"Countering terrorism has become, beyond any doubt, the top national security priority for the United States. This shift has occurred with the full support of the Congress, both major political parties, the media, and the American people." 9/11 Commission Report.
This national imperative drives Homeland Security, creating unique and unprecedented opportunities and risks. Crowell & Moring LLP brings the 360° vision, cross-cutting practices, and deep expertise to assist you in navigating the Homeland Security frontier.
The Risks of Homeland Security
Since 2003, DHS contract values have increased by 189%, with the number of contracts rising from 14,000 in 2003 to 63,000 in 2005, according to a 2006 House Gov. Reform Committee Report.
Like other wars, the war on terrorism propels dramatic increases in spending, such as the $10 billion US VISIT, $2 billion SBInet, and $2 billion FirstSource programs. Historically, such spending increases have come with intense governmental oversight and scrutiny – followed by investigations, audits, and charges of "war profiteering," fraud, waste, and abuse.
In the relatively short lifetime of Homeland Security, major risk areas have emerged, forcing radical changes in the ways that both the public and private sectors do business.
Liability & Risk of Loss. The 9/11 terrorist attacks shattered traditional risk allocation models, hurling the insurance market into disequilibrium and creating catastrophic risks for entire sectors of industry. To rebalance such risks, the private sector may have a variety of strategies, including the SAFETY Act, Public Law 85-804 indemnification, and special Congressional legislation.
Information Risks. Information sharing – a core Homeland Security mission – poses unprecedented challenges in the information arena, such as privacy, cybersecurity, and international data exchanges.
- Privacy: Concerns about privacy have caused delays, restructuring, and even termination of Homeland Security programs, including Total Information Awareness, Secure Flight, CAPPS II, and MATRIX.
- Cybersecurity: Both federal agencies and private companies face heightened duties for information security, including our critical infrastructure, such as the energy sector.
- International: Domestic laws, like the USA PATRIOT Act, increasingly clash with international privacy requirements.
Oversight Risks. Congressional committees, Inspector Generals, fraud investigators, whistleblowers, and the press are all poised to publicize missteps and seek to hold governmental agencies and private entities accountable. A few examples offer a flavor of such oversight risks:
- House Government Reform Committee (July 2006): "Predictably, this lack of accountability and control has unleashed a seemingly endless succession of disastrous acquisitions at [DHS]. These include: a $104 million Transportation Security Administration contract to train airport screeners that ballooned into a cost of more than $700 million; airport bomb-detection machines that continually produce false alarms; billion-dollar technology contracts that have yet to provide basic information technology and a telecommunications infrastructure for many of our nation’s airports; and of course, the Federal Emergency Management Agency’s Katrina-related fiascos."
- DHS IG (Nov. 2006): "At the same time, the urgency and complexity of the [DHS] mission create an environment in which many programs have acquisitions with a high risk of cost overruns, mismanagement, or failure."
- Charleston Post and Courier (July 27, 2006): "But it has become glaringly apparent that some also consider DHS a cash cow, there for the milking."
Acquisition Risks. A host of Homeland Security acquisitions have hit the buzz-saw, as Congress, GAO and others have reported a lack of requirements definition, information security, reliable cost estimating, test management, and risk management. As a result, major Homeland Security programs (US VISIT, ACE, ISIS, ASI, and others) have been investigated, delayed, downsized, or even canceled due to cost overruns, missed milestones, and/or performance shortfalls.
How We Can Help
We are Committed. As the General Counsel of one of our major clients stated, "We must be in the Homeland Security business because it is the right thing to do." We agree.
We are Fully Interoperable. Just as the creation of the Department of Homeland Security (DHS) and the reorganization of the Intelligence community sought to tear down smokestacks and fully integrate these functions into a working whole, our Homeland Security team cuts across Crowell & Moring practice groups to bring you targeted and tailored solutions.
We are Deeply Experienced. Our world-class experience in Government Contracts, Aviation, Privacy, White Collar, Government Relations, False Claims Act, and other areas means that you have ready access to a deep bench of expertise to handle Homeland Security risks.
Whom to Contact
For information on how Crowell & Moring LLP can help you, contact David Z. Bodenheimer, the head of the Homeland Security practice, or Evan D. Wolff, former advisor at DHS.
Liability & Risk of Loss
- SAFETY Act
- Advised both large and small businesses on SAFETY Act requirements, applications, and DHS consultations
- Prepared SAFETY Act applications for clients
- Developed procedures and requirements matrix to assure corporate compliance with SAFETY regulations, application kit, and information submission
- Wrote comments on SAFETY Act regulations for major trade associations and clients
- Testified before Congress regarding SAFETY Act implementation and anti-terrorism technology
- Indemnification & Public Law 85-804
- Counseled major service contractor regarding risk mitigation for design and installation of airport security systems
- Advised international biotechnology company regarding rules and precedent for Pub. L. 85-804 coverage for anthrax vaccine
- Litigated multi-million-dollar indemnification claims and requests for equitable adjustments and cost recovery for major defense and commercial contractors
- Defense Production Act (DPA)
- Counseled clients on DPA and Defense Priorities & Allocations System (DPAS) rules, risks, and scope, including potential applicability to Homeland Security contracts
- International Risk Allocation
- Assisted in appellate briefing on the scope of Defense Base Act and liability protection for security companies furnishing services abroad
- Prepared extensive analyses regarding risks of selling Homeland Security technology abroad, including potential applicability of foreign sovereign immunity
- Analyzed strategies for mitigating risks of selling anti-terrorism technology abroad, including "corporate veil" options in US and UK
- Advised security clients on battlefield and Iraqi contracting and risk allocation
- Prepared comprehensive privacy analysis of constitutional provisions, federal and state laws, and pending legislation affecting Homeland Security programs
- Tracked evolving rules and privacy implications regarding passenger screening (CAPPS II, Secure Flight, & Registered Traveler) and provided advice to major airlines and Homeland Security contractor
- Advised client and prepared analysis regarding applicability of Privacy Act to Homeland Security databases developed and maintained at private expense
- Prepared privacy policies and procedures for contractors with access to federal databases subject to the Privacy Act
- Reviewed federal and state statutes governing wiretapping, electronic monitoring, and workplace privacy and developed recommendations for compliance
- Monitored emerging privacy issues and advised US and foreign airlines on federal, state, and foreign regulations governing privacy
- Prepared analyses and advised clients on information security requirements, including the Federal Information Security Management Act (FISMA), FAR requirements, OMB policies, and NIST standards
- Advised numerous clients on state security breach laws, prepared analyses, and developed compliance plans
Handled information security breaches, prepared "incident response" plans, and furnished advice on mitigation measures to a variety of clients
- USA PATRIOT Act
- Advised both US and international companies on the tension between the USA PATRIOT Act (allowing access to personal information) and international privacy laws (restricting access to personal information)
- Prepared analyses for IT companies with international operations regarding compliance with USA PATRIOT Act and Canadian privacy laws (PIPEDA, Quebec, & Ontario)
- Authentication & HSPD-12
- Obtained corrective action in successful GAO protest of procurement for HSPD-12 smart cards
- Analyzed privacy obligations for contractor-developed authentication technology to allow expedited access to federal facilities via smart cards
- Furnished advice regarding HSPD-12 implementation for contractors and subcontractors, including privacy implications
- Secured corrective action in successful GAO protest for encryption services related to HSPD-12
- International Privacy
- Prepared risk assessments for selling anti-terrorism technology abroad, including European and Asian privacy laws that may be triggered by information-sharing technology
- Advised clients on how international privacy laws and passenger screening requirements may affect Homeland Security contractors and major airlines
- Congressional Oversight & Relations
- Prepared and advised clients appearing in Congressional hearings relating to private security practices and risks
- Advised clients and assisted with Congressional and FBI investigations relating to earmarks and ethics issues
- Testified in Congressional Homeland Security hearings relating to SAFETY Act and anti-terrorism technology
- Maintained Congressional relations, including through our Public Policy Group
- Advised US and foreign airlines on aviation security and passenger information requirements established by TSA, CBP, and other agencies
- Assisted US and foreign airlines with respect to user fees imposed by TSA, CBP and other agencies
Defended US and foreign airlines in administrative actions alleging violations of DHS security regulations brought by TSA, CBP and other agencies (including violations of TSA rules, carrier security programs, and carriage of individuals on the "No Fly" list)
- White Collar Defense
- Defended both companies and individuals in criminal prosecutions and civil fraud actions in broad spectrum of matters and industries
- Resolved debarment matter for small business relating to voice recognition technology for intelligence purposes and Homeland Security applications
- False Claims Act & Qui Tam Actions
- Litigated False Claims Act (FCA) cases (defense, aerospace, services, energy, health care & transportation industries) ranging from $3 million to $600 million in both bench and jury trials in multiple jurisdictions
- Knocked out a host of qui tam actions with pre-trial motions based upon lack of jurisdiction, Rule 9(b) lack of particularity, failure to prosecute, disqualification of opposing counsel, failure to state a cause of action, and government knowledge
- Defended companies in criminal, civil, and administrative investigations (IG, GAO, DCIS, NIS, FBI, etc.) in virtually every industry involving allegations of overpricing, false statements, non-disclosure of key data, product substitution, improper testing and inspection, and other allegations
- Assisted clients in responding to subpoenas, producing corporate records, assisting with interviews with government agents, and preparing for grand juries
- Pioneered the practice of reviewing client operations and developing compliance policies, procedures, and training for the defense and aerospace industries and have extended this expertise to virtually all other industries contracting with, or regulated by, federal agencies
- Currently serve as the head of the Defense Industry Initiative (DII) that assists industry in maintaining "best practices" in complying with applicable federal rules and requirements
- Successfully protested procurement for HSPD-12 smart cards and obtained corrective action
Obtained favorable interpretation of data rights provision, limiting DHS access to privately developed technology
- Handled protests (both as protester and intervenor) for variety of Homeland Security-related technology for chemical, biological, radiological, and nuclear (CBRN) protection
- Maintain a deep bench of protest litigators experience in full range of protests before Court of Federal Claims, GAO and agencies
- Cost & CAS Counseling
- Counseled international contractor on host of cost and pricing issues on subcontract under TSA prime contract
- Advised contractor on Cost Accounting Standards (CAS) compliance relating to solicitation for technology to defend against explosive devices
- Prepared analysis for international biodefense contractor regarding scope and exemptions for CAS coverage applicable to procurement for anthrax vaccine
- Assisted in negotiating prime contract between TSA and international services contractor
- Advised clients on Other Transactions Authority (OTA) for contracting with DHS
- Counseled international contractor on applicability of Service Contract Act to biodefense procurement
- IP & Data Rights
- Developed comprehensive data rights plan for defining, monitoring, and protecting proprietary rights in privately developed technology for multi-billion-dollar Homeland Security information-sharing program
- Assisted client in trade secrets dispute with competitor over Homeland Security procurements and explosive detection technology
- Defended client’s rights to proprietary software to be used in a DHS procurement
- Furnished IP counseling to client regarding biosurveillance information system
- Developed strategy for client to recover data rights to biodefense software for tracking outbreaks of high-risk hazards like anthrax and smallpox