an important part of the solution. Others proposed a tort reform approach to strictly limit the liabilities that any one technology developer-owner would face. Each of these approaches has merit. Most importantly, Congress recognized the importance of providing such protections and, in the end, decided to enact a tort reform regime through the SAFETY Act. PSC strongly supports the act and compliments the Department for issuing its interim final rules this week. The SAFETY Act represents an important step toward ensuring the government's ability to access the full scope of antiterrorism technologies and capabilities. However, from the perspective of the technology services base, PSC remains concerned that the regulations do not adequately address the critically important specifics relating to the act's application to services in particular. Since services will account for a substantial portion of the procurements of the antiterrorism technologies and solutions, this is an issue of significant importance. The very nature of technology means that the provision of services differs in many critical respects from the provision of goods. It is important, for instance, to recognize that the services provider might require qualification eligibility for a broad business area, rather than for a discrete technology use. The interim rule narrowly prescribes the scope of coverage by focusing on a deployed technology. Similarly, the review and approval process must be sufficiently flexible to address the special characteristics of these services offerings. For example, many solutions evolve and cannot be completely defined or fixed in advance. It is therefore important to provide coverage when systems design, for instance, is part of the contract performance. The regulations seem to assume the opposite. In the absence of such protections, sellers may be unwilling to bring technologies to market. On the positive side, we compliment the Department for outlining in the notice accompanying the proposed interim rules the Department's regulatory philosophy and interpretations. To add further clarity, we recommend that the Department incorporate these statements and views into the final regulations themselves. That way, all participants will have ready access to the information and be able to use that information directly in the application and interpretation of the specific provisions of the regulations. We also support the strong statutory and regulatory statements of coverage regarding services. The law is also, properly, technology-neutral with respect to the scope of coverage and the protections offered. In our view, the regulations must be written in a neatly technology-neutral manner to the maximum extent practicable. We support the broad definition of the term ``qualified antiterrorism technologies'' under the law and regulations. The categories of technologies that are available for designation must continue to be viewed broadly. This is particularly important in the services sector. However, the interim rule states that a designation will only be valid for being 5 to 8 years. In our view, absent the change in circumstances initiated by the seller after the Department's approval of the designation, there is no public policy reason to impose any fixed period of time on the useful life of the designation period. Further, under the interim rule, a designation will terminate automatically and have no further force or effect if the solution is significantly changed or modified. We strongly oppose the automatic termination of the designation. We believe each case will have its own circumstances and should be treated as such, particularly in the services realm where the focus is on evolving solutions, rather than on static devices. With respect to the certification of an application of a government contractor, we encourage the Department to use its rulemaking authority to recognize that some of the information to support applications for certification may be available and applicable to products but not for services. With respect to the issue of proprietary information, the interim rule, while appropriately recognizing the importance of such protection, regrettably does not define the procedures that applicants should follow to ensure that their proprietary data and trade secrets are protected. We strongly recommended before and continue to recommend that the Department develop a proprietary data-marking or other application notice by which applicants highlight or disclose those portions of the application that are proprietary. Finally, with respect to the relationship between the SAFETY Act and Public Law 85-804, ``Extraordinary Relief,'' we compliment the Department for acknowledging the interrelationship between these two important government contracting statutes and for recognizing that there are circumstances under which 85-804 relief will be appropriate. However, because there are some intrinsic and potentially unsolvable tensions associated with the SAFETY Act's effectiveness in the services sector, we continue to believe it important that the 85-804 authorities be clear and appropriately available. We recommend, therefore, that the Department create a new section in the regulations to specifically address this important matter. Mr. Chairman, PSC supports the SAFETY Act and encourages the Department to move expeditiously with finalizing regulations, processing applications, and addressing the issues that we and others have raised. This law, in its implementing regulations, is designed to create an incentive for the deployment and development of technologies that will enhance our domestic security; and we hope these technologies work so well the United States never again faces a terrorist attack, but we must be prepared. PSC would welcome the opportunity to work with you and the committee, the House Select Committee, and the Department on the further development of the regulations and in monitoring the implementation of the SAFETY Act. Thank you for the opportunity to testify today. I would be happy to answer any questions. Chairman Tom Davis. Thank you very much. [The prepared statement of Mr. Soloway follows:] [GRAPHIC] [TIFF OMITTED] T1553.030 [GRAPHIC] [TIFF OMITTED] T1553.031 [GRAPHIC] [TIFF OMITTED] T1553.032 [GRAPHIC] [TIFF OMITTED] T1553.033 [GRAPHIC] [TIFF OMITTED] T1553.034 [GRAPHIC] [TIFF OMITTED] T1553.035 [GRAPHIC] [TIFF OMITTED] T1553.036 Chairman Tom Davis. Mr. Clerici, welcome. Mr. Clerici. Thank you, Mr. Chairman, and members of this committee. It's an honor for me to testify before you today regarding the SAFETY Act and its impact on deploying safe and effective antiterrorism technologies in the United States and abroad. I applaud the leadership that you, Mr. Chairman, and this committee have shown in the areas, of Federal procurement policy, national security and homeland security. I appear before you today representing the Chamber of Commerce of the United States of America. The Chamber is the world's largest business federation, representing more than 3 million businesses and organizations of every size, sector and region. My testimony is based on over 24 months of direct experience advising large government contractors, pharmaceutical companies, biotech companies, and small businesses throughout America and, indeed, throughout the world, on how to bring the best possible homeland security and antiterrorism solutions to both government and private markets. Let me begin by saying that the Chamber applauds the Department of Homeland Security in its effort to ensure that the SAFETY Act provides the full protections intended by Congress. Clearly, the interim regulations' dual goals of certainty and flexibility are in keeping with the spirit of the SAFETY Act. Most significantly, the Chamber wholly endorses the Department's proper interpretation of both the jurisdictional consequences of the statute--namely, that only the seller of designated and qualified antiterrorism technologies is a proper defendant in any action arising out of an act of terrorism--and the impact of the statutory ``government contract or defense'' as providing early dismissal from any tort suit involving a certified qualified antiterrorism technology following an act of terrorism. The Chamber appreciates the Department's and this committee's recognition here today that there exist a number of antiterrorism technologies that have not and cannot be deployed by sellers unless and until they receive designation and/or certification under the SAFETY Act. The Chamber applauds this recognition and the Department's efforts to stimulate applications, including its innovative preapplication process. The Department also acknowledges that several technologies already have been deployed without protections of the SAFETY Act. However, while the interim rules attempt to address the issue of retroactive application of the protections of the SAFETY Act to such technologies, as we heard earlier today in response to Congressman Schrock's question, the Department appears to have too narrowly limited the possibility of such retroactive application. Clearly, Congress did not intend to limit the scope of the SAFETY Act only to newly developed technologies. With respect to the retroactive application of the SAFETY Act, in the Chamber's view, so long as no cause of action has been accrued--that is, there has been no terrorist incident involving an antiterror technology resulting in a lawsuit against a seller--the Department may provide SAFETY Act protection retroactively to previously deployed technologies that are substantially identical to a qualified antiterrorism technology. Nothing in the statute limits such an action. The Chamber intends to provide additional comments to urge clarification of this point and changes to the interim rule. With respect to the precise types of technologies meriting protection of the SAFETY Act, Section 865(l) of the act notes that qualified antiterrorism technologies may include technologies deployed for the purpose of, ``limiting the harm such acts [of terrorism] might otherwise cause.'' The ``harm'' that might be caused by an act of terrorism clearly goes beyond the immediate effects of the act itself. An act of terrorism such as the attacks of September 11 or the October 2001, anthrax attacks triggers a number of immediate remedial and emergency responses to limit the resulting harm and deter followup attacks. For example, immediately following the detection of anthrax in the offices of Senator Tom Daschle and Senator Patrick Leahy, Members of Congress and their staffs were treated with antibiotics and other prophylactic measures with the specific goal of limiting the harm that this act of terrorism could cause. Clearly, any injuries that might have been caused by the administration of these treatments, even though direct results of the act of terrorism itself, could be directly traced to the act and the objective of limiting the resulting harm. Moreover, any claims brought as a result of such injuries would clearly be arising out of, relating to, or resulting from an act of terrorism. Congress recently acknowledged that technologies designed to limit the harm from an act of terrorism that may result in harm not directly caused by the act of terrorism are protected by the SAFETY Act. In the legislative history of the ``Project Bioshield Act of 2002,'' Congress stated that the Secretary of Homeland Security is ``encouraged to designate [biodefense] countermeasures as 'qualified antiterrorism technologies'.'' The Department should affirm this congressional statement that technologies deployed after a terrorist attack with the hope of limiting harm may receive such designation. The Chamber appreciates that the Department has taken positive steps to more narrowly define the, ``substantial modification'' as one that significantly reduces safety and effectiveness and its willingness to promptly review notices of modification. Unless the Department informs the seller otherwise, however, these designations should remain in force. Only upon a showing and a determination by the Department that there has been a significant change or modification should the Secretary be able to affirmatively terminate a designation. It should only take effect upon written notice to the seller. The Chamber appreciates the opportunity to offer testimony on this very important statute. Achieving the objectives of certainty and flexibility in implementing the SAFETY Act are of the utmost importance to ensuring the homeland's protection and the protection of national security. We applaud your efforts and the efforts of the Department and look forward to the implementation of the act. Thank you, Mr. Chairman. Chairman Tom Davis. Thank you very much. [The prepared statement of Mr. Clerici follows:] [GRAPHIC] [TIFF OMITTED] T1553.037 [GRAPHIC] [TIFF OMITTED] T1553.038 [GRAPHIC] [TIFF OMITTED] T1553.039 [GRAPHIC] [TIFF OMITTED] T1553.040 [GRAPHIC] [TIFF OMITTED] T1553.041 [GRAPHIC] [TIFF OMITTED] T1553.042 [GRAPHIC] [TIFF OMITTED] T1553.043 Chairman Tom Davis. Let me ask each of you: Do you have suggestions for DHS to expedite the review process so that it is responsive to the need to deploy antiterrorist technologies? Mr. Miller. I think the first suggestion is prioritization, and we go back to work with DHS, but certainly some things they should look to are procurements that are actively under way; that would be one priority. They should look to prioritize applications related to procurement already under way. The second principle they could look to for prioritization would be technologies that they've advanced as being priorities, and that's what Science and Technology does to some extent. They list out there for public consumption or, if not appropriate, for internal consumption, the types of technologies they believe are priorities. So if, as we expect, they get a flood of applications, we think it's going to be absolutely necessary that they come up with some way of prioritizing these applications; otherwise, some of the key technologies may fall into the bottom of the pile and not get designations early enough in meeting the needs of the American people so many will incorporate. Another area that we touched on is the clarity of the regulations themselves. The process is going to be driven, by and large, by the degree the parties understand what the philosophy and interpretations of the Department are going to be and how it's going to work in critical areas, particularly when it comes to services and discrete products. That in itself will drive timelines for the application process and the discussions back and forth and trying to figure it all out. Mr. Clerici. Mr. Chairman, I think the proof is in the pudding how they interpret the responses to their application. If Dr. Albright's testimony of 100 hours is to be correct in the preparation, then hopefully DHS will not drill down to the extent that Congressman Carter mentioned and get these applications approved. The framework is there for them to do it expeditiously. It's just a question of whether they are going to be willing to do so. Mr. Miller. I don't mean to be cute, Mr. Chairman, but if they shorten the application, they shorten the review process, too. Chairman Tom Davis. Absolutely. When we passed the bill, it was a matter of some urgency. The American people said it in the election. And the longer the bureaucratic process--and ultimately I can give my opinion, DHS can give their opinion-- ultimately, the result is going to be the companies coming in and offering their services or their products--or not if they're deterred from doing it. That's why what industry thinks is far more important than what happens ordinarily, because if we can't get these products in the government marketplace, we are not going to be able to make use of the newest technologies. We have a vote on. I am going to try to get our questions in, because we have about five votes, and let you all go. So I'm going to move quickly to Mr. Bell. Mr. Bell. Thank you very much, Mr. Chairman. Mr. Miller, I was fascinated by your testimony regarding the application process. The thousand hours, how do you calculate that? Mr. Miller. We did it informally, an unscientific poll with many of our member companies by e-mail, and we asked them the estimates that they would fill out the application, based on the various drafts that are floating around even before they were published, and we got ranges. The lowest range we got was about 500 hours. We got some that estimated it would be 1,500, and we just averaged it out as 1,000 hours. This was based on asking government contractors who are used to filling out these kinds of applications. What they particularly found daunting, Mr. Bell, was the incredibly extensive financial information, much of it extremely confidential and sensitive. But we don't really feel it's necessary for DHS to make the kind of judgments they need to make as to whether or not this technology does or does not have a place in the marketplace. We think we understand what DHS is trying to achieve. They're trying to understand whether this technology would otherwise go in the marketplace if they did not get the designation by DHS. We understand that, but the kind of information they requested would take a brilliant econometrician months to analyze, and it seems to me to be too academic an exercise. Dr. Albright, to his credit, during his presentation to this committee, gave a couple simple rules of thumb. Why are they deployed already? Is there insurance in the marketplace? Those should be simple questions DHS should ask, not an incredible amount of financial information and then make some kind of a guess about whether this product will actually show in the marketplace in the absence of this designation. Mr. Bell. Well, certainly the individuals who came up with an application that would take 1,000 hours would be up for some kind of bureaucratic award or high honor, I would think. It's an extraordinary accomplishment. Chairman Tom Davis. The lawyers love it, don't they? Mr. Miller. That's why we poll our members and not our lawyer members. Mr. Bell. What else can be changed about it, if any of the others would like to weigh in on this? The financial information, but what else would you recommend? Mr. Miller. From what we can tell, the scientific information we are requesting seems to be reasonable. I don't think our company would have objections to that, because obviously that's the information on which the Science and Technology Director is going to make his decisions. Most that we objected to was incredibly detailed and, as we saw it, basically irrelevant financial information. Mr. Soloway. I would also add that, in the area of protecting proprietary data and trade secrets, although I think the Department's intentions are correct there's a very unclear process as to how you get the protections you need; and as you can imagine, in the technology industry, that is something in terms of a company's capital. And so a clear process in the applications and in the regulations for getting that adequate protection is critical. Mr. Clerici. Congressman Bell, I think much of the information that's requested, safety and efficacy data, whether you've got the proper amount of insurance with the market, is something a responsible corporation has to do for its shareholders every day. The Department should rely, particularly with respect to public companies, on what is being done internally to mitigate risks, rather than trying to invent a separate scheme that is somehow codified in the regulations. The parameters of the statute are quite clear, and you can round these bases not easily, but with a little bit of thought, in gathering the information that is usually already at the disposal of the company. Mr. Miller. This is the application, so just to give you some idea. Chairman Tom Davis. We will put the application in the record. Mr. Miller. It's the form and the background material; 40- some pages, I believe. [The information referred to follows:] [GRAPHIC] [TIFF OMITTED] T1553.044 [GRAPHIC] [TIFF OMITTED] T1553.045 [GRAPHIC] [TIFF OMITTED] T1553.046 [GRAPHIC] [TIFF OMITTED] T1553.047 [GRAPHIC] [TIFF OMITTED] T1553.048 [GRAPHIC] [TIFF OMITTED] T1553.049 [GRAPHIC] [TIFF OMITTED] T1553.050 [GRAPHIC] [TIFF OMITTED] T1553.051 [GRAPHIC] [TIFF OMITTED] T1553.052 [GRAPHIC] [TIFF OMITTED] T1553.053 [GRAPHIC] [TIFF OMITTED] T1553.054 [GRAPHIC] [TIFF OMITTED] T1553.055 [GRAPHIC] [TIFF OMITTED] T1553.056 [GRAPHIC] [TIFF OMITTED] T1553.057 [GRAPHIC] [TIFF OMITTED] T1553.058 [GRAPHIC] [TIFF OMITTED] T1553.059 [GRAPHIC] [TIFF OMITTED] T1553.060 [GRAPHIC] [TIFF OMITTED] T1553.061 [GRAPHIC] [TIFF OMITTED] T1553.062 [GRAPHIC] [TIFF OMITTED] T1553.063 [GRAPHIC] [TIFF OMITTED] T1553.064 [GRAPHIC] [TIFF OMITTED] T1553.065 [GRAPHIC] [TIFF OMITTED] T1553.066 [GRAPHIC] [TIFF OMITTED] T1553.067 [GRAPHIC] [TIFF OMITTED] T1553.068 [GRAPHIC] [TIFF OMITTED] T1553.069 [GRAPHIC] [TIFF OMITTED] T1553.070 [GRAPHIC] [TIFF OMITTED] T1553.071 [GRAPHIC] [TIFF OMITTED] T1553.072 [GRAPHIC] [TIFF OMITTED] T1553.073 [GRAPHIC] [TIFF OMITTED] T1553.074 [GRAPHIC] [TIFF OMITTED] T1553.075 [GRAPHIC] [TIFF OMITTED] T1553.076 [GRAPHIC] [TIFF OMITTED] T1553.077 [GRAPHIC] [TIFF OMITTED] T1553.078 [GRAPHIC] [TIFF OMITTED] T1553.079 [GRAPHIC] [TIFF OMITTED] T1553.080 [GRAPHIC] [TIFF OMITTED] T1553.081 [GRAPHIC] [TIFF OMITTED] T1553.082 [GRAPHIC] [TIFF OMITTED] T1553.083 Mr. Bell. What is the normal response? Mr. Miller. Well, you're talking about people supplying notebooks of financial and scientific information to back up their application and response. That's why we came up with the estimate of approximately 1,000 hours, which goes to the Congressman's earlier question. Mr. Bell. On the liability, I will be clear on that from where you all are. Is there a misunderstanding in the industry about the limitations on liability, or is it your suggestion to suggest we go further in limiting the liability? Mr. Miller. We didn't respond to this hearing in terms of suggested changes to the legislation. We were just commenting specifically on the regulations. Mr. Bell. You mention in your testimony that the liability questions are causing a lot of problems. Mr. Miller. Oh, just generally because the SAFETY Act has not been implemented. I think I was trying to make the point, Mr. Bell, maybe not eloquently, that exactly as Chairman Davis said, I've rarely had an occurrence where CEOs and member companies call me at night because a regulation was published. But I can tell you that, looking back to March 2002 when one of the first requests for proposal came out that had this self-insurance requirement, I literally had CEOs finding me at home at night saying, ``ITAA has to make this their No. 1 priority; we cannot bid in good conscience on these Department of Homeland Security contracts, when we're literally betting the company.'' And these were company CEOs of, in some cases, multibillion-dollar companies. That's how negative the initial reaction was and why the legislation that was enacted was so important and how the implementation of it was critically important. Mr. Soloway. Let me just second Harris' comments, that we've had dozens of company executives talking to us about this issue, even before the passage of the legislation. It's not a question of the extension or extent of liability. It's a question of how you can obtain appropriate protection and the interplay between this act, Public Law 85-804 for extraordinary relief, and the different tools that are available to make sure the government can get what it needs and provides the protections. So it's really a question of bringing it together in a clear way, and I think there is a lot of work to do in that area. Mr. Clerici. And I can say in my personal experience in the past few years, there has been an entire division of a company depending on whether risk mitigation could be accomplished. In one instance, the division suffered because the SAFETY Act was not in place and those jobs were lost; in the next one, hopefully we'll have the SAFETY Act up and running. Mr. Bell. Thanks a lot. Thanks, Mr. Chairman. Chairman Tom Davis. Mr. Schrock. Mr. Schrock. I'll be very brief because we have six votes, and we're not professors, so you're not required to stay in class past 20 minutes. Mr. Miller, you talked about Isabel. I represent Virginia Beach and Norfolk where there's massive amounts of military, maybe 125 ships in a massive commercial port. What a perfect opportunity for the terrorists to get in there, and to get in here too. You talked about protecting the IT companies. Is it a ``hold harmless'' agreement? We used to have people sign ``hold harmless'' things, so that if something happened to them the Navy couldn't be held accountable. Is that an answer to this? The lawyers wouldn't like it; and the chairman is right, he is one, so he knows what he talks about. Is that an answer? Mr. Miller. Industry is not saying there should not be liability whatsoever. There is an industry that will offer certain-level protections. The world has changed since September 11. As Mr. Soloway pointed out in his testimony, the idea between the Congress and the government saying to government contractors, ``In extreme situations when insurance is not available in the marketplace, we are going to offer you some protections,'' is not new. It goes back almost 50 years, Mr. Schrock, in the Department of Defense. It's used in the nuclear industry; it's used in the space launch industry. It was used at the time of development of Cipro in order to respond to the anthrax scare in this country. Those were situations where they said, ``We can't deal with this situation. There were no actuarial tables that gave us the ability to insure, so that's why the SAFETY Act is so critical. Not to say that the companies have zero liability, not to say they should be able to commit fraud, but in these extreme situations, if they don't have some limitation of liability, particularly when DHS reviews and approves their technology and services as Mr. Soloway pointed out, that's the only way to get these products to the public and ultimately to protect the American people. Chairman Tom Davis. There's got to be some limit somewhere, some reasonable limits. Mr. Schrock. It seems like there's a real disconnect between what the three of you say and what our previous person who testified said. It's like you're worlds apart. Have you all sat down with the DHS? You all have done that? Mr. Miller. We've had extensive discussions with DHS, collectively and independently. I think each of us, independently and collectively. In fact, ITAA and PSC worked very closely together on comments on the rule and so forth, so we've worked very closely with the Department and actually think the Department has made significant progress here. We don't want to be overly negative. What we're concerned about is, if there's a perception that the job is now completed and executed and we've got significant hurdles to overcome in bringing these products and services to the market, there are some realities that have to be addressed, issues of clarity, as I said earlier; and I don't want to harp on it again. There is a vast difference in buying a product or device and buying an evolving service which could be developed over time and constantly upgraded. A lot of discussion around the rule seems to focus more on the presumption of product than a service, and there are big differences that have to be overcome. Chairman Tom Davis. We want to make the vote and I don't want to keep you. We will be probably close to an hour over there voting. I want to allow you to supplement over the next 5 days, anything you want to add on this. We've had other questions, but we've been obviously in constant dialog. I appreciate your being here, and I hope that the Department understands this continues to be an ongoing discussion, that the interim regulations are really not where we need to be. At the end of this--I think you've articulated this--at the end of the day, the question is, ``are we getting the products in or aren't we?'' And there are still a lot of concerns, but I appreciate your being here and I'm going to adjourn the meeting. Thank you. [Whereupon, at 11:30 a.m., the committee was adjourned.] [The prepared statement of Hon. Elijah E. Cummings and additional information submitted for the hearing record follows:] [GRAPHIC] [TIFF OMITTED] T1553.084 [GRAPHIC] [TIFF OMITTED] T1553.085 [GRAPHIC] [TIFF OMITTED] T1553.086 [GRAPHIC] [TIFF OMITTED] T1553.087 [GRAPHIC] [TIFF OMITTED] T1553.088 [GRAPHIC] [TIFF OMITTED] T1553.089 [GRAPHIC] [TIFF OMITTED] T1553.090 [GRAPHIC] [TIFF OMITTED] T1553.091 [GRAPHIC] [TIFF OMITTED] T1553.092 [GRAPHIC] [TIFF OMITTED] T1553.093 [GRAPHIC] [TIFF OMITTED] T1553.094 [GRAPHIC] [TIFF OMITTED] T1553.095 [GRAPHIC] [TIFF OMITTED] T1553.096 [GRAPHIC] [TIFF OMITTED] T1553.097 [GRAPHIC] [TIFF OMITTED] T1553.098 [GRAPHIC] [TIFF OMITTED] T1553.099 [GRAPHIC] [TIFF OMITTED] T1553.100 [GRAPHIC] [TIFF OMITTED] T1553.101 [GRAPHIC] [TIFF OMITTED] T1553.102 [GRAPHIC] [TIFF OMITTED] T1553.103 [GRAPHIC] [TIFF OMITTED] T1553.104 [GRAPHIC] [TIFF OMITTED] T1553.105 [GRAPHIC] [TIFF OMITTED] T1553.106 [GRAPHIC] [TIFF OMITTED] T1553.107 [GRAPHIC] [TIFF OMITTED] T1553.108 [GRAPHIC] [TIFF OMITTED] T1553.109 [GRAPHIC] [TIFF OMITTED] T1553.110 [GRAPHIC] [TIFF OMITTED] T1553.111 [GRAPHIC] [TIFF OMITTED] T1553.112 [GRAPHIC] [TIFF OMITTED] T1553.113 [GRAPHIC] [TIFF OMITTED] T1553.114 [GRAPHIC] [TIFF OMITTED] T1553.115 [GRAPHIC] [TIFF OMITTED] T1553.116 [GRAPHIC] [TIFF OMITTED] T1553.117 [GRAPHIC] [TIFF OMITTED] T1553.118 [GRAPHIC] [TIFF OMITTED] T1553.119 [GRAPHIC] [TIFF OMITTED] T1553.120 [GRAPHIC] [TIFF OMITTED] T1553.121 [GRAPHIC] [TIFF OMITTED] T1553.122 [GRAPHIC] [TIFF OMITTED] T1553.123 [GRAPHIC] [TIFF OMITTED] T1553.124 [GRAPHIC] [TIFF OMITTED] T1553.125 [GRAPHIC] [TIFF OMITTED] T1553.126 [GRAPHIC] [TIFF OMITTED] T1553.127 [GRAPHIC] [TIFF OMITTED] T1553.128 [GRAPHIC] [TIFF OMITTED] T1553.129 [GRAPHIC] [TIFF OMITTED] T1553.130 [GRAPHIC] [TIFF OMITTED] T1553.131 [GRAPHIC] [TIFF OMITTED] T1553.132 [GRAPHIC] [TIFF OMITTED] T1553.133 [GRAPHIC] [TIFF OMITTED] T1553.134 [GRAPHIC] [TIFF OMITTED] T1553.135 [GRAPHIC] [TIFF OMITTED] T1553.136 [GRAPHIC] [TIFF OMITTED] T1553.137 [GRAPHIC] [TIFF OMITTED] T1553.138 [GRAPHIC] [TIFF OMITTED] T1553.139 [GRAPHIC] [TIFF OMITTED] T1553.140 [GRAPHIC] [TIFF OMITTED] T1553.141 [GRAPHIC] [TIFF OMITTED] T1553.142