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FAS Intro: The costs of the classification system exceeded $2.7 billion this year, according to the following report to Congress. As noted below, this enormous figure does not include the classification related costs of the secrecy-intensive Central Intelligence Agency. Nor does it include an additional several billion dollars of costs incurred (at taxpayer expense) by government contractors who handle classified information.

Information Security Oversight Office
National Archives and Records Administration
700 Pennsylvania Avenue, NW
Washington, DC 20408

April 30, 1996

The Honorable Jim Lightfoot
Subcommittee on Treasury, Postal Service and General Government
Committee on Appropriations
House of Representatives
B-307 Rayburn House Office Building
Washington, DC 20515

Dear Mr. Chairman:

As requested in House Report 104-183, please find enclosed at Tab A a table listing by agency the total Federal Government security classification cost estimates for FY 1995 and FY 1996. The total for each agency includes costs associated with the following six categories of classification related activities: (1) Personnel Security; (2) Information Security; (3) Professional Education, Training and Awareness; (4) Physical Security; (5) Security Management, Oversight and Planning; and (6) Unique Items.

At Tab B we enclose a copy of the Office of Management and Budget memorandum dated December 29, 1995, that directed departments and agencies to provide cost estimates associated with classifying and safeguarding classified information based upon instructions included with the memorandum. Of particular note, the instructions tell the agencies to report any cost for which 51% or more of a resource is used for classification related activities. Some agencies with very small security classification programs elected to report costs even though this threshold was not met.

In order that we could provide a timely, unclassified report, please note that the table at Tab A does not include the data for the Central Intelligence Agency (CIA). We continue to work with the CIA in order to provide you with a copy of its classified report. Also, we have not yet received the report of the Office of National Drug Control Policy (ONDCP). Therefore, its costs, which should be relatively small, are not included in the table. We will provide you a revised copy of the table if and when we receive the ONDCP report.

Also, despite our best efforts, we have not yet received the report of cost estimates from industry (contractor costs), which are clearly most significant. We are advised that we will be receiving them shortly. We will provide these data as soon as they are available to us.

The cost data estimates in this report differ from the cost estimates reported to the Subcommittee for FY 1994 in one major respect. The Department of Defense estimate reported herein incorporates the National Foreign Intelligence Program (NFIP), which includes such significant entities as the Defense Intelligence Agency, the National Security Agency, the National Reconnaissance Office, and the Central Imagery Office. The FY 1994 submission of the Department of Defense did not incorporate the NFIP estimates. These estimates, plus the cost estimates of the CIA, were provided separately through the Intelligence Committees.

Several agencies provided explanatory information concerning their cost estimates in their individual reports. At your request, we will be happy to provide the Subcommittee with the individual report of each agency listed on the table.


Steven Garfinkel


Agencies Reporting Security Classification Cost Estimates

Agency/Department	Security 		Security
			Classification		Classification
			Costs for FY 1995	Costs for FY 1996

Total $2,705,938,957 $2,741,987,125

Dept of Agriculture $1,153,000 $1,140,200

Dept of Commerce $10,376,469 $10,187,291

Dept of Defense $2,478,031,000 $2,526,091,000

Dept of Energy $105,590,000 $98,474,000

Dept of Health and Human Services $140,600 $245,600

Dept of Justice $29,262,888 $27,756,564

Dept of Labor $13,000 $105,000

Dept of State $33,726,000 $30,157,000

Dept of the Interior $2,129,700 $2,535,000

Dept of the Treasury $11,731,000 $12,377,000

Dept of Transportation $4,964,000 $3,629,000

Dept of Veterans Affairs $10,550 $8,570

Environmental Protection Agency $431,000 $553,000

Executive Office of the President, Office of Administration $125,000 $138,000

Export-Import Bank $128,000 $65,000

Federal Communications Commission $156,000 $53,000

Federal Emergency Management Agency $324,000 $281,000

Federal Reserve Board $305,000 $327,000

General Services Administration $1,178,000 $1,005,000

Marine Mammal Commission $1,000 $1,000

National Aeronautics and Space Administration $8,824,200 $8,760,500

National Archives and Records Administration $7,433,000 $9,520,000

National Science Foundation $61,000 $74,000

National Security Council $133,000 $136,000

Nuclear Regulatory Commission $2,567,750 $2,756,800

Office of Management and Budget $1,522,000 $88,000

Overseas Private Investment Corporation $41,300 $42,600

US Agency for International Development $1,678,000 $1,691,000

US Arms Control and Disarmament Agency $2,051,000 $1,963,000

US Information Agency $1,171,000 $1,228,000

US Peace Corps $157,500 $148,000

US Trade Representative $523,000 $450,000

Total $2,705,938,957 $2,741,987,125

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