Federal Register: October 3, 1997 (Volume 62, Number 192)
Rules and Regulations
Page 51800-51804
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DEPARTMENT OF ENERGY
48 CFR Parts 952 and 970
Acquisition Regulation, Classification, Security and
Counterintelligence
AGENCY: Department of Energy.
ACTION: Final rule.
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SUMMARY: The Department of Energy (DOE) is amending the Department of
Energy Acquisition Regulation (DEAR) to revise its classification
contract clause, revise its access authorization (security clearance)
procedures for contractor personnel, and add new counterintelligence
provisions. Specific material being revised or added is summarized in
the "Section-by-Section Analysis" appearing later in this document.
EFFECTIVE DATE: This rule will be effective December 2, 1997.
FOR FURTHER INFORMATION CONTACT: Richard B. Langston, Office of
Procurement and Assistance Policy (HR-51), Office of the Deputy
Assistant Secretary for Procurement and Assistance Management,
Department of Energy, 1000 Independence Avenue, SW., Washington, D.C.
20585-0705, (202) 586-8247.
SUPPLEMENTARY INFORMATION:
I. Background
II. Disposition of Comments
III. Section-by-Section Analysis
IV. Procedural Requirements
A. Review Under Executive Order 12612
B. Review Under Executive Order 12866
C. Review Under Executive Order 12988
D. Review Under the National Environmental Policy Act
E. Review Under the Paperwork Reduction Act
F. Review Under the Regulatory Flexibility Act
G. Review Under Small Business Regulatory Enforcement Fairness
Act of 1996
H. Review Under the Unfunded Mandates Reform Act of 1995
I. Background
This final rule results from a notice of proposed Rulemaking
published in the Federal Register on November 20, 1996, 61 FR 59072.
This rule will accomplish three objectives.
First, it will revise the classification contract clause to provide
that only Federal Government employees may serve as "original
classifiers" and that both Federal Government employees and contractor
employees may serve as "derivative classifiers." The clause is also
changed to recognize that a balance is required between the
Department's mission to protect the national security and prevent
nuclear proliferation and its commitment to maximize the amount of
information available to the public. As revised, the clause requires
that information, documents or material originated or generated in
classified or potentially classified subject areas be reviewed for
classification by the appropriate officials using proper classification
guidance provided by the Department. The clause also requires that
documents containing information which is no longer classified by
current classification guidance be systematically reviewed for
declassification by a Derivative Declassifier. Only when both
classification and declassification reviews are performed can the
Department achieve its goal of protecting the national security while
providing the public with access to as much Government information as
possible. Definitions of certain terms are added. These changes are at
item 2 of the final rule, subsection 952.204-70, the clause itself, and
item 5 of the final rule, subsection 970.0404-4, paragraph (a)(1), a
reference to the clause and its revised title.
Second, it will provide a definition of "counterintelligence"
consistent with E.O. 12333, a policy statement regarding DOE's
counterintelligence program, and a new contract clause on
counterintelligence applicable to certain DOE management and operating
contractors and other contractors managing DOE-owned facilities. These
changes appear at item 3 of the final rule, subsection 970.0404-1, a
definition, item 4 of the final rule, subsection 970.0404-2, paragraph
(e), a policy statement, item 5, subsection 970.0404-4, paragraph
(a)(2), an instruction for use of the clause, and item 7, subsection
970.5204-1, paragraph (b), the text of the clause.
Third, it will revise the DEAR to be consistent with the
recommendations of the General Accounting Office Report on Nuclear
Security, RCED-93-183, as implemented by DOE Order 472.1B entitled
"Personnel Security Activities." The GAO report stressed contractor
responsibility for certifying preemployment checks conducted on
prospective employees. Where DOE access authorization is required, the
contractor must perform normal and prudent preemployment checks and the
applicant's job qualifications and suitability must be established
before a request is made to the Department for a security clearance.
This revision is applicable to DOE management and operating contractors
and other contractors managing DOE-owned facilities. Such contractors
may, at their discretion, include this procedure in their subcontracts
where subcontractor employees are required to hold a DOE access
authorization in order to perform on-site duties, such as protective
force operations. This change appears at item 6 of the final rule,
section 970.2201, paragraph (b)(1)(ii).
[[Page 51801]]
II. Disposition of Comments
Comments were received from 2 reviewers.
The first reviewer registered general support for the amendment.
The reviewer supported the Department's efforts to maximize information
available to the public while ensuring the proper protection of
sensitive national security and atomic energy information. The addition
of the declassification reviews to DOE's security program was supported
by this reviewer.
The second reviewer offered four comments.
First Comment. The reviewer notes that the rulemaking emphasizes
the importance of a contractor's declassification activities. The
reviewer suggests that the declassification activities of the
contractor be formally recognized in the contract and states the
opinion that such declassification activities may be substantially
under funded until such action is taken.
First Response. Including the Classification/Declassification
clause in a contract constitutes formal recognition of these
activities. Contracts do not specify the individual tasks involved in
the work to such a specific level of work as classifying or
declassifying a document. DOE policy emphasizes the importance of
conducting declassification reviews. This policy has led, during each
of the past three years, to the declassification of greater numbers of
documents than have been classified. This suggests that our policy
emphasis has been effective.
Second Comment. The reviewer notes a statement in the "Review
Under the Regulatory Flexibility Act" (item IV.F. of the preamble of
the notice) which says that the security and counterintelligence
requirements apply only to management and operating contractors and do
not flow down to subcontractors. The reviewer asks for clarification
regarding whether the requirements apply to subcontractors.
Second Response. The statement has been revised to more
specifically define what is meant by "security requirements." The
security requirements being revised, in this context, are those of
970.2201 which discuss completion of preemployment background checks in
relation to access authorizations. This specific section (i.e.
970.2201(b)(1)(ii)) applies to DOE management and operating contractors
and other contractors operating DOE facilities which require access
authorizations. Section 970.2201 is a guiding principle, not a contract
clause. It does not flow down to subcontracts. Management and operating
contractors and other contractors operating DOE facilities may, at
their discretion, include this guiding principle in their solicitations
and subcontracts wherein subcontractor employees are required to hold a
DOE access authorization in order to perform on-site duties, such as
protective force operations. Possible applicability to subcontractors,
in specific circumstances, was added based on our analysis of the
comment. The Classification/Declassification clause does flow down to
subcontracts if they require access to classified information. The
counterintelligence requirements do not flowdown to subcontracts.
Section IV.F. of the preamble has been revised to avoid any
misunderstanding.
Third Comment. The reviewer notes section IV.E. "Review Under the
Paperwork Reduction Act," of the preamble of the notice. The reviewer
suggests that the declassification activity under the revised
Classification/Declassification clause of the notice represents a
tremendous record keeping and information burden.
Third Response. The rulemaking makes no change in the amount of
records or information. It is intended to move more records and
information from the classified category to the declassified category.
Fourth Comment. The reviewer expressed concern that the clause
would require most classification decisions to be made by Federal
classifiers even in situations where a major contractor operated
security program was involved. The reviewer suggested that the lack of
definition of the terms "document," "equipment," and
"information" made the intent of the clause unclear.
Fourth Response. We agree with the comment and have added
definitions of terms and revised the text of the clause for clarity.
III. Section-by-Section Analysis
1. The authority citations for Parts 952 and 970 are restated.
2. The classification clause at 952.204-70 is renamed
classification/declassification. It is revised to emphasize
declassification, add definitions, and differentiate the duties of
original versus derivative classifiers.
3. A definition of counterintelligence is added to subsection
970.0404-1.
4. A new paragraph is added to 970.0404-2 to describe DOE policy on
counterintelligence.
5. New instructions are added to 970.0404-4 to detail the security
clause requirements for management and operating contractors and other
contractors managing DOE-owned facilities which require access
authorizations.
6. Section 970.2201 is amended to describe the procedures for
confirming to DOE the conduct and outcome of preemployment checks
performed by management and operating contractors and other contractors
managing DOE-owned facilities, when such contractors request that the
DOE process an applicant for access authorization. Such contractors
may, at their discretion, include this procedure in subcontracts
wherein subcontractor employees are required to possess DOE access
authorization in order to perform on-site duties, such as protective
force operations.
7. Section 970.5204-1 is amended to add a new clause entitled
counterintelligence.
IV. Procedural Requirements
A. Review Under Executive Order 12612
Executive Order 12612, entitled "Federalism," 52 FR 41685
(October 30, 1987), requires that regulations, rules, legislation, and
any other policy actions be reviewed for any substantial direct effects
on states, on the relationship between the Federal Government and the
states, or in the distribution of power and responsibilities among
various levels of government. If there are sufficient substantial
direct effects, then the Executive Order requires preparation of a
federalism assessment to be used in all decisions involved in
promulgating and implementing a policy action. DOE has determined that
this rulemaking will not have a substantial direct effect on the
institutional interests or traditional functions of states.
B. Review Under Executive Order 12866
Today's regulatory action has been determined not to be a
"significant regulatory action" under Executive Order 12866,
"Regulatory Planning and Review," (58 FR 51735, October 4, 1993).
Accordingly, this action was not subject to review, under that
Executive Order, by the Office of Information and Regulatory Affairs of
the Office of Management and Budget (OMB).
C. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
"Civil Justice Reform," 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
[[Page 51802]]
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. With regard to the review
required by section 3(a), section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftsmanship under any guidelines issued by the Attorney
General. Section 3(c) of Executive Order 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to the extent permitted by law,
the final regulations meet the relevant standards of Executive Order
12988.
D. Review Under the National Environmental Policy Act
Pursuant to the Council on Environmental Quality Regulations (40
CFR 1500-1508), the Department has established guidelines for its
compliance with the provisions of the National Environmental Policy Act
(NEPA) of 1969 (42 U.S.C. 4321 et seq.). Pursuant to Appendix A of
Subpart D of 10 CFR Part 1021, National Environmental Policy Act
Implementing Procedures (Categorical Exclusion A), DOE has determined
that this rulemaking is categorically excluded from the need to prepare
an environmental impact statement or environmental assessment.
E. Review Under the Paperwork Reduction Act
This rulemaking imposes no new information collection or record
keeping requirements. Accordingly, they require no OMB clearance under
the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).
F. Review Under the Regulatory Flexibility Act
This rulemaking was reviewed under the Regulatory Flexibility Act
of 1980, Public Law 96-354, 5 U.S.C. 601, et seq., which requires
preparation of a regulatory flexibility analysis for any rule that is
likely to have a significant economic impact on a substantial number of
small entities. This rulemaking revises established classification and
security requirements and adds counterintelligence requirements. The
changes to the security requirements being made by this final rule
(i.e., 970.2201 dealing with completion of preemployment background
checks prior to requests for access authorizations) are applicable to
management and operating contractors and other contractors managing
DOE-owned facilities. Such contractors may, at their discretion,
include this procedure in subcontracts wherein subcontractor employees
will require DOE access authorization in order to perform on-site
duties, such as protective force operations. The prime contractors
operating DOE facilities are large businesses, large universities, or
large not for profit entities. This part of the rulemaking could affect
small entities only if they become subcontractors performing on-site
services that require DOE access authorizations such as protective
force operations. Even under such circumstances, there will not be a
significant economic impact on a substantial number of small entities
as the rulemaking does not require any unusual effort on the part of
the small entity. The procedure merely provides that, before requesting
that DOE undertake a review for employee access authorization, the
employer complete normal preemployment background checks, i.e. police
and credit checks, which are normal to the employment of personnel in
sensitive type positions such as protective force operations. Moreover,
the cost of the background checks are reimbursable.
The new counterintelligence requirements are only applicable to
management and operating contractors and other contractors managing DOE
facilities. As noted above, such contractors are large businesses or
universities, therefore, this rulemaking will have no significant
impact on a substantial number of small entities. The change to the
classification/declassification clause (i.e. 952.204-70) applies to all
contracts and subcontracts but has no significant economic impact. The
associated costs are estimated to be relatively small, and in any
event, the contracts are likely to be of the cost reimbursement type.
Based on the foregoing review, DOE certifies that this rulemaking
will not have a significant economic impact on a substantial number of
small entities and, therefore, no regulatory flexibility analysis has
been prepared.
G. Review Under Small Business Regulatory Enforcement Fairness Act of
1966
As required by 5 U.S.C. 801, DOE will report to Congress
promulgation of the rule prior to its effective date. The report will
state that it has been determined that the rule is not a "major rule"
as defined by 5 U.S.C. 804(3).
H. Review Under the Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally
requires a Federal agency to perform a detailed assessment of costs and
benefits of any rule imposing a Federal mandate with costs to State,
local or tribal governments, or to the private sector, of $100 million
or more. This rulemaking imposes no Federal mandates and does not have
an impact of $100 million or more.
List of Subjects in 48 CFR Parts 952 and 970
Government Procurement.
Issued in Washington, D.C., on September 29, 1997.
Richard H. Hopf,
Deputy Assistant Secretary for Procurement and Assistance Management.
For the reasons set out in the preamble, Chapter 9 of Title 48 of
the Code of Federal Regulations is amended as set forth below:
1. The authority citation for Part 952 continues to read:
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c); 42 U.S.C. 13524.
PART 952--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
952.204-70 [Amended]
2. Subsection 952.204-70 is amended by revising the section heading
and revising the clause to read:
952.204-70 Classification/Declassification.
* * * * *
Classification/Declassification (Sep 1997)
In the performance of work under this contract, the contractor
or subcontractor shall comply with all provisions of the Department
of Energy's regulations and mandatory DOE directives which apply to
work involving the classification and declassification of
information, documents, or material. In this section,
"information" means facts, data, or knowledge itself; "document"
means the physical medium on or in which information is recorded;
and "material" means a product or substance which contains or
reveals information, regardless of its physical form or
characteristics. Classified information is "Restricted Data" and
"Formerly Restricted Data" (classified under the Atomic Energy
[[Page 51803]]
Act of 1954, as amended) and "National Security Information"
(classified under Executive Order 12958 or prior Executive Orders).
The original decision to classify or declassify information is
considered an inherently Governmental function. For this reason,
only Government personnel may serve as original classifiers, i.e.,
Federal Government Original Classifiers. Other personnel (Government
or contractor) may serve as derivative classifiers which involves
making classification decisions based upon classification guidance
which reflect decisions made by Federal Government Original
Classifiers.
The contractor or subcontractor shall ensure that any document
or material that may contain classified information is reviewed by
either a Federal Government or a Contractor Derivative Classifier in
accordance with classification regulations including mandatory DOE
directives and classification/declassification guidance furnished to
the contractor by the Department of Energy to determine whether it
contains classified information prior to dissemination. For
information which is not addressed in classification/
declassification guidance, but whose sensitivity appears to warrant
classification, the contractor or subcontractor shall ensure that
such information is reviewed by a Federal Government Original
Classifier.
In addition, the contractor or subcontractor shall ensure that
existing classified documents (containing either Restricted Data or
Formerly Restricted Data or National Security Information) which are
in its possession or under its control are periodically reviewed by
a Federal Government or Contractor Derivative Declassifier in
accordance with classification regulations, mandatory DOE directives
and classification/declassification guidance furnished to the
contractor by the Department of Energy to determine if the documents
are no longer appropriately classified. Priorities for
declassification review of classified documents shall be based on
the degree of public and researcher interest and the likelihood of
declassification upon review. Documents which no longer contain
classified information are to be declassified. Declassified
documents then shall be reviewed to determine if they are publicly
releasable. Documents which are declassified and determined to be
publicly releasable are to be made available to the public in order
to maximize the public's access to as much Government information as
possible while minimizing security costs.
The contractor or subcontractor shall insert this clause in any
subcontract which involves or may involve access to classified
information.
PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS
The authority citation for Part 970 continues to read:
Authority: Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C.
2201), and Sec. 644 of the Department of Energy Organization Act,
Pub. L. 95-91 (42 U.S.C. 7254).
3. Subsection 970.0404-1 is amended by adding in alphabetic order
"counterintelligence" as a new definition to read as follows:
970.0404-1 Definitions.
* * * * *
Counterintelligence means information gathered and activities
conducted to protect against espionage, other intelligence activities,
sabotage, or assassinations conducted for or on behalf of foreign
powers, organizations or persons, or international terrorist
activities, but not including personnel, physical, document or
communication security programs.
* * * * *
4. Subsection 970.0404-2 is amended by adding paragraph (e) to read
as follows:
970.0404-2 General.
* * * * *
(e) Executive Order 12333, United States Intelligence Activities,
provides for the organization and control of United States foreign
intelligence and counterintelligence activities. In accordance with
this Executive Order, DOE has established a counterintelligence program
which is described in DOE Order 5670.3 (as amended). All DOE elements,
including management and operating contractors and other contractors
managing DOE-owned facilities which require access authorizations,
should undertake the necessary precautions to ensure that DOE and
covered contractor personnel, programs and resources are properly
protected from foreign intelligence threats and activities.
5. Subsection 970.0404-4 is amended by revising paragraph (a)(1)
and by adding a new paragraph (a)(2) to read as follows:
970.0404-4 Contract clauses.
(a) * * *
(1) Security and Classification/Declassification, 970.5204-1(a).
These clauses are required in all contracts which involve access to
classified information, nuclear material, or access authorizations.
(2) Counterintelligence, 970.5204-1(b). This clause is required in
all management and operating contracts and other contracts for the
management of DOE-owned facilities which include the security and
classification/declassification clauses.
* * * * *
6. Section 970.2201 is amended by revising paragraph (b)(1)(ii) to
read as follows:
970.2201 Basic labor policies.
* * * * *
(b) * * *
(1) * * *
(ii) The job qualifications and suitability of prospective
employees should be established by the contractor prior to employment
by careful personnel investigations. Such personnel investigations
should include, as appropriate: a credit check; verification of high
school degree/diploma or degree/diploma granted by an institution of
higher learning within the last 5 years; contacts with listed personal
references; contacts with listed employers for the past 3 years
(excluding employment of less than 60 days duration, part-time
employments, and craft/union employments); and local law enforcement
checks when such checks are not prohibited by State or local law,
statute, or regulation, and when the individual had resided in the
jurisdiction where the contractor is located. When a DOE access
authorization (security clearance) will be required, the aforementioned
preemployment checks must be conducted and the applicant's job
qualifications and suitability must be established before a request is
made to the DOE to process the applicant for access authorization.
Evidence must be furnished to the DOE with the applicant's security
forms that specifies: the date each check was conducted, the entity
contacted that provided information concerning the applicant, a
synopsis of the information provided as a result of each contact, and a
statement that all information available has been reviewed and
favorably adjudicated in accordance with the contractor's personnel
policies. When an applicant is being hired specifically for a position
which requires a DOE access authorization, the applicant shall not be
placed in that position prior to the access authorization being granted
by the DOE unless an exception has been obtained from the Head of the
Contracting Activity or designee. If an applicant is placed in that
position prior to access authorization being granted by the DOE, the
applicant may not be afforded access to classified matter or special
nuclear materials (in categories requiring access authorization) until
the DOE notifies the employer that access authorization has been
granted. Management and operating contractors and other contractors
operating DOE facilities may, at their discretion, include this
language in solicitations and subcontracts (appropriately modified to
identify the parties) wherein subcontract employees will be required to
hold DOE access
[[Page 51804]]
authorization in order to perform on-site duties, such as protective
force operations.
* * * * *
7. Section 970.5204-1 is revised to read as follows:
Subpart 970.52--Contract Clauses for Management and Operating
Contracts.
970.5204-1 Security.
(a) As prescribed in 970.0404-4(a)(1), insert the Security clause
found at 952.204-2 and the Classification/Declassification clause found
at 952.204-70.
(b) As prescribed in 970.0404-4(a)(2), insert the following
Counterintelligence clause in contracts containing the security and
classification/declassification clauses:
Counterintelligence (Sep 1997)
(a) The contractor shall take all reasonable precautions in the
work under this contract to protect DOE programs, facilities,
technology, personnel, unclassified sensitive information and
classified matter from foreign intelligence threats and activities
conducted for governmental or industrial purposes, in accordance
with DOE Order 5670.3, Counterintelligence Program; Executive Order
12333, U.S. Intelligence Activities; and other pertinent national
and Departmental Counterintelligence requirements.
(b) The contractor shall appoint a qualified employee(s) to
function as the Contractor Counterintelligence Officer. The
Contractor Counterintelligence Officer will be responsible for
conducting defensive Counterintelligence briefings and debriefings
of employees traveling to foreign countries or interacting with
foreign nationals; providing thoroughly documented written reports
relative to targeting, suspicious activity and other matters of
Counterintelligence interest; immediately reporting targeting,
suspicious activity and other Counterintelligence concerns to the
DOE Headquarters Counterintelligence Division; and providing
assistance to other elements of the U.S. Intelligence Community as
stated in the aforementioned Executive Order, the DOE
Counterintelligence Order, and other pertinent national and
Departmental Counterintelligence requirements.