[Title 32 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2011 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          Title 32

National Defense


________________________

Parts 1 to 190

                         Revised as of July 1, 2011

          Containing a codification of documents of general 
          applicability and future effect

          As of July 1, 2011
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

[[Page ii]]

          U.S. GOVERNMENT OFFICIAL EDITION NOTICE

          Legal Status and Use of Seals and Logos
          
          
          The seal of the National Archives and Records Administration 
              (NARA) authenticates the Code of Federal Regulations (CFR) as 
              the official codification of Federal regulations established 
              under the Federal Register Act. Under the provisions of 44 
              U.S.C. 1507, the contents of the CFR, a special edition of the 
              Federal Register, shall be judicially noticed. The CFR is 
              prima facie evidence of the original documents published in 
              the Federal Register (44 U.S.C. 1510).

          It is prohibited to use NARA's official seal and the stylized Code 
              of Federal Regulations logo on any republication of this 
              material without the express, written permission of the 
              Archivist of the United States or the Archivist's designee. 
              Any person using NARA's official seals and logos in a manner 
              inconsistent with the provisions of 36 CFR part 1200 is 
              subject to the penalties specified in 18 U.S.C. 506, 701, and 
              1017.

          Use of ISBN Prefix

          This is the Official U.S. Government edition of this publication 
              and is herein identified to certify its authenticity. Use of 
              the 0-16 ISBN prefix is for U.S. Government Printing Office 
              Official Editions only. The Superintendent of Documents of the 
              U.S. Government Printing Office requests that any reprinted 
              edition clearly be labeled as a copy of the authentic work 
              with a new ISBN.

              
              
          U . S . G O V E R N M E N T P R I N T I N G O F F I C E

          ------------------------------------------------------------------

          U.S. Superintendent of Documents  Washington, DC 
              20402-0001

          http://bookstore.gpo.gov

          Phone: toll-free (866) 512-1800; DC area (202) 512-1800

[[Page iii]]




                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 32:
    SUBTITLE A--Department of Defense
          Chapter I--Office of the Secretary of Defense              5
  Finding Aids:
      Table of CFR Titles and Chapters........................     ???
      Alphabetical List of Agencies Appearing in the CFR......     ???
      List of CFR Sections Affected...........................     ???

[[Page iv]]





                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 32 CFR 2.1 refers to 
                       title 32, part 2, section 
                       1.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, July 1, 2011), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
April 1, 2001, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, 1973-1985, or 1986-2000, published in eleven separate 
volumes. For the period beginning April 1, 2001, a ``List of CFR 
Sections Affected'' is published at the end of each CFR volume.

``[RESERVED]'' TERMINOLOGY

    The term ``[Reserved]'' is used as a place holder within the Code of 
Federal Regulations. An agency may add regulatory information at a 
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used 
editorially to indicate that a portion of the CFR was left vacant and 
not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed as 
an approved incorporation by reference, please contact the agency that 
issued the regulation containing that incorporation. If, after 
contacting the agency, you find the material is not available, please 
notify the Director of the Federal Register, National Archives and 
Records Administration, 8601 Adelphi Road, College Park, MD 20740-6001, 
or call 202-741-6010.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Authorities 
and Rules. A list of CFR titles, chapters, subchapters, and parts and an 
alphabetical list of agencies publishing in the CFR are also included in 
this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.

[[Page vii]]

    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, 8601 Adelphi Road, College Park, MD 
20740-6001 or e-mail [email protected].

SALES

    The Government Printing Office (GPO) processes all sales and 
distribution of the CFR. For payment by credit card, call toll-free, 
866-512-1800, or DC area, 202-512-1800, M-F 8 a.m. to 4 p.m. e.s.t. or 
fax your order to 202-512-2104, 24 hours a day. For payment by check, 
write to: US Government Printing Office - New Orders, P.O. Box 979050, 
St. Louis, MO 63197-9000.

ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, the LSA (List of 
CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers of the Presidents of the United 
States, Compilation of Presidential Documents and the Privacy Act 
Compilation are available in electronic format via www.ofr.gov. For more 
information, contact the GPO Customer Contact Center, U.S. Government 
Printing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). E-
mail, [email protected].
    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.archives.gov/federal-
register.

    Raymond A. Mosley,
    Director,
    Office of the Federal Register.
    July 1, 2011.







[[Page ix]]



                               THIS TITLE

    Title 32--National Defense is composed of six volumes. The parts in 
these volumes are arranged in the following order: Parts 1-190, parts 
191-399, parts 400-629, parts 630-699, parts 700-799, and part 800 to 
end. The contents of these volumes represent all current regulations 
codified under this title of the CFR as of July 1, 2011.

    The current regulations issued by the Department of Defense appear 
in the volumes containing parts 1-189 and parts 190-399; those issued by 
the Department of the Army appear in the volumes containing parts 400-
629 and parts 630-699; those issued by the Department of the Navy appear 
in the volume containing parts 700-799, and those issued by the 
Department of the Air Force, Defense Logistics Agency, Selective Service 
System, National Counterintelligence Center, Central Intelligence 
Agency, Information Security Oversight Office, National Security 
Council, Office of Science and Technology Policy, Office for Micronesian 
Status Negotiations, and Office of the Vice President of the United 
States appear in the volume containing part 800 to end.

    For this volume, Susannah C. Hurley was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Michael L. White, assisted by Ann Worley.


[[Page 1]]



                       TITLE 32--NATIONAL DEFENSE




  --------------------------------------------------------------------

                    SUBTITLE A--Department of Defense

                                                                    Part

chapter i--Office of the Secretary of Defense...............           2

[[Page 3]]

                    Subtitle A--Department of Defense

[[Page 5]]



              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE




                            (Parts 1 to 190)

  --------------------------------------------------------------------

                        SUBCHAPTER A--ACQUISITION
Part                                                                Page
1               [Reserved]

2               Pilot program policy........................          11
3               Transactions other than contracts, grants, 
                    or cooperative agreements for prototype 
                    projects................................          13
4-8             [Reserved]

                   SUBCHAPTER B--MILITARY COMMISSIONS
9               Procedures for trials by military 
                    commissions of certain non-United States 
                    citizens in the war against terrorism...          22
10              Military commission instructions............          31
11              Crimes and elements of trials by military 
                    commission..............................          32
12              Responsibilities of the Chief Prosecutor, 
                    prosecutors, and assistant prosecutors..          43
13              Responsibilities of the Chief Defense 
                    Counsel, Detailed Defense Counsel, and 
                    Civilian Defense Counsel................          45
14              Qualification of Civilian Defense Counsel...          48
15              Reporting relationships for military 
                    commission personnel....................          53
16              Sentencing..................................          54
17              Administrative procedures...................          55
18              Appointing authority for military 
                    commissions.............................          57
19-20           [Reserved]

            SUBCHAPTER C--DOD GRANT AND AGREEMENT REGULATIONS
21              DoD grants and agreements--general matters..          61
22              DoD grants and agreements--award and 
                    administration..........................          73

[[Page 6]]

26              Governmentwide requirements for drug-free 
                    workplace (financial assistance)........         106
28              New restrictions on lobbying................         112
32              Administrative requirements for grants and 
                    agreements with institutions of higher 
                    education, hospitals, and other non-
                    profit organizations....................         124
33              Uniform administrative requirements for 
                    grants and cooperative agreements to 
                    State and local governments.............         153
34              Administrative requirements for grants and 
                    agreements with for-profit organizations         181
37              Technology investment agreements............         200
             SUBCHAPTER D--PERSONNEL, MILITARY AND CIVILIAN
44              Screening the Ready Reserve.................         255
45              Certificate of release or discharge from 
                    active duty (DD Form 214/5 Series)......         259
47              Active duty service for civilian or 
                    contractual groups......................         274
48              Retired serviceman's family protection plan.         279
50              Personal commercial solicitation on DoD 
                    installations...........................         289
53              Wearing of the uniform......................         299
54              Allotments for child and spousal support....         300
56              Nondiscrimination on the basis of handicap 
                    in programs and activities assisted or 
                    conducted by the Department of Defense..         304
57              Provision of early intervention and special 
                    education services to eligible DoD 
                    dependents..............................         324
64              Management and mobilization of Regular and 
                    Reserve retired military members........         356
65              Post-9/11 GI bill...........................         358
67              Educational requirements for appointment of 
                    Reserve component officers to a grade 
                    above first lieutenant or lieutenant 
                    (junior grade)..........................         369
69              School boards for Department of Defense 
                    domestic dependent elementary and 
                    secondary schools.......................         371
70              Discharge Review Board (DRB) procedures and 
                    standards...............................         375
74              Appointment of doctors of osteopathy as 
                    medical officers........................         408
77              Program to encourage public and community 
                    service.................................         409
78              Voluntary State tax withholding from retired 
                    pay.....................................         419

[[Page 7]]

80              Provision of early intervention services to 
                    eligible infants and toddlers with 
                    disabilities and their families, and 
                    special education children with 
                    disabilities within the section 6 school 
                    arrangements............................         422
81              Paternity claims and adoption proceedings 
                    involving members and former members of 
                    the Armed Forces........................         446
85              Health promotion............................         447
86              Criminal history background checks on 
                    individuals in child care services......         451
88              Transition assistance for military personnel         463
93              Acceptance of service of process; release of 
                    official information in litigation; and 
                    testimony by NSA personnel as witnesses.         466
94              Naturalization of aliens serving in the 
                    Armed Forces of the United States and of 
                    alien spouses and/or alien adopted 
                    children of military and civilian 
                    personnel ordered overseas..............         470
96              Acquisition and use of criminal history 
                    record information by the military 
                    services................................         474
97              Release of official information in 
                    litigation and testimony by DoD 
                    personnel as witnesses..................         475
99              Procedures for States and localities to 
                    request indemnification.................         479
100             Unsatisfactory performance of Ready Reserve 
                    obligation..............................         481
101             Participation in Reserve training programs..         486
104             Civilian employment and reemployment rights 
                    of applicants for, and Service members 
                    and former Service members of the 
                    Uniformed Services......................         488
107             Personal services authority for direct 
                    health care providers...................         498
108             Health care eligibility under the 
                    secretarial designee program and related 
                    special authorities.....................         500
110             Standardized rates of subsistence allowance 
                    and commutation instead of uniforms for 
                    members of the Senior Reserve Officers' 
                    Training Corps..........................         505
112             Indebtedness of military personnel..........         511
113             Indebtedness procedures of military 
                    personnel...............................         515
142             Copyrighted sound and video recordings......         ???
143             DoD policy on organizations that seek to 
                    represent or organize members of the 
                    Armed Forces in negotiation or 
                    collective bargaining...................         ???
144             Service by members of the Armed Forces on 
                    State and local juries..................         ???

[[Page 8]]

145             Cooperation with the Office of Special 
                    Counsel of the Merit Systems Protection 
                    Board...................................         ???
147             Adjudicative guidelines for determining 
                    eligibility for access to classified 
                    information.............................         ???
148             National policy and implementation of 
                    reciprocity of facilities...............         ???
149             Policy on technical surveillance 
                    countermeasures.........................         ???
        SUBCHAPTER E--REGULATIONS PERTAINING TO MILITARY JUSTICE
150             Courts of criminal appeals rules of practice 
                    and procedure...........................         ???
151             Status of forces policies and information...         ???
152             Review of the Manual for Courts-Martial.....         ???
153             Criminal jurisdiction over civilians 
                    employed by or accompanying the Armed 
                    Forces outside the United States, 
                    certain service members, and former 
                    service members.........................         ???
                         SUBCHAPTER F--SECURITY
154             Department of Defense personnel security 
                    program regulation......................         ???
155             Defense Industrial Personnel Security 
                    Clearance Program.......................         ???
156             Department of Defense Personnel Security 
                    Program (DoDPSP)........................         ???
159             Private security contractors operating in 
                    contingency operations..................         ???
                    SUBCHAPTER G--DEFENSE CONTRACTING
162             Productivity Enhancing Capital Investment 
                    (PECI)..................................         ???
165             Recoupment of nonrecurring costs on sales of 
                    U.S. items..............................         ???
168a            National defense science and engineering 
                    graduate fellowships....................         ???
169             Commercial activities program...............         ???
169a            Commercial activities program procedures....         ???
171             Implementation of Wildfire Suppression 
                    Aircraft Transfer Act of 1996...........         ???
172             Disposition of proceeds from DoD sales of 
                    surplus personal property...............         ???
173             Competitive information certificate and 
                    profit reduction clause.................         ???
                 SUBCHAPTER H--CLOSURES AND REALIGNMENT
174             Revitalizing base closure communities and 
                    addressing impacts of realignment.......         ???

[[Page 9]]

175             [Reserved]

176             Revitalizing base closure communities and 
                    community assistance--community 
                    redevelopment and homeless assistance...         ???
179             Munitions Response Site Prioritization 
                    Protocol (MRSPP)........................         ???
                       SUBCHAPTER I--CIVIL DEFENSE
185             Defense Support of Civil Authorities (DSCA).         ???
                       SUBCHAPTERS J-K [RESERVED]
                        SUBCHAPTER L--ENVIRONMENT
187             Environmental effects abroad of major 
                    Department of Defense actions...........         ???
188-190         [Reserved]

[[Page 11]]



                        SUBCHAPTER A_ACQUISITION
                            PART 1 [RESERVED]



PART 2_PILOT PROGRAM POLICY--Table of Contents



Sec.
2.1 Purpose.
2.2 Statutory relief for participating programs.
2.3 Regulatory relief for participating programs.
2.4 Designation of participating programs.
2.5 Criteria for designation of participating programs.

    Authority: 10 U.S.C. 2340 note.

    Source: 62 FR 17549, Apr. 10, 1997, unless otherwise noted.



Sec. 2.1  Purpose.

    Section 809 of Public Law 101-510, ``National Defense Authorization 
Act for Fiscal Year 1991,'' as amended by section 811 of Public Law 102-
484, ``National Defense Authorization Act for Fiscal Year 1993'' and 
Public Law 103-160, ``National Defense Authorization Act for Fiscal Year 
1994,'' authorizes the Secretary of Defense to conduct the Defense 
Acquisition Pilot Program. In accordance with section 809 of Public Law 
101-510, the Secretary may designate defense acquisition programs for 
participation in the Defense Acquisition Pilot Program.
    (a) The purpose of the pilot programs is to determine the potential 
for increasing the efficiency and effectiveness of the acquisition 
process. Pilot programs shall be conducted in accordance with the 
standard commercial, industrial practices. As used in this policy, the 
term ``standard commercial, industrial practice'' refers to any 
acquisition management practice, process, or procedure that is used by 
commercial companies to produce and sell goods and services in the 
commercial marketplace. This definition purposely implies a broad range 
of potential activities to adopt commercial practices, including 
regulatory and statutory streamlining, to eliminate unique Government 
requirements and practices such as government-unique contracting 
policies and practices, government-unique specifications and standards, 
and reliance on cost determination rather than price analysis.
    (b) Standard commercial, industrial practices include, but are not 
limited to:
    (1) Innovative contracting policies and practices;
    (2) Performance and commercial specifications and standards;
    (3) Innovative budget policies;
    (4) Establishing fair and reasonable prices without cost data;
    (5) Maintenance of long-term relationships with quality suppliers;
    (6) Acquisition of commercial and non-developmental items (including 
components); and
    (7) Other best commercial practices.



Sec. 2.2  Statutory relief for participating programs.

    (a) Within the limitations prescribed, the applicability of any 
provision of law or any regulation prescribed to implement a statutory 
requirement may be waived for all programs participating in the Defense 
Acquisition Pilot Program, or separately for each participating program, 
if that waiver or limit is specifically authorized to be waived or 
limited in a law authorizing appropriations for a program designated by 
statute as a participant in the Defense Acquisition Pilot Program.
    (b) Only those laws that prescribe procedures for the procurement of 
supplies or services; a preference or requirement for acquisition from 
any source or class of sources; any requirement related to contractor 
performance; any cost allowability, cost accounting, or auditing 
requirements; or any requirement for the management of, testing to be 
performed under, evaluation of, or reporting on a defense acquisition 
program may be waived.
    (c) The requirements in section 809 of Public Law 101-510, as 
amended by section 811 of Public Law 102-484, the requirements in any 
law enacted on or after the enactment of Public Law 101-510 (except to 
the extent that a waiver or limitation is specifically authorized for 
such a defense acquisition program by statute), and any provision of law 
that ensures the financial integrity of

[[Page 12]]

the conduct of a Federal Government program or that relates to the 
authority of the Inspector General of the Department of Defense may not 
be considered for waiver.



Sec. 2.3  Regulatory relief for participating programs.

    (a) A program participating in the Defense Acquisition Pilot Program 
will not be subject to any regulation, policy, directive, or 
administrative rule or guideline relating to the acquisition activities 
of the Department of Defense other than the Federal Acquisition 
Regulation (FAR) \1\, the Defense FAR Supplement (DFARS) \2\, or those 
regulatory requirements added by the Under Secretary of Defense for 
Acquisition and Technology, the Head of the Component, or the DoD 
Component Acquisition Executive.
---------------------------------------------------------------------------

    \1\ Copies of this Department of Defense publication may be obtained 
from the Government Printing Office, Superintendent of Documents, 
Washington, DC 20402.
    \2\ See footnote 1 to Sec. 2.3(a).
---------------------------------------------------------------------------

    (b) Provisions of the FAR and/or DFARS that do not implement 
statutory requirements may be waived by the Under Secretary of Defense 
for Acquisition and Technology using appropriate administrative 
procedures. Provisions of the FAR and DFARS that implement statutory 
requirements may be waived or limited in accordance with the procedures 
for statutory relief previously mentioned.
    (c) Regulatory relief includes relief from use of government-unique 
specifications and standards. Since a major objective of the Defense 
Acquisition Pilot Program is to promote standard, commercial industrial 
practices, functional performance and commercial specifications and 
standards will be used to the maximum extent practical. Federal or 
military specifications and standards may be used only when no practical 
alternative exists that meet the user's needs. Defense acquisition 
officials (other than the Program Manager or Commodity Manager) may only 
require the use of military specifications and standards with advance 
approval from the Under Secretary of Defense for Acquisition and 
Technology, the Head of the DoD Component, or the DoD Component 
Acquisition Executive.



Sec. 2.4  Designation of participating programs.

    (a) Pilot programs may be nominated by a DoD Component Head or 
Component Acquisition Executive for participation in the Defense 
Acquisition Pilot Program. The Under Secretary of Defense for 
Acquisition and Technology shall determine which specific programs will 
participate in the pilot program and will transmit to the Congressional 
defense committees a written notification of each defense acquisition 
program proposed for participation in the pilot program. Programs 
proposed for participation must be specifically designated as 
participants in the Defense Acquisition Pilot Program in a law 
authorizing appropriations for such programs and provisions of law to be 
waived must be specifically authorized for waiver.
    (b) Once included in the Defense Acquisition Pilot Program, decision 
and approval authority for the participating program shall be delegated 
to the lowest level allowed in the acquisition regulations consistent 
with the total cost of the program (e.g., under DoD Directive 5000.1, 
\3\ an acquisition program that is a major defense acquisition program 
would be delegated to the appropriate Component Acquisition Executive as 
an acquisition category IC program)
---------------------------------------------------------------------------

    \3\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------

    (c) At the time of nomination approval, the Under Secretary of 
Defense for Acquisition and Technology will establish measures to judge 
the success of a specific program, and will also establish a means of 
reporting progress towards the measures.



Sec. 2.5  Criteria for designation of participating programs.

    (a) Candidate programs must have an approved requirement, full 
program funding assured prior to designation, and low risk. Nomination 
of a candidate program to participate in the Defense Acquisition Pilot 
Program should occur as early in the program's life-cycle as possible. 
Developmental programs will only be considered on an exception basis.

[[Page 13]]

    (b) Programs in which commercial or non-developmental items can 
satisfy the military requirement are preferred as candidate programs. A 
nominated program will address which standard commercial, industrial 
practices will be used in the pilot program and how those practices will 
be applied.
    (c) Nomination of candidate programs must be accompanied by a list 
of waivers being requested to Statutes, FAR, DFARS, DoD Directives \4\ 
and Instructions, \5\ and where applicable, DoD Component regulations. 
Waivers being requested must be accompanied by rationale and 
justification for the waiver. The justification must include:
---------------------------------------------------------------------------

    \4\ See footnote 3 to Sec. 2.4(b).
    \5\ See footnote 3 to Sec. 2.4(b).
---------------------------------------------------------------------------

    (1) The provision of law proposed to be waived or limited.
    (2) The effects of the provision of law on the acquisition, 
including specific examples.
    (3) The actions taken to ensure that the waiver or limitation will 
not reduce the efficiency, integrity, and effectiveness of the 
acquisition process used for the defense acquisition program; and
    (4) A discussion of the efficiencies or savings, if any, that will 
result from the waiver or limitation.
    (d) No nominated program shall be accepted until the Under Secretary 
of Defense has determined that the candidate program is properly 
planned.



PART 3_TRANSACTIONS OTHER THAN CONTRACTS, GRANTS, OR COOPERATIVE AGREEMENTS 

FOR PROTOTYPE PROJECTS--Table of Contents



Sec.
3.1 Purpose.
3.2 Background.
3.3 Applicability.
3.4 Definitions.
3.5 Appropriate use.
3.6 Limitations on cost-sharing.
3.7 Comptroller General access.
3.8 DoD access to records policy.
3.9 Follow-on production contracts.

    Authority: Sec. 845, Pub. L. 103-160, 107 Stat. 1547, as amended.

    Source: 66 FR 57383, Nov. 15, 2001, unless otherwise noted.



Sec. 3.1  Purpose.

    This part consolidates rules that implement section 845 of the 
National Defense Authorization Act for Fiscal Year 1994, Public Law 103-
160, 107 Stat. 1547, as amended, and have a significant impact on the 
public. Section 845 authorizes the Secretary of a Military Department, 
the Director of Defense Advanced Research Projects Agency, and any other 
official designated by the Secretary of Defense, to enter into 
transactions other than contracts, grants, or cooperative agreements in 
certain situations for prototype projects that are directly relevant to 
weapons or weapon systems proposed to be acquired or developed by the 
Department of Defense.

[67 FR 54956, Aug. 27, 2002]



Sec. 3.2  Background.

    ``Other transactions'' is the term commonly used to refer to the 10 
U.S.C. 2371 authority to enter into transactions other than contracts, 
grants or cooperative agreements. ``Other transactions'' are generally 
not subject to the Federal laws and regulations limited in applicability 
to contracts, grants or cooperative agreements. As such, they are not 
required to comply with the Federal Acquisition Regulation (FAR) and its 
supplements (48 CFR).

[67 FR 54956, Aug. 27, 2002]



Sec. 3.3  Applicability.

    This part applies to the Secretary of a Military Department, the 
Directors of the Defense Agencies, and any other official designated by 
the Secretary of Defense to enter into transactions other than 
contracts, grants or cooperative agreements for prototype projects that 
are directly relevant to weapons or weapon systems proposed to be 
acquired or developed by the Department of Defense, under authority of 
10 U.S.C. 2371. Such transactions are commonly referred to as ``other 
transaction'' agreements and are hereafter referred to as agreements.

[65 FR 35576, June 5, 2000. Redesignated at 67 FR 54956, Aug. 27, 2002]

[[Page 14]]



Sec. 3.4  Definitions.

    Agency point of contact (POC). The individual identified by the 
military department or defense agency as its POC for prototype OTs.
    Agreements Officer. An individual with the authority to enter into, 
administer, or terminate OTs for prototype projects and make related 
determinations and findings.
    Approving Official. The official responsible for approving the OTs 
acquisition strategy and resulting OT agreement. This official must be 
at least one level above the Agreements Officer and at no lower level 
than existing agency thresholds associated with procurement contracts.
    Awardee. Any business unit that is the direct recipient of an OT 
agreement.
    Business unit. Any segment of an organization, or an entire business 
organization which is not divided into segments.
    Contracting activity. An element of an agency designated by the 
agency head and delegated broad authority regarding acquisition 
functions. It includes elements designated by the Director of a Defense 
Agency which has been delegated contracting authority through its agency 
charter.
    Contracting Officer. A person with the authority to enter into, 
administer, and/or terminate contracts and make related determinations 
and findings as defined in Chapter 1 of Title 48, CFR, Federal 
Acquisition Regulation, Section 2.101(b).
    Cost-type OT. Agreements where payments are based on amounts 
generated from the awardee's financial or cost records or that require 
at least one third of the total costs to be provided by non-Federal 
parties pursuant to statute or require submittal of financial or cost 
records/reports to determine whether additional effort can be 
accomplished for the fixed amount.
    Fixed-price type OT. Agreements where payments are not based on 
amounts generated from the awardee's financial or cost records.
    Head of the contracting activity (HCA). The official who has overall 
responsibility for managing the contracting activity.
    Nontraditional Defense contractor. A business unit that has not, for 
a period of at least one year prior to the date of the OT agreement, 
entered into or performed on (1) any contract that is subject to full 
coverage under the cost accounting standards prescribed pursuant to 
section 26 of the Office of Federal Procurement Policy Act (41 U.S.C. 
422) and the regulations implementing such section; or (2) any other 
contract in excess of $500,000 to carry out prototype projects or to 
perform basic, applied, or advanced research projects for a Federal 
agency, that is subject to the Federal Acquisition Regulation.
    Procurement contract. A contract awarded pursuant to the Federal 
Acquisition Regulation.
    Project Manager. The government manager for the prototype project.
    Qualified Independent Public Accountant. An accountant that is 
licensed or works for a firm that is licensed in the state or other 
political jurisdiction where they operate their professional practice 
and comply with the applicable provisions of the public accountancy law 
and rules of the jurisdiction where the audit is being conducted.
    Segment. One of two or more divisions, product departments, plants, 
or other subdivisions of an organization reporting directly to a home 
office, usually identified with responsibility for profit and/or 
producing a product or service.
    Senior Procurement Executive. The following individuals:
    (1) Department of the Army--Assistant Secretary of the Army 
(Acquisition, Logistics and Technology);
    (2) Department of the Navy--Assistant Secretary of the Navy 
(Research, Development and Acquisition);
    (3) Department of the Air Force--Assistant Secretary of the Air 
Force (Acquisition).
    (4) The Directors of Defense Agencies who have been delegated 
authority to act as Senior Procurement Executive for their respective 
agencies.
    Single Audit Act. Establishes uniform audit requirements for audits 
of state and local government, universities, and non-profit 
organizations that expend Federal awards.
    Subawardee. Any business unit of a party, entity or subordinate 
element

[[Page 15]]

performing effort under the OT agreement, other than the awardee.
    Traditional Defense contractor. Any business unit that does not meet 
the definition of a nontraditional Defense contractor.

[68 FR 27457, May 20, 2003, as amended at 69 FR 16482, Mar. 30, 2004]



Sec. 3.5  Appropriate use.

    In accordance with statute, this authority may be used only when:
    (a) At least one nontraditional Defense contractor is participating 
to a significant extent in the prototype project; or
    (b) No nontraditional Defense contractor is participating to a 
significant extent in the prototype project, but at least one of the 
following circumstances exists:
    (1) At least one third of the total cost of the prototype project is 
to be paid out of funds provided by non-Federal parties to the 
transaction.
    (2) The Senior Procurement Executive for the agency determines in 
writing that exceptional circumstances justify the use of a transaction 
that provides for innovative business arrangements or structures that 
would not be feasible or appropriate under a procurement contract.

[67 FR 54956, Aug. 27, 2002]



Sec. 3.6  Limitations on cost-sharing.

    (a) When a nontraditional Defense contractor is not participating to 
a significant extent in the prototype project and cost-sharing is the 
reason for using OT authority, then the non-Federal amounts counted as 
provided, or to be provided, by the business units of an awardee or 
subawardee participating in the performance of the OT agreement may not 
include costs that were incurred before the date on which the OT 
agreement becomes effective. Costs that were incurred for a prototype 
project by the business units of an awardee or subawardee after the 
beginning of negotiations, but prior to the date the OT agreement 
becomes effective, may be counted as non-Federal amounts if and to the 
extent that the Agreements Officer determines in writing that:
    (1) The awardee or subawardee incurred the costs in anticipation of 
entering into the OT agreement; and
    (2) It was appropriate for the awardee or subawardee to incur the 
costs before the OT agreement became effective in order to ensure the 
successful implementation of the OT agreement.
    (b) As a matter of policy, these limitations on cost-sharing apply 
any time cost-sharing may be recognized when using OT authority for 
prototype projects.

[67 FR 54956, Aug. 27, 2002]



Sec. 3.7  Comptroller General access.

    (a) A clause must be included in solicitations and agreements for 
prototype projects awarded under authority of 10 U.S.C. 2371, that 
provide for total government payments in excess of $5,000,000 to allow 
Comptroller General access to records that directly pertain to such 
agreements.
    (b) The clause referenced in paragraph (a) of this section will not 
apply with respect to a party or entity, or subordinate element of a 
party or entity, that has not entered into any other contract, grant, 
cooperative agreement or ``other transaction'' agreement that provides 
for audit access by a government entity in the year prior to the date of 
the agreement. The clause must be included in all agreements described 
in paragraph (a) of this section in order to fully implement the law by 
covering those participating entities and their subordinate elements 
which have entered into prior agreements providing for Government audit 
access, and are therefore not exempt. The presence of the clause in an 
agreement will not operate to require Comptroller General access to 
records from any party or participating entity, or subordinate element 
of a party or participating entity, or subordinate element of a party or 
participating entity, which is otherwise exempt under the terms of the 
clause and the law.
    (c)(1) The right provided to the Comptroller General in a clause of 
an agreement under paragraph (a) of this part, is limited as provided by 
subparagraph (c)(2) of this part in the case of a party to the 
agreement, an entity that participates in the performance of the 
agreement, or a subordinate element of

[[Page 16]]

that party or entity, if the only cooperative agreements or ``other 
transactions'' that the party, entity, or subordinate element entered 
into with government entities in the year prior to the date of that 
agreement are cooperative agreements or transactions that were entered 
into under 10 U.S.C. 2371 or Section 845 of the National Defense 
Authorization Act for Fiscal Year 1994 (Pub. L. 103-160; 10 U.S.C. 2371 
note).
    (c)(2) The only records of a party, other entity, or subordinate 
element referred to in subparagraph (c)(1) of this part that the 
Comptroller General may examine in the exercise of the right referred to 
in that subparagraph, are records of the same type as the records that 
the government has had the right to examine under the audit access 
clauses of the previous cooperative agreements or transactions referred 
to in such subparagraph that were entered into by that particular party, 
entity, or subordinate element.
    (d) The head of the contracting activity (HCA) that is carrying out 
the agreement may waive the applicability of the Comptroller General 
access requirement if the HCA determines it would not be in the public 
interest to apply the requirement to the agreement. The waiver will be 
effective with respect to the agreement only if the HCA transmits a 
notification of the waiver to the Committees on Armed Services of the 
Senate and the House of Representatives, the Comptroller General, and 
the Director, Defense Procurement before entering into the agreement. 
The notification must include the rationale for the determination.
    (e) The HCA must notify the Director, Defense Procurement of 
situations where there is evidence that the Comptroller General Access 
requirement caused companies to refuse to participate or otherwise 
restricted the Department's access to companies that typically do not do 
business with the Department.
    (f) In no case will the requirement to examine records under the 
clause referenced in paragraph (a) of this section apply to an agreement 
where more than three years have passed after final payment is made by 
the government under such an agreement.
    (g) The clause referenced in paragraph (a) of this section, must 
provide for the following:
    (1) The Comptroller General of the United States, in the discretion 
of the Comptroller General, shall have access to and the right to 
examine records of any party to the agreement or any entity that 
participates in the performance of this agreement that directly pertain 
to, and involve transactions relating to, the agreement.
    (2) Excepted from the Comptroller General access requirement is any 
party to this agreement or any entity that participates in the 
performance of the agreement, or any subordinate element of such party 
or entity, that, in the year prior to the date of the agreement, has not 
entered into any other contract, grant, cooperative agreement, or 
``other transaction'' agreement that provides for audit access to its 
records by a government entity.
    (3)(A) The right provided to the Comptroller General is limited as 
provided in subparagraph (B) in the case of a party to the agreement, 
any entity that participates in the performance of the agreement, or a 
subordinate element of that party or entity if the only cooperative 
agreements or ``other transactions'' that the party, entity, or 
subordinate element entered into with government entities in the year 
prior to the date of that agreement are cooperative agreements or 
transactions that were entered into under 10 U.S.C. 2371 or Section 845 
of the National Defense Authorization Act for Fiscal Year 1994 (Pub. L. 
103-160; 10 U.S.C. 2371 note).
    (B) The only records of a party, other entity, or subordinate 
element referred to in subparagraph (A) that the Comptroller General may 
examine in the exercise of the right referred to in that subparagraph 
are records of the same type as the records that the government has had 
the right to examine under the audit access clauses of the previous 
agreements or transactions referred to in such subparagraph that were 
entered into by that particular party, entity, or subordinate element.
    (4) This clause shall not be construed to require any party or 
entity, or any

[[Page 17]]

subordinate element of such party or entity, that participates in the 
performance of the agreement, to create or maintain any record that is 
not otherwise maintained in the ordinary course of business or pursuant 
to a provision of law.
    (5) The Comptroller General shall have access to the records 
described in this clause until three years after the date the final 
payment is made by the United States under this agreement.
    (6) The recipient of the agreement shall flow down this provision to 
any entity that participates in the performance of the agreement.

[65 FR 35576, June 5, 2000. Redesignated at 67 FR 54956, Aug. 27, 2002]



Sec. 3.8  DoD access to records policy.

    (a) Applicability. This section provides policy concerning DoD 
access to awardee and subawardee records on OT agreements for prototype 
projects. This access is separate and distinct from Comptroller General 
access.
    (1) Fixed-price type OT agreements. (i) General--DoD access to 
records is not generally required for fixed-price type OT agreements. In 
order for an agreement to be considered a fixed-price type OT agreement, 
it must adequately specify the effort to be accomplished for a fixed 
amount and provide for defined payable milestones, with no provision for 
financial or cost reporting that would be a basis for making adjustment 
in either the work scope or price of the effort.
    (ii) Termination considerations. The need to provide for DoD access 
to records in the case of termination of a fixed-price type OT can be 
avoided by limiting potential termination settlements to an amount 
specified in the original agreement or to payment for the last completed 
milestone. However, if a fixed-price agreement provides that potential 
termination settlement amounts may be based on amounts generated from 
cost or financial records and the agreement exceeds the specified 
threshold, the OT should provide that DoD will have access to records in 
the event of termination.
    (2) Cost-type OT agreements. (i) Single Audit Act--In accordance 
with the requirements of Public Law 98-502, as amended by Public Law 
104-156, 110 STAT. 1396-1404, when a business unit that will perform the 
OT agreement, or a subawardee, meets the criteria for an audit pursuant 
to the Single Audit Act, the DoD must have sufficient access to the 
entity's records to assure compliance with the provisions of the Act.
    (ii) Traditional Defense contractors. The DoD shall have access to 
records on cost-type OT agreements with traditional Defense contractors 
that provide for total Government payments in excess of $5,000,000. The 
content of the access to records clause shall be in accordance with 
paragraph (c) of this section. The value establishing the threshold is 
the total value of the agreement including all options.
    (iii) Nontraditional Defense contractors. The DoD should have access 
to records on cost-type OT agreements with nontraditional Defense 
contractors that provide for total Government payments in excess of 
$5,000,000. The content of the access to records clause should be in 
accordance with paragraph (c) of this section. The value establishing 
the threshold is the total value of the agreement including all options.
    (iv) DoD access below threshold. The Agreements Officer has the 
discretion to determine whether to include DoD access to records when 
the OT does not meet any of the requirements in (a)(2)(i) through 
(a)(2)(iii) of this section. The content of that access to records 
clause should be tailored to meet the particular circumstances of the 
agreement.
    (v) Examples of cost-type OT agreements. (A) An agreement that 
requires at least one-third cost share pursuant to statute.
    (B) An agreement that includes payable milestones, but provides for 
adjustment of the milestone amounts based on actual costs or reports 
generated from the awardee's financial or cost records.
    (C) An agreement that is for a fixed-Government amount, but the 
agreement provides for submittal of financial or cost records/reports to 
determine whether additional effort can be accomplished for the fixed 
amount.
    (3) Subawardees. When a DoD access to records provision is included 
in the OT agreement, the awardee shall use the criteria established in 
paragraphs

[[Page 18]]

(a)(2)(i) through (a)(2)(iii) of this section to determine whether DoD 
access to records clauses should be included in subawards.
    (b) Exceptions--(1) Nontraditional Defense contractors--(i) The 
Agreements Officers may deviate, in part or in whole, from the 
application of this access to records policy for a nontraditional 
Defense contractor when application of the policy would adversely impact 
the government's ability to incorporate commercial technology or execute 
the prototype project.
    (ii) The Agreements Officer will document:
    (A) What aspect of the audit policy was not applied;
    (B) Why it was problematic;
    (C) What means will be used to protect the Government's interest; 
and
    (D) Why the benefits of deviating from the policy outweigh the 
potential risks.
    (iii) This determination will be reviewed by the approving official 
as part of the pre-award approval of the agreement and submitted to the 
agency POC within 10 days of award.
    (iv) The agency POC will forward all such documentation received in 
any given fiscal year, to the Director, Defense Procurement by 15 
October of each year.
    (2) Traditional Defense contractor. (i) Any departure from this 
policy for other than nontraditional Defense contractors must be 
approved by the Head of the Contracting Activity prior to award and set 
forth the exceptional circumstances justifying deviation.
    (ii) Additionally, the justification will document:
    (A) What aspect of the policy was not applied;
    (B) Why it was problematic;
    (C) What means will be used to protect the Government's interest; 
and
    (D) Why the benefits of deviating from the policy outweigh the 
potential risks.
    (iii) The HCA will forward documentation associated with such 
waivers in any given fiscal year, to the Director, Defense Procurement 
by 15 October of each year.
    (3) DoD access below the threshold. When the Agreements Officer 
determines that access to records is appropriate for an agreement below 
the $5,000,000 threshold, the content, length and extent of access may 
be mutually agreed to by the parties, without documenting reasons for 
departing from the policy of this section.
    (4) Flow down provisions. The awardee shall submit justification for 
any exception to the DoD access to records policy to the Agreements 
Officer for subawardees. The Agreements Officer will review and obtain 
appropriate approval, as set forth in paragraphs (b)(1) and (b)(2) of 
this section.
    (c) Content of DoD access to records clause. When a DoD access to 
records clause is included as part of the OT agreement, address the 
following areas during the negotiation of the clause:
    (1) Frequency of audits. Audits will be performed when the 
Agreements Officer determines it is necessary to verify statutory cost 
share or to verify amounts generated from financial or cost records that 
will be used as the basis for payment or adjustment of payment.
    (2) Means of accomplishing audits. (i) Business units subject to the 
Single Audit Act--When the awardee or subawardee is a state government, 
local government, or nonprofit organization whose Federal cost 
reimbursement contracts and financial assistance agreements are subject 
to the Single Audit Act (Public Law 98-502, as amended by Public Law 
104-156, 110 STAT. 1396-1404), the clause must apply the provisions of 
that Act for purposes of performing audits of the awardee or subawardee 
under the agreement.
    (ii) Business units not subject to the Single Audit Act currently 
performing on procurement contracts. The clause must provide that DCAA 
will perform any necessary audits if, at the time of agreement award, 
the awardee or subawardee is not subject to the Single Audit Act and is 
performing a procurement contract that is subject to the Cost Principles 
Applicable to Commercial Organizations (48 CFR part 31.2) and/or the 
Cost Accounting Standards (48 CFR part 99).
    (iii) Other business units. DCAA or a qualified IPA may perform any 
necessary audit of a business unit of the awardee or subawardee if, at 
the time of agreement award, the business unit

[[Page 19]]

does not meet the criteria in (c)(2)(i) or (c)(2)(ii) of this section. 
The clause must provide for the use of a qualified IPA if such a 
business unit will not accept the agreement if the Government has access 
to the business unit's records. The Agreements Officer will include a 
statement in the file that the business unit is not performing on a 
procurement contract subject to the Cost Principles or Cost Accounting 
Standards at the time of agreement award, and will not accept the 
agreement if the government has access to the business unit's records. 
The Agreements Officer will also prepare a report (Part III to the 
annual report submission) for the Director, Defense Procurement that 
identifies, for each business unit that is permitted to use an IPA: the 
business unit's name, address and the expected value of its award. When 
the clause provides for use of an IPA to perform any necessary audits, 
the clause must state that:
    (A) The IPA will perform the audit in accordance with Generally 
Accepted Government Auditing Standards (GAGAS). Electronic copies of the 
standards may be accessed at www.gao.gov. Printed copies may be 
purchased from the U.S. Government Printing Office (for ordering 
information, call (202) 512-1800 or access the Internet Site at 
www.gpo.gov).
    (B) The Agreements Officers' authorized representative has the right 
to examine the IPA's audit report and working papers for 3 years after 
final payment or three years after issuance of the audit report, 
whichever is later, unless notified otherwise by the Agreements Officer.
    (C) The IPA will send copies of the audit report to the Agreements 
Officer and the Assistant Inspector General (Audit Policy and Oversight) 
[AIG(APO)], 400 Army Navy Drive, Suite 737, Arlington, VA 22202.
    (D) The IPA will report instances of suspected fraud directly to the 
DoDIG.
    (E) The Government has the right to require corrective action by the 
awardee or subawardee if the Agreements Officer determines (subject to 
appeal under the disputes clause of the agreement) that the audit has 
not been performed or has not been performed in accordance with GAGAS. 
The Agreements Officer should take action promptly once the Agreements 
Officer determines that the audit is not being accomplished in a timely 
manner or the audit is not performed in accordance with GAGAS but 
generally no later than twelve (12) months of the date requested by the 
Agreements Officer. The awardee or subawardee may take corrective action 
by having the IPA correct any deficiencies identified by the Agreements 
Officer, having another IPA perform the audit, or electing to have the 
Government perform the audit. If corrective action is not taken, the 
Agreements Officer has the right to take one or more of the following 
actions:
    (1) Withhold or disallow a specified percentage of costs until the 
audit is completed satisfactorily. The agreement should include a 
specified percentage that is sufficient to enhance performance of 
corrective action while also not being unfairly punitive.
    (2) Suspend performance until the audit is completed satisfactorily; 
and/or
    (3) Terminate the agreement if the agreements officer determines 
that imposition of either (c)(2)(iii)(E)(1) or (c)(2)(iii)(e)(2) of this 
section is not practical.
    (F) If it is found that the awardee or subawardee was performing a 
procurement contract subject to Cost Principles Applicable to Commercial 
Organizations (48 CFR part 31.2) and/or Cost Accounting Standards (48 
CFR part 99) at the time of agreement award, the Agreements Officer, or 
an authorized representative, has the right to audit records of the 
awardee or subawardee to verify the actual costs or reporting 
information used as the basis for payment or to verify statutorily 
required cost share under the agreement, and the IPA is to be paid by 
the awardee or subawardee. The cost of an audit performed in accordance 
with this policy is reimbursable based on the business unit's 
established accounting practices and subject to any limitations in the 
agreement.
    (3) Scope of audit. The Agreements Officer should coordinate with 
the auditor regarding the nature of any audit envisioned.

[[Page 20]]

    (4) Length and extent of access. (i) Clauses that do not provide for 
use of an IPA--The clause must provide for the Agreements Officer's 
authorized representative to have access to directly pertinent records 
of those business units of the awardee or subawardee's performing effort 
under the OT agreement, when needed to verify the actual costs or 
reporting used as the basis for payment or to verify statutorily 
required cost share under the agreement.
    (ii) Clauses that provide for use of an IPA to perform the audits. 
The clause must:
    (A) Provide the Agreements Officer's authorized representative 
access to the IPA's audit reports and working papers to ensure that the 
IPA has performed the audit in accordance with GAGAS.
    (B) State that the Government will make copies of contractor records 
contained in the IPA's work papers if needed to demonstrate that the 
audit was not performed in accordance with GAGAS.
    (C) State that the Government has no direct access to any awardee or 
subawardee records unless it is found that the awardee or subawardee was 
performing a procurement contract subject to Cost Principles (48 CFR 
part 31) and/or Cost Accounting Standards (48 CFR part 99) at the time 
of agreement award.
    (iii) Business Units subject to the Single Audit Act. The clause 
must provide access to the extent authorized by the Single Audit Act.
    (iv) Record Retention/Period of Access. The clause must require that 
the awardee and subawardee retain, and provide access to, the records 
referred to in (c)(4)(i) and (c)(4)(ii) of this section for three years 
after final payment, unless notified of a shorter or longer period by 
the Agreements Officer.
    (5) Awardee flow down responsibilities. Agreements must require 
awardees to include the necessary provisions in subawards that meet the 
conditions set forth in this DoD access to records policy.
    (d) DoDIG and GAO access. In accordance with statute, if an 
agreement gives the Agreements Officer or another DoD component official 
access to a business unit's records, the DoDIG or GAO are granted the 
same access to those records.

[68 FR 27457, May 20, 2003]



Sec. 3.9  Follow-on production contracts.

    (a) Authority. A competitively awarded OT agreement for a prototype 
project that satisfies the condition set forth in law that requires non-
Federal parties to the OT agreement to provide at least one-third of the 
costs of the prototype project may provide for the award of a follow-on 
production contract to the awardee of the OT prototype agreement for a 
specific number of units at specific target prices, without further 
competition.
    (b) Conditions. The Agreements Officer must do the following in the 
award of the prototype project:
    (1) Ensure non-Federal parties to the OT prototype agreement offer 
at least one-third of the costs of the prototype project pursuant to 
subsection (d)(1)(B)(i), 10 U.S.C. 2371 note.
    (2) Use competition to select parties for participation in the OT 
prototype agreement and evaluate the proposed quantity and target prices 
for the follow-on production units as part of that competition.
    (3) Determine the production quantity that may be procured without 
further competition, by balancing of the level of the investment made in 
the project by the non-Federal parties with the interest of the Federal 
Government in having competition among sources in the acquisition of the 
product or products prototyped under the project.
    (4) Specify the production quantity and target prices in the OT 
prototype agreement and stipualte in the agreement that the Contracting 
Officer for the follow-on contract may award a production contract 
without further competition if the awardee successfully completes the 
prototype project and agrees to production quantities and prices that do 
not exceed those specified in the OT prototype agreement (see part 
206.001 of the Defense Federal Acquisition Regulation Supplement).
    (c) Limitation. As a matter of policy, establishing target prices 
for production units should only be considered when the risk of the 
prototype project permits realistic production pricing

[[Page 21]]

without placing undue risks on the awardee.
    (d) Documentation. (1) The Agreements Officer will need to provide 
information to the Contracting Officer from the agreement and award file 
that the conditions set forth in paragraph (b) of this section have been 
satisfied.
    (2) The information shall contain, at a minimum:
    (i) The competitive procedures used;
    (ii) How the production quantities and target prices were evaluated 
in the competition;
    (iii) The percentage of cost-share; and
    (iv) The production quantities and target prices set forth in the OT 
agreement.
    (3) The Project Manager will provide evidence of successful 
completion of the prototype project to the Contracting Officer.

[69 FR 16482, Mar. 30, 2004]

                          PARTS 4-8 [RESERVED]

[[Page 22]]



                    SUBCHAPTER B_MILITARY COMMISSIONS



PART 9_PROCEDURES FOR TRIALS BY MILITARY COMMISSIONS OF CERTAIN NON-UNITED 

STATES CITIZENS IN THE WAR AGAINST TERRORISM--Table of Contents



Sec.
9.1 Purpose.
9.2 Establishment of Military Commissions.
9.3 Jurisdiction.
9.4 Commission personnel.
9.5 Procedures accorded the accused.
9.6 Conduct of the trial.
9.7 Regulations.
9.8 Authority.
9.9 Protection of State secrets.
9.10 Other.
9.11 Amendment.
9.12 Delegation.

    Authority: 5 U.S.C. 552(1)(a)(1)(C) and (D).

    Source: 68 FR 39374, July 1, 2003, unless otherwise noted.



Sec. 9.1  Purpose.

    This part implements policy, assigns responsibilities, and 
prescribes procedures under the United States Constitution, Article II, 
section 2 and Military Order of November 13, 2001, ``Detention, 
Treatment, and Trial of Certain Non-Citizens in the War Against 
Terrorism'' (3 CFR, 2001 comp., p. 918, 66 FR 57833), for trials before 
military commissions of individuals subject to the President's Military 
Order. These procedures shall be implemented and construed so as to 
ensure that any such individual receives a full and fair trial before a 
military commission, as required by the President's Military Order. 
Unless otherwise directed by the Secretary of Defense, and except for 
supplemental procedures established pursuant to the President's Military 
Order or this part, the procedures prescribed herein and no others shall 
govern such trials.



Sec. 9.2  Establishment of Military Commissions.

    In accordance with the President's Military Order, the Secretary of 
Defense or a designee (``Appointing Authority'') may issue orders from 
time to time appointing one or more military commissions to try 
individuals subject to the President's Military Order and appointing any 
other personnel necessary to facilitate such trials.



Sec. 9.3  Jurisdiction.

    (a) Over persons. A military commission appointed under this part 
(``Commission'') shall have jurisdiction over only an individual or 
individuals (``the Accused''):
    (1) Subject to the President's Military Order; and
    (2) Alleged to have committed an offense in a charge that has been 
referred to the Commission by the Appointing Authority.
    (b) Over offenses. Commissions established hereunder shall have 
jurisdiction over violations of the laws of war and all other offenses 
triable by military commission.
    (c) Maintaining integrity of commission proceedings. The Commission 
may exercise jurisdiction over participants in its proceedings as 
necessary to preserve the integrity and order of the proceedings.



Sec. 9.4  Commission personnel.

    (a) Members--(1) Appointment. The Appointing Authority shall appoint 
the members and the alternate member or members of each Commission. The 
alternate member or members shall attend all sessions of the Commission, 
but the absence of an alternate member shall not preclude the Commission 
from conducting proceedings. In case of incapacity, resignation, or 
removal of any member, an alternate member shall take the place of that 
member. Any vacancy among the members or alternate members occurring 
after a trial has begun may be filled by the Appointing Authority, but 
the substance of all prior proceedings and evidence taken in that case 
shall be made known to that new member or alternate member before the 
trial proceeds.
    (2) Number of members. Each Commission shall consist of at least 
three but

[[Page 23]]

no more than seven members, the number being determined by the 
Appointing Authority. For each such Commission, there shall also be one 
or two alternate members, the number being determined by the Appointing 
Authority.
    (3) Qualifications. Each member and alternate member shall be a 
commissioned officer of the United States armed forces (``Military 
Officer''), including without limitation reserve personnel on active 
duty, National Guard personnel on active duty in Federal service, and 
retired personnel recalled to active duty. The Appointing Authority 
shall appoint members and alternate members determined to be competent 
to perform the duties involved. The Appointing Authority may remove 
members and alternate members for good cause.
    (4) Presiding Officer. From among the members of each Commission, 
the Appointing Authority shall designate a Presiding Officer to preside 
over the proceedings of that Commission. The Presiding Officer shall be 
a Military Officer who is a judge advocate of any United States armed 
force.
    (5) Duties of the Presiding Officer. (i) The Presiding Officer shall 
admit or exclude evidence at trial in accordance with section 6(d) of 
this part. The Presiding Officer shall have authority to close 
proceedings or portions of proceedings in accordance with Sec. 
9.6(b)(3) of this part and for any other reason necessary for the 
conduct of a full and fair trial.
    (ii) The Presiding Officer shall ensure that the discipline, 
dignity, and decorum of the proceedings are maintained, shall exercise 
control over the proceedings to ensure proper implementation of the 
President's Military Order and this part, and shall have authority to 
act upon any contempt or breach of Commission rules and procedures. Any 
attorney authorized to appear before a Commission who is thereafter 
found not to satisfy the requirements for eligibility or who fails to 
comply with laws, rules, regulations, or other orders applicable to the 
Commission proceedings or any other individual who violates such laws, 
rules, regulations, or orders may be disciplined as the Presiding 
Officer deems appropriate, including but not limited to revocation of 
eligibility to appear before that Commission. The Appointing Authority 
may further revoke that attorney's or any other person's eligibility to 
appear before any other Commission convened under this part.
    (iii) The Presiding Officer shall ensure the expeditious conduct of 
the trial. In no circumstance shall accommodation of counsel be allowed 
to delay proceedings unreasonably.
    (iv) The Presiding Officer shall certify all interlocutory 
questions, the disposition of which would effect a termination of 
proceedings with respect to a charge, for decision by the Appointing 
Authority. The Presiding Officer may certify other interlocutory 
questions to the Appointing Authority as the Presiding Officer deems 
appropriate.
    (b) Prosecution--(1) Office of the Chief Prosecutor. The Chief 
Prosecutor shall be a judge advocate of any United States armed force, 
shall supervise the overall prosecution efforts under the President's 
Military Order, and shall ensure proper management of personnel and 
resources.
    (2) Prosecutors and Assistant Prosecutors. (i) Consistent with any 
supplementary regulations or instructions issued under Sec. 9.7(a), the 
Chief Prosecutor shall detail a Prosecutor and, as appropriate, one or 
more Assistant Prosecutors to prepare charges and conduct the 
prosecution for each case before a Commission (``Prosecution''). 
Prosecutors and Assistant Prosecutors shall be:
    (A) Military Officers who are judge advocates of any United States 
armed force, or
    (B) Special trial counsel of the Department of Justice who may be 
made available by the Attorney General of the United States.
    (ii) The duties of the Prosecution are:
    (A) To prepare charges for approval and referral by the Appointing 
Authority;
    (B) To conduct the prosecution before the Commission of all cases 
referred for trial; and
    (C) To represent the interests of the Prosecution in any review 
process.
    (c) Defense--(1) Office of the Chief Defense Counsel. The Chief 
Defense Counsel shall be a judge advocate of any

[[Page 24]]

United States armed force, shall supervise the overall defense efforts 
under the President's Military Order, shall ensure proper management of 
personnel and resources, shall preclude conflicts of interest, and shall 
facilitate proper representation of all Accused.
    (2) Detailed Defense Counsel. Consistent with any supplementary 
regulations or instructions issued under Sec. 9.7(a), the Chief Defense 
Counsel shall detail one or more Military Officers who are judge 
advocates of any United States armed force to conduct the defense for 
each case before a Commission (``Detailed Defense Counsel''). The duties 
of the Detailed Defense Counsel are:
    (i) To defend the Accused zealously within the bounds of the law 
without regard to personal opinion as to the guilt of the Accused; and
    (ii) To represent the interests of the Accused in any review process 
as provided by this part.
    (iii) Choice of Counsel. (A) The Accused may select a Military 
Officer who is a judge advocate of any United States armed force to 
replace the Accused's Detailed Defense Counsel, provided that Military 
Officer has been determined to be available in accordance with any 
applicable supplementary regulations or instructions issued under Sec. 
9.7(a). After such selection of a new Detailed Defense Counsel, the 
original Detailed Defense Counsel will be relieved of all duties with 
respect to that case. If requested by the Accused, however, the 
Appointing Authority may allow the original Detailed Defense Counsel to 
continue to assist in representation of the Accused as another Detailed 
Defense Counsel.
    (B) The Accused may also retain the services of a civilian attorney 
of the Accused's own choosing and at no expense to the United States 
Government (``Civilian Defense Counsel''), provided that attorney:
    (1) Is a United States citizen;
    (2) Is admitted to the practice of law in a State, district, 
territory, or possession of the United States, or before a Federal 
court;
    (3) Has not been the subject of any sanction or disciplinary action 
by any court, bar, or other competent governmental authority for 
relevant misconduct;
    (4) Has been determined to be eligible for access to information 
classified at the level SECRET or higher under the authority of and in 
accordance with the procedures prescribed in DoD 5200.2-R \1\; and
---------------------------------------------------------------------------

    \1\ Available from www.ditc.mil/whs/directives.
---------------------------------------------------------------------------

    (5) Has signed a written agreement to comply with all applicable 
regulations or instructions for counsel, including any rules of court 
for conduct during the course of proceedings. Civilian attorneys may be 
pre-qualified as members of the pool of available attorneys if, at the 
time of application, they meet the relevant criteria, or they may be 
qualified on an ad hoc basis after being requested by an Accused. 
Representation by Civilian Defense Counsel will not relieve Detailed 
Defense Counsel of the duties specified in paragraph (c)(2) of this 
section. The qualification of a Civilian Defense Counsel does not 
guarantee that person's presence at closed Commission proceedings or 
that person's access to any information protected under Sec. 9.6(d)(5).
    (4) Continuity of representation. The Accused must be represented at 
all relevant times by Detailed Defense Counsel. Detailed Defense Counsel 
and Civilian Defense Counsel shall be herein referred to collectively as 
``Defense Counsel.'' The Accused and Defense Counsel shall be herein 
referred to collectively as ``the Defense.''
    (d) Other Personnel. Other personnel, such as court reporters, 
interpreters, security personnel, bailiffs, and clerks may be detailed 
or employed by the Appointing Authority, as necessary.



Sec. 9.5  Procedures accorded the accused.

    The following procedures shall apply with respect to the Accused:
    (a) The Prosecution shall furnish to the Accused, sufficiently in 
advance of trial to prepare a defense, a copy of the charges in English 
and, if appropriate, in another language that the Accused understands.
    (b) The Accused shall be presumed innocent until proven guilty.
    (c) A Commission member shall vote for a finding of Guilty as to an 
offense if and only if that member is convinced

[[Page 25]]

beyond a reasonable doubt, based on the evidence admitted at trial, that 
the Accused is guilty of the offense.
    (d) At least one Detailed Defense Counsel shall be made available to 
the Accused sufficiently in advance of trial to prepare a defense and 
until any findings and sentence become final in accordance with Sec. 
9.6(h)(2).
    (e) The Prosecution shall provide the Defense with access to 
evidence the Prosecution intends to introduce at trial and with access 
to evidence known to the Prosecution that tends to exculpate the 
Accused. Such access shall be consistent with Sec. 9.6(d)(5) and 
subject to Sec. 9.9.
    (f) The Accused shall not be required to testify during trial. A 
Commission shall draw no adverse inference from an Accused's decision 
not to testify. This subsection shall not preclude admission of evidence 
of prior statements or conduct of the Accused.
    (g) If the Accused so elects, the Accused may testify at trial on 
the Accused's own behalf and shall then be subject to cross-examination.
    (h) The Accused may obtain witnesses and documents for the Accused's 
defense, to the extent necessary and reasonably available as determined 
by the Presiding Officer. Such access shall be consistent with the 
requirements of Sec. 9.6(d)(5) and subject to Sec. 9.9. The Appointing 
Authority shall order that such investigative or other resources be made 
available to the Defense as the Appointing Authority deems necessary for 
a full and fair trial.
    (i) The Accused may have Defense Counsel present evidence at trial 
in the Accused's defense and cross-examine each witness presented by the 
Prosecution who appears before the Commission.
    (j) The Prosecution shall ensure that the substance of the charges, 
the proceedings, and any documentary evidence are provided in English 
and, if appropriate, in another language that the Accused understands. 
The Appointing Authority may appoint one or more interpreters to assist 
the Defense, as necessary.
    (k) The Accused may be present at every stage of the trial before 
the Commission, consistent with Sec. 9.6(b)(3), unless the Accused 
engages in disruptive conduct that justifies exclusion by the Presiding 
Officer. Detailed Defense Counsel may not be excluded from any trial 
proceeding or portion thereof.
    (l) Except by order of the Commission for good cause shown, the 
Prosecution shall provide the Defense with access before sentencing 
proceedings to evidence the Prosecution intends to present in such 
proceedings. Such access shall be consistent with Sec. 9.6(d)(5) of 
this part and subject to Sec. 9.9.
    (m) The Accused may make a statement during sentencing proceedings.
    (n) The Accused may have Defense Counsel submit evidence to the 
Commission during sentencing proceedings.
    (o) The Accused shall be afforded a trial open to the public (except 
proceedings closed by the Presiding Officer), consistent with Sec. 
9.6(b).
    (p) The Accused shall not again be tried by any Commission for a 
charge once a Commission's finding on that charge becomes final in 
accordance with Sec. 9.6(h)(2).



Sec. 9.6  Conduct of the trial.

    (a) Pretrial procedures--(1) Preparation of the Charges. The 
Prosecution shall prepare charges for approval by the Appointing 
Authority, as provided in Sec. 9.4(b)(2)(i).
    (2) Referral to the Commission. The Appointing Authority may approve 
and refer for trial any charge against an individual or individuals 
within the jurisdiction of a Commission in accordance with Sec. 9.3(a) 
and alleging an offense within the jurisdiction of a Commission in 
accordance with Sec. 9.3(b).
    (3) Notification of the accused. The Prosecution shall provide 
copies of the charges approved by the Appointing Authority to the 
Accused and Defense Counsel. The Prosecution also shall submit the 
charges approved by the Appointing Authority to the Presiding Officer of 
the Commission to which they were referred.
    (4) Plea Agreements. The Accused, through Defense Counsel, and the 
Prosecution may submit for approval to the Appointing Authority a plea 
agreement mandating a sentence limitation or any other provision in 
exchange for an agreement to plead guilty, or any other consideration. 
Any agreement to plead

[[Page 26]]

guilty must include a written stipulation of fact, signed by the 
Accused, that confirms the guilt of the Accused and the voluntary and 
informed nature of the plea of guilty. If the Appointing Authority 
approves the plea agreement, the Commission will, after determining the 
voluntary and informed nature of the plea agreement, admit the plea 
agreement and stipulation into evidence and be bound to adjudge findings 
and a sentence pursuant to that plea agreement.
    (5) Issuance and service of process; obtaining evidence. (i) The 
Commission shall have power to:
    (A) Summon witnesses to attend trial and testify;
    (B) Administer oaths or affirmations to witnesses and other persons 
and to question witnesses;
    (C) Require the production of documents and other evidentiary 
material; and
    (D) Designate special commissioners to take evidence.
    (ii) The Presiding Officer shall exercise these powers on behalf of 
the Commission at the Presiding Officer's own initiative, or at the 
request of the Prosecution or the Defense, as necessary to ensure a full 
and fair trial in accordance with the President's Military Order and 
this part. The Commission shall issue its process in the name of the 
Department of Defense over the signature of the Presiding Officer. Such 
process shall be served as directed by the Presiding Officer in a manner 
calculated to give reasonable notice to persons required to take action 
in accordance with that process.
    (b) Duties of the Commission during trial. The Commission shall:
    (1) Provide a full and fair trial.
    (2) Proceed impartially and expeditiously, strictly confining the 
proceedings to a full and fair trial of the charges, excluding 
irrelevant evidence, and preventing any unnecessary interference or 
delay.
    (3) Hold open proceedings except where otherwise decided by the 
Appointing Authority or the Presiding Officer in accordance with the 
President's Military Order and this part. Grounds for closure include 
the protection of information classified or classifiable under Executive 
Order 12958; information protected by law or rule from unauthorized 
disclosure; the physical safety of participants in Commission 
proceedings, including prospective witnesses; intelligence and law 
enforcement sources, methods, or activities; and other national security 
interests. The Presiding Officer may decide to close all or part of a 
proceeding on the Presiding Officer's own initiative or based upon a 
presentation, including an ex parte, in camera presentation by either 
the Prosecution or the Defense. A decision to close a proceeding or 
portion thereof may include a decision to exclude the Accused, Civilian 
Defense Counsel, or any other person, but Detailed Defense Counsel may 
not be excluded from any trial proceeding or portion thereof. Except 
with the prior authorization of the Presiding Officer and subject to 
section 9 of this part, Defense Counsel may not disclose any information 
presented during a closed session to individuals excluded from such 
proceeding or part thereof. Open proceedings may include, at the 
discretion of the Appointing Authority, attendance by the public and 
accredited press, and public release of transcripts at the appropriate 
time. Proceedings should be open to the maximum extent practicable. 
Photography, video, or audio broadcasting, or recording of or at 
Commission proceedings shall be prohibited, except photography, video, 
and audio recording by the Commission pursuant to the direction of the 
Presiding Officer as necessary for preservation of the record of trial.
    (4) Hold each session at such time and place as may be directed by 
the Appointing Authority. Members of the Commission may meet in closed 
conference at any time.
    (5) As soon as practicable at the conclusion of a trial, transmit an 
authenticated copy of the record of trial to the Appointing Authority.
    (c) Oaths. (1) Members of a Commission, all Prosecutors, all Defense 
Counsel, all court reporters, all security personnel, and all 
interpreters shall take an oath to perform their duties faithfully.
    (2) Each witness appearing before a Commission shall be examined 
under oath, as provided in paragraph (d)(2)(ii) of this section.

[[Page 27]]

    (3) An oath includes an affirmation. Any formulation that appeals to 
the conscience of the person to whom the oath is administered and that 
binds that person to speak the truth, or, in the case of one other than 
a witness, properly to perform certain duties, is sufficient.
    (d) Evidence--(1) Admissibility. Evidence shall be admitted if, in 
the opinion of the Presiding Officer (or instead, if any other member of 
the Commission so requests at the time the Presiding Officer renders 
that opinion, the opinion of the Commission rendered at that time by a 
majority of the Commission), the evidence would have probative value to 
a reasonable person.
    (2) Witnesses--(i) Production of witnesses. The Prosecution or the 
Defense may request that the Commission hear the testimony of any 
person, and such testimony shall be received if found to be admissible 
and not cumulative. The Commission may also summon and hear witnesses on 
its own initiative. The Commission may permit the testimony of witnesses 
by telephone, audiovisual means, or other means; however, the Commission 
shall consider the ability to test the veracity of that testimony in 
evaluating the weight to be given to the testimony of the witness.
    (ii) Testimony. Testimony of witnesses shall be given under oath or 
affirmation. The Commission may still hear a witness who refuses to 
swear an oath or make a solemn undertaking; however, the Commission 
shall consider the refusal to swear an oath or give an affirmation in 
evaluating the weight to be given to the testimony of the witness.
    (iii) Examination of witnesses. A witness who testifies before the 
Commission is subject to both direct examination and cross-examination. 
The Presiding Officer shall maintain order in the proceedings and shall 
not permit badgering of witnesses or questions that are not material to 
the issues before the Commission. Members of the Commission may question 
witnesses at any time.
    (iv) Protection of witnesses. The Presiding Officer shall consider 
the safety of witnesses and others, as well as the safeguarding of 
Protected Information as defined in paragraph (d)(5)(i) of this section, 
in determining the appropriate methods of receiving testimony and 
evidence. The Presiding Officer may hear any presentation by the 
Prosecution or the Defense, including an ex parte, in camera 
presentation, regarding the safety of potential witnesses before 
determining the ways in which witnesses and evidence will be protected. 
The Presiding Officer may authorize any methods appropriate for the 
protection of witnesses and evidence. Such methods may include, but are 
not limited to: testimony by telephone, audiovisual means, or other 
electronic means; closure of the proceedings; introduction of prepared 
declassified summaries of evidence; and the use of pseudonyms.
    (3) Other evidence. Subject to the requirements of paragraph (d)(1) 
of this section concerning admissibility, the Commission may consider 
any other evidence including, but not limited to, testimony from prior 
trials and proceedings, sworn or unsworn written statements, physical 
evidence, or scientific or other reports.
    (4) Notice. The Commission may, after affording the Prosecution and 
the Defense an opportunity to be heard, take conclusive notice of facts 
that are not subject to reasonable dispute either because they are 
generally known or are capable of determination by resort to sources 
that cannot reasonably be contested.
    (5) Protection of Information--(i) Protective Order. The Presiding 
Officer may issue protective orders as necessary to carry out the 
Military Order and this part, including to safeguard ``Protected 
Information,'' which includes:
    (A) Information classified or classifiable pursuant to Executive 
Order 12958;
    (B) Information protected by law or rule from unauthorized 
disclosure;
    (C) Information the disclosure of which may endanger the physical 
safety of participants in Commission proceedings, including prospective 
witnesses;
    (D) Information concerning intelligence and law enforcement sources, 
methods, or activities; or
    (E) Information concerning other national security interests. As 
soon as practicable, counsel for either side will

[[Page 28]]

notify the Presiding Officer of any intent to offer evidence involving 
Protected Information.
    (ii) Limited disclosure. The Presiding Officer, upon motion of the 
Prosecution or sua sponte, shall, as necessary to protect the interests 
of the United States and consistent with Sec. 9.9, direct:
    (A) The deletion of specified items of Protected Information from 
documents to be made available to the Accused, Detailed Defense Counsel, 
or Civilian Defense Counsel;
    (B) The substitution of a portion or summary of the information for 
such Protected Information; or
    (C) The substitution of a statement of the relevant facts that the 
Protected Information would tend to prove. The Prosecution's motion and 
any materials submitted in support thereof or in response thereto shall, 
upon request of the Prosecution, be considered by the Presiding Officer 
ex parte, in camera, but no Protected Information shall be admitted into 
evidence for consideration by the Commission if not presented to 
Detailed Defense Counsel.
    (iii) Closure of proceedings. The Presiding Officer may direct the 
closure of proceedings in accordance with paragraph (b)(3) of this 
section.
    (iv) Protected information as part of the record of trial. All 
exhibits admitted as evidence but containing Protected Information shall 
be sealed and annexed to the record of trial. Additionally, any 
Protected Information not admitted as evidence but reviewed in camera 
and subsequently withheld from the Defense over Defense objection shall, 
with the associated motions and responses and any materials submitted in 
support thereof, be sealed and annexed to the record of trial as 
additional exhibits. Such sealed material shall be made available to 
reviewing authorities in closed proceedings.
    (e) Proceedings during trial. The proceedings at each trial will be 
conducted substantially as follows, unless modified by the Presiding 
Officer to suit the particular circumstances:
    (1) Each charge will be read, or its substance communicated, in the 
presence of the Accused and the Commission.
    (2) The Presiding Officer shall ask each Accused whether the Accused 
pleads ``Guilty'' or ``Not Guilty.'' Should the Accused refuse to enter 
a plea, the Presiding Officer shall enter a plea of ``Not Guilty'' on 
the Accused's behalf. If the plea to an offense is ``Guilty,'' the 
Presiding Officer shall enter a finding of Guilty on that offense after 
conducting sufficient inquiry to form an opinion that the plea is 
voluntary and informed. Any plea of Guilty that is not determined to be 
voluntary and informed shall be changed to a plea of Not Guilty. Plea 
proceedings shall then continue as to the remaining charges. If a plea 
of ``Guilty'' is made on all charges, the Commission shall proceed to 
sentencing proceedings; if not, the Commission shall proceed to trial as 
to the charges for which a ``Not Guilty'' plea has been entered.
    (3) The Prosecution shall make its opening statement.
    (4) The witnesses and other evidence for the Prosecution shall be 
heard or received.
    (5) The Defense may make an opening statement after the 
Prosecution's opening statement or prior to presenting its case.
    (6) The witnesses and other evidence for the Defense shall be heard 
or received.
    (7) Thereafter, the Prosecution and the Defense may introduce 
evidence in rebuttal and surrebuttal.
    (8) The Prosecution shall present argument to the Commission. 
Defense Counsel shall be permitted to present argument in response, and 
then the Prosecution may reply in rebuttal.
    (9) After the members of the Commission deliberate and vote on 
findings in closed conference, the Presiding Officer shall announce the 
Commission's findings in the presence of the Commission, the 
Prosecution, the Accused, and Defense Counsel. The individual votes of 
the members of the Commission shall not be disclosed.
    (10) In the event a finding of Guilty is entered for an offense, the 
Prosecution and the Defense may present information to aid the 
Commission in determining an appropriate sentence. The Accused may 
testify and shall be subject to cross-examination regarding any such 
testimony.

[[Page 29]]

    (11) The Prosecution and, thereafter, the Defense shall present 
argument to the Commission regarding sentencing.
    (12) After the members of the Commission deliberate and vote on a 
sentence in closed conference, the Presiding Officer shall announce the 
Commission's sentence in the presence of the Commission, the 
Prosecution, the Accused, and Defense Counsel. The individual votes of 
the members of the Commission shall not be disclosed.
    (f) Voting. Members of the Commission shall deliberate and vote in 
closed conference. A Commission member shall vote for a finding of 
Guilty as to an offense if and only if that member is convinced beyond a 
reasonable doubt, based on the evidence admitted at trial, that the 
Accused is guilty of the offense. An affirmative vote of two-thirds of 
the members is required for a finding of Guilty. When appropriate, the 
Commission may adjust a charged offense by exceptions and substitutions 
of language that do not substantially change the nature of the offense 
or increase its seriousness, or it may vote to convict of a lesser-
included offense. An affirmative vote of two-thirds of the members is 
required to determine a sentence, except that a sentence of death 
requires a unanimous, affirmative vote of all of the members. Votes on 
findings and sentences shall be taken by secret, written ballot.
    (g) Sentence. Upon conviction of an Accused, the Commission shall 
impose a sentence that is appropriate to the offense or offenses for 
which there was a finding of Guilty, which sentence may include death, 
imprisonment for life or for any lesser term, payment of a fine or 
restitution, or such other lawful punishment or condition of punishment 
as the Commission shall determine to be proper. Only a Commission of 
seven members may sentence an Accused to death. A Commission may 
(subject to rights of third parties) order confiscation of any property 
of a convicted Accused, deprive that Accused of any stolen property, or 
order the delivery of such property to the United States for 
disposition.
    (h) Post-trial procedures--(1) Record of Trial. Each Commission 
shall make a verbatim transcript of its proceedings, apart from all 
Commission deliberations, and preserve all evidence admitted in the 
trial (including any sentencing proceedings) of each case brought before 
it, which shall constitute the record of trial. The court reporter shall 
prepare the official record of trial and submit it to the Presiding 
Officer for authentication upon completion. The Presiding Officer shall 
transmit the authenticated record of trial to the Appointing Authority. 
If the Secretary of Defense is serving as the Appointing Authority, the 
record shall be transmitted to the Review Panel constituted under 
paragraph (h)(4) of this section.
    (2) Finality of findings and sentence. A Commission finding as to a 
charge and any sentence of a Commission becomes final when the President 
or, if designated by the President, the Secretary of Defense makes a 
final decision thereon pursuant to section 4(c)(8) of the President's 
Military Order and in accordance with paragraph (h)(6) of this section. 
An authenticated finding of Not Guilty as to a charge shall not be 
changed to a finding of Guilty. Any sentence made final by action of the 
President or the Secretary of Defense shall be carried out promptly. 
Adjudged confinement shall begin immediately following the trial.
    (3) Review by the Appointing Authority. If the Secretary of Defense 
is not the Appointing Authority, the Appointing Authority shall promptly 
perform an administrative review of the record of trial. If satisfied 
that the proceedings of the Commission were administratively complete, 
the Appointing Authority shall transmit the record of trial to the 
Review Panel constituted under paragraph (h)(4) of this section. If not 
so satisfied, the Appointing Authority shall return the case for any 
necessary supplementary proceedings.
    (4) Review Panel. The Secretary of Defense shall designate a Review 
Panel consisting of three Military Officers, which may include civilians 
commissioned pursuant to section 603 of title 10, United States Code. At 
least one member of each Review Panel shall have experience as a judge. 
The Review Panel shall review the record of trial and, in its 
discretion, any written submissions from the Prosecution and the Defense 
and shall deliberate in closed

[[Page 30]]

conference. The Review Panel shall disregard any variance from 
procedures specified in this part or elsewhere that would not materially 
have affected the outcome of the trial before the Commission. Within 
thirty days after receipt of the record of trial, the Review Panel shall 
either:
    (i) Forward the case to the Secretary of Defense with a 
recommendation as to disposition, or
    (ii) Return the case to the Appointing Authority for further 
proceedings, provided that a majority of the Review Panel has formed a 
definite and firm conviction that a material error of law occurred.
    (5) Review by the Secretary of Defense. The Secretary of Defense 
shall review the record of trial and the recommendation of the Review 
Panel and either return the case for further proceedings or, unless 
making the final decision pursuant to a Presidential designation under 
section 4(c)(8) of the President's Military Order, forward it to the 
President with a recommendation as to disposition.
    (6) Final decision. After review by the Secretary of Defense, the 
record of trial and all recommendations will be forwarded to the 
President for review and final decision (unless the President has 
designated the Secretary of Defense to perform this function). If the 
President has so designated the Secretary of Defense, the Secretary may 
approve or disapprove findings or change a finding of Guilty to a 
finding of Guilty to a lesser-included offense, or mitigate, commute, 
defer, or suspend the sentence imposed or any portion thereof. If the 
Secretary of Defense is authorized to render the final decision, the 
review of the Secretary of Defense under paragraph (h)(5) of this 
section shall constitute the final decision.



Sec. 9.7  Regulations.

    (a) Supplementary regulations and instructions. The Appointing 
Authority shall, subject to approval of the General Counsel of the 
Department of Defense if the Appointing Authority is not the Secretary 
of Defense, publish such further regulations consistent with the 
President's Military Order and this part as are necessary or appropriate 
for the conduct of proceedings by Commissions under the President's 
Military Order. The General Counsel shall issue such instructions 
consistent with the President's Military Order and this part as the 
General Counsel deems necessary to facilitate the conduct of proceedings 
by such Commissions, including those governing the establishment of 
Commission-related offices and performance evaluation and reporting 
relationships.
    (b) Construction. In the event of any inconsistency between the 
President's Military Order and this part, including any supplementary 
regulations or instructions issued under paragraph (a) of this section, 
the provisions of the President's Military Order shall govern. In the 
event of any inconsistency between this part and any regulations or 
instructions issued under paragraph (a) of this section, the provisions 
of this part shall govern.



Sec. 9.8  Authority.

    Nothing in this part shall be construed to limit in any way the 
authority of the President as Commander in Chief of the Armed Forces or 
the power of the President to grant reprieves and pardons. Nothing in 
this part shall affect the authority to constitute military commissions 
for a purpose not governed by the President's Military Order.



Sec. 9.9  Protection of State secrets.

    Nothing in this part shall be construed to authorize disclosure of 
state secrets to any person not authorized to receive them.



Sec. 9.10  Other.

    This part is not intended to and does not create any right, benefit, 
or privilege, substantive or procedural, enforceable by any party, 
against the United States, its departments, agencies, or other entities, 
its officers or employees, or any other person. No provision in this 
part shall be construed to be a requirement of the United States 
Constitution. Section and subsection captions in this document are for 
convenience only and shall not be used in construing the requirements of 
this part. Failure to meet a time period specified in this

[[Page 31]]

part, or supplementary regulations or instructions issued under Sec. 
9.7(a), shall not create a right to relief for the Accused or any other 
person. DoD Directive 5025.1 \2\ shall not apply to this part or any 
supplementary regulations or instructions issued under Sec. 9.7(a).
---------------------------------------------------------------------------

    \2\ Available from www.ditc.mil/whs/directives.
---------------------------------------------------------------------------



Sec. 9.11  Amendment.

    The Secretary of Defense may amend this part from time to time.



Sec. 9.12  Delegation.

    The authority of the Secretary of Defense to make requests for 
assistance under section 5 of the President's Military Order is 
delegated to the General Counsel of the Department of Defense. The 
Executive Secretary of the Department of Defense shall provide such 
assistance to the General Counsel as the General Counsel determines 
necessary for this purpose.



PART 10_MILITARY COMMISSION INSTRUCTIONS--Table of Contents



Sec.
10.1 Purpose.
10.2 Authority.
10.3 Applicability.
10.4 Policies and procedures.
10.5 Construction.
10.6 Non-creation of right.
10.7 Reservation of authority.
10.8 Amendment.

    Authority: 10 U.S.C. 113Id) and 140(b).

    Source: 68 FR 39380, July 1, 2003, unless otherwise noted.



Sec. 10.1  Purpose.

    This part establishes policies for the issuance and interpretation 
of Military Commission Instructions promulgated pursuant to 32 CFR part 
9, and Military Order of November 13, 2001, ``Detention, Treatment, and 
Trial of Certain Non-Citizens in the War Against Terrorism,'' (3 CFR, 
2001 comp., p. 918, 66 FR 57833).



Sec. 10.2  Authority.

    This part is issued pursuant to 32 CFR 9.7(a) and in accordance with 
10 U.S.C. 113(d) and 140(b).



Sec. 10.3  Applicability.

    This part, and, unless stated otherwise, all other Military 
Commission Instructions apply throughout the Department of Defense, 
including to the Office of the Secretary of Defense, the Military 
Departments, the Chairman and Vice Chairman of the Joint Chiefs of Staff 
and the Joint Staff, the Combatant Commands, the Office of the Inspector 
General of the Department of Defense, the Defense Agencies, the 
Department of Defense Field Activities, and all other organizational 
entities within the Department of Defense, to any special trial counsel 
of the Department of Justice who may be made available by the Attorney 
General of the United States to serve as a prosecutor in trials before 
military commissions pursuant to 32 CFR 9.4(b)(2), to any civilian 
attorney who seeks qualification as a member of the pool of qualified 
Civilian Defense Counsel authorized in 32 CFR 9.4(c)(3)(ii), and to any 
attorney who has been qualified as a member of that pool.



Sec. 10.4  Policies and procedures.

    (a) Promulgation. Military Commission Instructions will be issued by 
the General Counsel of the Department of Defense (hereinafter General 
Counsel). Each Instruction will issue over the signature of the General 
Counsel and, unless otherwise specified therein, shall take effect upon 
the signature of the General Counsel. Instructions will be numbered in 
sequence.
    (b) Professional responsibility. Compliance with these Instructions 
shall be deemed a professional responsibility obligation for the 
practice of law within the Department of Defense.
    (c) Compliance breaches. Failure to adhere to these Instructions or 
any other failure to comply with any rule, regulation, or Instruction 
applicable to trials by military commission convened pursuant to 32 CFR 
part 9, and Military Order of November 13, 2001, ``Detention, Treatment, 
and Trial of Certain Non-Citizens in the War Against Terrorism,'' may be 
subject to appropriate action by the Appointing Authority, the General 
Counsel of the

[[Page 32]]

Department of Defense, or the Presiding Officer of a military 
commission. Such action may include permanently barring an individual 
from participating in any military commission proceeding convened 
pursuant to 32 CFR part 9, and Military Order of November 13, 2001, 
``Detention, Treatment, and Trial of Certain Non-Citizens in the War 
Against Terrorism,'' punitive measures imposed under 10 U.S.C. 898, and 
any other lawful sanction.



Sec. 10.5  Construction.

    Military Commission Instructions shall be construed in a manner 
consistent with 32 CFR part 9, and Military Order of November 13, 2001, 
``Detention, Treatment, and Trial of Certain Non-Citizens in the War 
Against Terrorism.'' Nothing in these Military Commission Instructions 
applies with respect to the trial of crimes by military commissions 
convened under other authority. In the event of an inconsistency, the 
provisions of 32 CFR part 9, and Military Order of November 13, 2001, 
``Detention, Treatment, and Trial of Certain Non-Citizens in the War 
Against Terrorism,'' shall govern as provided in Section 7(B) of 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism.'' Pronouns 
referring to the male gender shall be construed as applying to both male 
and female.



Sec. 10.6  Non-creation of right.

    Neither this part nor any Military Commission Instruction issued 
hereafter, is intended to and does not create any right, benefit, 
privilege, substantive or procedural, enforceable by any party, against 
the United States, its departments, agencies, or other entities, its 
officers or employees, or any other person. Alleged noncompliance with 
an Instruction does not, of itself, constitute error, give rise to 
judicial review, or establish a right to relief for the Accused or any 
other person.



Sec. 10.7  Reservation of authority.

    Neither this part nor any Military Commission Instruction issued 
hereafter shall be construed to limit, impair, or otherwise affect any 
authority granted by the Constitution or laws of the United States or 
Department of Defense regulation or directive.



Sec. 10.8  Amendment.

    The General Counsel may issue, supplement, amend, or revoke any 
Military Commission Instruction at any time.



PART 11_CRIMES AND ELEMENTS FOR TRIALS BY MILITARY COMMISSION--Table of 

Contents



Sec.
11.1 Purpose.
11.2 Authority.
11.3 General.
11.4 Applicable principles of law.
11.5 Definitions.
11.6 Crimes and elements.

    Authority: 10 U.S.C. 821.

    Source: 68 FR 39381, July 1, 2003, unless otherwise noted.



Sec. 11.1  Purpose.

    This part provides guidance with respect to crimes that may be tried 
by military commissions established pursuant to 32 CFR part 9, and 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism,'' (3 CFR, 2001 
comp., p. 918, 66 FR 57833) and enumerates the elements of those crimes.



Sec. 11.2  Authority.

    This part is issued pursuant to 32 CFR 9.7(a) and in accordance with 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism,'' (66 FR 57833) 
and 10 U.S.C. 113(d), 140(b), and 821. The provisions of 32 CFR part 10 
are applicable to this part.



Sec. 11.3  General.

    (a) Background. The following crimes and elements thereof are 
intended for use by military commissions established pursuant to 32 CFR 
part 9, and Military Order of November 13, 2001, ``Detention, Treatment, 
and Trial of Certain Non-Citizens in the War Against Terrorism,'' the 
jurisdiction of which extends to offenses or offenders that by statute 
or the law of armed

[[Page 33]]

conflict may be tried by military commission as limited by Military 
Order of November 13, 2001, ``Detention, Treatment, and Trial of Certain 
Non-Citizens in the War Against Terrorism.'' No offense is cognizable in 
a trial by military commission if that offense did not exist prior to 
the conduct in question. These crimes and elements derive from the law 
of armed conflict, a body of law that is sometimes referred to as the 
law of war. They constitute violations of the law of armed conflict or 
offenses that, consistent with that body of law, are triable by military 
commission. Because this document is declarative of existing law, it 
does not preclude trial for crimes that occurred prior to its effective 
date.
    (b) Effect of other laws. No conclusion regarding the applicability 
or persuasive authority of other bodies of law should be drawn solely 
from the presence, absence, or similarity of particular language in this 
part as compared to other articulations of law.
    (c) Non-exclusivity. This part does not contain a comprehensive list 
of crimes triable by military commission. It is intended to be 
illustrative of applicable principles of the common law of war but not 
to provide an exclusive enumeration of the punishable acts recognized as 
such by that law. The absence of a particular offense from the corpus of 
those enumerated herein does not preclude trial for that offense.



Sec. 11.4  Applicable principles of law.

    (a) General intent. All actions taken by the Accused that are 
necessary for completion of a crime must be performed with general 
intent. This intent is not listed as a separate element. When the mens 
rea required for culpability to attach involves an intent that a 
particular consequence occur, or some other specific intent, an intent 
element is included. The necessary relationship between such intent 
element and the conduct constituting the actus reus is not articulated 
for each set of elements, but is presumed; a nexus between the two is 
necessary.
    (b) The element of wrongfulness and defenses. Conduct must be 
wrongful to constitute one of the offenses enumerated herein or any 
other offense triable by military commission. Conduct is wrongful if it 
is done without justification or excuse cognizable under applicable law. 
The element of wrongfulness (or the absence of lawful justification or 
excuse), which may be required under the customary law of armed 
conflict, is not repeated in the elements of crimes in Sec. 11.6. 
Conduct satisfying the elements found herein shall be inferred to be 
wrongful in the absence of evidence to the contrary. Similarly, this 
part does not enunciate defenses that may apply for specific offenses, 
though an Accused is entitled to raise any defense available under the 
law of armed conflict. Defenses potentially available to an Accused 
under the law of armed conflict, such as self-defense, mistake of fact, 
and duress, may be applicable to certain offenses subject to trial by 
military commission. In the absence of evidence to the contrary, 
defenses in individual cases shall be presumed not to apply. The burden 
of going forward with evidence of lawful justification or excuse or any 
applicable defense shall be upon the Accused. With respect to the issue 
of combatant immunity raised by the specific enumeration of an element 
requiring the absence thereof, the prosecution must affirmatively prove 
that element regardless of whether the issue is raised by the defense. 
Once an applicable defense or an issue of lawful justification or lawful 
excuse is fairly raised by the evidence presented, except for the 
defense of lack of mental responsibility, the burden is on the 
prosecution to establish beyond a reasonable doubt that the conduct was 
wrongful or that the defense does not apply. With respect to the defense 
of lack of mental responsibility, the Accused has the burden of proving 
by clear and convincing evidence that, as a result of a severe mental 
disease or defect, the Accused was unable to appreciate the nature and 
quality of the wrongfulness of the Accused's acts. As provided in 32 CFR 
9.5(c), the prosecution bears the burden of establishing the Accused's 
guilt beyond a reasonable doubt in all cases tried by a military 
commission. Each element of an offense enumerated herein must be proven 
beyond a reasonable doubt.

[[Page 34]]

    (c) Statute of limitations. Violations of the laws of war listed 
herein are not subject to any statute of limitations.



Sec. 11.5  Definitions.

    (a) Combatant immunity. Under the law of armed conflict, only a 
lawful combatant enjoys ``combatant immunity'' or ``belligerent 
privilege'' for the lawful conduct of hostilities during armed conflict.
    (b) Enemy. ``Enemy'' includes any entity with which the United 
States or allied forces may be engaged in armed conflict, or which is 
preparing to attack the United States. It is not limited to foreign 
nations, or foreign military organizations or members thereof. ``Enemy'' 
specifically includes any organization of terrorists with international 
reach.
    (c) In the context of and was associated with armed conflict. 
Elements containing this language require a nexus between the conduct 
and armed hostilities. Such nexus could involve, but is not limited to, 
time, location, or purpose of the conduct in relation to the armed 
hostilities. The existence of such factors, however, may not satisfy the 
necessary nexus (e.g., murder committed between members of the same 
armed force for reasons of personal gain unrelated to the conflict, even 
if temporally and geographically associated with armed conflict, is not 
``in the context of'' the armed conflict). The focus of this element is 
not the nature or characterization of the conflict, but the nexus to it. 
This element does not require a declaration of war, ongoing mutual 
hostilities, or confrontation involving a regular national armed force. 
A single hostile act or attempted act may provide sufficient basis for 
the nexus so long as its magnitude or severity rises to the level of an 
``armed attack'' or an ``act of war,'' or the number, power, stated 
intent or organization of the force with which the actor is associated 
is such that the act or attempted act is tantamount to an attack by an 
armed force. Similarly, conduct undertaken or organized with knowledge 
or intent that it initiate or contribute to such hostile act or 
hostilities would satisfy the nexus requirement.
    (d) Military Objective. ``Military objectives'' are those potential 
targets during an armed conflict which, by their nature, location, 
purpose, or use, effectively contribute to the opposing force's war-
fighting or war-sustaining capability and whose total or partial 
destruction, capture, or neutralization would constitute a military 
advantage to the attacker under the circumstances at the time of the 
attack.
    (e) Object of the attack. ``Object of the attack'' refers to the 
person, place, or thing intentionally targeted. In this regard, the term 
includes neither collateral damage nor incidental injury or death.
    (f) Protected property. ``Protected property'' refers to property 
specifically protected by the law of armed conflict such as buildings 
dedicated to religion, education, art, science or charitable purposes, 
historic monuments, hospitals, or places where the sick and wounded are 
collected, provided they are not being used for military purposes or are 
not otherwise military objectives. Such property would include objects 
properly identified by one of the distinctive emblems of the Geneva 
Conventions but does not include all civilian property.
    (g) Protected under the law of war. The person or object in question 
is expressly ``protected'' under one or more of the Geneva Conventions 
of 1949 or, to the extent applicable, customary international law. The 
term does not refer to all who enjoy some form of protection as a 
consequence of compliance with international law, but those who are 
expressly designated as such by the applicable law of armed conflict. 
For example, persons who either are hors de combat or medical or 
religious personnel taking no active part in hostilities are expressly 
protected, but other civilians may not be.
    (h) Should have known. The facts and circumstances were such that a 
reasonable person in the Accused's position would have had the relevant 
knowledge or awareness.



Sec. 11.6  Crimes and elements.

    (a) Substantive offenses--war crimes. The following enumerated 
offenses, if applicable, should be charged in separate counts. Elements 
are drafted to

[[Page 35]]

reflect conduct of the perpetrator. Each element need not be 
specifically charged.
    (1) Willful killing of protected persons--(i) Elements. (A) The 
accused killed one or more persons;
    (B) The accused intended to kill such person or persons;
    (C) Such person or persons were protected under the law of war;
    (D) The accused knew or should have known of the factual 
circumstances that established that protected status; and
    (E) The killing took place in the context of and was associated with 
armed conflict.
    (ii) Comments. The intent required for this offense precludes its 
applicability with regard to collateral damage or injury incident to a 
lawful attack.
    (2) Attacking civilians--(i) Elements. (A) The accused engaged in an 
attack;
    (B) The object of the attack was a civilian population as such or 
individual civilians not taking direct or active part in hostilities;
    (C) The accused intended the civilian population as such or 
individual civilians not taking direct or active part in hostilities to 
be an object of the attack; and
    (D) The attack took place in the context of and was associated with 
armed conflict.
    (ii) Comments. The intent required for this offense precludes its 
applicability with regard to collateral damage or injury incident to a 
lawful attack.
    (3) Attacking civilian objects--(i) Elements. (A) The accused 
engaged in an attack;
    (B) The object of the attack was civilian property, that is, 
property that was not a military objective;
    (C) The accused intended such property to be an object of the 
attack;
    (D) The accused knew or should have known that such property was not 
a military objective; and
    (E) The attack took place in the context of and was associated with 
armed conflict.
    (ii) Comments. The intent required for this offense precludes its 
applicability with regard to collateral damage or injury incident to a 
lawful attack.
    (4) Attacking Protected Property--(i) Elements. (A) The accused 
engaged in an attack;
    (B) The object of the attack was protected property;
    (C) The accused intended such property to be an object of the 
attack;
    (D) The accused knew or should have known of the factual 
circumstances that established that protected status; and
    (E) The attack took place in the context of and was associated with 
armed conflict.
    (ii) Comments. The intent required for this offense precludes its 
applicability with regard to collateral damage or injury incident to a 
lawful attack.
    (5) Pillaging--(i) Elements. (A) The accused appropriated or seized 
certain property;
    (B) The accused intended to appropriate or seize such property for 
private or personal use;
    (C) The appropriation or seizure was without the consent of the 
owner of the property or other person with authority to permit such 
appropriation or seizure; and
    (D) The appropriation or seizure took place in the context of and 
was associated with armed conflict.
    (ii) Comments. As indicated by the use of the term ``private or 
personal use,'' legitimate captures or appropriations, or seizures 
justified by military necessity, cannot constitute the crime of 
pillaging.
    (6) Denying quarter--(i) Elements. (A) The accused declared, 
ordered, or otherwise indicated that there shall be no survivors or 
surrender accepted;
    (B) The accused thereby intended to threaten an adversary or to 
conduct hostilities such that there would be no survivors or surrender 
accepted;
    (C) It was foreseeable that circumstances would be such that a 
practicable and reasonable ability to accept surrender would exist;
    (D) The accused was in a position of effective command or control 
over the subordinate forces to which the declaration or order was 
directed; and
    (E) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. Paragraph (a)(6)(i)(C) of this section precludes this 
offense

[[Page 36]]

from being interpreted as limiting the application of lawful means or 
methods of warfare against enemy combatants. For example, a remotely 
delivered attack cannot give rise to this offense.
    (7) Taking Hostages--(i) Elements. (A) The accused seized, detained, 
or otherwise held hostage one or more persons;
    (B) The accused threatened to kill, injure, or continue to detain 
such person or persons;
    (C) The accused intended to compel a State, an international 
organization, a natural or legal person, or a group of persons to act or 
refrain from acting as an explicit or implicit condition for the safety 
or release of such person or persons; and
    (D) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. Consistent with Sec. 11.4(b), this offense cannot be 
committed by lawfully detaining enemy combatants or other individuals as 
authorized by the law of armed conflict.
    (8) Employing poison or analogous weapons--(i) Elements. (A) The 
accused employed a substance or a weapon that releases a substance as a 
result of its employment;
    (B) The substance was such that exposure thereto causes death or 
serious damage to health in the ordinary course of events, through its 
asphyxiating, poisonous, or bacteriological properties;
    (C) The accused employed the substance or weapon with the intent of 
utilizing such asphyxiating, poisonous, or bacteriological properties as 
a method of warfare;
    (D) The accused knew or should have known of the nature of the 
substance or weapon; and
    (E) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. (A) The ``death or serious damage to health'' 
required by paragraph (a)(8)(i)(B) of this section must be a direct 
result of the substance's effect or effects on the human body (e.g., 
asphyxiation caused by the depletion of atmospheric oxygen secondary to 
a chemical or other reaction would not give rise to this offense).
    (B) The clause ``serious damage to health'' does not include 
temporary incapacitation or sensory irritation.
    (C) The use of the ``substance or weapon'' at issue must be 
proscribed under the law of armed conflict. It may include chemical or 
biological agents.
    (D) The specific intent element for this offense precludes liability 
for mere knowledge of potential collateral consequences (e.g., mere 
knowledge of a secondary asphyxiating or toxic effect would be 
insufficient to complete the offense).
    (9) Using protected persons as shields--(i) Elements. (A) The 
accused positioned, or took advantage of the location of, one or more 
civilians or persons protected under the law of war;
    (B) The accused intended to use the civilian or protected nature of 
the person or persons to shield a military objective from attack or to 
shield, favor, or impede military operations; and
    (C) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) [Reserved]
    (10) Using protected property as shields--(i) Elements. (A) The 
accused positioned, or took advantage of the location of, civilian 
property or property protected under the law of war;
    (B) The accused intended to shield a military objective from attack 
or to shield, favor, or impede military operations; and
    (C) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) [Reserved]
    (11) Torture--(i) Elements. (A) The accused inflicted severe 
physical or mental pain or suffering upon one or more persons;
    (B) The accused intended to inflict such severe physical or mental 
pain or suffering;
    (C) Such person or persons were in the custody or under the control 
of the accused; and
    (D) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. (A) Consistent with Sec. 11.4(b), this offense does 
not include pain or suffering arising only from, inherent in, or 
incidental to, lawfully imposed punishments. This offense does

[[Page 37]]

not include the incidental infliction of pain or suffering associated 
with the legitimate conduct of hostilities.
    (B) Severe ``mental pain or suffering'' is the prolonged mental harm 
caused by or resulting from:
    (1) The intentional infliction or threatened infliction of severe 
physical pain or suffering;
    (2) The administration or application, or threatened administration 
or application, of mind-altering substances or other procedures 
calculated to disrupt profoundly the senses or the personality;
    (3) The threat of imminent death; or
    (4) The threat that another person will imminently be subjected to 
death, severe physical pain or suffering, or the administration or 
application of mind-altering substances or other procedures calculated 
to disrupt profoundly the senses or personality.
    (C) ``Prolonged mental harm'' is a harm of some sustained duration, 
though not necessarily permanent in nature, such as a clinically 
identifiable mental disorder.
    (D) Paragraph (a)(11)(i)(C) of this section does not require a 
particular formal relationship between the accused and the victim. 
Rather, it precludes prosecution for pain or suffering consequent to a 
lawful military attack.
    (12) Causing serious injury--(i) Elements. (A) The accused caused 
serious injury to the body or health of one or more persons;
    (B) The accused intended to inflict such serious injury;
    (C) Such person or persons were in the custody or under the control 
of the accused; and
    (D) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. ``Serious injury'' includes fractured or dislocated 
bones, deep cuts, torn members of the body, and serious damage to 
internal organs.
    (13) Mutilation or maiming--(i) Elements. (A) The accused subjected 
one or more persons to mutilation, in particular by permanently 
disfiguring the person or persons, or by permanently disabling or 
removing an organ or appendage;
    (B) The accused intended to subject such person or persons to such 
mutilation;
    (C) The conduct caused death or seriously damaged or endangered the 
physical or mental health or appearance of such person or persons.
    (D) The conduct was neither justified by the medical treatment of 
the person or persons concerned nor carried out in the interest of such 
person or persons;
    (E) Such person or persons were in the custody or control of the 
accused; and
    (F) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) [Reserved]
    (14) Use of treachery or perfidy--(i) Elements. (A) The accused 
invited the confidence or belief of one or more persons that they were 
entitled to, or were obliged to accord, protection under the law of war;
    (B) The accused intended to betray that confidence or belief;
    (C) The accused killed, injured, or captured one or more persons;
    (D) The accused made use of that confidence or belief in killing, 
injuring, or capturing such person or persons; and
    (E) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) [Reserved]
    (15) Improper use of flag of truce--(i) Elements. (A) The accused 
used a flag of truce;
    (B) The accused made such use in order to feign an intention to 
negotiate, surrender, or otherwise to suspend hostilities when there was 
no such intention on the part of the accused; and
    (C) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) [Reserved]
    (16) Improper use of protective emblems--(i) Elements. (A) The 
accused used a protective emblem recognized by the law of armed 
conflict;
    (B) The accused undertook such use for combatant purposes in a 
manner prohibited by the law of armed conflict;

[[Page 38]]

    (C) The accused knew or should have known of the prohibited nature 
of such use; and
    (D) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. ``Combatant purposes,'' as used in paragraph 
(a)(16)(i)(B) of this section, means purposes directly related to 
hostilities and does not include medical, religious, or similar 
activities.
    (17) Degrading treatment of a dead body--(i) Elements. (A) The 
accused degraded or otherwise violated the dignity of the body of a dead 
person;
    (B) The accused intended to degrade or otherwise violate the dignity 
of such body;
    (C) The severity of the degradation or other violation was of such 
degree as to be generally recognized as an outrage upon personal 
dignity; and
    (D) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. Paragraph (a)(17)(i)(B) of this section precludes 
prosecution for actions justified by military necessity.
    (18) Rape--(i) Elements. (A) The accused invaded the body of a 
person by conduct resulting in penetration, however slight, of any part 
of the body of the victim or of the accused with a sexual organ, or of 
the anal or genital opening of the victim with any object or any other 
part of the body;
    (B) The invasion was committed by force, threat of force or 
coercion, or was committed against a person incapable of giving consent; 
and
    (C) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. (A) Paragraph (a)(18)(i)(B) of this section 
recognizes that consensual conduct does not give rise to this offense.
    (B) It is understood that a person may be incapable of giving 
consent if affected by natural, induced, or age-related incapacity.
    (C) The concept of ``invasion'' is linked to the inherent 
wrongfulness requirement for all offenses. In this case, for example, a 
legitimate body cavity search could not give rise to this offense.
    (D) The concept of ``invasion'' is gender neutral.
    (b) Substantive offenses--other offenses triable by military 
commission. The following enumerated offenses, if applicable, should be 
charged in separate counts. Elements are drafted to reflect conduct of 
the perpetrator. Each element need not be specifically charged.
    (1) Hijacking or hazarding a vessel or aircraft--(i) Elements. (A) 
The accused seized, exercised control over, or endangered the safe 
navigation of a vessel or aircraft;
    (B) The accused intended to so seize, exercise control over, or 
endanger such vessel or aircraft; and
    (C) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. A seizure, exercise of control, or endangerment 
required by military necessity, or against a lawful military objective 
undertaken by military forces of a State in the exercise of their 
official duties, would not satisfy the wrongfulness requirement for this 
crime.
    (2) Terrorism--(i) Elements. (A) The accused killed or inflicted 
bodily harm on one or more persons or destroyed property;
    (B) The accused:
    (1) Intended to kill or inflict bodily harm on one or more persons; 
or
    (2) Intentionally engaged in an act that is inherently dangerous to 
another and evinces a wanton disregard of human life;
    (C) The killing, harm or destruction was intended to intimidate or 
coerce a civilian population, or to influence the policy of a government 
by intimidation or coercion; and
    (D) The killing, harm or destruction took place in the context of 
and was associated with armed conflict.
    (ii) Comments. (A) Paragraph (b)(2)(i)(A) of this section includes 
the concept of causing death or bodily harm, even if indirectly.
    (B) The requirement that the conduct be wrongful for this crime 
necessitates that the conduct establishing this offense not constitute 
an attack against a lawful military objective undertaken by military 
forces of a State in the exercise of their official duties.

[[Page 39]]

    (3) Murder by an unprivileged belligerent--(i) Elements. (A) The 
accused killed one or more persons;
    (B) The accused:
    (1) Intended to kill or inflict great bodily harm on such person or 
persons; or
    (2) Intentionally engaged in an act that is inherently dangerous to 
another and evinces a wanton disregard of human life;
    (C) The accused did not enjoy combatant immunity; and
    (D) The killing took place in the context of and was associated with 
armed conflict.
    (ii) Comments. (A) The term ``kill'' includes intentionally causing 
death, whether directly or indirectly.
    (B) Unlike the crimes of willful killing or attacking civilians, in 
which the victim's status is a prerequisite to criminality, for this 
offense the victim's status is immaterial. Even an attack on a soldier 
would be a crime if the attacker did not enjoy ``belligerent privilege'' 
or ``combatant immunity.''
    (4) Destruction of property by an unprivileged belligerent--(i) 
Elements. (A) The accused destroyed property;
    (B) The property belonged to another person, and the destruction was 
without that person's consent;
    (C) The accused intended to destroy such property;
    (D) The accused did not enjoy combatant immunity; and
    (E) The destruction took place in the context of and was associated 
with armed conflict.
    (ii) [Reserved]
    (5) Aiding the enemy--(i) Elements. (A) The accused aided the enemy;
    (B) The accused intended to aid the enemy; and
    (C) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. (A) Means of accomplishing paragraph (b)(5)(i)(A) of 
this section include, but are not limited to: providing arms, 
ammunition, supplies, money, other items or services to the enemy; 
harboring or protecting the enemy; or giving intelligence or other 
information to the enemy.
    (B) The requirement that conduct be wrongful for this crime 
necessitates that the accused act without proper authority. For example, 
furnishing enemy combatants detained during hostilities with subsistence 
or quarters in accordance with applicable orders or policy is not aiding 
the enemy.
    (C) The requirement that conduct be wrongful for this crime may 
necessitate that, in the case of a lawful belligerent, the accused owe 
allegiance or some duty to the United States of America or to an ally or 
coalition partner. For example, citizenship, resident alien status, or a 
contractual relationship in or with the United States or an ally or 
coalition partner is sufficient to satisfy this requirement so long as 
the relationship existed at a time relevant to the offense alleged.
    (6) Spying--(i) Elements. (A) The accused collected or attempted to 
collect certain information;
    (B) The accused intended to convey such information to the enemy;
    (C) The accused, in collecting or attempting to collect the 
information, was lurking or acting clandestinely, while acting under 
false pretenses; and
    (D) The conduct took place in the context of and was associated with 
armed conflict.
    (ii) Comments. (A) Members of a military organization not wearing a 
disguise and others who carry out their missions openly are not spies, 
if, though they may have resorted to concealment, they have not acted 
under false pretenses.
    (B) Related to the requirement that conduct be wrongful or without 
justification or excuse in this case is the fact that, consistent with 
the law of war, a lawful combatant who, after rejoining the armed force 
to which that combatant belongs, is subsequently captured, can not be 
punished for previous acts of espionage. His successful rejoining of his 
armed force constitutes a defense.
    (7) Perjury or false testimony--(i) Elements. (A) The accused 
testified at a military commission, in proceedings ancillary to a 
military commission, or provided information in a writing executed under 
an oath to tell the truth or a declaration acknowledging the 
applicability of penalties of perjury in connection with such 
proceedings;
    (B) Such testimony or information was material;

[[Page 40]]

    (C) Such testimony or information was false; and
    (D) The accused knew such testimony or information to be false.
    (ii) [Reserved]
    (8) Obstruction of justice related to military commissions--(i) 
Elements. (A) The accused did an act;
    (B) The accused intended to influence, impede, or otherwise obstruct 
the due administration of justice; and
    (C) The accused did such act in the case of a certain person against 
whom the accused had reason to believe:
    (1) There were or would be proceedings before a military commission; 
or
    (2) There was an ongoing investigation of offenses triable by 
military commission.
    (ii) [Reserved]
    (c) Other forms of liability and related offenses. A person is 
criminally liable as a principal for a completed substantive offense if 
that person commits the offense (perpetrator), aids or abets the 
commission of the offense, solicits commission of the offense, or is 
otherwise responsible due to command responsibility. Such a person would 
be charged as a principal even if another individual more directly 
perpetrated the offense. In proving culpability, however, the below 
listed definitions and elements are applicable. Additionally, if a 
substantive offense was completed, a person may be criminally liable for 
the separate offense of accessory after the fact. If the substantive 
offense was not completed, a person may be criminally liable of the 
lesser-included offense of attempt or the separate offense of 
solicitation. Finally, regardless of whether the substantive offense was 
completed, a person may be criminally liable of the separate offense of 
conspiracy in addition to the substantive offense. Each element need not 
be specifically charged.
    (1) Aiding or abetting--(i) Elements. (A) The accused committed an 
act that aided or abetted another person or entity in the commission of 
a substantive offense triable by military commission;
    (B) Such other person or entity committed or attempted to commit the 
substantive offense; and
    (C) The accused intended to or knew that the act would aid or abet 
such other person or entity in the commission of the substantive offense 
or an associated criminal purpose or enterprise.
    (ii) Comments. (A) The term ``aided or abetted'' in paragraph 
(c)(1)(i)(A) of this section includes: assisting, encouraging, advising, 
instigating, counseling, ordering, or procuring another to commit a 
substantive offense; assisting, encouraging, advising, counseling, or 
ordering another in the commission of a substantive offense; and in any 
other way facilitating the commission of a substantive offense.
    (B) In some circumstances, inaction may render one liable as an 
aider or abettor. If a person has a legal duty to prevent or thwart the 
commission of a substantive offense, but does not do so, that person may 
be considered to have aided or abetted the commission of the offense if 
such noninterference is intended to and does operate as an aid or 
encouragement to the actual perpetrator.
    (C) An accused charged with aiding or abetting should be charged 
with the related substantive offense as a principal.
    (2) Solicitation--(i) Elements. (A) The accused solicited, ordered, 
induced, or advised a certain person or persons to commit one or more 
substantive offenses triable by military commission; and
    (B) The accused intended that the offense actually be committed.
    (ii) Comments. (A) The offense is complete when a solicitation is 
made or advice is given with the specific wrongful intent to induce a 
person or persons to commit any offense triable by military commission. 
It is not necessary that the person or persons solicited, ordered, 
induced, advised, or assisted agree to or act upon the solicitation or 
advice. If the offense solicited is actually committed, however, the 
accused is liable under the law of armed conflict for the substantive 
offense. An accused should not be convicted of both solicitation and the 
substantive offense solicited if criminal liability for the substantive 
offense is based upon the solicitation.
    (B) Solicitation may be by means other than speech or writing. Any 
act or conduct that reasonably may be

[[Page 41]]

construed as a serious request, order, inducement, advice, or offer of 
assistance to commit any offense triable by military commission may 
constitute solicitation. It is not necessary that the accused act alone 
in the solicitation, order, inducement, advising, or assistance. The 
accused may act through other persons in committing this offense.
    (C) An accused charged with solicitation of a completed substantive 
offense should be charged for the substantive offense as a principal. An 
accused charged with solicitation of an uncompleted offense should be 
charged for the separate offense of solicitation. Solicitation is not a 
lesser-included offense of the related substantive offense.
    (3) Command/superior responsibility--perpetrating--(i) Elements. (A) 
The accused had command and control, or effective authority and control, 
over one or more subordinates;
    (B) One or more of the accused's subordinates committed, attempted 
to commit, conspired to commit, solicited to commit, or aided or abetted 
the commission of one or more substantive offenses triable by military 
commission;
    (C) The accused either knew or should have known that the 
subordinate or subordinates were committing, attempting to commit, 
conspiring to commit, soliciting, or aiding or abetting such offense or 
offenses; and
    (D) The accused failed to take all necessary and reasonable measures 
within his power to prevent or repress the commission of the offense or 
offenses.
    (ii) Comments. (A) The phrase ``effective authority and control'' in 
paragraph (c)(3)(i)(A) of this section includes the concept of relative 
authority over the subject matter or activities associated with the 
perpetrator's conduct. This may be relevant to a civilian superior who 
should not be held responsible for the behavior of subordinates involved 
in activities that have no relationship to such superior's sphere of 
authority. Subject matter authority need not be demonstrated for command 
responsibility as it applies to a military commander.
    (B) A commander or other military or civilian superior, not in 
command, charged with failing adequately to prevent or repress a 
substantive offense triable by military commission should be charged for 
the related substantive offense as a principal.
    (4) Command/superior responsibility--misprision--(i) Elements. (A) 
The accused had command and control, or effective authority and control, 
over one or more subordinates;
    (B) One or more of the accused's subordinates had committed, 
attempted to commit, conspired to commit, solicited to commit, or aided 
or abetted the commission of one or more substantive offenses triable by 
military commission;
    (C) The accused knew or should have known that the subordinate or 
subordinates had committed, attempted to commit, conspired to commit, 
solicited, or aided or abetted such offense or offenses; and
    (D) The accused failed to submit the matter to competent authorities 
for investigation or prosecution as appropriate.
    (ii) Comments. (A) The phrase, ``effective authority and control'' 
in paragraph (c)(4)(i)(A) of this section includes the concept of 
relative authority over the subject matter or activities associated with 
the perpetrator's conduct. This may be relevant to a civilian superior 
who cannot be held responsible under this offense for the behavior of 
subordinates involved in activities that have nothing to do with such 
superior's sphere of authority.
    (B) A commander or superior charged with failing to take appropriate 
punitive or investigative action subsequent to the perpetration of a 
substantive offense triable by military commission should not be charged 
for the substantive offense as a principal. Such commander or superior 
should be charged for the separate offense of failing to submit the 
matter for investigation and/or prosecution as detailed in these 
elements. This offense is not a lesser-included offense of the related 
substantive offense.
    (5) Accessory after the fact--(i) Elements. (A) The accused 
received, comforted, or assisted a certain person;
    (B) Such person had committed an offense triable by military 
commission;

[[Page 42]]

    (C) The accused knew that such person had committed such offense or 
believed such person had committed a similar or closely related offense; 
and
    (D) The accused intended to hinder or prevent the apprehension, 
trial, or punishment of such person.
    (ii) Comments. Accessory after the fact should be charged separately 
from the related substantive offense. It is not a lesser-included 
offense of the related substantive offense.
    (6) Conspiracy--(i) Elements. (A) The accused entered into an 
agreement with one or more persons to commit one or more substantive 
offenses triable by military commission or otherwise joined an 
enterprise of persons who shared a common criminal purpose that 
involved, at least in part, the commission or intended commission of one 
or more substantive offenses triable by military commission;
    (B) The accused knew the unlawful purpose of the agreement or the 
common criminal purpose of the enterprise and joined in it willfully, 
that is, with the intent to further the unlawful purpose; and
    (C) One of the conspirators or enterprise members, during the 
existence of the agreement or enterprise, knowingly committed an overt 
act in order to accomplish some objective or purpose of the agreement or 
enterprise.
    (ii) Comments. (A) Two or more persons are required in order to have 
a conspiracy. Knowledge of the identity of co-conspirators and their 
particular connection with the agreement or enterprise need not be 
established. A person may be guilty of conspiracy although incapable of 
committing the intended offense. The joining of another conspirator 
after the conspiracy has been established does not create a new 
conspiracy or affect the status of the other conspirators. The agreement 
or common criminal purpose in a conspiracy need not be in any particular 
form or manifested in any formal words.
    (B) The agreement or enterprise must, at least in part, involve the 
commission or intended commission of one or more substantive offenses 
triable by military commission. A single conspiracy may embrace multiple 
criminal objectives. The agreement need not include knowledge that any 
relevant offense is in fact ``triable by military commission.''
    (C) The overt act must be done by one or more of the conspirators, 
but not necessarily the accused, and it must be done to effectuate the 
object of the conspiracy or in furtherance of the common criminal 
purpose. The accused need not have entered the agreement or criminal 
enterprise at the time of the overt act.
    (D) The overt act need not be in itself criminal, but it must 
advance the purpose of the conspiracy. It is not essential that any 
substantive offense be committed.
    (E) Each conspirator is liable for all offenses committed pursuant 
to or in furtherance of the conspiracy by any of the co-conspirators, 
after such conspirator has joined the conspiracy and while the 
conspiracy continues and such conspirator remains a party to it.
    (F) A party to the conspiracy who withdraws from or abandons the 
agreement or enterprise before the commission of an overt act by any 
conspirator is not guilty of conspiracy. An effective withdrawal or 
abandonment must consist of affirmative conduct that is wholly 
inconsistent with adherence to the unlawful agreement or common criminal 
purpose and that shows that the party has severed all connection with 
the conspiracy. A conspirator who effectively withdraws from or abandons 
the conspiracy after the performance of an overt act by one of the 
conspirators remains guilty of conspiracy and of any offenses committed 
pursuant to the conspiracy up to the time of the withdrawal or 
abandonment. The withdrawal of a conspirator from the conspiracy does 
not affect the status of the remaining members.
    (G) That the object of the conspiracy was impossible to effect is 
not a defense to this offense.
    (H) Conspiracy to commit an offense is a separate and distinct 
offense from any offense committed pursuant to or in furtherance of the 
conspiracy, and both the conspiracy and any related offense may be 
charged, tried, and punished separately. Conspiracy should be charged 
separately from the related substantive offense. It is not a lesser-

[[Page 43]]

included offense of the substantive offense.
    (7) Attempt--(i) Elements. (A) The accused committed an act;
    (B) The accused intended to commit one or more substantive offenses 
triable by military commission;
    (C) The act amounted to more than mere preparation; and
    (D) The act apparently tended to effect the commission of the 
intended offense.
    (ii) Comments. (A) To constitute an attempt there must be a specific 
intent to commit the offense accompanied by an act that tends to 
accomplish the unlawful purpose. This intent need not involve knowledge 
that the offense is in fact ``triable by military commission.''
    (B) Preparation consists of devising or arranging means or measures 
apparently necessary for the commission of the offense. The act need not 
be the last act essential to the consummation of the offense. The 
combination of specific intent to commit an offense, plus the commission 
of an act apparently tending to further its accomplishment, constitutes 
the offense of attempt. Failure to complete the offense, whatever the 
cause, is not a defense.
    (C) A person who purposely engages in conduct that would constitute 
the offense if the attendant circumstances were as that person believed 
them to be is guilty of an attempt.
    (D) It is a defense to an attempt offense that the person 
voluntarily and completely abandoned the intended offense, solely 
because of the person's own sense that it was wrong, prior to the 
completion of the substantive offense. The voluntary abandonment defense 
is not allowed if the abandonment results, in whole or in part, from 
other reasons, for example, the person feared detection or apprehension, 
decided to await a better opportunity for success, was unable to 
complete the crime, or encountered unanticipated difficulties or 
unexpected resistance.
    (E) Attempt is a lesser-included offense of any substantive offense 
triable by military commission and need not be charged separately. An 
accused may be charged with attempt without being charged with the 
substantive offense.



PART 12_RESPONSIBILITIES OF THE CHIEF PROSECUTOR, PROSECUTORS, AND ASSISTANT 

PROSECUTORS--Table of Contents



Sec.
12.1 Purpose.
12.2 Authority.
12.3 Office of the Chief Prosecutor.
12.4 Duties and responsibilities of the prosecution.
12.5 Policies.

    Authority: 10 U.S.C. 113(d) and 140(b).

    Source: 68 FR 39388, July 1, 2003, unless otherwise noted.



Sec. 12.1  Purpose.

    This part establishes the responsibilities of the Office of the 
Chief Prosecutor and components thereof.



Sec. 12.2  Authority.

    This part is issued pursuant to 32 CFR 9.7(a) and in accordance with 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism,'' (3 CFR, 2001 
comp., p. 918, 66 FR 57833) and 10 U.S.C. 113(d) and 140(b). The 
provisions of 32 CFR part 10 are applicable to this part.



Sec. 12.3  Office of the Chief Prosecutor.

    (a) General. The Office of the Chief Prosecutor shall be a component 
of the Office of Military Commissions and shall be comprised of the 
Chief Prosecutor, Prosecutors, and other persons properly under the 
supervision of the Chief Prosecutor.
    (b) Chief Prosecutor. (1) The Chief Prosecutor shall be a judge 
advocate of any United States armed force and shall be designated by the 
General Counsel of the Department of Defense.
    (2) The Chief Prosecutor shall report directly to the Deputy General 
Counsel (Legal Counsel) of the Department of Defense.
    (3) The Chief Prosecutor shall have authority to subpoena any 
individual to appear as a witness, to testify, or to produce any 
evidence in a case referred to military commissions or in a criminal 
investigation associated with a case that may be referred to a military 
commission.
    (4) The Chief Prosecutor shall direct the overall prosecution effort 
pursuant

[[Page 44]]

to 32 CFR part 9, and Military Order of November 13, 2001, ``Detention, 
Treatment, and Trial of Certain Non-Citizens in the War Against 
Terrorism,'' ensuring proper supervision and management of all personnel 
and resources assigned to the Office of the Chief Prosecutor.
    (5) The Chief Prosecutor shall ensure that all personnel assigned to 
the Office of the Chief Prosecutor review, and attest that they 
understand and will comply with, 32 CFR part 9, and Military Order of 
November 13, 2001,'' Detention, Treatment, and Trial of Certain Non-
Citizens in the War Against Terrorism,'' and all Supplementary 
Regulations and Instructions issued in accordance therewith.
    (6) The Chief Prosecutor shall inform the Deputy General Counsel 
(Legal Counsel) of all requirements for personnel, office space, 
equipment, and supplies to ensure the successful functioning and mission 
accomplishment of the Office of the Chief Prosecutor.
    (7) The Chief Prosecutor shall supervise all Prosecutors and other 
personnel assigned to the Office of the Chief Prosecutor including any 
special trial counsel of the Department of Justice who may be made 
available by the Attorney General of the United States.
    (8) The Chief Prosecutor, or his designee, shall fulfill applicable 
performance evaluation requirements associated with Prosecutors and 
other personnel properly under the supervision of the Office of the 
Chief Prosecutor.
    (9) The Chief Prosecutor shall detail a Prosecutor and, as 
appropriate, one or more Assistant Prosecutors to perform the duties of 
the prosecution as set forth in 32 CFR 9.4(b)(2). The Chief Prosecutor 
may detail himself to perform such duties.
    (10) The Chief Prosecutor shall ensure that all Prosecutors and 
Assistant Prosecutors faithfully represent the United States in 
discharging their prosecutorial duties before military commissions 
conducted pursuant to 32 CFR part 9, and Military Order of November 13, 
2001, ``Detention, Treatment, and Trial of Certain Non-Citizens in the 
War Against Terrorism.''
    (11) The Chief Prosecutor shall ensure that all Prosecutors and 
Assistant Prosecutors have taken an oath to perform their duties 
faithfully.
    (12) The Chief Prosecutor shall ensure that all personnel properly 
under the supervision of the Office of the Chief Prosecutor possess the 
appropriate security clearances.
    (c) Prosecutors. (1) Prosecutors shall be detailed by the Chief 
Prosecutor and may be either judge advocates of any United States armed 
force or special trial counsel of the Department of Justice who may be 
made available by the Attorney General of the United States.
    (2) Prosecutors shall represent the United States as Prosecutors or 
Assistant Prosecutors as directed by the Chief Prosecutor and in 
accordance with 32 CFR part 9, and Military Order of November 13, 2001, 
``Detention, Treatment, and Trial of Certain Non-Citizens in the War 
Against Terrorism.''
    (3) Prosecutors shall fulfill all responsibilities detailed in 32 
CFR part 9, and Military Order of November 13, 2001, ``Detention, 
Treatment, and Trial of Certain Non-Citizens in the War Against 
Terrorism,'' those set forth in this part, and those assigned by the 
Chief Prosecutor.
    (4) Prosecutors shall ensure that all court reporters, security 
personnel, and interpreters who are to perform duties in relation to a 
military commission proceeding have taken an oath to perform their 
duties faithfully. As directed by the Presiding Officer, Prosecutors 
also shall administer appropriate oaths to witnesses during military 
commission proceedings.



Sec. 12.4  Duties and responsibilities of the prosecution.

    (a) Regular duties. The Prosecution shall perform all duties 
specified or implied in 32 CFR part 9 as responsibilities of the 
Prosecution.
    (b) Administrative duties. The Prosecution shall, as directed by the 
Presiding Officer or the Appointing Authority, prepare any documentation 
necessary to facilitate the conduct of military commissions proceedings. 
The Prosecution shall, as directed by the Deputy General Counsel (Legal 
Counsel), prepare a trial guide to provide a standardized administrative 
plan for the

[[Page 45]]

conduct of military commission proceedings. Unless directed otherwise by 
the Appointing Authority, the Presiding Officer may, in his discretion, 
depart from this guide as appropriate.
    (c) Special duties. The Prosecution shall perform all other 
functions, consistent with 32 CFR part 9, and Military Order of November 
13, 2001, ``Detention, Treatment, and Trial of Certain Non-Citizens in 
the War Against Terrorism,'' as may be directed by the Appointing 
Authority or the General Counsel of the Department of Defense.



Sec. 12.5  Policies.

    (a) Prohibition on Prosecutors serving as Defense Counsel. Judge 
advocates assigned to the Office of the Chief Prosecutor shall be deemed 
unavailable for service as Defense Counsel under 32 CFR 9.4(c)(3)(i).
    (b) Prohibition on certain disclosures. All Prosecutors must 
strictly comply with 32 CFR 9.6(d)(5) and 9.9 to ensure they do not 
improperly disclose classified information, national security 
information, or state secrets to any person not specifically authorized 
to receive such information.
    (c) Statements to the media. Consistent with DoD Directive 5122.5 
\1\, the Assistant Secretary of Defense for Public Affairs shall serve 
as the sole release authority for DoD information and audiovisual 
materials regarding military commissions. Personnel assigned to the 
Office of the Chief Prosecutor may communicate with news media 
representatives regarding cases and other matters related to military 
commissions only when approved by the Appointing Authority or the 
General Counsel of the Department of Defense.
---------------------------------------------------------------------------

    \1\ Available at http://www.dtic.mil/whs/directives.
---------------------------------------------------------------------------



PART 13_RESPONSIBILITIES OF THE CHIEF DEFENSE COUNSEL, DETAILED DEFENSE 

COUNSEL, AND CIVILIAN DEFENSE COUNSEL--Table of Contents



Sec.
13.1 Purpose.
13.2 Authority.
13.3 Office of the Chief Defense Counsel.
13.4 Duties and responsibilities of the defense.
13.5 Policies.

    Authority: 10 U.S.C. 113(d) and 140(b).

    Source: 68 FR 39389, July 1, 2003, unless otherwise noted.



Sec. 13.1  Purpose.

    This part establishes the responsibilities of the Office of Chief 
Defense Counsel and components thereof.



Sec. 13.2  Authority.

    This part is issued pursuant to 32 CFR 9.7(a) and in accordance with 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism,'' (3 CFR, 2001 
comp., p. 918, 66 FR 57833) and 10 U.S.C. 113(d) and 140(b). The 
provisions of 32 CFR part 10 are applicable to this part.



Sec. 13.3  Office of the Chief Defense Counsel.

    (a) General. The Office of the Chief Defense Counsel shall be a 
component of the Office of Military Commissions and shall be comprised 
of the Chief Defense Counsel, Defense Counsel, and other such persons 
properly under the supervision of the Chief Defense Counsel.
    (b) Chief Defense Counsel. (1) The Chief Defense Counsel shall be a 
judge advocate of any United States armed force and shall be designated 
by the General Counsel of the Department of Defense.
    (2) The Chief Defense Counsel shall report directly to the Deputy 
General Counsel (Personnel and Health Policy) of the Department of 
Defense.
    (3) The Chief Defense Counsel shall supervise all defense activities 
and the efforts of Detailed Defense Counsel and other office personnel 
and resources pursuant to 32 CFR part 9, and Military Order of November 
13, 2001, ``Detention, Treatment, and Trial of Certain Non-Citizens in 
the War Against Terrorism,'' ensuring proper supervision and management 
of all personnel and resources assigned to the Office of the Chief 
Defense Counsel and facilitating the proper representation of all 
Accused referred to trial before a military commission appointed 
pursuant to 32

[[Page 46]]

CFR part 9, and Military Order of November 13, 2001, ``Detention, 
Treatment, and Trial of Certain Non-Citizens in the War Against 
Terrorism.''
    (4) The Chief Defense Counsel shall ensure that all personnel 
assigned to the Office of the Chief Defense Counsel review, and attest 
that they understand and will comply with, 32 CFR part 9, and Military 
Order of November 13, 2001, ``Detention, Treatment, and Trial of Certain 
Non-Citizens in the War Against Terrorism,'' and all Supplementary 
Regulations and Instructions issued in accordance therewith. 
Furthermore, the Chief Defense Counsel shall regulate the conduct of 
Detailed Defense Counsel as deemed necessary, consistent with 32 CFR 
part 9, and Military Order of November 13, 2001, ``Detention, Treatment, 
and Trial of Certain Non-Citizens in the War Against Terrorism,'' and 
subordinate instructions and regulations, and specifically shall ensure 
that Detailed Defense Counsel have been directed to conduct their 
activities consistent with applicable prescriptions and proscriptions 
specified in Section II of the Affidavit And Agreement By Civilian 
Defense Counsel at Appendix B to 32 CFR part 14.
    (5) The Chief Defense Counsel shall inform the Deputy General 
Counsel (Personnel and Health Policy) of the Department of Defense of 
all requirements for personnel, office space, equipment, and supplies to 
ensure the successful functioning and mission accomplishment of the 
Office of the Chief Defense Counsel.
    (6) The Chief Defense Counsel shall supervise all Defense Counsel 
and other personnel assigned to the Office of the Chief Defense Counsel.
    (7) The Chief Defense Counsel, or his designee, shall fulfill 
applicable performance evaluation requirements associated with Defense 
Counsel and other personnel properly under the supervision of the Chief 
Defense Counsel.
    (8) The Chief Defense Counsel shall detail a judge advocate of any 
United States armed force to perform the duties of the Detailed Defense 
Counsel as set forth in 32 CFR 9.4(c)(2) and shall detail or employ any 
other personnel as directed by the Appointing Authority or the Presiding 
Officer in a particular case. The Chief Defense Counsel may not detail 
himself to perform the duties of Detailed Defense Counsel, nor does he 
form an attorney-client relationship with accused persons or incur any 
concomitant confidentiality obligations.
    (i) The Chief Defense Counsel may, when appropriate, detail an 
additional judge advocate as Assistant Detailed Defense Counsel to 
assist in performing the duties of the Detailed Defense Counsel.
    (ii) The Chief Defense Counsel may structure the Office of the Chief 
Defense Counsel so as to include subordinate supervising attorneys who 
may incur confidentiality obligations in the context of fulfilling their 
supervisory responsibilities with regard to Detailed Defense Counsel.
    (9) The Chief Defense Counsel shall take appropriate measures to 
preclude Defense Counsel conflicts of interest arising from the 
representation of Accused before military commissions. The Chief Defense 
Counsel shall be provided sufficient information (potentially including 
protected information) to fulfill this responsibility.
    (10) The Chief Defense Counsel shall take appropriate measures to 
ensure that each Detailed Defense Counsel is capable of zealous 
representation, unencumbered by any conflict of interest. In this 
regard, the Chief Defense Counsel shall monitor the activities of all 
Defense Counsel (Detailed and Civilian) and take appropriate measures to 
ensure that Defense Counsel do not enter into agreements with other 
Accused or Defense Counsel that might cause them or the Accused they 
represent to incur an obligation of confidentiality with such other 
Accused or Defense Counsel or to effect some other impediment to 
representation.
    (11) The Chief Defense Counsel shall ensure that an Accused tried 
before a military commission pursuant to 32 CFR part 9, and Military 
Order of November 13, 2001, ``Detention, Treatment, and Trial of Certain 
Non-Citizens in the War Against Terrorism,'' is represented at all 
relevant times by Detailed Defense Counsel.
    (12) The Chief Defense Counsel shall administer all requests for 
replacement Detailed Defense Counsel requested in

[[Page 47]]

accordance with 32 CFR 9.4(c)(3). He shall determine the availability of 
such counsel in accordance with this part.
    (13) The Chief Defense Counsel shall administer the Civilian Defense 
Counsel pool, screening all requests for pre-qualification and ad hoc 
qualification, making qualification determinations and recommendations 
in accordance with 32 CFR part 9, this part, and 32 CFR part 14, and 
ensuring appropriate notification to an Accused of civilian attorneys 
available to represent Accused before a military commission.
    (14) The Chief Defense Counsel shall ensure that all Detailed 
Defense Counsel and Civilian Defense Counsel who are to perform duties 
in relation to a military commission have taken an oath to perform their 
duties faithfully.
    (15) The Chief Defense Counsel shall ensure that all personnel 
properly under the supervision of the Office of the Chief Defense 
Counsel possess the appropriate security clearances.
    (c) Detailed Defense Counsel. (1) Detailed Defense Counsel shall be 
judge advocates of any United States armed force.
    (2) Detailed Defense Counsel shall represent the Accused before 
military commissions when detailed in accordance with 32 CFR part 9, and 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism.'' In this regard 
Detailed Defense Counsel shall: defend the Accused to whom detailed 
zealously within the bounds of the law and without regard to personal 
opinion as to guilt; represent the interests of the Accused in any 
review process as provided by 32 CFR part 9; and comply with the 
procedures accorded the Accused pursuant to 32 CFR 9.5 and 9.6. Detailed 
Defense Counsel shall so serve notwithstanding any intention expressed 
by the Accused to represent himself.
    (3) Detailed Defense Counsel shall have primary responsibility to 
prevent conflicts of interest related to the handling of the cases to 
which detailed.
    (4) Detailed Defense Counsel shall fulfill all responsibilities 
detailed in 32 CFR part 9, and Military Order of November 13, 2001, 
``Detention, Treatment, and Trial of Certain Non-Citizens in the War 
Against Terrorism,'' those set forth in this part, and those assigned by 
the Chief Defense Counsel.
    (d) Selected Detailed Defense Counsel. (1) The Accused may select a 
judge advocate of any United States armed force to replace the Accused's 
Detailed Defense Counsel, provided that judge advocate has been 
determined to be available by the Chief Defense Counsel in consultation 
with the Judge Advocate General of that judge advocate's military 
department.
    (2) A judge advocate shall be determined not to be available if 
assigned duties: as a general or flag officer; as a military judge; as a 
prosecutor in the Office of Military Commissions; as a judge advocate 
assigned to the Department of Defense Criminal Investigation Task Force 
or Joint Task Force Guantanamo; as a principal legal advisor to a 
command, organization, or agency; as an instructor or student at a 
service school, academy, college or university; or in any other capacity 
that the Judge Advocate General of the Military Department concerned may 
determine not to be available because of the nature or responsibilities 
of their assignments, exigent circumstances, military necessity, or 
other appropriate reasons.
    (3) Consistent with 32 CFR 9.6(b), the selection and replacement of 
new Detailed Defense Counsel shall not unreasonably delay military 
commission proceedings.
    (4) Unless otherwise directed by the Appointing Authority or the 
General Counsel of the Department of Defense, the Chief Defense Counsel 
will, after selection of a new Detailed Defense Counsel, relieve the 
original Detailed Defense Counsel of all duties with respect to that 
case.
    (e) Qualified Civilian Defense Counsel. (1) The Accused may, at no 
expense to the United States, retain the services of a civilian attorney 
of the Accused's own choosing to assist in the conduct of his defense 
before a military commission, provided that the civilian attorney 
retained has been determined to be qualified pursuant to 32 CFR 
9.4(c)(3)(ii).
    (2) Consistent with 32 CFR 9.6(b), the retention of Civilian Defense 
Counsel shall not unreasonably delay military commission proceedings.

[[Page 48]]

    (3) Representation by Civilian Defense Counsel will not relieve 
Detailed Defense Counsel of the duties specified in 32 CFR 9.4(c)(2).
    (4) Neither qualification of a Civilian Defense Counsel for 
membership in the pool of available Civilian Defense Counsel nor the 
entry of appearance in a specific case guarantees that counsel's 
presence at closed military commission proceedings or access to 
information protected under 32 CFR 9.6(d)(5).
    (5) The Chief Defense Counsel shall monitor the conduct of all 
qualified Civilian Defense Counsel for compliance with all rules, 
regulations, and instructions governing military commissions. The Chief 
Defense Counsel will report all instances of noncompliance with the 
rules, regulations, and instructions governing military commissions to 
the Appointing Authority and to the General Counsel of the Department of 
Defense with a recommendation as to any appropriate action consistent 
with 32 CFR part 9 and this part.



Sec. 13.4  Duties and responsibilities of the defense.

    (a) Regular duties. The Defense shall perform all duties specified 
or implied in 32 CFR part 9 as responsibilities of the Defense.
    (b) Special duties. The Office of the Chief Defense Counsel shall 
perform such other functions, consistent with 32 CFR part 9, and 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism,'' and the mission 
of the Office of the Chief Defense Counsel, as may be directed by the 
Appointing Authority or the General Counsel of the Department of 
Defense.



Sec. 13.5  Policies.

    (a) Prohibition on certain agreements. No Defense Counsel may enter 
into agreements with any detainee other than his client, or such 
detainee's Defense Counsel, that might cause him or the client he 
represents to incur an obligation of confidentiality with such other 
detainee or Defense Counsel or to effect some other impediment to 
representation.
    (b) Prohibition on certain disclosures. All Defense Counsel must 
strictly comply with 32 CFR 9.6(d)(5) and 9.9 to ensure they do not 
improperly disclose classified information, national security 
information, or state secrets to an Accused or potential Accused or to 
any other person not specifically authorized to receive such 
information.
    (c) Statements to the media. Consistent with DoD Directive 5122.5 
\1\, the Assistant Secretary of Defense for Public Affairs shall serve 
as the sole release authority for DoD information and audiovisual 
materials regarding military commissions. Personnel assigned to the 
Office of the Chief Defense Counsel, as well as all members of the 
Civilian Defense Counsel pool and associated personnel may communicate 
with news media representatives regarding cases and other matters 
related to military commissions only when approved by the Appointing 
Authority or the General Counsel of the Department of Defense.
---------------------------------------------------------------------------

    \1\ Available at http://www.dtic.mil/whs/directives.
---------------------------------------------------------------------------



PART 14_QUALIFICATION OF CIVILIAN DEFENSE COUNSEL--Table of Contents



Sec.
14.1 Purpose.
14.2 Authority.
14.3 Policies and procedures.

Appendix A to Part 14--United States of America Authorization for 
          Release of Information
Appendix B to Part 14--Affidavit and Agreement by Civilian Defense 
          Counsel

    Authority: 10 U.S.C. 113(d) and 140(b).

    Source: 68 FR 39392, July 1, 2003, unless otherwise noted.



Sec. 14.1  Purpose.

    This part establishes policies and procedures for the creation and 
management of the pool of qualified Civilian Defense Counsel authorized 
in 32 CFR 9.4 (c)(3)(ii) in accordance with Military Order of November 
13, 2001, ``Detention, Treatment, and Trial of Certain Non-Citizens in 
the War Against Terrorism,'' (3 CFR 2001 Comp., 918, 66 FR 57833).

[[Page 49]]



Sec. 14.2  Authority.

    This part is issued pursuant to 32 CFR 9.7(a) and in accordance with 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism,'' and 10 U.S.C. 
113(d) and 140(b). The provisions of 32 CFR part 10 are applicable to 
this part.



Sec. 14.3  Policies and procedures.

    (a) Application procedures. (1) Civilian attorneys may be 
prequalified as members of the pool of attorneys eligible to represent 
Accused before military commissions at no expense to the United States 
if, at the time of application, they meet the eligibility criteria set 
forth in 32 CFR 9.4(c)(3)(ii) as further detailed in this part, or they 
may be qualified on an ad hoc basis after being requested by an Accused. 
In both cases, qualification results in membership in the pool of 
available Civilian Defense Counsel.
    (2) An attorney seeking qualification as a member of the pool of 
available Civilian Defense Counsel shall submit an application, by 
letter, to: Office of the General Counsel, Department of Defense, (Attn: 
Chief Defense Counsel, Office of Military Commissions), 1600 Defense 
Pentagon, Washington, DC 20301-1600. Applications will be comprised of 
the letter requesting qualification for membership, together with the 
following documents that demonstrate satisfaction of the criteria set 
forth in 32 CFR 9.4(c)(3)(ii):
    (i) Civilian Defense Counsel shall be United States citizens (32 CFR 
9.4(c)(3)(ii)(A)). Applicants will provide proof of citizenship (e.g., 
certified true copy of passport, birth certificate, or certificate of 
naturalization).
    (ii) Civilian Defense Counsel shall be admitted to the practice of 
law in a State, district, territory or possession of the United States, 
or before a Federal court (32 CFR 9.4(c)(3)(ii)(B)). Applicants will 
submit an official certificate showing that the applicant is an active 
member in good standing with the bar of a qualifying jurisdiction. The 
certificate must be dated within three months of the date of the Chief 
Defense Counsel's receipt of the application.
    (iii) Civilian Defense Counsel shall not have been the subject of 
any sanction or disciplinary action by any court, bar, or other 
competent governmental authority for relevant misconduct (32 CFR 
9.4(c)(2)(iii)).
    (A) An applicant shall submit a statement detailing all sanctions or 
disciplinary actions, pending or final, to which he has been subject, 
whether by a court, bar or other competent governmental authority, for 
misconduct of any kind. The statement shall identify the jurisdiction or 
authority that imposed the sanction or disciplinary action, together 
with any explanation deemed appropriate by the applicant. Additionally, 
the statement shall identify and explain any formal challenge to the 
attorney's fitness to practice law, regardless of the outcome of any 
subsequent proceedings. In the event that no sanction, disciplinary 
action or challenge has been imposed on or made against an applicant, 
the statement shall so state. Further, the applicant's statement shall 
identify each jurisdiction in which he has been admitted or to which he 
has applied to practice law, regardless of whether the applicant 
maintains a current active license in that jurisdiction, together with 
any dates of admission to or rejection by each such jurisdiction and, if 
no longer active, the date of and basis for inactivation. The 
information shall be submitted either in the form of a sworn notarized 
statement or as a declaration under penalty of perjury of the laws of 
the United States. The sworn statement or declaration must be executed 
and dated within three months of the date of the Chief Defense Counsel's 
receipt of the application.
    (B) Further, applicants shall submit a properly executed 
Authorization for Release of Information (Appendix A to this part), 
authorizing the Chief Defense Counsel or his designee to obtain 
information relevant to qualification of the applicant as a member of 
the Civilian Defense Counsel pool from each jurisdiction in which the 
applicant has been admitted or to which he has applied to practice law.
    (iv) Civilian Defense Counsel shall be determined to be eligible for 
access to information classified at the level SECRET or higher under the 
authority of

[[Page 50]]

and in accordance with the procedures described in Department of Defense 
Regulation, DoD 5200.2-R, ``Personnel Security Program.'' \1\ (32 CFR 
9.4(c)(2)(iv)
    (A) Civilian Defense Counsel applicants who possess a valid current 
security clearance of SECRET or higher shall provide, in writing, the 
date of their background investigation, the date such clearance was 
granted, the level of the clearance, and the adjudicating authority.
    (B) Civilian Defense Counsel applicants who do not possess a valid 
current security clearance of SECRET or higher shall state in writing 
their willingness to submit to a background investigation in accordance 
with DoD 5200.2-R and to pay any actual costs associated with the 
processing of the same. The security clearance application, 
investigation, and adjudication process will not be initiated until the 
applicant has submitted an application that otherwise fully complies 
with this part and the Chief Defense Counsel has determined that the 
applicant would otherwise be qualified for membership in the Civilian 
Defense Counsel pool. Favorable adjudication of the applicant's 
personnel security investigation must be completed before an applicant 
will be qualified for membership in the pool of Civilian Defense 
Counsel. The Chief Defense Counsel may, at his discretion, withhold 
qualification and wait to initiate the security clearance process until 
such time as the Civilian Defense Counsel's services are likely to be 
sought.
---------------------------------------------------------------------------

    \1\ Available at http://www.dtic.mil/whs/directives.
---------------------------------------------------------------------------

    (v) Civilian Defense Counsel shall have signed a written agreement 
to comply with all applicable regulations or instructions for counsel, 
including any rules of court for conduct during the course of 
proceedings (32 CFR 9.4(c)(2)(v)). This requirement shall be satisfied 
by the execution of the Affidavit And Agreement By Civilian Defense 
Counsel at Appendix B to this part. The Affidavit And Agreement By 
Civilian Defense Counsel shall be executed and agreed to without change, 
(i.e., no omissions, additions or substitutions). Proper execution shall 
require the notarized signature of the applicant. The Affidavit And 
Agreement By Civilian Defense Counsel shall be dated within three months 
of the date of the Chief Defense Counsel's receipt of the application.
    (3) Applications mailed in a franked U.S. Government envelope or 
received through U.S. Government distribution will not be considered. 
Telefaxed or electronic mail application materials will not be accepted. 
Failure to provide all of the requisite information and documentation 
may result in rejection of the application. A false statement in any 
part of the application may preclude qualification and/or render the 
applicant liable for disciplinary or criminal sanction, including under 
18 U.S.C. 1001.
    (b) Application review. (1) The Chief Defense Counsel or his 
designee shall review all Civilian Defense Counsel pool applications for 
compliance with 32 CFR part 9 and Military Order of November 13, 2001, 
``Detention, Treatment, and Trial of Certain Non-Citizens in the War 
Against Terrorism,'' and with this part.
    (2) The Chief Defense Counsel shall consider all applicants for 
qualification as members of the Civilian Defense Counsel pool without 
regard to race, religion, color, sex, age, national origin, or other 
non-disqualifying physical or mental disability.
    (3) The Chief Defense Counsel may reject any Civilian Defense 
Counsel application that is incomplete or otherwise fails to comply with 
32 CFR part 9 and Military Order of November 13, 2001, ``Detention, 
Treatment, and Trial of Certain Non-Citizens in the War Against 
Terrorism,'' or with this part.
    (4) Subject to review by the General Counsel of the Department of 
Defense, the Chief Defense Counsel shall determine the number of 
qualified attorneys that shall constitute the pool of available Civilian 
Defense Counsel. Similarly, subject to review by the General Counsel of 
the Department of Defense, the Chief Defense Counsel shall determine the 
qualification of applicants for membership in such pool. This shall 
include determinations as to whether any sanction, disciplinary action, 
or

[[Page 51]]

challenge is related to relevant misconduct that would disqualify the 
Civilian Defense Counsel applicant.
    (5) The Chief Defense Counsel's determination as to each applicant's 
qualification for membership in the pool of qualified Civilian Defense 
Counsel shall be deemed effective as of the date of the Chief Defense 
Counsel's written notification publishing such determination to the 
applicant. Subsequent to this notification, the retention of qualified 
Civilian Defense Counsel is effected upon written entry of appearance, 
communicated to the military commission through the Chief Defense 
Counsel.
    (6) The Chief Defense Counsel may reconsider his determination as to 
an individual's qualification as a member of the Civilian Defense 
Counsel pool on the basis of subsequently discovered information 
indicating material nondisclosure or misrepresentation in the 
application, or material violation of obligations of the Civilian 
Defense Counsel, or other good cause, or the matter may be referred to 
the Appointing Authority or the General Counsel of the Department of 
Defense, who may revoke or suspend the qualification of any member of 
the Civilian Defense Counsel pool.



 Sec. Appendix A to Part 14--United States of America Authorization for 

                         Release of Information

                        United States of America

                Authorization for Release of Information

(Carefully read this authorization to release information about you, 
then sign and date it in ink.)

    I authorize the Chief Defense Counsel, Office of Military 
Commissions, Department of Defense, his designee or other duly 
authorized representative of the Department of Defense who may be 
charged with assessing or determining my qualification for membership in 
the pool of Civilian Defense Counsel available to represent Accused 
before military commissions, to obtain any information from any court, 
the bar of any State, locality, district, territory or possession of the 
United States, or from any other governmental authority.
    This information may include, but is not limited to, information 
relating to: Any application for a security clearance; my admission or 
application for admission to practice law in any jurisdiction, including 
action by the jurisdiction upon such application, together with my 
current status with regard to the practice of law in such jurisdiction; 
any sanction or disciplinary action to which I have been subject for 
misconduct of any kind; and any formal challenge to my fitness to 
practice law, regardless of the outcome of subsequent proceedings.
    I authorize custodians of such records or information and other 
sources of information pertaining to me to release such at the request 
of the officials named above, regardless of any previous agreement to 
the contrary.
    I understand that for certain custodians or sources of information a 
separate specific release may be required and that I may be contacted 
for the purposes of executing such at a later date.
    I understand that the records or information released by custodians 
and other sources of information are for official use by the Department 
of Defense, only for the purposes provided herein, and that they may be 
redisclosed by the Department of Defense only as authorized by law.
    Copies of this authorization that show my signature are as valid as 
the original signed by me. This authorization is valid for five (5) 
years from the date signed or upon termination of my affiliation with 
the Department of Defense, whichever is later.

________________________________________________________________________
Signature (sign in ink) SSN

________________________________________________________________________
Date



Sec. Appendix B to Part 14--Affidavit and Agreement by Civilian Defense 

                                 Counsel

           Affidavit and Agreement by Civilian Defense Counsel

    Pursuant to Section 4(C)(3)(b) of Department of Defense Military 
Commission Order No. 1, ``Procedures for Trials by Military Commissions 
of Certain Non-United States Citizens in the War Against Terrorism,'' 
dated March 21, 2002 (``MCO No. 1''), Military Commission Instructions 
No. 4, ``Responsibilities of the Chief Defense Counsel, Detailed Defense 
Counsel, and Civilian Defense Counsel'' (``MCI No. 4'') and No. 5, 
``Qualification of Civilian Defense Counsel'' (``MCI No. 5''), and in 
accordance with the President's Military Order of November 13, 2001, 
``Detention, Treatment, and Trial of Certain Non-Citizens in the War 
Against Terrorism,'' 66 FR 57833 (Nov. 16, 2001) (``President's Military 
Order''), I [Name of Civilian Attorney], make this Affidavit and 
Agreement for the purposes of applying for qualification as a member of 
the pool of Civilian Defense Counsel available to represent Accused 
before military commissions and serving in that capacity.

[[Page 52]]

    I. Oaths or Affirmations. I swear or affirm that the following 
information is true to the best of my knowledge and belief:
    A. I have read and understand the President's Military Order, MCO 
No. 1, MCI No. 4, MCI No. 5, and all other Military Commission Orders 
and Instructions concerning the rules, regulations and instructions 
applicable to trial by military commissions. I will read all future 
Orders and Instructions applicable to trials by military commissions.
    B. I am aware that my qualification as a Civilian Defense Counsel 
does not guarantee my presence at closed military commission proceedings 
or guarantee my access to any information protected under Section 
6(D)(5) or Section 9 of MCO No. 1.
    II. Agreements. I hereby agree to comply with all applicable 
regulations and instructions for counsel, including any rules of court 
for conduct during the course of proceedings, and specifically agree, 
without limitation, to the following:
    A. I will notify the Chief Defense Counsel and, as applicable, the 
relevant Presiding Officer immediately if, after the execution of this 
Affidavit and Agreement but prior to the conclusion of proceedings 
(defined as the review and final decision of the President or, if 
designated, the Secretary of Defense), if there is any change in any of 
the information provided in my application, including this Affidavit and 
Agreement, for qualification as member of the Civilian Defense Counsel 
pool. I understand that such notification shall be in writing and shall 
set forth the substantive nature of the changed information.
    B. I will be well-prepared and will conduct the defense zealously, 
representing the Accused throughout the military commission process, 
from the inception of my representation through the completion of any 
post trial proceedings as detailed in Section 6(H) of MCO No. 1. I will 
ensure that these proceedings are my primary duty. I will not seek to 
delay or to continue the proceedings for reasons relating to matters 
that arise in the course of my law practice or other professional or 
personal activities that are not related to military commission 
proceedings.
    C. The Defense Team shall consist entirely of myself, Detailed 
Defense Counsel, and other personnel provided by the Chief Defense 
Counsel, the Presiding Officer, or the Appointing Authority. I will make 
no claim against the U.S. Government for any fees or costs associated 
with my conduct of the defense or related activities or efforts.
    D. Recognizing that my representation does not relieve Detailed 
Defense Counsel of duties specified in Section 4(C)(2) of MCO No. 1, I 
will work cooperatively with such counsel to ensure coordination of 
efforts and to ensure such counsel is capable of conducting the defense 
independently if necessary.
    E. During the pendency of the proceedings, unless I obtain approval 
in advance from the Presiding Officer to do otherwise, I will comply 
with the following restrictions on my travel and communications:
    1. I will not travel or transmit documents from the site of the 
proceedings without the approval of the Appointing Authority or the 
Presiding Officer. The Defense Team and I will otherwise perform all of 
our work relating to the proceedings, including any electronic or other 
research, at the site of the proceedings (except that this shall not 
apply during post-trial proceedings detailed in Section 6(H) of MCO No. 
1).
    2. I will not discuss or otherwise communicate or share documents or 
information about the case with anyone except persons who have been 
designated as members of the Defense Team in accordance with this 
Affidavit and Agreement and other applicable rules, regulations and 
instructions.
    F. At no time, to include any period subsequent to the conclusion of 
the proceedings, will I make any public or private statements regarding 
any closed sessions of the proceedings or any classified information or 
material, or document or material constituting protected information 
under MCO No. 1.
    G. I understand and agree to comply with all rules, regulations and 
instructions governing the handling of classified information and 
material. Furthermore, no document or material constituting protected 
information under MCO No. 1, regardless of its classification level, may 
leave the site of the proceedings.
    H. I understand that there may be reasonable restrictions on the 
time and duration of contact I may have with my client, as imposed by 
the Appointing Authority, the Presiding Officer, detention authorities, 
or regulation.
    I. I understand that my communications with my client, even if 
traditionally covered by the attorney-client privilege, may be subject 
to monitoring or review by government officials, using any available 
means, for security and intelligence purposes. I understand that any 
such monitoring will only take place in limited circumstances when 
approved by proper authority, and that any evidence or information 
derived from such communications will not be used in proceedings against 
the Accused who made or received the relevant communication. I further 
understand that communications are not protected if they would 
facilitate criminal acts or a conspiracy to commit criminal acts, or if 
those communications are not related to the seeking or providing of 
legal advice.
    J. I agree that I shall reveal to the Chief Defense Counsel and any 
other appropriate authorities, information relating to the 
representation of my client to the extent that I reasonably believe 
necessary to prevent the

[[Page 53]]

commission of a future criminal act that I believe is likely to result 
in death or substantial bodily harm, or significant impairment of 
national security.
    K. I understand and agree that nothing in this Affidavit and 
Agreement creates any substantive, procedural, or other rights for me as 
counsel or for my client(s).
 /s/____________________________________________________________________
 Print Name:____________________________________________________________
 Address:_______________________________________________________________
 Date:__________________________________________________________________

State of )
County of )

    Sworn to and subscribed before me, by ----------, this ---- day of 
--------, 20----.

                                 Notary

 My commission expires:_________________________________________________



PART 15_REPORTING RELATIONSHIPS FOR MILITARY COMMISSION PERSONNEL--Table of 

Contents



Sec.
15.1 Purpose.
15.2 Authority.
15.3 Policies and procedures.

    Authority: 10 U.S.C. 113(d) and 140(b).

    Source: 68 FR 39395, July 1, 2003, unless otherwise noted.



Sec. 15.1  Purpose.

    This part establishes supervisory and performance evaluation 
relationships for military commission personnel.



Sec. 15.2  Authority.

    This part is issued pursuant to 32 CFR 9.7(a) and in accordance with 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism,'' (3 CFR 2001 
Comp., p. 918, 66 FR 57833) and 10 U.S.C. 113(d) and 140(b). The 
provisions of 32 CFR part 10 are applicable to this part.



Sec. 15.3  Policies and Procedures.

    (a) Supervisory and performance evaluation relationships. 
Individuals appointed, assigned, detailed, designated or employed in a 
capacity related to the conduct of military commission proceedings 
conducted in accordance with 32 CFR part 9 and Military Order of 
November 13, 2001, ``Detention, Treatment, and Trial of Certain Non-
Citizens in the War Against Terrorism,'' shall be subject to the 
relationships set forth in paragraphs (a)(1) through (a)(9) of this 
section. Unless stated otherwise, the person to whom an individual 
``reports,'' as set forth in paragraphs (a)(1) through (a)(9) of this 
section, shall be deemed to be such individual's supervisor and shall, 
to the extent possible, fulfill all performance evaluation 
responsibilities normally associated with the function of direct 
supervisor in accordance with the subordinate's Military Service 
performance evaluation regulations.
    (1) Appointing Authority: Any Appointing Authority designated by the 
Secretary of Defense pursuant to 32 CFR part 9 shall report to the 
Secretary of Defense in accordance with 10 U.S.C. 113(d).
    (2) Legal Advisor to Appointing Authority: The Legal Advisor to the 
Appointing Authority shall report to the Appointing Authority.
    (3) Chief Prosecutor: The Chief Prosecutor shall report to the 
Deputy General Counsel (Legal Counsel) of the Department of Defense and 
then to the General Counsel of the Department of Defense.
    (4) Prosecutors and Assistant Prosecutors: Prosecutors and Assistant 
Prosecutors shall report to the Chief Prosecutor and then to the Deputy 
General Counsel (Legal Counsel) of the Department of Defense.
    (5) Chief Defense Counsel: The Chief Defense Counsel shall report to 
the Deputy General Counsel (Personnel and Health Policy) of the 
Department of Defense and then to the General Counsel of the Department 
of Defense.
    (6) Detailed Defense Counsel: Detailed Defense Counsel shall report 
to the Chief Defense Counsel and then to the Deputy General Counsel 
(Personnel and Health Policy) of the Department of Defense.
    (7) Review Panel members: Members of the Review Panel shall report 
to the Secretary of Defense.
    (8) Commission members: Commission members shall continue to report 
to their parent commands. The consideration or evaluation of the 
performance of duty as a member of a military commission is prohibited 
in preparing effectiveness, fitness, or evaluation reports of a 
commission member.

[[Page 54]]

    (9) Other personnel: All other military commission personnel, such 
as court reporters, interpreters, security personnel, bailiffs, and 
clerks detailed or employed by the Appointing Authority pursuant to 32 
CFR 9.4(d), if not assigned to the Office of the Chief Prosecutor or the 
Office of the Chief Defense Counsel, shall report to the Appointing 
Authority or his designee.
    (b) Responsibilities of supervisory/reporting officials. Officials 
designated in this part as supervisory/reporting officials shall:
    (1) Supervise subordinates in the performance of their duties.
    (2) Prepare fitness or performance evaluation reports and, as 
appropriate, process awards and citations for subordinates. To the 
extent practicable, a reporting official shall comply with the rated 
subordinate's Military Service regulations regarding the preparation of 
fitness or performance evaluation reports and in executing related 
duties.



PART 16_SENTENCING--Table of Contents



Sec.
16.1 Purpose.
16.2 Authority.
16.3 Available sentences.
16.4 Sentencing procedures.

    Authority: 10 U.S.C. 113(d) and 140(b).

    Source: 68 FR 39396, July 1, 2003, unless otherwise noted.



Sec. 16.1  Purpose.

    This part promulgates policy, assigns responsibilities, and 
prescribes procedures for matters related to sentencing of persons with 
regard to whom a finding of guilty is entered for an offense referred 
for trial by a military commission appointed pursuant to 32 CFR part 9 
and Military Order of November 13, 2001, ``Detention, Treatment, and 
Trial of Certain Non-Citizens in the War Against Terrorism'' (3 CFR 2001 
Comp., p. 918, 66 FR 57833).



Sec. 16.2  Authority.

    This part is issued pursuant to 32 CFR 9.7(a) and in accordance with 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism,'' and 10 U.S.C. 
113(d) and 140(b). The provisions of 32 CFR part 10 are applicable to 
this part.



Sec. 16.3  Available sentences.

    (a) General. 32 CFR part 9 permits a military commission wide 
latitude in sentencing. Any lawful punishment or condition of punishment 
is authorized, including death, so long as the prerequisites detailed in 
32 CFR part 9 are met. Detention associated with an individual's status 
as an enemy combatant shall not be considered to fulfill any term of 
imprisonment imposed by a military commission. The sentence 
determination should be made while bearing in mind that there are 
several principal reasons for a sentence given to those who violate the 
law. Such reasons include: punishment of the wrongdoer; protection of 
society from the wrongdoer; deterrence of the wrongdoer and those who 
know of his crimes and sentence from committing the same or similar 
offenses; and rehabilitation of the wrongdoer. In determining an 
appropriate sentence, the weight to be accorded any or all of these 
reasons rests solely within the discretion of commission members. All 
sentences should, however, be grounded in a recognition that military 
commissions are a function of the President's war-fighting role as 
Commander-in-Chief of the Armed Forces of the United States and of the 
broad deterrent impact associated with a sentence's effect on adherence 
to the laws and customs of war in general.
    (b) Conditions of imprisonment. Decisions regarding the location 
designated for any imprisonment, the conditions under which a sentence 
to imprisonment is served, or the privileges accorded one during any 
period of imprisonment should generally not be made by the commission. 
Those decisions and actions, however, may be appropriate subjects for 
recommendation to the person making a final decision on the sentence in 
accordance with of 32 CFR 9.6(h).
    (c) Prospective recommendations for sentence modification. A 
sentence imposed by military commission may be accompanied by a 
recommendation to suspend, remit, commute or otherwise modify the 
adjudged sentence in concert with one or more conditions upon

[[Page 55]]

which the suspension, remission, commutation, or other modification is 
contingent (usually relating to the performance, behavior or conduct of 
the Accused). Unless otherwise directed, a decision or action in 
accordance with such a recommendation will be effected by direction or 
delegation to the Appointing Authority by the official making a final 
decision on the sentence in accordance with of 32 CFR 9.6(h).



Sec. 16.4  Sentencing procedures.

    (a) General. 32 CFR part 9 permits the military commission 
substantial discretion regarding the conduct of sentencing proceedings. 
Sentencing proceedings should normally proceed expeditiously. In the 
discretion of the Presiding Officer, as limited by the Appointing 
Authority, reasonable delay between the announcement of findings and the 
commencement of sentencing proceedings may be authorized to facilitate 
the conduct of proceedings in accordance with of 32 CFR 9.6(b).
    (b) Information relevant to sentencing. 32 CFR 9.6(e)(10) permits 
the Prosecution and Defense to present information to aid the military 
commission in determining an appropriate sentence. Such information may 
include a recommendation of an appropriate sentence, information 
regarding sentence ranges for analogous offenses (e.g., the sentencing 
range under the Federal Sentencing Guidelines that could be applicable 
to the Accused for the most analogous federal offenses), and other 
relevant information. Regardless of any presentation by the Prosecution 
or Defense, the military commission shall consider any evidence admitted 
for consideration prior to findings regarding guilt. The Presiding 
Officer may limit or require the presentation of certain information 
consistent with 32 CFR part 9 and Military Order of November 13, 2001, 
``Detention, Treatment, and Trial of Certain Non-Citizens in the War 
Against Terrorism'.
    (c) Cases involving plea agreements. In accordance with 32 CFR 
9.6(a)(4), after determining the voluntary and informed nature of a plea 
agreement approved by the Appointing Authority, the military commission 
is bound to adjudge findings and a sentence pursuant to that plea 
agreement. Accordingly, the Presiding Officer may exercise the authority 
granted in of 32 CFR 9.6(e) to curtail or preclude the presentation of 
information and argument relative to the military commission's 
determination of an appropriate sentence.
    (d) Special duties. In cases involving plea agreements or 
recommendations for certain conditions of imprisonment or prospective 
sentence modification, the Prosecution and Defense shall provide 
whatever post-trial information or recommendation as is relevant to any 
subsequent decision regarding such condition or suspension, remission, 
commutation, or other modification recommendation associated with the 
sentence.



PART 17_ADMINISTRATIVE PROCEDURES--Table of Contents



Sec.
17.1 Purpose.
17.2 Authority.
17.3 Commission personnel.
17.4 Interlocutory questions.
17.5 Implied duties of the presiding officer.
17.6 Disclosures.

    Authority: 10 U.S.C. 113(d) and 140(b).

    Source: 68 FR 39397, July 1, 2003, unless otherwise noted.



Sec. 17.1  Purpose.

    This part promulgates policy, assigns responsibilities, and 
prescribes procedures for the conduct of trials by a military commission 
appointed pursuant to 32 CFR part 9 and Military Order of November 13, 
2001, ``Detention, Treatment, and Trial of Certain Non-Citizens in the 
War Against Terrorism,'' (3 CFR 2001 Comp., p. 918, 66 FR 57833).



Sec. 17.2  Authority.

    This part is issued pursuant to 32 CFR 9.7(a) and in accordance with 
Military Order of November 13, 2001, ``Detention, Treatment, and Trial 
of Certain Non-Citizens in the War Against Terrorism,'' and 10 U.S.C. 
113(d) and 140(b). The provisions of 32 CFR part 10 are applicable to 
this part.



Sec. 17.3  Commission personnel.

    (a) Appointment and removal of Commission members. (1) In accordance 
with

[[Page 56]]

32 CFR part 9, the Appointing Authority shall appoint at least three but 
no more than seven members and one or two alternate members. The 
Appointing Authority may remove members and alternate members for good 
cause. In the event a member (or alternate member) is removed for good 
cause, the Appointing Authority may replace the member, direct that an 
alternate member serve in the place of the original member, direct that 
proceedings simply continue without the member, or convene a new 
commission. In the absence of guidance from the Appointing Authority 
regarding replacement, the Presiding Officer shall select an alternate 
member to replace the member in question.
    (2) The Presiding Officer shall determine if it is necessary to 
conduct or permit questioning of members (including the Presiding 
Officer) on issues of whether there is good cause for their removal. The 
Presiding Officer may permit questioning in any manner he deems 
appropriate. Consistent with 32 CFR part 9, any such questioning shall 
be narrowly focused on issues pertaining to whether good cause may exist 
for the removal of any member.
    (3) From time to time, it may be appropriate for a Presiding Officer 
to forward to the Appointing Authority information and, if appropriate, 
a recommendation relevant to the question of whether a member (including 
the Presiding Officer) should be removed for good cause. While awaiting 
the Appointing Authority's decision on such matter, the Presiding 
Officer may elect either to hold proceedings in abeyance or to continue. 
The Presiding Officer may issue any appropriate instructions to the 
member whose continued service is in question. A military commission 
shall not engage in deliberations on findings or sentence prior to the 
Appointing Authority's decision in any case in which the Presiding 
Officer has recommended a member's removal.
    (b) Military commission security officer. The Appointing Authority 
may detail a Security Officer to advise a military commission on matters 
related to classified and protected information. In addition to any 
other duties assigned by the Appointing Authority, the Security Officer 
shall ensure that all classified or protected evidence and information 
is appropriately safeguarded at all times and that only personnel with 
the appropriate clearances and authorizations are present when 
classified or protected materials are presented before military 
commissions.
    (c) Other military commission personnel. The Appointing Authority 
may detail court reporters, interpreters, security personnel, bailiffs, 
clerks, and any other personnel to a military commission as deemed 
necessary. In the absence of a detailing by the Appointing Authority, 
the Chief Prosecutor shall be responsible to ensure the availability of 
necessary or appropriate personnel to facilitate the impartial and 
expeditious conduct of full and fair trials by military commission.



Sec. 17.4  Interlocutory questions.

    (a) Certification of interlocutory questions. The Presiding Officer 
shall generally adjudicate all motions and questions that arise during 
the course of a trial by military commission. In accordance with 32 CFR 
9.4(a)(5)(iv), however, the Presiding Officer shall certify all 
interlocutory questions, the disposition of which would effect a 
termination of proceedings with respect to a charge, for decision by the 
Appointing Authority. In addition, the Presiding Officer may certify 
other interlocutory questions to the Appointing Authority as the 
Presiding Officer deems appropriate.
    (b) Submission of interlocutory questions. The Presiding Officer 
shall determine what, if any, documentary or other materials should be 
forwarded to the Appointing Authority in conjunction with an 
interlocutory question.
    (c) Effect of interlocutory question certification on proceedings. 
While decision by the Appointing Authority is pending on any certified 
interlocutory question, the Presiding Officer may elect either to hold 
proceedings in abeyance or to continue.



Sec. 17.5  Implied duties of the presiding officer.

    The Presiding Officer shall ensure the execution of all ancillary 
functions necessary for the impartial and expeditious conduct of a full 
and fair trial by military commission in accordance

[[Page 57]]

with 32 CFR part 9. Such functions include, for example, scheduling the 
time and place of convening of a military commission, ensuring that an 
oath or affirmation is administered to witnesses and military commission 
personnel as appropriate, conducting appropriate in camera meetings to 
facilitate efficient trial proceedings, and providing necessary 
instructions to other commission members. The Presiding Officer shall 
rule on appropriate motions or, at his discretion consistent with 32 CFR 
part 9, may submit them to the commission for decision or to the 
Appointing Authority as a certified interlocutory question.



Sec. 17.6  Disclosures.

    (a) General. Unless directed otherwise by the Presiding Officer upon 
a showing of good cause or for some other reason, counsel for the 
Prosecution and the Defense shall provide to opposing counsel, at least 
one week prior to the scheduled convening of a military commission, 
copies of all information intended for presentation as evidence at 
trial, copies of all motions the party intends to raise before the 
military commission, and names and contact information of all witnesses 
a party intends to call. Motions shall also be provided to the Presiding 
Officer at the time they are provided to opposing counsel. Unless 
directed otherwise by the Presiding Officer, written responses to any 
motions will be provided to opposing counsel and the Presiding Officer 
no later than three days prior to the scheduled convening of a military 
commission.
    (b) Notifications by the prosecution. The Prosecution shall provide 
the Defense with access to evidence known to the Prosecution that tends 
to exculpate the Accused as soon as practicable, and in no instance 
later than one week prior to the scheduled convening of a military 
commission.
    (c) Notifications by the defense. The Defense shall give notice to 
the Prosecution of any intent to raise an affirmative defense to any 
charge at least one week prior to the scheduled convening of a military 
commission.
    (d) Evidence related to mental responsibility. If the Defense 
indicates an intent to raise a defense of lack of mental responsibility 
or introduce expert testimony regarding an Accused's mental condition, 
the prosecution may require that the Accused submit to a mental 
examination by a military psychologist or psychiatrist, and both parties 
shall have access to the results of that examination.



PART 18_APPOINTING AUTHORITY FOR MILITARY COMMISSIONS--Table of Contents



Sec.
18.1 Purpose
18.2 Applicability and scope.
18.3 Organization.
18.4 Responsibilities and functions.
18.5 Relationships.
18.6 Authorities.

    Authority: 10 U.S.C. 113 and 131(b)(8).

    Source: 69 FR 31292, June 3, 2004, unless otherwise noted.



Sec. 18.1  Purpose.

    Pursuant to the authority vested in the Secretary of Defense under 
the U.S. Constitution, Article II, Section 2, Clause 2, 10 U.S.C. 113 
and 131(b)(8) and Military Order of November 13, 2001, ``Detention, 
Treatment, and Trial of Certain Non-Citizens in the War Against 
Terrorism,'' (66 FR 57833 (November 16, 2001)) (``President's Military 
Order'') this part establishes the position and office of the Appointing 
Authority for Military Commissions, with the responsibilities, 
functions, relationships, and authorities as prescribed herein.



Sec. 18.2  Applicability and scope.

    This part applies to:
    (a) The Office of the Secretary of Defense (OSD), the Military 
Departments, the Chairman of the Joint Chiefs of Staff, the Combatant 
Commands, the Office of the Inspector General of the Department of 
Defense, the Defense Agencies, the DoD Field Activities, all other 
organizational entities in the Department of Defense (hereafter referred 
to collectively as ``the DoD Components'').
    (b) Any special trial counsel of the Department of Justice who may 
be made available by the Attorney General of the United States to serve 
as a prosecutor in trials before military commissions pursuant to 
section

[[Page 58]]

4(B)(2) of DoD Military Commission Order No. 1, \1\ ``Procedures for 
Trials by Military Commissions of Certain Non-United States Citizens in 
the War Against Terrorism,'' March 21, 2002.
---------------------------------------------------------------------------

    \1\ DoD Military Commission Orders and Instructions referenced in 
this Directive can be found at http://www.dtic.mil/whs/directives/
corres/mco.htm.
---------------------------------------------------------------------------

    (c) Any civilian attorney who seeks qualification as a member of a 
pool of qualified Civilian Defense Counsel authorized in section 
4(C)(3)(b) of DoD Military Commission Order No. 1; and to any attorney 
who has been qualified as a member of that pool.



Sec. 18.3  Organization.

    (a) The Appointing Authority for Military Commissions is established 
in the Office of the Secretary of Defense under the authority, 
direction, and control of the Secretary of Defense.
    (b) The Office of the Appointing Authority shall consist of the 
Appointing Authority, the Legal Advisor to the Appointing Authority, and 
such other subordinate officials and organizational elements as are 
established by the General Counsel of the Department of Defense within 
the resources assigned by the Secretary of Defense.



Sec. 18.4  Responsibilities and functions.

    (a) The Appointing Authority for Military Commissions is an officer 
of the United States appointed by the Secretary of Defense pursuant to 
the U.S. Constitution and 10 U.S.C. In this capacity, the Appointing 
Authority for Military Commissions shall exercise the duties prescribed 
in DoD Military Commission Order No. 1 and this part and shall:
    (1) Issue orders from time to time appointing one or more military 
commissions to try individuals subject to the President's Military Order 
and DoD Military Commission Order No. 1; and appoint any other personnel 
necessary to facilitate military commissions.
    (2) Appoint military commission members and alternate members, based 
on competence to perform the duties involved. Remove members and 
alternate members for good cause pursuant to Military Commission 
Instruction No. 8.
    (3) Designate a Presiding Officer from among the members of each 
military commission to preside over the proceedings of that military 
commission. The Presiding Officer shall be a military officer who is a 
judge advocate of any United States Armed Force.
    (4) Approve and refer charges prepared by that Prosecution against 
an individual or individuals subject to Military Order of November 13, 
2001.
    (5) Approve plea agreements with an Accused.
    (6) Decide interlocutory questions certified by the Presiding 
Officer.
    (7) Ensure military commission proceedings are open to the maximum 
extent practicable. Decide when military commission proceedings should 
be closed pursuant to Military Order of November 13, 2001 and DoD 
Military Commission Order No. 1.
    (8) Make decisions related to attendance at military commission 
proceedings by the public and accredited press and the public release of 
transcripts. Such matters, including policy and plans for media coverage 
shall be coordinated with the Assistant Secretary of Defense for Public 
Affairs (ASD(PA)) and, as appropriate, the Assistant Secretary of 
Defense for Special Operations/Low Intensity Conflict (ASD(SO/LIC)) 
under the Under Secretary of Defense for Policy (USD(P)).
    (9) Approve or disapprove requests from the Prosecution and Defense 
to communicate with news media representatives regarding cases and other 
matters related to military commissions. Such matters shall be 
coordinated with the ASD(PA).
    (10) Detail or employ personnel such as court reporters, 
interpreters, security personnel, bailiffs, and clerks to support 
military commissions, as necessary. When such details effect resources 
committed to operational missions, coordinate with the ASD (SO/LIC) 
under the USD(P) and the Heads of appropriate DoD Components.
    (11) Order that such investigative or other resources be made 
available to Defense Counsel and the Accused ad deemed necessary for a 
full and fair trial, including appointing interpreters.

[[Page 59]]

    (12) Promptly review military commission records of trial for 
administrative completeness and determine appropriate disposition, 
either transmitting the record of trial to the Review Panel or returning 
it to the military commission for any necessary supplementary 
proceedings.
    (13) Implement directions of officials with final decision-making 
authority for sentences.
    (14) Perform supervisory and performance evaluation duties pursuant 
to this part and DoD Military Commission Instruction No. 6.
    (15) Coordinate matters involving members of the Congress, including 
correspondence, with the Assistant Secretary of Defense for Legislative 
Affairs; and coordinate and exchange data and information with other OSD 
officials, the Heads of the DoD Components, and other Federal officials 
having collateral or related functions.
    (16) Establish, maintain, and preserve records that serve as 
evidence of the organization, functions, policies, decisions, 
procedures, operations, and other activities of the Office of the 
Appointing Authority for Military Commissions in accordance with Title 
44 U.S.C.
    (17) Perform such other functions as the Secretary of Defense may 
prescribe.
    (b) The General Counsel of the Department of Defense shall:
    (1) Review and approve such regulations, instructions, memoranda, 
and other DoD publications prepared by the Appointing Authority (see 
Sec. 18.6(c)) for the conduct of proceedings by military commissions 
established pursuant to Military Order of November 13, 2001 and DoD 
Military Commission Order No. 1.
    (2) Provide guidance and issue instructions necessary to facilitate 
the conduct of proceedings by military commissions established pursuant 
to Military Order of November 13, 2001 and DoD Military Commission Order 
No. 1, including but not limited to instructions pertaining to military 
commission-related offices, performance evaluations and reporting 
relationships.
    (c) The Chairman of the Joint Chiefs of Staff and the OSD Principal 
Staff Assistants shall exercise their designated authorities and 
responsibilities as established by law or DoD guidance to support the 
Appointing Authority for Military Commissions in the implementation of 
the responsibilities and functions specified herein.
    (d) The Secretaries of the Military Departments shall support the 
personnel requirements of the Appointing Authority as validated by the 
General Counsel of the Department of Defense and provide other requested 
assistance and support within their capabilities.



Sec. 18.5  Relationships.

    (a) In the performance of assigned functions and responsibilities, 
the Appointing Authority for Military Commission shall:
    (1) Report directly to the Secretary of Defense.
    (2) Use existing facilities and services of the Department of 
Defense and other Federal Agencies, whenever practicable, to avoid 
duplication and to achieve an appropriate level of efficiency and 
economy.
    (b) Other OSD officials and the Heads of the DoD Components shall 
coordinate with the Appointing Authority for Military Commissions on all 
matters related to the responsibilities and functions cited in Sec. 
18.4.
    (c) Nothing herein shall be interpreted to subsume or replace the 
responsibilities, functions, or authorities of the OSD Principal Staff 
Assistants, the Secretaries of the Military Departments, the Chairman of 
the Joint Chiefs of Staff, the Commanders of Combatant Commands, or the 
Heads of Defense Agencies or the Department of Defense Field Activities 
prescribed by law or Department of Defense guidance.



Sec. 18.6  Authorities.

    The Appointing Authority for Military Commissions is hereby 
delegated authority to:
    (a) Obtain reports and information, consistent with DoD Directive 
8910.1 as necessary to carry out assigned functions.
    (b) Communicate directly with the Heads of the DoD Components as 
necessary to carry out assigned functions, including the transmission of 
requests for advice and assistance. Communications to the Military 
Departments

[[Page 60]]

shall be transmitted through the Secretaries of the Military 
Departments, their designees, or as otherwise provided in law or 
directed by the Secretary of Defense in other Department of Defense 
issuances. Communications to the Commanders of the Combatant Commands, 
except in unusual circumstances, shall be transmitted through the 
Chairman of the Joint Chiefs of Staff.
    (c) Subject to the approval of the General Counsel of the Department 
of Defense, issue DoD Publications and one-time directive-type memoranda 
consistent with DoD 5025.1-M; Military Commission Instructions 
consistent with DoD Military Commission Instruction No. 1; and such 
other regulations as are necessary or appropriate for the conduct of 
proceedings by military commissions established pursuant to Military 
Order of November 13, 2001 and DoD Military Commission Order No. 1. 
Instructions to the Military Departments shall be issued through the 
Secretaries of the Military Departments. Instructions to the Combatant 
Commands, except in unusual circumstances, shall be communicated through 
the Chairman of the Joint Chiefs of Staff.
    (d) Communicate with other Government officials, representatives of 
the Legislative Branch, members of the public, and representatives of 
foreign governments, as applicable, in carrying out assigned functions.

                         PARTS 19-20 [RESERVED]

[[Page 61]]



            SUBCHAPTER C_DoD GRANT AND AGREEMENT REGULATIONS



PART 21_DoD GRANTS AND AGREEMENTS_GENERAL MATTERS--Table of Contents



                         Subpart A_Introduction

Sec.
21.100 What are the purposes of this part?

         Subpart B_Defense Grant and Agreement Regulatory System

21.200 What is the Defense Grant and Agreement Regulatory System 
          (DGARS)?
21.205 What types of instruments are covered by the DGARS?
21.210 What are the purposes of the DGARS?
21.215 Who is responsible for the DGARS?
21.220 What publications are in the DGARS?

            Subpart C_The DoD Grant and Agreement Regulations

21.300 What instruments are subject to the DoD Grant and Agreement 
          Regulations (DoDGARs)?
21.305 What is the purpose of the DoDGARs?
21.310 Who ensures DoD Component compliance with the DoDGARs?
21.315 May DoD Components issue supplemental policies and procedures to 
          implement the DoDGARs?
21.320 Are there areas in which DoD Components must establish policies 
          and procedures to implement the DoDGARs?
21.325 Do acquisition regulations also apply to DoD grants and 
          agreements?
21.330 How are the DoDGARs published and maintained?
21.335 Who can authorize deviations from the DoDGARs?
21.340 What are the procedures for requesting and documenting 
          deviations?

Subpart D_Authorities and Responsibilities for Making and Administering 
                            Assistance Awards

21.400 To what instruments does this subpart apply?
21.405 What is the purpose of this subpart?
21.410 Must a DoD Component have statutory authority to make an 
          assistance award?
21.415 Must the statutory authority specifically mention the use of 
          grants or other assistance instruments?
21.420 Under what types of statutory authorities do DoD Components award 
          assistance instruments?
21.425 How does a DoD Component's authority flow to awarding and 
          administering activities?
21.430 What are the responsibilities of the head of the awarding or 
          administering activity?
21.435 Must DoD Components formally select and appoint grants officers 
          and agreements officers?
21.440 What are the standards for selecting and appointing grants 
          officers and agreements officers?
21.445 What are the requirements for a grants officer's or agreements 
          officer's statement of appointment?
21.450 What are the requirements for a termination of a grants officer's 
          or agreements officer's appointment?
21.455 Who can sign, administer, or terminate assistance instruments?
21.460 What is the extent of grants officers' and agreements officers' 
          authority?
21.465 What are grants officers' and agreements officers' 
          responsibilities?

 Subpart E_Information Reporting on Awards Subject to 31 U.S.C. Chapter 
                                   61

21.500 What is the purpose of this subpart?
21.505 What is the Catalog of Federal Domestic Assistance (CFDA)?
21.510 Why does the DoD report information to the CFDA?
21.515 Who reports the information for the CFDA?
21.520 What are the purposes of the Defense Assistance Awards Data 
          System (DAADS)?
21.525 Who issues policy guidance for the DAADS?
21.530 Who operates the DAADS?
21.535 Do DoD Components have central points for collecting DAADS data?
21.540 What are the duties of the DoD Components' central points for the 
          DAADS?
21.545 Must DoD Components report every obligation to the DAADS?
21.550 Must DoD Components relate reported actions to listings in the 
          CFDA?
21.555 When and how must DoD Components report to the DAADS?
21.560 Must DoD Components assign numbers uniformly to awards?
21.565 Must DoD Components' electronic systems accept Data Universal 
          Numbering System (DUNS) numbers?

                          Subpart F_Definitions

21.605 Acquisition.
21.610 Agreements officer.
21.615 Assistance.

[[Page 62]]

21.620 Award.
21.625 Contract.
21.630 Contracting activity.
21.635 Contracting officer.
21.640 Cooperative agreement.
21.645 Deviation.
21.650 DoD Components.
21.655 Grant.
21.660 Grants officer.
21.665 Nonprocurement instrument.
21.670 Procurement contract.
21.675 Recipient.
21.680 Technology investment agreements.

Appendix A to Part 21--Instruments to Which DoDGARs Portions Apply

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 68 FR 47153, Aug. 7, 2003, unless otherwise noted.



                         Subpart A_Introduction



Sec. 21.100  What are the purposes of this part?

    This part of the DoD Grant and Agreement Regulations:
    (a) Provides general information about the Defense Grant and 
Agreement Regulatory System (DGARS).
    (b) Sets forth general policies and procedures related to DoD 
Components' overall management of functions related to assistance and 
certain other nonprocurement instruments subject to the DGARS (see Sec. 
21.205(b)).



         Subpart B_Defense Grant and Agreement Regulatory System



Sec. 21.200  What is the Defense Grant and Agreement Regulatory System 

(DGARS)?

    The Defense Grant and Agreement Regulatory System (DGARS) is the 
system of regulatory policies and procedures for the award and 
administration of DoD Components' assistance and other nonprocurement 
awards. DoD Directive 3210.6 \1\ established the DGARS.
---------------------------------------------------------------------------

    \1\ Electronic copies may be obtained at the Washington Headquarters 
Services Internet site http://www.dtic.mil/whs/directives. Paper copies 
may be obtained, at cost, from the National Technical Information 
Service, 5285 Port Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------



Sec. 21.205  What types of instruments are covered by the DGARS?

    The Defense Grant and Agreement Regulatory System (DGARS) applies to 
the following types of funding instruments awarded by DoD Components:
    (a) All grants, cooperative agreements, and technology investment 
agreements.
    (b) Other nonprocurement instruments, as needed to implement 
statutes, Executive orders, or other Federal Governmentwide rules that 
apply to those other nonprocurement instruments, as well as to grants 
and cooperative agreements.



Sec. 21.210  What are the purposes of the DGARS?

    The purposes of the DGARS are to provide uniform policies and 
procedures for DoD Components' awards, in order to meet DoD needs for:
    (a) Efficient program execution, effective program oversight, and 
proper stewardship of Federal funds.
    (b) Compliance with relevant statutes; Executive orders; and 
applicable guidance, such as Office of Management and Budget (OMB) 
circulars.
    (c) Collection from DoD Components, retention, and dissemination of 
management and fiscal data related to awards.



Sec. 21.215  Who is responsible for the DGARS?

    The Director of Defense Research and Engineering, or his or her 
designee, develops and implements DGARS policies and procedures. He or 
she does so by issuing and maintaining the DoD publications that 
comprise the DGARS.



Sec. 21.220  What publications are in the DGARS?

    A DoD publication (DoD 3210.6-R \2\) entitled ``The DoD Grant and 
Agreement Regulations'' is the principal element of the DGARS. The 
Director of Defense Research and Engineering also may publish DGARS 
policies and procedures in DoD instructions and other DoD publications, 
as appropriate.
---------------------------------------------------------------------------

    \2\ See footnote 1 to Sec. 21.200.

---------------------------------------------------------------------------

[[Page 63]]



            Subpart C_The DoD Grant and Agreement Regulations



Sec. 21.300  What instruments are subject to the DoD Grant and Agreement 

Regulations (DoDGARs)?

    (a) The types of instruments that are subject to the DoDGARs vary 
from one portion of the DoDGARs to another. The types of instruments 
include grants, cooperative agreements, and technology investment 
agreements. Some portions of the DoDGARs apply to other types of 
assistance or nonprocurement instruments. The term ``awards,'' as 
defined in subpart D of this part, is used in this part to refer 
collectively to all of the types of instruments that are subject to one 
or more portions of the DoDGARs.
    (b) Note that each portion of the DoDGARs identifies the types of 
instruments to which it applies. However, grants officers and agreements 
officers must exercise caution when determining the applicability of 
some Governmentwide rules that are included within the DoDGARs, because 
a term may be defined differently in a Governmentwide rule than it is 
defined elsewhere in the DoDGARs. One example is part 33 of the DoDGARs 
(32 CFR part 33), which contains administrative requirements for awards 
to State and local governments. That DoDGARs part is the DoD's 
codification of the Governmentwide rule implementing OMB Circular A-102. 
\3\ Part 33 states that it applies to grants, but defines the term 
``grant'' to include cooperative agreements and other forms of financial 
assistance.
---------------------------------------------------------------------------

    \3\ Electronic copies may be obtained at the Internet site http://
www.whitehouse.gov/OMB. For paper copies, contact the Office of 
Management and Budget, EOP Publications, 725 17th St., NW., New 
Executive Office Building, Washington, DC 20503.
---------------------------------------------------------------------------

    (c) For convenience, the table in Appendix A to this part provides 
an overview of the applicability of the various portions of the DoDGARs.



Sec. 21.305  What is the purpose of the DoDGARs?

    The DoD Grant and Agreement Regulations provide uniform policies and 
procedures for the award and administration of DoD Components' awards. 
The DoDGARs are the primary DoD regulations for achieving the DGARS 
purposes described in Sec. 21.210.



Sec. 21.310  Who ensures DoD Component compliance with the DoDGARs?

    The Head of each DoD Component that makes or administers awards, or 
his or her designee, is responsible for ensuring compliance with the 
DoDGARs within that DoD Component.



Sec. 21.315  May DoD Components issue supplemental policies and procedures to 

implement the DoDGARs?

    Yes, Heads of DoD Components or their designees may issue 
regulations, procedures, or instructions to implement the DGARS or 
supplement the DoDGARs to satisfy needs that are specific to the DoD 
Component, as long as the regulations, procedures, or instructions do 
not impose additional costs or administrative burdens on recipients or 
potential recipients.



Sec. 21.320  Are there areas in which DoD Components must establish policies 

and procedures to implement the DoDGARs?

    Yes, Heads of DoD Components or their designees must establish 
policies and procedures in areas where uniform policies and procedures 
throughout the DoD Component are required, such as for:
    (a) Requesting class deviations from the DoDGARs (see Sec. Sec. 
21.335(b) and 21.340(a)) or exemptions from the provisions of 31 U.S.C. 
6301 through 6308, that govern the appropriate use of contracts, grants, 
and cooperative agreements (see 32 CFR 22.220).
    (b) Designating one or more Grant Appeal Authorities to resolve 
claims, disputes, and appeals (see 32 CFR 22.815).
    (c) Reporting data on assistance awards and programs, as required by 
31 U.S.C. chapter 61 (see subpart E of this part).
    (d) Prescribing requirements for use and disposition of real 
property acquired under awards, if the DoD Component makes any awards to 
institutions of higher education or to other nonprofit organizations 
under which real property is acquired in whole or in

[[Page 64]]

part with Federal funds (see 32 CFR 32.32).



Sec. 21.325  Do acquisition regulations also apply to DoD grants and 

agreements?

    Unless the DoDGARs specify that they apply, policies and procedures 
in the following acquisition regulations that apply to procurement 
contracts do not apply to grants, cooperative agreements, technology 
investment agreements, or to other assistance or nonprocurement awards:
    (a) The Federal Acquisition Regulation (FAR)(48 CFR parts 1-53).
    (b) The Defense Federal Acquisition Regulation Supplement (DFARS)(48 
CFR parts 201-270).
    (c) DoD Component supplements to the FAR and DFARS.



Sec. 21.330  How are the DoDGARs published and maintained?

    (a) The DoD publishes the DoDGARs in the Code of Federal Regulations 
(CFR) and in a separate internal DoD document (DoD 3210.6-R).
    (1) The location of the DoDGARs in the CFR currently is in 
transition. They are moving from Chapter I, Subchapter C, Title 32, to a 
new location in Chapter XI, Title 2 of the CFR. During the transition, 
there will be some parts of the DoDGARs in each of the two titles.
    (2) The DoD document is divided into parts, subparts, and sections, 
to parallel the CFR publication. Cross references within the DoD 
document are stated as CFR citations (e.g., a reference to section 
21.215 in part 21 would be to 32 CFR 21.215), which also is how they are 
stated in the CFR publication of the DoDGARs.
    (b) The DoD publishes updates to the DoDGARs in the Federal 
Register. When finalized, the DoD also posts the updates to the internal 
DoD document on the World Wide Web at http://www.dtic.mil/whs/
directives.
    (c) A standing working group recommends revisions to the DoDGARs to 
the Director of Defense Research and Engineering (DDR&E). The DDR&E, 
Director of Defense Procurement, and each Military Department must be 
represented on the working group. Other DoD Components that make or 
administer awards may also nominate representatives. The working group 
meets when necessary.

[68 FR 47153, Aug. 7, 2003, as amended at 72 FR 34986, June 26, 2007]



Sec. 21.335  Who can authorize deviations from the DoDGARs?

    (a) The Head of the DoD Component or his or her designee may 
authorize individual deviations from the DoDGARs, which are deviations 
that affect only one award, if the deviations are not prohibited by 
statute, executive order or regulation.
    (b) The Director of Defense Research and Engineering (DDR&E) or his 
or her designee must approve in advance any class deviation that affects 
more than one award. Note that OMB concurrence also is required for 
class deviations from two parts of the DoDGARs, 32 CFR parts 32 and 33, 
in accordance with 32 CFR 32.4 and 33.6, respectively.



Sec. 21.340  What are the procedures for requesting and documenting 

deviations?

    (a) DoD Components must submit copies of justifications and agency 
approvals for individual deviations and written requests for class 
deviations to: Deputy Director of Defense Research and Engineering, 
ATTN: Basic Research, 3080 Defense Pentagon, Washington, DC 20301-3080.
    (b) Grants officers and agreements officers must maintain copies of 
requests and approvals for individual and class deviations in award 
files.



Subpart D_Authorities and Responsibilities for Making and Administering 

                            Assistance Awards



Sec. 21.400  To what instruments does this subpart apply?

    This subpart applies to grants, cooperative agreements, and 
technology investment agreements, which are legal instruments used to 
reflect assistance relationships between the United States Government 
and recipients.

[[Page 65]]



Sec. 21.405  What is the purpose of this subpart?

    This subpart describes the sources and flow of authority to make or 
administer assistance awards, and assigns the broad responsibilities 
associated with DoD Components' use of those instruments.



Sec. 21.410  Must a DoD Component have statutory authority to make an 

assistance award?

    Yes, the use of an assistance instrument to carry out a program 
requires authorizing legislation. That is unlike the use of a 
procurement contract, for which Federal agencies have inherent, 
Constitutional authority.



Sec. 21.415  Must the statutory authority specifically mention the use of 

grants or other assistance instruments?

    No, the statutory authority described in Sec. 21.410 need not 
specifically say that the purpose of the program is assistance or 
mention the use of any type of assistance instrument. However, the 
intent of the statute must support a judgment that the use of an 
assistance instrument is appropriate. For example, a DoD Component may 
judge that the principal purpose of a program for which it has 
authorizing legislation is assistance, rather than acquisition. The DoD 
Component would properly use an assistance instrument to carry out that 
program, in accordance with 31 U.S.C. chapter 63.



Sec. 21.420  Under what types of statutory authorities do DoD Components award 

assistance instruments?

    DoD Components may use assistance instruments under a number of 
statutory authorities that fall into three categories:
    (a) Authorities that statutes provide to the Secretary of Defense. 
These authorities generally are delegated by the Secretary of Defense to 
Heads of DoD Components, usually through DoD directives, instructions, 
or policy memoranda that are not part of the Defense Grant and Agreement 
Regulatory System. Examples of statutory authorities in this category 
are:
    (1) Authority under 10 U.S.C. 2391 to award grants or cooperative 
agreements to help State and local governments alleviate serious 
economic impacts of defense program changes (e.g., base openings and 
closings, contract changes, and personnel reductions and increases).
    (2) Authority under 10 U.S.C. 2413 to enter into cooperative 
agreements with entities that furnish procurement technical assistance 
to businesses.
    (b) Authorities that statutes may provide directly to Heads of DoD 
Components. When a statute authorizes the Head of a DoD Component to use 
a funding instrument to carry out a program with a principal purpose of 
assistance, use of that authority requires no delegation by the 
Secretary of Defense. For example, 10 U.S.C. 2358 authorizes the 
Secretaries of the Military Departments, in addition to the Secretary of 
Defense, to perform research and development projects through grants and 
cooperative agreements. Similarly, 10 U.S.C. 2371 provides authority for 
the Secretaries of the Military Departments and Secretary of Defense to 
carry out basic, applied, or advanced research projects using assistance 
instruments other than grants and cooperative agreements. A Military 
Department's use of the authority of 10 U.S.C. 2358 or 10 U.S.C. 2371 
therefore requires no delegation by the Secretary of Defense.
    (c) Authorities that arise indirectly as the result of statute. For 
example, authority to use an assistance instrument may result from:
    (1) A federal statute authorizing a program that is consistent with 
an assistance relationship (i.e., the support or stimulation of a public 
purpose, rather than the acquisition of a good or service for the direct 
benefit of the Department of Defense). In accordance with 31 U.S.C. 
chapter 63, such a program would appropriately be carried out through 
the use of grants or cooperative agreements. Depending upon the nature 
of the program (e.g., research) and whether the program statute includes 
authority for any specific types of instruments, there also may be 
authority to use other assistance instruments.
    (2) Exemptions requested by the Department of Defense and granted by 
the Office of Management and Budget

[[Page 66]]

under 31 U.S.C. 6307, as described in 32 CFR 22.220.



Sec. 21.425  How does a DoD Component's authority flow to awarding and 

administering activities?

    The Head of a DoD Component, or his or her designee, may delegate to 
the heads of contracting activities (HCAs) within the Component, that 
Component's authority to make and administer awards, to appoint grants 
officers and agreements officers (see Sec. Sec. 21.435 through 21.450), 
and to broadly manage the DoD Component's functions related to 
assistance instruments. The HCA is the same official (or officials) 
designated as the head of the contracting activity for procurement 
contracts, as defined at 48 CFR 2.101. The intent is that overall 
management responsibilities for a DoD Component's functions related to 
nonprocurement instruments be assigned only to officials that have 
similar responsibilities for procurement contracts.



Sec. 21.430  What are the responsibilities of the head of the awarding or 

administering activity?

    When designated by the Head of the DoD Component or his or her 
designee (see 32 CFR 21.425), the head of the awarding or administering 
activity (i.e., the HCA) is responsible for the awards made by or 
assigned to that activity. He or she must supervise and establish 
internal policies and procedures for that activity's awards.



Sec. 21.435  Must DoD Components formally select and appoint grants officers 

and agreements officers?

    Yes, each DoD Component that awards grants or enters into 
cooperative agreements must have a formal process (see Sec. 21.425) for 
selecting and appointing grants officers and for terminating their 
appointments. Similarly, each DoD Component that awards or administers 
technology investment agreements must have a process for selecting and 
appointing agreements officers and for terminating their appointments.



Sec. 21.440  What are the standards for selecting and appointing grants 

officers and agreements officers?

    In selecting grants officers and agreements officers, DoD Components 
must use the following minimum standards:
    (a) In selecting a grants officer, the appointing official must 
judge whether the candidate has the necessary experience, training, 
education, business acumen, judgment, and knowledge of assistance 
instruments and contracts to function effectively as a grants officer. 
The appointing official also must take those attributes of the candidate 
into account when deciding the complexity and dollar value of the grants 
and cooperative agreements to be assigned.
    (b) In selecting an agreements officer, the appointing official must 
consider all of the same factors as in paragraph (a) of this section. In 
addition, the appointing official must consider the candidate's ability 
to function in the less structured environment of technology investment 
agreements, where the rules provide more latitude and the individual 
must have a greater capacity for exercising judgment. Agreements 
officers therefore should be individuals who have demonstrated expertise 
in executing complex assistance and acquisition instruments.



Sec. 21.445  What are the requirements for a grants officer's or agreements 

officer's statement of appointment?

    A statement of a grants officer's or agreements officer's 
appointment:
    (a) Must be in writing.
    (b) Must clearly state the limits of the individual's authority, 
other than limits contained in applicable laws or regulations. 
Information on those limits of a grants officer's or agreements 
officer's authority must be readily available to the public and agency 
personnel.
    (c) May, if the individual is a contracting officer, be incorporated 
into his or her statement of appointment as a contracting officer (i.e., 
there does not need to be a separate written statement of appointment 
for assistance instruments).

[[Page 67]]



Sec. 21.450  What are the requirements for a termination of a grants officer's 

or agreements officer's appointment?

    A termination of a grants officer's or agreements officer's 
authority:
    (a) Must be in writing, unless the written statement of appointment 
provides for automatic termination.
    (b) May not be retroactive.
    (c) May be integrated into a written termination of the individual's 
appointment as a contracting officer, as appropriate.



Sec. 21.455  Who can sign, administer, or terminate assistance instruments?

    Only grants officers are authorized to sign, administer, or 
terminate grants or cooperative agreements (other than technology 
investment agreements) on behalf of the Department of Defense. 
Similarly, only agreements officers may sign, administer, or terminate 
technology investment agreements.



Sec. 21.460  What is the extent of grants officers' and agreements officers' 

authority?

    Grants officers and agreements officers may bind the Government only 
to the extent of the authority delegated to them in their written 
statements of appointment (see Sec. 21.445).



Sec. 21.465  What are grants officers' and agreements officers' 

responsibilities?

    Grants officers and agreements officers should be allowed wide 
latitude to exercise judgment in performing their responsibilities, 
which are to ensure that:
    (a) Individual awards are used effectively in the execution of DoD 
programs, and are made and administered in accordance with applicable 
laws, Executive orders, regulations, and DoD policies.
    (b) Sufficient funds are available for obligation.
    (c) Recipients of awards receive impartial, fair, and equitable 
treatment.



 Subpart E_Information Reporting on Awards Subject to 31 U.S.C. Chapter 

                                   61



Sec. 21.500  What is the purpose of this subpart?

    This subpart prescribes policies and procedures for compiling and 
reporting data related to DoD awards and programs that are subject to 
information reporting requirements of 31 U.S.C. chapter 61. That chapter 
of the U.S. Code requires the Office of Management and Budget to 
maintain a Governmentwide information system to collect data on Federal 
agencies' domestic assistance awards and programs.



Sec. 21.505  What is the Catalog of Federal Domestic Assistance (CFDA)?

    The Catalog of Federal Domestic Assistance (CFDA) is a 
Governmentwide compilation of information about domestic assistance 
programs. It covers all domestic assistance programs and activities, 
regardless of the number of awards made under the program, the total 
dollar value of assistance provided, or the duration. In addition to 
programs using grants and agreements, covered programs include those 
providing assistance in other forms, such as payments in lieu of taxes 
or indirect assistance resulting from Federal operations.



Sec. 21.510  Why does the DoD report information to the CFDA?

    The Federal Program Information Act (31 U.S.C. 6101 through 6106), 
as implemented through OMB Circular A-89, \4\ requires the Department of 
Defense and other Federal agencies to provide certain information about 
their domestic assistance programs to the OMB and the General Services 
Administration (GSA). The GSA makes this information available to the 
public by publishing it in the Catalog of Federal Domestic Assistance 
(CFDA) and maintaining the Federal Assistance Programs Retrieval System, 
a computerized data base of the information.
---------------------------------------------------------------------------

    \4\ See footnote 3 to Sec. 21.300(b).

---------------------------------------------------------------------------

[[Page 68]]



Sec. 21.515  Who reports the information for the CFDA?

    (a) Each DoD Component that provides domestic financial assistance 
must:
    (1) Report to the Director of Information, Operations and Reports, 
Washington Headquarters Services (DIOR, WHS) all new programs and 
changes as they occur or as the DoD Component submits its annual updates 
to existing CFDA information.
    (2) Identify to the DIOR, WHS a point-of-contact who will be 
responsible for reporting the program information and for responding to 
inquiries related to it.
    (b) The DIOR, WHS is the Department of Defense's single office for 
collecting, compiling and reporting such program information to the OMB 
and GSA.



Sec. 21.520  What are the purposes of the Defense Assistance Awards Data 

System (DAADS)?

    Data from the Defense Assistance Awards Data System (DAADS) are used 
to provide:
    (a) DoD inputs to meet statutory requirements for Federal 
Governmentwide reporting of data related to obligations of funds by 
assistance instrument.
    (b) A basis for meeting Governmentwide requirements to report to the 
Federal Assistance Awards Data System (FAADS) maintained by the 
Department of Commerce and for preparing other recurring and special 
reports to the President, the Congress, the General Accounting Office, 
and the public.
    (c) Information to support policy formulation and implementation and 
to meet management oversight requirements related to the use of awards.



Sec. 21.525  Who issues policy guidance for the DAADS?

    The Deputy Director, Defense Research and Engineering (DDDR&E), or 
his or her designee, issues necessary policy guidance for the Defense 
Assistance Awards Data System.



Sec. 21.530  Who operates the DAADS?

    The Director of Information Operations and Reports, Washington 
Headquarters Services (DIOR, WHS), consistent with guidance issued by 
the DDDR&E:
    (a) Processes DAADS information on a quarterly basis and prepares 
recurring and special reports using such information.
    (b) Prepares, updates, and disseminates instructions for reporting 
information to the DAADS. The instructions are to specify procedures, 
formats, and editing processes to be used by DoD Components, including 
record layout, submission deadlines, media, methods of submission, and 
error correction schedules.



Sec. 21.535  Do DoD Components have central points for collecting DAADS data?

    Each DoD Component must have a central point for collecting DAADS 
information from contracting activities within that DoD Component. The 
central points are as follows:
    (a) For the Army: As directed by the U.S. Army Contracting Support 
Agency.
    (b) For the Navy: As directed by the Office of Naval Research.
    (c) For the Air Force: As directed by the Office of the Secretary of 
the Air Force, Acquisition Contracting Policy and Implementation 
Division (SAF/AQCP).
    (d) For the Office of the Secretary of Defense, Defense Agencies, 
and DoD Field Activities: Each Defense Agency must identify a central 
point for collecting and reporting DAADS information to the DIOR, WHS, 
at the address given in Sec. 21.555(a). DIOR, WHS serves as the central 
point for offices and activities within the Office of the Secretary of 
Defense and for DoD Field Activities.



Sec. 21.540  What are the duties of the DoD Components' central points for the 

DAADS?

    The office that serves, in accordance with Sec. 21.535, as the 
central point for collecting DAADS information from contracting 
activities within each DoD Component must:
    (a) Establish internal procedures to ensure reporting by contracting 
activities that make awards subject to 31 U.S.C. chapter 61.

[[Page 69]]

    (b) Collect information required by DD Form 2566, \5\ ``DoD 
Assistance Award Action Report,'' from those contracting activities, and 
report it to DIOR, WHS, in accordance with Sec. Sec. 21.545 through 
21.555.
---------------------------------------------------------------------------

    \5\ Department of Defense forms are available at Internet site 
http://www.dior.whs.mil/ICDHOME/FORMTAB.HTM.
---------------------------------------------------------------------------

    (c) Submit to the DIOR, WHS, any recommended changes to the DAADS.



Sec. 21.545  Must DoD Components report every obligation to the DAADS?

    Yes, DoD Components' central points must collect and report the data 
required by the DD Form 2566 for each individual action that involves 
the obligation or deobligation of Federal funds for an award that is 
subject to 31 U.S.C. chapter 61.



Sec. 21.550  Must DoD Components relate reported actions to listings in the 

CFDA?

    Yes, DoD Components' central points must report each action as an 
obligation or deobligation under a specific programmatic listing in the 
Catalog of Federal Domestic Assistance (CFDA, see Sec. 21.505). The 
programmatic listing to be shown is the one that provided the funds 
being obligated or deobligated. For example, if a grants officer or 
agreements officer in one DoD Component obligates appropriations of a 
second DoD Component's programmatic listing, the grants officer or 
agreements officer must show the CFDA programmatic listing of the second 
DoD Component on the DD Form 2566.



Sec. 21.555  When and how must DoD Components report to the DAADS?

    DoD Components' central points must report:
    (a) On a quarterly basis to DIOR, WHS. For the first three quarters 
of the Federal fiscal year, the data are due by close-of-business (COB) 
on the 15th day after the end of the quarter (i.e., first-quarter data 
are due by COB on January 15th, second-quarter data by COB April 15th, 
and third-quarter data by COB July 15th). Fourth-quarter data are due by 
COB October 25th, the 25th day after the end of the quarter. If any due 
date falls on a weekend or holiday, the data are due on the next regular 
workday. The mailing address for DIOR, WHS is 1215 Jefferson Davis 
Highway, Suite 1204, Arlington, VA 22202-4302.
    (b) On a floppy diskette or by other means permitted either by the 
instructions described in Sec. 21.530(b) or by agreement with the DIOR, 
WHS. The data must be reported in the format specified in the 
instructions.



Sec. 21.560  Must DoD Components assign numbers uniformly to awards?

    Yes, DoD Components must assign identifying numbers to all awards 
subject to this subpart, including grants, cooperative agreements, and 
technology investment agreements. The uniform numbering system parallels 
the procurement instrument identification (PII) numbering system 
specified in 48 CFR 204.70 (in the ``Defense Federal Acquisition 
Regulation Supplement''), as follows:
    (a) The first six alphanumeric characters of the assigned number 
must be identical to those specified by 48 CFR 204.7003(a)(1) to 
identify the DoD Component and contracting activity.
    (b) The seventh and eighth positions must be the last two digits of 
the fiscal year in which the number is assigned to the grant, 
cooperative agreement, or other nonprocurement instrument.
    (c) The 9th position must be a number:
    (1) ``1'' for grants.
    (2) ``2'' for cooperative agreements, including technology 
investment agreements that are cooperative agreements (see Appendix B to 
32 CFR part 37).
    (3) ``3'' for other nonprocurement instruments, including technology 
investment agreements that are not cooperative agreements.
    (d) The 10th through 13th positions must be the serial number of the 
instrument. DoD Components and contracting activities need not follow 
any specific pattern in assigning these numbers and may create multiple 
series of letters and numbers to meet internal needs for distinguishing 
between various sets of awards.

[[Page 70]]



Sec. 21.565  Must DoD Components' electronic systems accept Data Universal 

Numbering System (DUNS) numbers?

    The DoD Components must comply with paragraph 5.e of the Office of 
Management and Budget (OMB) policy directive entitled, ``Requirement for 
a DUNS number in Applications for Federal Grants and Cooperative 
Agreements.'' \6\ Paragraph 5.e requires electronic systems that handle 
information about grants and cooperative agreements (which, for the DoD, 
include Technology Investment Agreements) to accept DUNS numbers. Each 
DoD Component that awards or administers grants or cooperative 
agreements must ensure that DUNS numbers are accepted by each such 
system for which the DoD Component controls the system specifications. 
If the specifications of such a system are subject to another 
organization's control and the system can not accept DUNS numbers, the 
DoD Component must alert that organization to the OMB policy directive's 
requirement for use of DUNS numbers with a copy to: Director for Basic 
Sciences, ODDR&E, 3040 Defense Pentagon, Washington, DC 20301-3040.
---------------------------------------------------------------------------

    \6\ This OMB policy directive is available at the Internet site 
http://www.whitehouse.gov/omb/grants/grants--docs.html.

[72 FR 34986, June 26, 2007]



                          Subpart F_Definitions



Sec. 21.605  Acquisition.

    The acquiring (by purchase, lease, or barter) of property or 
services for the direct benefit or use of the United States Government 
(see more detailed definition at 48 CFR 2.101). In accordance with 31 
U.S.C. 6303, procurement contracts are the appropriate legal instruments 
for acquiring such property or services.



Sec. 21.610  Agreements officer.

    An official with the authority to enter into, administer, and/or 
terminate technology investment agreements.



Sec. 21.615  Assistance.

    The transfer of a thing of value to a recipient to carry out a 
public purpose of support or stimulation authorized by a law of the 
United States (see 31 U.S.C. 6101(3)). Grants, cooperative agreements, 
and technology investment agreements are examples of legal instruments 
used to provide assistance.



Sec. 21.620  Award.

    A grant, cooperative agreement, technology investment agreement, or 
other nonprocurement instrument subject to one or more parts of the DoD 
Grant and Agreement Regulations (see appendix A to this part).



Sec. 21.625  Contract.

    See the definition for procurement contract in this subpart.



Sec. 21.630  Contracting activity.

    An activity to which the Head of a DoD Component has delegated broad 
authority regarding acquisition functions, pursuant to 48 CFR 1.601.



Sec. 21.635  Contracting officer.

    A person with the authority to enter into, administer, and/or 
terminate contracts and make related determinations and findings. A more 
detailed definition of the term appears at 48 CFR 2.101.



Sec. 21.640  Cooperative agreement.

    A legal instrument which, consistent with 31 U.S.C. 6305, is used to 
enter into the same kind of relationship as a grant (see definition 
``grant''), except that substantial involvement is expected between the 
Department of Defense and the recipient when carrying out the activity 
contemplated by the cooperative agreement. The term does not include 
``cooperative research and development agreements'' as defined in 15 
U.S.C. 3710a.



Sec. 21.645  Deviation.

    The issuance or use of a policy or procedure that is inconsistent 
with the DoDGARs.



Sec. 21.650  DoD Components.

    The Office of the Secretary of Defense, the Military Departments, 
the

[[Page 71]]

Defense Agencies, and DoD Field Activities.



Sec. 21.655  Grant.

    A legal instrument which, consistent with 31 U.S.C. 6304, is used to 
enter into a relationship:
    (a) Of which the principal purpose is to transfer a thing of value 
to the recipient to carry out a public purpose of support or stimulation 
authorized by a law of the United States, rather than to acquire 
property or services for the Department of Defense's direct benefit or 
use.
    (b) In which substantial involvement is not expected between the 
Department of Defense and the recipient when carrying out the activity 
contemplated by the grant.



Sec. 21.660  Grants officer.

    An official with the authority to enter into, administer, and/or 
terminate grants or cooperative agreements.



Sec. 21.665  Nonprocurement instrument.

    A legal instrument other than a procurement contract. Examples 
include instruments of financial assistance, such as grants or 
cooperative agreements, and those of technical assistance, which provide 
services in lieu of money.



Sec. 21.670  Procurement contract.

    A legal instrument which, consistent with 31 U.S.C. 6303, reflects a 
relationship between the Federal Government and a State, a local 
government, or other recipient when the principal purpose of the 
instrument is to acquire property or services for the direct benefit or 
use of the Federal Government. See the more detailed definition for 
contract at 48 CFR 2.101.



Sec. 21.675  Recipient.

    An organization or other entity receiving an award from a DoD 
Component.



Sec. 21.680  Technology investment agreements.

    A special class of assistance instruments used to increase 
involvement of commercial firms in defense research programs and for 
other purposes related to integrating the commercial and defense sectors 
of the nation's technology and industrial base. Technology investment 
agreements include one kind of cooperative agreement with provisions 
tailored for involving commercial firms, as well as one kind of other 
assistance transaction. Technology investment agreements are described 
more fully in 32 CFR part 37.

[[Page 72]]



 Sec. Appendix A to Part 21--Instruments to Which DoDGARs Portions Apply

[GRAPHIC] [TIFF OMITTED] TR26JN07.007


[[Page 73]]



[72 FR 34986, June 26, 2007]



PART 22_DoD GRANTS AND AGREEMENTS_AWARD AND ADMINISTRATION--Table of Contents



                            Subpart A_General

Sec.
22.100 Purpose, relation to other parts, and organization.
22.105 Definitions.

             Subpart B_Selecting the Appropriate Instrument

22.200 Purpose.
22.205 Distinguishing assistance from procurement.
22.210 Authority for providing assistance.
22.215 Distinguishing grants and cooperative agreements.
22.220 Exemptions.

                          Subpart C_Competition

22.300 Purpose.
22.305 General policy and requirement for competition.
22.310 Statutes concerning certain research, development, and facilities 
          construction grants.
22.315 Merit-based, competitive procedures.
22.320 Special competitions.
22.325 Historically Black colleges and universities (HBCUs) and other 
          minority institutions (MIs).

     Subpart D_Recipient Qualification Matters_General Policies and 
                               Procedures

22.400 Purpose.
22.405 Policy.
22.410 Grants officers' responsibilities.
22.415 Standards.
22.420 Pre-award procedures.

                    Subpart E_National Policy Matters

22.505 Purpose.
22.510 Certifications, representations, and assurances.
22.515 Provisions of annual appropriations acts.
22.520 Campus access for military recruiting and Reserve Officer 
          Training Corps (ROTC).
22.525 Paperwork Reduction Act.
22.530 Metric system of measurement.

                             Subpart F_Award

22.600 Purpose.
22.605 Grants officers' responsibilities.
22.610 Award instruments.

                     Subpart G_Field Administration

22.700 Purpose.
22.705 Policy.
22.710 Assignment of grants administration offices.
22.715 Grants administration office functions.

                   Subpart H_Post-Award Administration

22.800 Purpose and relation to other parts.
22.805 Post-award requirements in other parts.
22.810 Payments.
22.815 Claims, disputes, and appeals.
22.820 Debt collection.
22.825 Closeout audits.

Appendix A to Part 22--Proposal Provision for Required Certification.
Appendix B to Part 22--Suggested Award Provisions for National Policy 
          Requirements That Often Apply.
Appendix C to Part 22--Administrative Requirements and Issues To Be 
          Addressed in Award Terms and Conditions.

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 63 FR 12164, Mar. 12, 1998, unless otherwise noted.



                            Subpart A_General



Sec. 22.100  Purpose, relation to other parts, and organization.

    (a) This part outlines grants officers' and DoD Components' 
responsibilities related to the award and administration of grants and 
cooperative agreements.
    (b) In doing so, it also supplements other parts of the DoD Grant 
and Agreement Regulations (DoDGARs) that are either Governmentwide rules 
or DoD implementation of Governmentwide guidance in Office of Management 
and Budget (OMB) Circulars. Those other parts of the DoDGARs, which are 
referenced as appropriate in this part, are:
    (1) The DoD implementation, in 2 CFR part 1125, of OMB guidance on 
nonprocurement debarment and suspension.
    (2) The Governmentwide rule on drug-free workplace requirements, in 
32 CFR part 26.
    (3) The Governmentwide rule on lobbying restrictions, in 32 CFR part 
28.
    (4) Administrative requirements for grants and agreements awarded to 
specific types of recipients:

[[Page 74]]

    (i) For State and local governmental organizations, in the 
Governmentwide rule at 32 CFR part 33.
    (ii) For institutions of higher education and other nonprofit 
organizations, at 32 CFR part 32.
    (iii) For for-profit organizations, at 32 CFR part 34.
    (c) The organization of this part parallels the award and 
administration process, from pre-award through post-award matters. It 
therefore is organized in the same manner as the parts of the DoDGARs 
(32 CFR parts 32, 33, and 34) that prescribe administrative requirements 
for specific types of recipients.

[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005; 
72 FR 34988, June 26, 2007]



Sec. 22.105  Definitions.

    Other than the terms defined in this section, terms used in this 
part are defined in 32 CFR part 21, subpart F.
    Administrative offset. An action whereby money payable by the United 
States Government to, or held by the Government for, a recipient is 
withheld to satisfy a delinquent debt the recipient owes the Government.
    Advanced research. Advanced technology development that creates new 
technology or demonstrates the viability of applying existing technology 
to new products and processes in a general way. Advanced research is 
most closely analogous to precompetitive technology development in the 
commercial sector (i.e., early phases of research and development on 
which commercial competitors are willing to collaborate, because the 
work is not so coupled to specific products and processes that the 
results of the work must be proprietary). It does not include 
development of military systems and hardware where specific requirements 
have been defined. It is typically funded in Advanced Technology 
Development (Budget Activity 3 and Research Category 6.3A) programs 
within Research, Development, Test and Evaluation (RDT&E).
    Applied research. Efforts that attempt to determine and exploit the 
potential of scientific discoveries or improvements in technology such 
as new materials, devices, methods and processes. It typically is funded 
in Applied Research (Budget Activity 2 and Research Category 6.2) 
programs within Research, Development, Test and Evaluation (RDT&E). 
Applied research normally follows basic research but may not be fully 
distinguishable from the related basic research. The term does not 
include efforts whose principal aim is the design, development, or 
testing of specific products, systems or processes to be considered for 
sale or acquisition; these efforts are within the definition of 
``development.''
    Basic research. Efforts directed toward increasing knowledge and 
understanding in science and engineering, rather than the practical 
application of that knowledge and understanding. It typically is funded 
within Basic Research (Budget Activity 1 and Research Category 6.1) 
programs within Research, Development, Test and Evaluation (RDT&E). For 
the purposes of this part, basic research includes:
    (1) Research-related, science and engineering education, including 
graduate fellowships and research traineeships.
    (2) Research instrumentation and other activities designed to 
enhance the infrastructure for science and engineering research.
    Claim. A written demand or written assertion by one of the parties 
to a grant or cooperative agreement seeking as a matter of right, the 
payment of money in a sum certain, the adjustment or interpretation of 
award terms, or other relief arising under or relating to a grant or 
cooperative agreement. A routine request for payment that is not in 
dispute when submitted is not a claim. The submission may be converted 
to a claim by written notice to the grants officer if it is disputed 
either as to liability or amount, or is not acted upon in a reasonable 
time.
    Debt. Any amount of money or any property owed to a Federal Agency 
by any person, organization, or entity except another United States 
Federal Agency. Debts include any amounts due from insured or guaranteed 
loans, fees, leases, rents, royalties, services, sales of real or 
personal property, or overpayments, penalties, damages, interest, fines 
and forfeitures, and all other claims and similar sources.

[[Page 75]]

Amounts due a nonappropriated fund instrumentality are not debts owed 
the United States, for the purposes of this subchapter.
    Delinquent debt. A debt:
    (1) That the debtor fails to pay by the date specified in the 
initial written notice from the agency owed the debt, normally within 30 
calendar days, unless the debtor makes satisfactory payment arrangements 
with the agency by that date; and
    (2) With respect to which the debtor has elected not to exercise any 
available appeals or has exhausted all agency appeal processes.
    Development. The systematic use of scientific and technical 
knowledge in the design, development, testing, or evaluation of 
potential new products, processes, or services to meet specific 
performance requirements or objectives. It includes the functions of 
design engineering, prototyping, and engineering testing.
    Electronic commerce. The conduct of business through the use of 
automation and electronic media, in lieu of paper transactions, direct 
personal contact, telephone, or other means. For grants and cooperative 
agreements, electronic commerce can include the use of electronic data 
interchange, electronic mail, electronic bulletin board systems, and 
electronic funds transfer for: program announcements or solicitations; 
applications or proposals; award documents; recipients' requests for 
payment; payment authorizations; and payments.
    Electronic data interchange. The exchange of standardized 
information communicated electronically between business partners, 
typically between computers. It is DoD policy that DoD Component EDI 
applications conform to the American National Standards Institute 
(ANSI), Accredited Standards Committee (ASC) X-12 standard. \1\
---------------------------------------------------------------------------

    \1\ Available from Accredited Standards Committee, X-12 Secretariat, 
Data Interchange Standards Association, 1800 Diagonal Road, Suite 355, 
Alexandria, VA 22314-2852; Attention: Manager Maintenance and 
Publications.
---------------------------------------------------------------------------

    Electronic funds transfer. A system that provides the authority to 
debit or credit accounts in financial institutions by electronic means 
rather than source documents (e.g., paper checks). Processing typically 
occurs through the Federal Reserve System and/or the Automated Clearing 
House (ACH) computer network. It is DoD policy that DoD Component EFT 
transmissions conform to the American National Standards Institute 
(ANSI), Accredited Standards Committee (ASC) X-12 standard.
    Historically Black colleges and universities. Institutions of higher 
education determined by the Secretary of Education to meet the 
requirements of 34 CFR 608.2. Each DoD Component's contracting 
activities and grants officers may obtain a list of historically Black 
colleges and universities from that DoD Component's Small and 
Disadvantaged Business Utilization office.
    Institution of higher education. An educational institution that 
meets the criteria in section 1201(a) of the Higher Education Act of 
1965 (20 U.S.C. 1141(a)). Note, however, that institution of higher 
education has a different meaning in Sec. 22.520, as given at Sec. 
22.520(b)(2).
    Minority institutions. Institutions of higher education that meet 
the criteria for minority institutions specified in 10 U.S.C. 2323. Each 
DoD Component's contracting activities and grants officers may obtain 
copies of a current list of institutions that qualify as minority 
institutions under 10 U.S.C. 2323 from that DoD Component's Small and 
Disadvantaged Business Utilization office (the list of minority 
institutions changes periodically, based on Department of Education data 
on institutions' enrollments of minority students).
    Research. Basic, applied, and advanced research, as defined in this 
section.
    Subaward. An award of financial assistance in the form of money, or 
property in lieu of money, made under a DoD grant or cooperative 
agreement by a recipient to an eligible subrecipient. The term includes 
financial assistance for substantive program performance by the 
subrecipient of a portion of the program for which the DoD grant or 
cooperative agreement was made. It

[[Page 76]]

does not include the recipient's procurement of goods and services 
needed to carry out the program.

[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]



             Subpart B_Selecting the Appropriate Instrument



Sec. 22.200  Purpose.

    This subpart provides the bases for determining the appropriate type 
of instrument in a given situation.



Sec. 22.205  Distinguishing assistance from procurement.

    Before using a grant or cooperative agreement, the grants officer 
shall make a positive judgment that an assistance instrument, rather 
than a procurement contract, is the appropriate instrument, based on the 
following:
    (a) Purpose. (1) The grants officer must judge that the principal 
purpose of the activity to be carried out under the instrument is to 
stimulate or support a public purpose (i.e., to provide assistance), 
rather than acquisition (i.e., to acquire goods and services for the 
direct benefit of the United States Government). If the principal 
purpose is acquisition, then the grants officer shall judge that a 
procurement contract is the appropriate instrument, in accordance with 
31 U.S.C. chapter 63 (``Using Procurement Contracts and Grant and 
Cooperative Agreements''). Assistance instruments shall not be used in 
such situations, except:
    (i) When a statute specifically provides otherwise; or
    (ii) When an exemption is granted, in accordance with Sec. 22.220.
    (2) For research and development, the appropriate use of grants and 
cooperative agreements therefore is almost exclusively limited to the 
performance of selected basic, applied, and advanced research projects. 
Development projects nearly always shall be performed by contract or 
other acquisition transaction because their principal purpose is the 
acquisition of specific deliverable items (e.g., prototypes or other 
hardware) for the benefit of the Department of Defense.
    (b) Fee or profit. Payment of fee or profit is consistent with an 
activity whose principal purpose is the acquisition of goods and 
services for the direct benefit or use of the United States Government, 
rather than an activity whose principal purpose is assistance. 
Therefore, the grants officer shall use a procurement contract, rather 
than an assistance instrument, in all cases where:
    (1) Fee or profit is to be paid to the recipient of the instrument; 
or
    (2) The instrument is to be used to carry out a program where fee or 
profit is necessary to achieving program objectives.



Sec. 22.210  Authority for providing assistance.

    (a) Before a grant or cooperative agreement may be used, the grants 
officer must:
    (1) Identify the program statute, the statute that authorizes the 
DoD Component to carry out the activity the principal purpose of which 
is assistance (see 32 CFR 21.410 through 21.420.
    (2) Review the program statute to determine if it contains 
requirements that affect the:
    (i) Solicitation, selection, and award processes. For example, 
program statutes may authorize assistance to be provided only to certain 
types of recipients; may require that recipients meet certain other 
criteria to be eligible to receive assistance; or require that a 
specific process shall be used to review recipients' proposals.
    (ii) Terms and conditions of the award. For example, some program 
statutes require a specific level of cost sharing or matching.
    (b) The grants officer shall ensure that the award of DoD 
appropriations through a grant or cooperative agreement for a research 
project meets the standards of 10 U.S.C. 2358, DoD's broad authority to 
carry out research, even if the research project is authorized under a 
statutory authority other than 10 U.S.C. 2358. The standards of 10 
U.S.C. 2358 are that, in the opinion of the Head of the DoD Component or 
his or her designee, the projects must be:
    (1) Necessary to the responsibilities of the DoD Component.

[[Page 77]]

    (2) Related to weapons systems and other military needs or of 
potential interest to the DoD Component.

[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]



Sec. 22.215  Distinguishing grants and cooperative agreements.

    (a) Once a grants officer judges, in accordance with Sec. Sec. 
22.205 and 22.210, that either a grant or cooperative agreement is the 
appropriate instrument, the grants officer shall distinguish between the 
two instruments as follows:
    (1) Grants shall be used when the grants officer judges that 
substantial involvement is not expected between the Department of 
Defense and the recipient when carrying out the activity contemplated in 
the agreement.
    (2) Cooperative agreements shall be used when the grants officer 
judges that substantial involvement is expected. The grants officer 
should document the nature of the substantial involvement that led to 
selection of a cooperative agreement. Under no circumstances are 
cooperative agreements to be used solely to obtain the stricter controls 
typical of a contract.
    (b) In judging whether substantial involvement is expected, grants 
officers should recognize that ``substantial involvement'' is a 
relative, rather than an absolute, concept, and that it is primarily 
based on programmatic factors, rather than requirements for grant or 
cooperative agreement award or administration. For example, substantial 
involvement may include collaboration, participation, or intervention in 
the program or activity to be performed under the award.



Sec. 22.220  Exemptions.

    Under 31 U.S.C. 6307, ``the Director of the Office of Management and 
Budget may exempt an agency transaction or program'' from the 
requirements of 31 U.S.C. chapter 63. Grants officers shall request such 
exemptions only in exceptional circumstances. Each request shall specify 
for which individual transaction or program the exemption is sought; the 
reasons for requesting an exemption; the anticipated consequences if the 
exemption is not granted; and the implications for other agency 
transactions and programs if the exemption is granted. The procedures 
for requesting exemptions shall be:
    (a) In cases where 31 U.S.C. chapter 63 would require use of a 
contract and an exemption from that requirement is desired:
    (1) The grants officer shall submit a request for exemption, through 
appropriate channels established by his or her DoD Component (see 32 CFR 
21.320(a)), to the Director of Defense Procurement and Acquisition 
Policy (DDP&AP).
    (2) The DDP&AP, after coordination with the Director of Defense 
Research and Engineering (DDR&E), shall transmit the request to OMB or 
notify the DoD Component that the request has been disapproved.
    (b) In other cases, the DoD Component shall submit a request for the 
exemption through appropriate channels to the DDR&E. The DDR&E shall 
transmit the request to OMB or notify the DoD Component that the request 
has been disapproved.
    (c) Where an exemption is granted, documentation of the approval 
shall be maintained in the award file.

[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003; 70 
FR 49464, Aug. 23, 2005]



                          Subpart C_Competition



Sec. 22.300  Purpose.

    This subpart establishes DoD policy and implements statutes related 
to the use of competitive procedures in the award of grants and 
cooperative agreements.



Sec. 22.305  General policy and requirement for competition.

    (a) It is DoD policy to maximize use of competition in the award of 
grants and cooperative agreements. This also conforms with:
    (1) 31 U.S.C. 6301(3), which encourages the use of competition in 
awarding all grants and cooperative agreements.
    (2) 10 U.S.C. 2374(a), which sets out Congressional policy that any 
new grant for research, development, test, or evaluation be awarded 
through merit-based selection procedures.

[[Page 78]]

    (b) Grants officers shall use merit-based, competitive procedures 
(as defined by Sec. 22.315) to award grants and cooperative agreements:
    (1) In every case where required by statute (e.g., 10 U.S.C. 2361, 
as implemented in Sec. 22.310, for certain grants to institutions of 
higher education).
    (2) To the maximum extent practicable in all cases where not 
required by statute.



Sec. 22.310  Statutes concerning certain research, development, and facilities 

construction grants.

    (a) Definitions specific to this section. For the purposes of 
implementing the requirements of 10 U.S.C. 2374 in this section, the 
following terms are defined:
    (1) Follow-on grant. A grant that provides for continuation of 
research and development performed by a recipient under a preceding 
grant. Note that follow-on grants are distinct from incremental funding 
actions during the period of execution of a multi-year award.
    (2) New grant. A grant that is not a follow-on grant.
    (b) Statutory requirement to use competitive procedures. (1) A 
grants officer shall not award a grant by other than merit-based, 
competitive procedures (as defined by Sec. 22.315) to an institution of 
higher education for the performance of research and development or for 
the construction of research or other facilities, unless:
    (i) In the case of a new grant for research and development, there 
is a statute meeting the criteria in paragraph (c)(1) of this section;
    (ii) In the case of a follow-on grant for research and development, 
or of a grant for the construction of research or other facilities, 
there is a statute meeting the criteria in paragraph (c)(2) of this 
section; and
    (iii) The Secretary of Defense submits to Congress a written notice 
of intent to make the grant. The grant may not be awarded until 180 
calendar days have elapsed after the date on which Congress received the 
notice of intent. Contracting activities must submit a draft notice of 
intent with supporting documentation through channels to the Deputy 
Director, Defense Research and Engineering.
    (2) Because subsequently enacted statutes may, by their terms, 
impose different requirements than set out in paragraph (b)(1) of this 
section, grants officers shall consult legal counsel on a case-by-case 
basis, when grants for the performance of research and development or 
for the construction of research or other facilities are to be awarded 
to institutions of higher education by other than merit-based 
competitive procedures.
    (c) Subsequent statutes. In accordance with 10 U.S.C. 2361 and 10 
U.S.C. 2374, a provision of law may not be construed as requiring the 
award of a grant through other than the merit-based, competitive 
procedures described in Sec. 22.315, unless:
    (1) Institutions of higher education--new grants for research and 
development. In the case of a new grant for research and development to 
an institution of higher education, such provision of law specifically:
    (i) Identifies the particular institution of higher education 
involved;
    (ii) States that such provision of law modifies or supersedes the 
provisions of 10 U.S.C. 2361 (a requirement that applies only if the 
statute authorizing or requiring award by other than competitive 
procedures was enacted after September 30, 1989); and
    (iii) States that the award to the institution of higher education 
involved is required by such provision of law to be made in 
contravention of the policy set forth in 10 U.S.C. 2374(a).
    (2) Institutions of higher education--follow-on grants for research 
and development and grants for the construction of any research or other 
facility. In the case of any such grant to an institution of higher 
education, such provision of law specifically:
    (i) Identifies the particular institution of higher education 
involved; and
    (ii) States that such provision of law modifies or supersedes the 
provisions of 10 U.S.C. 2361 (a requirement that applies only if the 
statute authorizing or requiring award by other than competitive 
procedures was enacted after September 30, 1989).
    (3) Other entities--new grants for research and development--(i) 
General. In

[[Page 79]]

the case of a new grant for research and development to an entity other 
than an institution of higher education, such provision of law 
specifically:
    (A) Identifies the particular entity involved;
    (B) States that the award to that entity is required by such 
provision of law to be made in contravention of the policy set forth in 
10 U.S.C. 2374(a).
    (ii) Exception. The requirement of paragraph (c)(3)(i) of this 
section does not apply to any grant that calls upon the National Academy 
of Sciences to:
    (A) Investigate, examine, or experiment upon any subject of science 
or art of significance to the Department of Defense or any Military 
Department; and
    (B) Report on such matters to the Congress or any agency of the 
Federal Government.



Sec. 22.315  Merit-based, competitive procedures.

    Competitive procedures are methods that encourage participation in 
DoD programs by a broad base of the most highly qualified performers. 
These procedures are characterized by competition among as many eligible 
proposers as possible, with a published or widely disseminated notice. 
Competitive procedures include, as a minimum:
    (a) Notice to prospective proposers. The notice may be a notice of 
funding availability or Broad Agency Announcement that is publicly 
disseminated, with unlimited distribution, or a specific notice that is 
distributed to eligible proposers (a specific notice must be distributed 
to at least two eligible proposers to be considered as part of a 
competitive procedure). Requirements for notices are as follows:
    (1) The format and content of each notice must conform with the 
Governmentwide format for announcements of funding opportunities 
established by the Office of Management and Budget (OMB) in a policy 
directive entitled, ``Format for Financial Assistance Program 
Announcements.'' \2\
---------------------------------------------------------------------------

    \2\ This OMB policy directive is available at the Internet site 
http://www.whitehouse.gov/omb/grants/grants--docs.html (the link is 
``Final Policy Directive on Financial Assistance Program 
Announcements'').
---------------------------------------------------------------------------

    (2) In accordance with that OMB policy directive, DoD Components 
also must post on the Internet any notice under which domestic entities 
may submit proposals, if the distribution of the notice is unlimited. 
DoD Components are encouraged to simultaneously publish the notice in 
other media (e.g., the Federal Register), if doing so would increase the 
likelihood of its being seen by potential proposers. If a DoD Component 
issues a specific notice with limited distribution (e.g., for national 
security considerations), the notice need not be posted on the Internet.
    (3) To comply with an OMB policy directive entitled, ``Requirement 
to Post Funding Opportunity Announcement Synopses at Grants.gov and 
Related Data Elements/Format,'' \3\ DoD Components must post on the 
Internet a synopsis for each notice that, in accordance with paragraph 
(a)(2) of this section, is posted on the Internet. The synopsis must be 
posted at the Governmentwide site designated by the OMB (currently 
http://www.FedGrants.gov). The synopsis for each notice must provide 
complete instructions on where to obtain the notice and should have an 
electronic link to the Internet location at which the notice is posted.
---------------------------------------------------------------------------

    \3\ This OMB policy directive is available at the Internet site 
http://www.whitehouse.gov/omb/grants/grants--docs.html (the link is 
``Office of Federal Financial Management Policy Directive on Use of 
Grants.Gov FIND'').
---------------------------------------------------------------------------

    (4) In accordance with an OMB policy directive entitled, 
``Requirement for a DUNS Number in Applications for Federal Grants and 
Cooperative Agreements,'' \4\ each notice must include a requirement for 
proposers to include Data Universal Numbering System (DUNS) numbers in 
their proposals. If a notice provides for submission of application 
forms, the forms must incorporate the DUNS number. To the extent that 
unincorporated consortia of separate organizations may submit proposals, 
the notice should explain that an unincorporated consortium

[[Page 80]]

would use the DUNS number of the entity proposed to receive DoD payments 
under the award (usually, a lead organization that consortium members 
identify for administrative matters).
---------------------------------------------------------------------------

    \4\ This OMB policy directive is available at the Internet site 
http://www.whitehouse.gov/omb/grants/grants--docs.html (the link is 
``Use of a Universal Identifier by Grant Applicants'').
---------------------------------------------------------------------------

    (b) At least two eligible, prospective proposers.
    (c) Impartial review of the merits of applications or proposals 
received in response to the notice, using the evaluation method and 
selection criteria described in the notice. For research and development 
awards, in order to be considered as part of a competitive procedure, 
the two principal selection criteria, unless statute provides otherwise, 
must be the:
    (1) Technical merits of the proposed research and development; and
    (2) Potential relationship of the proposed research and development 
to Department of Defense missions.

[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005; 
72 FR 34988, June 26, 2007]



Sec. 22.320  Special competitions.

    Some programs may be competed for programmatic or policy reasons 
among specific classes of potential recipients. An example would be a 
program to enhance U.S. capabilities for academic research and research-
coupled graduate education in defense-critical, science and engineering 
disciplines, a program that would be competed specifically among 
institutions of higher education. All such special competitions shall be 
consistent with program representations in the President's budget 
submission to Congress and with subsequent Congressional authorizations 
and appropriations for the programs.



Sec. 22.325  Historically Black colleges and universities (HBCUs) and other 

minority institutions (MIs).

    Increasing the ability of HBCUs and MIs to participate in federally 
funded, university programs is an objective of Executive Order 12876 (3 
CFR, 1993 Comp., p. 671) and 10 U.S.C. 2323. Grants officers shall 
include appropriate provisions in Broad Agency Announcements (BAAs) or 
other announcements for programs in which awards to institutions of 
higher education are anticipated, in order to promote participation of 
HBCUs and MIs in such programs. Also, whenever practicable, grants 
officers shall reserve appropriate programmatic areas for exclusive 
competition among HBCUs and MIs when preparing announcements for such 
programs.



     Subpart D_Recipient Qualification Matters_General Policies and 

                               Procedures



Sec. 22.400  Purpose.

    The purpose of this subpart is to specify policies and procedures 
for grants officers' determination of recipient qualifications prior to 
award.



Sec. 22.405  Policy.

    (a) General. Grants officers normally shall award grants or 
cooperative agreements only to qualified recipients that meet the 
standards in Sec. 22.415. This practice conforms with the 
Governmentwide policy to do business only with responsible persons, 
which is stated in OMB guidance at 2 CFR 180.125(a) and implemented by 
the Department of Defense in 2 CFR part 1125.
    (b) Exception. In exceptional circumstances, grants officers may 
make awards to recipients that do not fully meet the standards in Sec. 
22.415 and include special award conditions that are appropriate to the 
particular situation, in accordance with 32 CFR 32.14, 33.12, or 34.4.

[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005; 
72 FR 34988, June 26, 2007]



Sec. 22.410  Grants officers' responsibilities.

    The grants officer is responsible for determining a recipient's 
qualification prior to award. The grants officer's signature on the 
award document shall signify his or her determination that either:
    (a) The potential recipient meets the standards in Sec. 22.415 and 
is qualified to receive the grant or cooperative agreement; or
    (b) An award is justified to a recipient that does not fully meet 
the standards, pursuant to Sec. 22.405(b). In such cases, grants 
officers shall document in the award file the rationale for making

[[Page 81]]

an award to a recipient that does not fully meet the standards.



Sec. 22.415  Standards.

    To be qualified, a potential recipient must:
    (a) Have the management capability and adequate financial and 
technical resources, given those that would be made available through 
the grant or cooperative agreement, to execute the program of activities 
envisioned under the grant or cooperative agreement.
    (b) Have a satisfactory record of executing such programs or 
activities (if a prior recipient of an award).
    (c) Have a satisfactory record of integrity and business ethics.
    (d) Be otherwise qualified and eligible to receive a grant or 
cooperative agreement under applicable laws and regulations (see Sec. 
22.420(c)).



Sec. 22.420  Pre-award procedures.

    (a) The appropriate method to be used and amount of effort to be 
expended in deciding the qualification of a potential recipient will 
vary. In deciding on the method and level of effort, the grants officer 
should consider factors such as:
    (1) DoD's past experience with the recipient;
    (2) Whether the recipient has previously received cost-type 
contracts, grants, or cooperative agreements from the Federal 
Government; and
    (3) The amount of the prospective award and complexity of the 
project to be carried out under the award.
    (b) There is no DoD-wide requirement to obtain a pre-award credit 
report, audit, or any other specific piece of information. On a case-by-
case basis, the grants officer will decide whether there is a need to 
obtain any such information to assist in deciding whether the recipient 
meets the standards in Sec. 22.415 (a), (b), and (c).
    (1) Should the grants officer in a particular case decide that a 
pre-award credit report, audit, or survey is needed, he or she should 
consult first with the appropriate grants administration office 
(identified in Sec. 22.710), and decide whether pre-existing surveys or 
audits of the recipient, such as those of the recipient's internal 
control systems under OMB Circular A-133 \5\ will satisfy the need (see 
Sec. 22.715(a)(1)).
---------------------------------------------------------------------------

    \5\ Electronic copies may be obtained at Internet site http://
www.whitehouse.gov/OMB. For paper copies, contact the Office of 
Management and Budget, EOP Publications, 725 17th St. NW., New Executive 
Office Building, Washington, DC 20503.
---------------------------------------------------------------------------

    (2) If, after consulting with the grants administration office, the 
grants officer decides to obtain a credit report, audit, or other 
information, and the report or other information discloses that a 
potential recipient is delinquent on a debt to an agency of the United 
States Government, then:
    (i) The grants officer shall take such information into account when 
determining whether the potential recipient is qualified with respect to 
the grant or cooperative agreement; and
    (ii) If the grants officer decides to make the award to the 
recipient, unless there are compelling reasons to do otherwise, the 
grants officer shall delay the award of the grant or cooperative 
agreement until payment is made or satisfactory arrangements are made to 
repay the debt.
    (c) In deciding whether a recipient is otherwise qualified and 
eligible in accordance with the standard in Sec. 22.415(d), the grants 
officer shall ensure that the potential recipient:
    (1) Is not identified in the Governmentwide Excluded Parties List 
System (EPLS) as being debarred, suspended, or otherwise ineligible to 
receive the award. In addition to being a requirement for every new 
award, note that checking the EPLS also is a requirement for subsequent 
obligations of additional funds, such as incremental funding actions, in 
the case of pre-existing awards to institutions of higher education, as 
described at 32 CFR 22.520(e)(5). The grants officer's responsibilities 
include (see the OMB guidance at 2 CFR 180.425 and 180.430, as 
implemented by the Department of Defense at 2 CFR 1125.425) checking the 
EPLS for:
    (i) Potential recipients of prime awards; and
    (ii) A recipient's principals (as defined in OMB guidance at 2 CFR 
180.995, implemented by the Department of Defense in 2 CFR part 1125), 
potential recipients of subawards, and principals of

[[Page 82]]

those potential subaward recipients, if DoD Component approval of those 
principals or lower-tier recipients is required under the terms of the 
award (e.g., if a subsequent change in a recipient's principal 
investigator or other key person would be subject to the DoD Component's 
prior approval under 32 CFR 32.25(c)(2), 33.30(d)(3), or 
34.15(c)(2)(i)).
    (2) Has provided all certifications and assurances required by 
Federal statute, Executive order, or codified regulation, unless they 
are to be addressed in award terms and conditions at the time of award 
(see Sec. 22.510).
    (3) Meets any eligibility criteria that may be specified in the 
statute authorizing the specific program under which the award is being 
made (see Sec. 22.210(a)(2)).
    (d) Grants officers shall obtain each recipient's Taxpayer 
Identification Number (TIN, which may be the Social Security Number for 
an individual and Employer Identification Number for a business or non-
profit entity) and notify the recipient that the TIN is being obtained 
for purposes of collecting and reporting on any delinquent amounts that 
may arise out of the recipient's relationship with the Government. 
Obtaining the TIN and so notifying the recipient is a statutory 
requirement of 31 U.S.C. 7701, as amended by the Debt Collection 
Improvement Act of 1996 (section 31001(i)(1), Pub. L. 104-134).

[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005; 
72 FR 34988, June 26, 2007]



                    Subpart E_National Policy Matters



Sec. 22.505  Purpose.

    The purpose of this subpart is to supplement other regulations that 
implement national policy requirements, to the extent that it is 
necessary to provide additional guidance to DoD grants officers. The 
other regulations that implement national policy requirements include:
    (a) The other parts of the DoDGARs (32 CFR parts 32, 33, and 34) 
that implement the Governmentwide guidance in OMB Circulars A-102 \6\ 
and A-110 \7\ on administrative requirements for grants and cooperative 
agreements. Those parts address some national policy matters that appear 
in the OMB Circulars.
---------------------------------------------------------------------------

    \6\ See footnote 5 to Sec. 22.420(b)(1).
    \7\ See footnote 5 to Sec. 22.420(b)(1).
---------------------------------------------------------------------------

    (b) DoD regulations other than the DoDGARs.
    (c) Other Federal agencies' regulations.

[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005]



Sec. 22.510  Certifications, representations, and assurances.

    (a) Certifications--(1) Policy. Certifications of compliance with 
national policy requirements are to be obtained from recipients only for 
those national policies where a statute, Executive order, or codified 
regulation specifically states that a certification is required. Other 
national policy requirements may be addressed by obtaining 
representations or assurances (see paragraph (b) of this section). 
Grants officers should utilize methods for obtaining certifications, in 
accordance with Executive Order 12866 (3 CFR, 1993 Comp., p. 638), that 
minimize administration and paperwork.
    (2) Procedures. (i) When necessary, grants officers may obtain 
individual, written certifications.
    (ii) Whenever possible, and to the extent consistent with statute 
and codified regulation, grants officers should identify the 
certifications that are required for the particular type of recipient 
and program, and consolidate them into a single certification provision 
that cites them by reference.
    (A) If a grants officer elects to have proposers incorporate 
certifications by reference into their proposals, he or she must do so 
in one of the two following ways. When required by statute or codified 
regulation, the solicitation must include the full text of the 
certifications that proposers are to provide by reference. In other 
cases, the grants officer may include language in the solicitation that 
informs the proposers where the full text may be found (e.g., in 
documents or computer network sites that are readily available to the 
public) and offers to provide it to proposers upon request.

[[Page 83]]

    (B) Appendix A to this part provides language that may be used for 
incorporating by reference the certification on lobbying, which 
currently is the only certification requirement that commonly applies to 
DoD grants and agreements. Because that certification is required by law 
to be submitted at the time of proposal, rather than at the time of 
award, Appendix A includes language to incorporate the certification by 
reference into a proposal.
    (C) Grants officers may incorporate certifications by reference in 
award documents when doing so is consistent with statute and codified 
regulation (that is not the case for the lobbying certification 
addressed in paragraph (a)(2)(ii)(B) of this section). The provision 
that a grants officer would use to incorporate certifications in award 
documents, when consistent with statute and codified regulation, would 
be similar to the provision in Appendix A to this part, except that it 
would be modified to state that the recipient is providing the required 
certifications by signing the award document or by accepting funds under 
the award.
    (b) Representations and assurances. Many national policies, either 
in statute or in regulation, require recipients of grants and 
cooperative agreements to make representations or provide assurances 
(rather than certifications) that they are in compliance with the 
policies. As discussed in Sec. 22.610(b), Appendix B to this part 
suggests award terms and conditions that may be used to address several 
of the more commonly applicable national policy requirements. These 
terms and conditions may be used to obtain required assurances and 
representations, if the grants officer wishes to do so at the time of 
award, rather than through the use of the standard application form (SF-
424 \8\) or other means at the time of proposal.
---------------------------------------------------------------------------

    \8\ For copies of Standard Forms listed in this part, contact 
regional grants administration offices of the Office of Naval Research. 
Addresses for the offices are listed in the ``Federal Directory of 
Contract Administration Services (CAS) Components,'' which may be 
accessed through the Defense Contract Management Agency homepage at: 
http://www.dcma.mil.

[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005]



Sec. 22.515  Provisions of annual appropriations acts.

    An annual appropriations act can include general provisions stating 
national policy requirements that apply to the use of funds (e.g., 
obligation through a grant or cooperative agreement) appropriated by the 
act. Because these requirements are of limited duration (the period 
during which a given year's appropriations are available for 
obligation), and because they can vary from year to year and from one 
agency's appropriations act to another agency's, the grants officer must 
know the agency(ies) and fiscal year(s) of the appropriations being 
obligated by a given grant or cooperative agreement, and may need to 
consult legal counsel if he or she does not know the requirements 
applicable to those appropriations.



Sec. 22.520  Campus access for military recruiting and Reserve Officer 

Training Corps (ROTC).

    (a) Purpose. (1) The purpose of this section is to implement 10 
U.S.C. 983 as it applies to grants. Under that statute, DoD Components 
are prohibited from providing funds to institutions of higher education 
that have policies or practices, as described in paragraph (c) of this 
section, restricting campus access of military recruiters or the Reserve 
Officer Training Corps (ROTC).
    (2) By addressing the effect of 10 U.S.C. 983 on grants and 
cooperative agreements, this section supplements the DoD's primary 
implementation of that statute in 32 CFR part 216, ``Military Recruiting 
and Reserve Officer Training Corps Program Access to Institutions of 
Higher Education.'' Part 216 establishes procedures by which the 
Department of Defense identifies institutions of higher education that 
have a policy or practice described in paragraph (c) of this section.
    (b) Definition specific to this section. ``Institution of higher 
education'' in this section has the meaning given at 32 CFR 216.3, which 
is different than the meaning given at Sec. 22.105 for other sections 
of this part.

[[Page 84]]

    (c) Statutory requirement of 10 U.S.C. 983. No funds made available 
to the Department of Defense may be provided by grant to an institution 
of higher education (including any subelement of such institution) if 
the Secretary of Defense determines that the institution (or any 
subelement of that institution) has a policy or practice that either 
prohibits, or in effect prevents:
    (1) The Secretary of a Military Department from maintaining, 
establishing, or operating a unit of the Senior ROTC (in accordance with 
10 U.S.C. 654 and other applicable Federal laws) at that institution (or 
any subelement of that institution);
    (2) A student at that institution (or any subelement of that 
institution) from enrolling in a unit of the Senior ROTC at another 
institution of higher education;
    (3) The Secretary of a Military Department or Secretary of Homeland 
Security from gaining access to campuses, or access to students (who are 
17 years of age or older) on campuses, for purposes of military 
recruiting in a manner that is at least equal in quality and scope to 
the access to campuses and to students that is provided to any other 
employer; or
    (4) Access by military recruiters for purposes of military 
recruiting to the following information pertaining to students (who are 
17 years of age or older) enrolled at that institution (or any 
subelement of that institution):
    (i) Names, addresses, and telephone listings.
    (ii) Date and place of birth, levels of education, academic majors, 
degrees received, and the most recent educational institution enrolled 
in by the student.
    (d) Policy. (1) Applicability to cooperative agreements. As a matter 
of DoD policy, the restrictions of 10 U.S.C. 983, as implemented by 32 
CFR part 216, apply to cooperative agreements, as well as grants.
    (2) Deviations. Grants officers may not deviate from any provision 
of this section without obtaining the prior approval of the Director of 
Defense Research and Engineering. Requests for deviations shall be 
submitted, through appropriate channels, to: Director for Basic 
Sciences, ODUSD(LABS), 3040 Defense Pentagon, Washington, D.C. 20301-
3040.
    (e) Grants officers' responsibility. (1) A grants officer shall not 
award any grant or cooperative agreement to an institution of higher 
education that has been identified pursuant to the procedures of 32 CFR 
part 216. Such institutions are identified as being ineligible on the 
Governmentwide Excluded Parties List System (EPLS). The cause and 
treatment code on the EPLS indicates the reason for an institution's 
ineligibility, as well as the effect of the exclusion. Note that OMB 
guidance in 2 CFR 180.425 and 180.430, as implemented by the Department 
of Defense at 2 CFR part 1125, require a grants officer to check the 
EPLS prior to determining that a recipient is qualified to receive an 
award.
    (2) A grants officer shall not consent to a subaward of DoD funds to 
such an institution, under a grant or cooperative agreement to any 
recipient, if the subaward requires the grants officer's consent.
    (3) A grants officer shall include the following award term in each 
grant or cooperative agreement with an institution of higher education 
(note that this requirement does not flow down and that recipients are 
not required to include the award term in subawards):

    ``As a condition for receipt of funds available to the Department of 
Defense (DoD) under this award, the recipient agrees that it is not an 
institution of higher education (as defined in 32 CFR part 216) that has 
a policy or practice that either prohibits, or in effect prevents:
    (A) The Secretary of a Military Department from maintaining, 
establishing, or operating a unit of the Senior Reserve Officers 
Training Corps (in accordance with 10 U.S.C. 654 and other applicable 
Federal laws) at that institution (or any subelement of that 
institution);
    (B) Any student at that institution (or any subelement of that 
institution) from enrolling in a unit of the Senior ROTC at another 
institution of higher education;
    (C) The Secretary of a Military Department or Secretary of Homeland 
Security from gaining access to campuses, or access to students (who are 
17 years of age or older) on campuses, for purposes of military 
recruiting in a manner that is at least equal in quality and scope to 
the access to campuses and to students that is provided to any other 
employer; or

[[Page 85]]

    (D) Access by military recruiters for purposes of military 
recruiting to the names of students (who are 17 years of age or older 
and enrolled at that institution or any subelement of that institution); 
their addresses, telephone listings, dates and places of birth, levels 
of education, academic majors, and degrees received; and the most recent 
educational institutions in which they were enrolled.

If the recipient is determined, using the procedures in 32 CFR part 216, 
to be such an institution of higher education during the period of 
performance of this agreement, the Government will cease all payments of 
DoD funds under this agreement and all other DoD grants and cooperative 
agreements to the recipient, and it may suspend or terminate such grants 
and agreements unilaterally for material failure to comply with the 
terms and conditions of award.''

    (4) If an institution of higher education refuses to accept the 
award term in paragraph (e)(3) of this section, the grants officer 
shall:
    (i) Determine that the institution is not qualified with respect to 
the award. The grants officer may award to an alternative recipient.
    (ii) Transmit the name of the institution, through appropriate 
channels, to the Director for Accession Policy, Office of the Deputy 
Under Secretary of Defense for Military Personnel Policy (ODUSD(MPP)), 
4000 Defense Pentagon, Washington, DC 20301-4000. This will allow 
ODUSD(MPP) to decide whether to initiate an evaluation of the 
institution under 32 CFR part 216, to determine whether it is an 
institution that has a policy or practice described in paragraph (c) of 
this section.
    (5) With respect to any pre-existing award to an institution of 
higher education that currently is listed on the EPLS pursuant to a 
determination under 32 CFR part 216, a grants officer:
    (i) Shall not obligate additional funds available to the DoD for the 
award. A grants officer therefore must check the EPLS before approving 
an incremental funding action or other additional funding for any pre-
existing award to an institution of higher education. The grants officer 
may not obligate the additional funds if the cause and treatment code 
indicates that the reason for an institution's EPLS listing is a 
determination under 32 CFR part 216 that institutional policies or 
practices restrict campus access of military recruiters or ROTC.
    (ii) Shall not approve any request for payment submitted by such an 
institution (including payments for costs already incurred).
    (iii) Shall:
    (A) Terminate the award unless he or she has a reason to believe, 
after consulting with the ODUSD(MPP), 4000 Defense Pentagon, Washington, 
DC 20301-4000), that the institution may be removed from the EPLS in the 
near term and have its eligibility restored; and
    (B) Suspend any award that is not immediately terminated, as well as 
all payments under it.
    (f) Post-award administration responsibilities of the Office of 
Naval Research (ONR). As the DoD office assigned responsibility for 
performing field administration services for grants and cooperative 
agreements with institutions of higher education, the ONR shall 
disseminate the list it receives from the ODUSD(MPP) of institutions of 
higher education identified pursuant to the procedures of 32 CFR part 
216 to:
    (1) ONR field administration offices, with instructions to:
    (i) Disapprove any payment requests under awards to such 
institutions for which post-award payment administration was delegated 
to the ONR; and
    (ii) Alert the DoD offices that made the awards to their 
responsibilities under paragraphs (e)(5)(i) and (e)(5)(iii) of this 
section.
    (2) Awarding offices in DoD Components that may be identified from 
data in the Defense Assistance Awards Data System (see 32 CFR 21.520 
through 21.555) as having awards with such institutions for which post-
award payment administration was not delegated to ONR. The ONR is to 
alert those offices to their responsibilities under paragraph (e)(5) of 
this section.

[70 FR 49465, Aug. 23, 2005, as amended at 72 FR 34988, June 26, 2007]



Sec. 22.525  Paperwork Reduction Act.

    Grants officers shall include appropriate award terms or conditions, 
if a recipient's activities under an award will be subject to the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3500, et seq.):

[[Page 86]]

    (a) Generally, the Act only applies to Federal agencies--it requires 
agencies to obtain clearance from the Office of Management and Budget 
before collecting information using forms, schedules, questionnaires, or 
other methods calling either for answers to:
    (1) Identical questions from ten or more persons other than 
agencies, instrumentalities, or employees of the United States.
    (2) Questions from agencies, instrumentalities, or employees of the 
United States which are to be used for statistical compilations of 
general public interest.
    (b) The Act applies to similar collections of information by 
recipients of grants or cooperative agreements only when:
    (1) A recipient collects information at the specific request of the 
awarding Federal agency; or
    (2) The terms and conditions of the award require specific approval 
by the agency of the information collection or the collection 
procedures.



Sec. 22.530  Metric system of measurement.

    (a) Statutory requirement. The Metric Conversion Act of 1975, as 
amended by the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 
205) and implemented by Executive Order 12770 (3 CFR, 1991 Comp., p. 
343), states that:
    (1) The metric system is the preferred measurement system for U.S. 
trade and commerce.
    (2) The metric system of measurement will be used, to the extent 
economically feasible, in federal agencies' procurements, grants, and 
other business-related activities.
    (3) Metric implementation shall not be required to the extent that 
such use is likely to cause significant inefficiencies or loss of 
markets to United States firms.
    (b) Responsibilities. DoD Components shall ensure that the metric 
system is used, to the maximum extent practicable, in measurement-
sensitive activities supported by programs that use grants and 
cooperative agreements, and in measurement-sensitive outputs of such 
programs.



                             Subpart F_Award



Sec. 22.600  Purpose.

    This subpart sets forth grants officers' responsibilities relating 
to the award document and other actions at the time of award.



Sec. 22.605  Grants officers' responsibilities.

    At the time of award, the grants officer is responsible for ensuring 
that:
    (a) The award instrument contains the appropriate terms and 
conditions, in accordance with Sec. 22.610.
    (b) Information about the award is provided to the office 
responsible for preparing reports for the Defense Assistance Award Data 
System (DAADS), to ensure timely and accurate reporting of data required 
by 31 U.S.C. 6101-6106 (see 32 CFR part 21, subpart E).
    (c)(1) In addition to the copy of the award document provided to the 
recipient, a copy is forwarded to the office designated to administer 
the grant or cooperative agreement, and another copy is forwarded to the 
finance and accounting office designated to make the payments to the 
recipient.
    (2) For any award subject to the electronic funds transfer (EFT) 
requirement described in Sec. 22.810(b)(2), the grants officer shall 
include a prominent notification of that fact on the first page of the 
copies forwarded to the recipient, the administrative grants officer, 
and the finance and accounting office. On the first page of the copy 
forwarded to the recipient, the grants officer also shall include a 
prominent notification that the recipient, to be paid, must submit a 
Payment Information Form (Standard Form SF-3881 \9\) to the responsible 
DoD payment office, if that payment office does not currently have the 
information (e.g., bank name and account number) needed to pay the 
recipient by EFT.
---------------------------------------------------------------------------

    \9\ See footnote 8 to Sec. 22.510(b).

[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003; 70 
FR 49465, Aug. 23, 2005]

[[Page 87]]



Sec. 22.610  Award instruments.

    (a) Each award document shall include terms and conditions that:
    (1) Address programmatic requirements (e.g., a statement of work or 
other appropriate terms or conditions that describe the specific goals 
and objectives of the project). The grants officer shall develop such 
terms and conditions in coordination with program officials.
    (2) Provide for the recipient's compliance with:
    (i) Pertinent Federal statutes or Executive orders that apply 
broadly to Federal or DoD assistance awards.
    (ii) Any program-specific requirements that are prescribed in the 
program statute (see Sec. 22.210(a)(2)), or appropriation-specific 
requirements that are stated in the pertinent Congressional 
appropriations (see Sec. 22.515).
    (iii) Pertinent portions of the DoDGARs or other Federal 
regulations, including those that implement the Federal statutes or 
Executive orders described in paragraphs (a)(2) (i) and (ii) of this 
section.
    (3) Specify the grants officer's instructions for post-award 
administration, for any matter where the post-award administration 
provisions in 32 CFR part 32, 33, or 34 give the grants officer options 
for handling the matter. For example, under 32 CFR 32.24(b), the grants 
officers must choose among possible methods for the recipient's 
disposition of program income. It is essential that the grants officer 
identify the option selected in each case, to provide clear instructions 
to the recipient and the grants officer responsible for post-award 
administration of the grant or cooperative agreement.
    (b) To assist grants officers:
    (1) Appendix B to this part provides model clauses to implement 
certain Federal statutes, Executive orders, and regulations (see 
paragraph (a)(2)(i) of this section) that frequently apply to DoD grants 
and cooperative agreements. Grants officers may incorporate the model 
clauses into award terms and conditions, as appropriate. It should be 
noted that Appendix B to this part is an aid, and not an exhaustive list 
of all requirements that apply in all cases. Depending on the 
circumstances of a given award, other statutes, Executive orders, or 
codified regulations also may apply (e.g., Appendix B to this part does 
not list program-specific requirements described in paragraph (a)(2)(ii) 
of this section).
    (2) Appendix C to this part is a list of administrative requirements 
that apply to awards to different types of recipients. It also 
identifies post-award administration issues that the grants officer must 
address in the award terms and conditions.



                     Subpart G_Field Administration



Sec. 22.700  Purpose.

    This subpart prescribes policies and procedures for administering 
grants and cooperative agreements. It does so in conjunction with 32 CFR 
parts 32, 33, and 34, which prescribe administrative requirements for 
particular types of recipients.



Sec. 22.705  Policy.

    (a) DoD policy is to have each recipient deal with a single office, 
to the maximum extent practicable, for post-award administration of its 
grants and cooperative agreements. This reduces burdens on recipients 
that can result when multiple DoD offices separately administer grants 
and cooperative agreements they award to a given recipient. It also 
minimizes unnecessary duplication of field administration services.
    (b) To further reduce burdens on recipients, the office responsible 
for performing field administration services for grants and cooperative 
agreements to a particular recipient shall be, to the maximum extent 
practicable, the same office that is assigned responsibility for 
performing field administration services for contracts awarded to that 
recipient.
    (c) Contracting activities and grants officers therefore shall use 
cross-servicing arrangements whenever practicable and, to the maximum 
extent possible, delegate responsibility for post-award administration 
to the cognizant grants administration offices identified in Sec. 
22.710.

[[Page 88]]



Sec. 22.710  Assignment of grants administration offices.

    In accordance with the policy stated in Sec. 22.705(b), the DoD 
offices (referred to in this part as ``grants administration offices'') 
that are assigned responsibility for performing field administration 
services for grants and cooperative agreements are (see the ``Federal 
Directory of Contract Administration Services (CAS) Components'' \10\ 
for specific addresses of administration offices):
---------------------------------------------------------------------------

    \10\ The ``Federal Directory of Contract Administration Services 
(CAS) Components'' may be accessed through the Defense Contract 
Management Agency hompage at http://www.dcma.mil.
---------------------------------------------------------------------------

    (a) Regional offices of the Office of Naval Research, for grants and 
cooperative agreements with:
    (1) Institutions of higher education and laboratories affiliated 
with such institutions, to the extent that such organizations are 
subject to the university cost principles in OMB Circular A-21. \11\
---------------------------------------------------------------------------

    \11\ See footnote 5 to Sec. 22.420(b)(1).
---------------------------------------------------------------------------

    (2) Nonprofit organizations that are subject to the cost principles 
in OMB Circular A-122, \12\ if their principal business with the 
Department of Defense is research and development.
---------------------------------------------------------------------------

    \12\ See footnote 5 to Sec. 22.420(b)(1).
---------------------------------------------------------------------------

    (b) Field offices of the Defense Contract Management Command, for 
grants and cooperative agreements with all other entities, including:
    (1) For-profit organizations.
    (2) Nonprofit organizations identified in Attachment C of OMB 
Circular A-122 that are subject to for-profit cost principles in 48 CFR 
part 31.
    (3) Nonprofit organizations subject to the cost principles in OMB 
Circular A-122, if their principal business with the Department of 
Defense is other than research and development.
    (4) State and local governments.

[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49466, Aug. 23, 2005; 
72 FR 34989, June 26, 2007]



Sec. 22.715  Grants administration office functions.

    The primary responsibility of cognizant grants administration 
offices shall be to advise and assist grants officers and recipients 
prior to and after award, and to help ensure that recipients fulfill all 
requirements in law, regulation, and award terms and conditions. 
Specific functions include:
    (a) Conducting reviews and coordinating reviews, audits, and audit 
requests. This includes:
    (1) Advising grants officers on the extent to which audits by 
independent auditors (i.e., public accountants or Federal auditors) have 
provided the information needed to carry out their responsibilities. If 
a recipient has had an independent audit in accordance with OMB Circular 
A-133, and the audit report disclosed no material weaknesses in the 
recipient's financial management and other management and control 
systems, additional preaward or closeout audits usually will not be 
needed (see Sec. Sec. 22.420(b) and 22.825(b)).
    (2) Performing pre-award surveys, when requested by a grants 
officer, after providing advice described in paragraph (a)(1) of this 
section.
    (3) Reviewing recipients' systems and compliance with Federal 
requirements, in coordination with any reviews and compliance audits 
performed by independent auditors under OMB Circular A-133, or in 
accordance with the terms and conditions of the award. This includes:
    (i) Reviewing recipients' financial management, property management, 
and purchasing systems, to determine the adequacy of such systems.
    (ii) Determining that recipients have drug-free workplace programs, 
as required under 32 CFR part 26.
    (iii) Determining that governmental, university and nonprofit 
recipients have complied with requirements in OMB Circular A-133, as 
implemented at 32 CFR 32.26 and 33.26, to have single audits and submit 
audit reports to the Federal Audit Clearinghouse. If a recipient has not 
had a required audit, appropriate action must be taken (e.g., contacting 
the recipient and coordinating with the Office of the Assistant 
Inspector General for Audit Policy and Oversight (OAIG(P&O)), Office of 
the Deputy Inspector General for Inspections and Policy, Office of the 
Inspector General of the Department of Defense (OIG, DoD), 400 Army-Navy 
Drive, Arlington, VA 22202).

[[Page 89]]

    (4) Issuing timely management decisions, in accordance with DoD 
Directive 7640.2, ``Policy for Follow-up on Contract Audit Reports,'' 
\13\ on single audit findings referred by the OIG, DoD, under DoD 
Directive 7600.10, ``Audits of States, Local Governments, and Non-Profit 
Organizations.'' \14\
---------------------------------------------------------------------------

    \13\ Electronic copies may be obtained at the Washington 
Headquarters Services Internet site http://www.dtic.mil/whs/directives. 
Paper copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
    \14\ See footnote 13 to Sec. 22.715(a)(4).
---------------------------------------------------------------------------

    (b) Performing property administration services for Government-owned 
property, and for any property acquired by a recipient, with respect to 
which the recipient has further obligations to the Government.
    (c) Ensuring timely submission of required reports.
    (d) Executing administrative closeout procedures.
    (e) Establishing recipients' indirect cost rates, where the 
Department of Defense is the cognizant or oversight Federal agency with 
the responsibility for doing so.
    (f) Performing other administration functions (e.g., receiving 
recipients' payment requests and transmitting approved payment 
authorizations to payment offices) as delegated by applicable cross-
servicing agreements or letters of delegation.

[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49466, Aug. 23, 2005; 
72 FR 34989, June 26, 2007]



                   Subpart H_Post-Award Administration



Sec. 22.800  Purpose and relation to other parts.

    This subpart sets forth grants officers' and DoD Components' 
responsibilities for post-award administration, by providing DoD-
specific requirements on payments; debt collection; claims, disputes and 
appeals; and closeout audits.



Sec. 22.805  Post-award requirements in other parts.

    Grants officers responsible for post-award administration of grants 
and cooperative agreements shall administer such awards in accordance 
with the following parts of the DoDGARs, as supplemented by this 
subpart:
    (a) Awards to domestic recipients. Standard administrative 
requirements for grants and cooperative agreements with domestic 
recipients are specified in other parts of the DoDGARs, as follows:
    (1) For awards to domestic institutions of higher education and 
other nonprofit organizations, requirements are specified in 32 CFR part 
32, which is the DoD implementation of OMB Circular A-110.
    (2) For awards to State and local governments, requirements are 
specified in 32 CFR part 33, which is the DoD codification of the 
Governmentwide common rule to implement OMB Circular A-102.
    (3) For awards to domestic for-profit organizations, requirements 
are specified in 32 CFR part 34, which is modeled on the requirements in 
OMB Circular A-110.
    (b) Awards to foreign recipients. DoD Components shall use the 
administrative requirements specified in paragraph (a) of this section, 
to the maximum extent practicable, for grants and cooperative agreements 
to foreign recipients.



Sec. 22.810  Payments.

    (a) Purpose. This section prescribes policies and grants officers' 
post-award responsibilities, with respect to payments to recipients of 
grants and cooperative agreements.
    (b) Policy. (1) It is Governmentwide policy to minimize the time 
elapsing between any payment of funds to a recipient and the recipient's 
disbursement of the funds for program purposes (see 32 CFR 32.22(a) and 
33.21(b), and the implementation of the Cash Management Improvement Act 
at 31 CFR part 205).
    (2) It also is a Governmentwide requirement to use electronic funds 
transfer (EFT) in the payment of any grant for which an application or 
proposal was submitted or renewed on or after July 26, 1996, unless the 
recipient has obtained a waiver by submitting to the head of the 
pertinent Federal agency a certification that it has neither an

[[Page 90]]

account with a financial institution nor an authorized payment agent. 
This requirement is in 31 U.S.C. 3332, as amended by the Debt Collection 
Improvement Act of 1996 (section 31001(x)(1)(A), Pub. L. 104-134), and 
as implemented by Department of Treasury regulations at 31 CFR part 208. 
As a matter of DoD policy, this requirement applies to cooperative 
agreements, as well as grants. Within the Department of Defense, the 
Defense Finance and Accounting Service implements this EFT requirement, 
and grants officers have collateral responsibilities at the time of 
award, as described in Sec. 22.605(c), and in postaward administration, 
as described in Sec. 22.810(c)(3)(iv).
    (3) Expanding on these Governmentwide policies, DoD policy is for 
DoD Components to use electronic commerce, to the maximum extent 
practicable, in the portions of the payment process for grants and 
cooperative agreements for which grants officers are responsible. In 
cases where recipients submit each payment request to the grants 
officer, this includes using electronic methods to receive recipients' 
requests for payment and to transmit authorizations for payment to the 
DoD payment office. Using electronic methods will improve timeliness and 
accuracy of payments and reduce administrative burdens associated with 
paper-based payments.
    (c) Post-award responsibilities. In cases where the recipient 
submits each payment request to the grants officer, the administrative 
grants officer designated to handle payments for a grant or cooperative 
agreement is responsible for:
    (1) Handling the recipient's requests for payments in accordance 
with DoD implementation of Governmentwide guidance (see 32 CFR 32.22, 
33.21, or 34.12, as applicable).
    (2) Reviewing each payment request to ensure that:
    (i) The request complies with the award terms.
    (ii) Available funds are adequate to pay the request.
    (iii) The recipient will not have excess cash on hand, based on 
expenditure patterns.
    (3) Maintaining a close working relationship with the personnel in 
the finance and accounting office responsible for making the payments. A 
good working relationship is necessary, to ensure timely and accurate 
handling of financial transactions for grants and cooperative 
agreements. Administrative grants officers:
    (i) Should be generally familiar with policies and procedures for 
disbursing offices that are contained in Chapter 19 of Volume 10 of the 
DoD Financial Management Regulation (the FMR, DoD 7000.14-R \15\).
---------------------------------------------------------------------------

    \15\ See footnote 13 to Sec. 22.715(a)(4).
---------------------------------------------------------------------------

    (ii) Shall forward authorizations to the designated payment office 
expeditiously, so that payments may be made in accordance with the 
timely payment guidelines in Chapter 19 of Volume 10 of the FMR. Unless 
alternative arrangements are made with the payment office, 
authorizations should be forwarded to the payment office at least 3 
working days before the end of the period specified in the FMR. The 
period specified in the FMR is:
    (A) No more than seven calendar days after receipt of the 
recipient's request by the administrative grants officer, whenever 
electronic commerce is used (i.e., EDI to request and authorize payments 
and electronic funds transfer (EFT) to make payments).
    (B) No more than thirty calendar days after receipt of the 
recipient's request by the administrative grants officer, when it is not 
possible to use electronic commerce and paper transactions are used.
    (C) No more than seven calendar days after each date specified, when 
payments are authorized in advance based on a predetermined payment 
schedule, provided that the payment schedule was received in the 
disbursing office at least 30 calendar days in advance of the date of 
the scheduled payment.
    (iii) Shall ensure that the recipients' Taxpayer Identification 
Number (TIN) is included with each payment authorization forwarded to 
the payment office. This is a statutory requirement of 31 U.S.C. 3325, 
as amended by the Debt Collection Improvement Act of 1996 (section 
31001(y), Pub. L. 104-134).

[[Page 91]]

    (iv) For each award that is required to be paid by EFT (see Sec. 
22.605(c) and (Sec. 22.810(b)(2)), shall prominently indicate that fact 
in the payment authorization.

[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49467, Aug. 23, 2005]



Sec. 22.815  Claims, disputes, and appeals.

    (a) Award terms. Grants officers shall include in grants and 
cooperative agreements a term or condition that incorporates the 
procedures of this section for:
    (1) Processing recipient claims and disputes.
    (2) Deciding appeals of grants officers' decisions.
    (b) Submission of claims--(1) Recipient claims. If a recipient 
wishes to submit a claim arising out of or relating to a grant or 
cooperative agreement, the grants officer shall inform the recipient 
that the claim must:
    (i) Be submitted in writing to the grants officer for decision;
    (ii) Specify the nature and basis for the relief requested; and
    (iii) Include all data that supports the claim.
    (2) DoD Component claims. Claims by a DoD Component shall be the 
subject of a written decision by a grants officer.
    (c) Alternative Dispute Resolution (ADR)--(1) Policy. DoD policy is 
to try to resolve all issues concerning grants and cooperative 
agreements by mutual agreement at the grants officer's level. DoD 
Components therefore are encouraged to use ADR procedures to the maximum 
extent practicable. ADR procedures are any voluntary means (e.g., mini-
trials or mediation) used to resolve issues in controversy without 
resorting to formal administrative appeals (see paragraph (e) of this 
section) or to litigation.
    (2) Procedures. (i) The ADR procedures or techniques to be used may 
either be agreed upon by the Government and the recipient in advance 
(e.g., when agreeing on the terms and conditions of the grant or 
cooperative agreement), or may be agreed upon at the time the parties 
determine to use ADR procedures.
    (ii) If a grants officer and a recipient are not able to resolve an 
issue through unassisted negotiations, the grants officer shall 
encourage the recipient to enter into ADR procedures. ADR procedures may 
be used prior to submission of a recipient's claim or at any time prior 
to the Grant Appeal Authority's decision on a recipient's appeal (see 
paragraph (e)(3)(iii) of this section).
    (d) Grants officer decisions. (1) Within 60 calendar days of receipt 
of a written claim, the grants officer shall either:
    (i) Prepare a written decision, which shall include the reasons for 
the decision; shall identify all relevant data on which the decision is 
based; shall identify the cognizant Grant Appeal Authority and give his 
or her mailing address; and shall be included in the award file; or
    (ii) Notify the recipient of a specific date when he or she will 
render a written decision, if more time is required to do so. The notice 
shall inform the recipient of the reason for delaying the decision 
(e.g., the complexity of the claim, a need for more time to complete ADR 
procedures, or a need for the recipient to provide additional 
information to support the claim).
    (2) The decision of the grants officer shall be final, unless the 
recipient decides to appeal. If a recipient decides to appeal a grants 
officer's decision, the grants officer shall encourage the recipient to 
enter into ADR procedures, as described in paragraph (c) of this 
section.
    (e) Formal administrative appeals--(1) Grant appeal authorities. 
Each DoD Component that awards grants or cooperative agreements shall 
establish one or more Grant Appeal Authorities to decide formal, 
administrative appeals in accordance with paragraph (e)(3) of this 
section. Each Grant Appeal Authority shall be either:
    (i) An individual at a grade level in the Senior Executive Service, 
if civilian, or at the rank of Flag or General Officer, if military; or
    (ii) A board chaired by such an individual.
    (2) Right of appeal. A recipient has the right to appeal a grants 
officer's decision to the Grant Appeal Authority (but note that ADR 
procedures, as described in paragraph (c) of this section, are the 
preferred means for resolving any appeal).

[[Page 92]]

    (3) Appeal procedures--(i) Notice of appeal. A recipient may appeal 
a decision of the grants officer within 90 calendar days of receiving 
that decision, by filing a written notice of appeal to the Grant Appeal 
Authority and to the grants officer. If a recipient elects to use an ADR 
procedure, the recipient is permitted an additional 60 calendar days to 
file the written notice of appeal to the Grant Appeal Authority and 
grants officer.
    (ii) Appeal file. Within 30 calendar days of receiving the notice of 
appeal, the grants officer shall forward to the Grant Appeal Authority 
and the recipient the appeal file, which shall include copies of all 
documents relevant to the appeal. The recipient may supplement the file 
with additional documents it deems relevant. Either the grants officer 
or the recipient may supplement the file with a memorandum in support of 
its position. The Grant Appeal Authority may request additional 
information from either the grants officer or the recipient.
    (iii) Decision. The appeal shall be decided solely on the basis of 
the written record, unless the Grant Appeal Authority decides to conduct 
fact-finding procedures or an oral hearing on the appeal. Any fact-
finding or hearing shall be conducted using procedures that the Grant 
Appeal Authority deems appropriate.
    (f) Representation. A recipient may be represented by counsel or any 
other designated representative in any claim, appeal, or ADR proceeding 
brought pursuant to this section, as long as the representative is not 
otherwise prohibited by law or regulation from appearing before the DoD 
Component concerned.
    (g) Non-exclusivity of remedies. Nothing in this section is intended 
to limit a recipient's right to any remedy under the law.



Sec. 22.820  Debt collection.

    (a) Purpose. This section prescribes procedures for establishing 
debts owed by recipients of grants and cooperative agreements, and 
transferring them to payment offices for collection.
    (b) Resolution of indebtedness. The grants officer shall attempt to 
resolve by mutual agreement any claim of a recipient's indebtedness to 
the United States arising out of a grant or cooperative agreement (e.g., 
by a finding that a recipient was paid funds in excess of the amount to 
which the recipient was entitled under the terms and conditions of the 
award).
    (c) Grants officer's decision. In the absence of such mutual 
agreement, any claim of a recipient's indebtedness shall be the subject 
of a grants officer decision, in accordance with Sec. 22.815(b)(2). The 
grants officer shall prepare and transmit to the recipient a written 
notice that:
    (1) Describes the debt, including the amount, the name and address 
of the official who determined the debt (e.g., the grants officer under 
Sec. 22.815(d)), and a copy of that determination.
    (2) Informs the recipient that:
    (i) Within 30 calendar days of the grants officer's decision, the 
recipient shall either pay the amount owed to the grants officer (at the 
address that was provided pursuant to paragraph (c)(1) of this section) 
or inform the grants officer of the recipient's intention to appeal the 
decision.
    (ii) If the recipient elects not to appeal, any amounts not paid 
within 30 calendar days of the grants officer's decision will be a 
delinquent debt.
    (iii) If the recipient elects to appeal the grants officer's 
decision the recipient has 90 calendar days, or 150 calendar days if ADR 
procedures are used, after receipt of the grants officer's decision to 
file the appeal, in accordance with Sec. 22.815(e)(3)(i).
    (iv) The debt will bear interest, and may include penalties and 
other administrative costs, in accordance with the debt collection 
provisions in Chapters 29, 31, and 32 of Volume 5 and Chapters 18 and 19 
of Volume 10 of the DoD Financial Management Regulation (DoD 7000.14-R). 
No interest will be charged if the recipient pays the amount owed within 
30 calendar days of the grants officer's decision. Interest will be 
charged for the entire period from the date the decision was mailed, if 
the recipient pays the amount owed after 30 calendar days.
    (d) Follow-up. Depending upon the response from the recipient, the 
grants officer shall proceed as follows:

[[Page 93]]

    (1) If the recipient pays the amount owed within 30 calendar days to 
the grants officer, the grants officer shall forward the payment to the 
responsible payment office.
    (2) If within 30 calendar days the recipient elects to appeal the 
grants officer's decision, further action to collect the debt is 
deferred, pending the outcome of the appeal. If the final result of the 
appeal is a determination that the recipient owes a debt to the Federal 
Government, the grants officer shall send a demand letter to the 
recipient and transfer responsibility for further debt collection to a 
payment office, as described in paragraph (d)(3) of this section.
    (3) If within 30 calendar days the recipient has neither paid the 
amount due nor provided notice of intent to file an appeal of the grants 
officer's decision, the grants officer shall send a demand letter to the 
recipient, with a copy to the payment office that will be responsible 
for collecting the delinquent debt. The payment office will be 
responsible for any further debt collection activity, including issuance 
of additional demand letters (see Chapter 19 of volume 10 of the DoD 
Financial Management Regulation, DoD 7000.14-R). The grants officer's 
demand letter shall:
    (i) Describe the debt, including the amount, the name and address of 
the official that determined the debt (e.g., the grants officer under 
Sec. 22.815(d)), and a copy of that determination.
    (ii) Notify the recipient that the debt is a delinquent debt that 
bears interest from the date of the grants officer's decision, and that 
penalties and other administrative costs may be assessed.
    (iii) Identify the payment office that is responsible for the 
collection of the debt, and notify the recipient that it may submit a 
proposal to that payment office to defer collection, if immediate 
payment is not practicable.
    (e) Administrative offset. In carrying out the responsibility for 
collecting delinquent debts, a disbursing officer may need to consult 
grants officers, to determine whether administrative offset against 
payments to a recipient owing a delinquent debt would interfere with 
execution of projects being carried out under grants or cooperative 
agreements. Disbursing officers may also ask grants officers whether it 
is feasible to convert payment methods under grants or cooperative 
agreements from advance payments to reimbursements, to facilitate use of 
administrative offset. Grants officers therefore should be familiar with 
guidelines for disbursing officers, in Chapter 19 of Volume 10 of the 
Financial Management Regulation (DoD 7000.14-R), concerning withholding 
and administrative offset to recover delinquent debts.



Sec. 22.825  Closeout audits.

    (a) Purpose. This section establishes DoD policy for obtaining 
audits at closeout of individual grants and cooperative agreements. It 
thereby supplements the closeout procedures specified in:
    (1) 32 CFR 32.71 and 32.72, for awards to institutions of higher 
education and other nonprofit organizations.
    (2) 32 CFR 33.50 and 33.51, for awards to State and local 
governments.
    (3) 32 CFR 34.61 and 34.62, for awards to for-profit entities.
    (b) Policy. Grants officers shall use their judgment on a case-by-
case basis, in deciding whether to obtain an audit prior to closing out 
a grant or cooperative agreement (i.e., there is no specific DoD 
requirement to obtain an audit prior to doing so). Factors to be 
considered include:
    (1) The amount of the award.
    (2) DoD's past experience with the recipient, including the presence 
or lack of findings of material deficiencies in recent:
    (i) Audits of individual awards; or
    (ii) Systems-wide financial audits and audits of the compliance of 
the recipient's systems with Federal requirements, under OMB Circular A-
133, where that Circular is applicable. (See Sec. 22.715(a)(1)).

[[Page 94]]



      Sec. Appendix A to Part 22--Proposal Provision for Required 

                              Certification

[GRAPHIC] [TIFF OMITTED] TR23AU05.028


[70 FR 49468, Aug. 23, 2005]

[[Page 95]]



  Sec. Appendix B to Part 22--Suggested Award Provisions for National 

                  Policy Requirements That Often Apply

[GRAPHIC] [TIFF OMITTED] TR26JN07.008


[[Page 96]]


[GRAPHIC] [TIFF OMITTED] TR26JN07.009


[[Page 97]]


[GRAPHIC] [TIFF OMITTED] TR26JN07.010


[[Page 98]]


[GRAPHIC] [TIFF OMITTED] TR26JN07.011


[[Page 99]]


[GRAPHIC] [TIFF OMITTED] TR26JN07.012


[[Page 100]]


[GRAPHIC] [TIFF OMITTED] TR26JN07.013


[[Page 101]]


[GRAPHIC] [TIFF OMITTED] TR26JN07.014


[[Page 102]]


[GRAPHIC] [TIFF OMITTED] TR26JN07.015


[72 FR 34989, June 26, 2007]

[[Page 103]]



Sec. Appendix C to Part 22--Administrative Requirements and Issues To Be 

                 Addressed in Award Terms and Conditions

[GRAPHIC] [TIFF OMITTED] TR16MR00.024


[[Page 104]]


[GRAPHIC] [TIFF OMITTED] TR16MR00.025


[[Page 105]]


[GRAPHIC] [TIFF OMITTED] TR16MR00.026


[[Page 106]]


[GRAPHIC] [TIFF OMITTED] TR16MR00.027


[65 FR 14411, Mar. 16, 2000]



PART 26_GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL 

ASSISTANCE)--Table of Contents



                     Subpart A_Purpose and Coverage

Sec.
26.100 What does this part do?

[[Page 107]]

26.105 Does this part apply to me?
26.110 Are any of my Federal assistance awards exempt from this part?
26.115 Does this part affect the Federal contracts that I receive?

      Subpart B_Requirements for Recipients Other Than Individuals

26.200 What must I do to comply with this part?
26.205 What must I include in my drug-free workplace statement?
26.210 To whom must I distribute my drug-free workplace statement?
26.215 What must I include in my drug-free awareness program?
26.220 By when must I publish my drug-free workplace statement and 
          establish my drug-free awareness program?
26.225 What actions must I take concerning employees who are convicted 
          of drug violations in the workplace?
26.230 How and when must I identify workplaces?

        Subpart C_Requirements for Recipients Who Are Individuals

26.300 What must I do to comply with this part if I am an individual 
          recipient?
26.301 [Reserved]

     Subpart D_Responsibilities of DOD Component Awarding Officials

26.400 What are my responsibilities as a DOD Component awarding 
          official?

           Subpart E_Violations of This Part and Consequences

26.500 How are violations of this part determined for recipients other 
          than individuals?
26.505 How are violations of this part determined for recipients who are 
          individuals?
26.510 What actions will the Federal Government take against a recipient 
          determined to have violated this part?
26.515 Are there any exceptions to those actions?

                          Subpart F_Definitions

26.605 Award
26.610 Controlled substance.
26.615 Conviction.
26.620 Cooperative agreement.
26.625 Criminal drug statute.
26.630 Debarment.
26.632 DOD Component.
26.635 Drug-free workplace.
26.640 Employee.
26.645 Federal agency or agency.
26.650 Grant.
26.655 Individual.
26.660 Recipient.
26.665 State.
26.670 Suspension.

    Authority: 41U.S.C.701, et seq.

    Source: 68 FR 66557, 66609, Nov. 26, 2003, unless otherwise noted.



                     Subpart A_Purpose and Coverage



Sec. 26.100  What does this part do?

    This part carries out the portion of the Drug-Free Workplace Act of 
1988 (41 U.S.C. 701 et seq., as amended) that applies to grants. It also 
applies the provisions of the Act to cooperative agreements and other 
financial assistance awards, as a matter of Federal Government policy.



Sec. 26.105  Does this part apply to me?

    (a) Portions of this part apply to you if you are either--
    (1) A recipient of an assistance award from the DOD Component; or
    (2) A(n) DOD Component awarding official. (See definitions of award 
and recipient in Sec. Sec. 26.605 and 26.660, respectively.)
    (b) The following table shows the subparts that apply to you:

------------------------------------------------------------------------
             If you are . . .                    see subparts . . .
------------------------------------------------------------------------
(1) A recipient who is not an individual..  A, B and E.
(2) A recipient who is an individual......  A, C and E.
(3) A(n) DOD Component awarding official..  A, D and E.
------------------------------------------------------------------------



Sec. 26.110  Are any of my Federal assistance awards exempt from this part?

    This part does not apply to any award that the Head of the DOD 
Component or his or her designee determines that the application of this 
part would be inconsistent with the international obligations of the 
United States or the laws or regulations of a foreign government.



Sec. 26.115  Does this part affect the Federal contracts that I receive?

    It will affect future contract awards indirectly if you are debarred 
or suspended for a violation of the requirements of this part, as 
described in Sec. 26. 510(c). However, this part does not apply 
directly to procurement contracts. The portion of the Drug-Free 
Workplace Act of 1988 that applies to

[[Page 108]]

Federal procurement contracts is carried out through the Federal 
Acquisition Regulation in chapter 1 of Title 48 of the Code of Federal 
Regulations (the drug-free workplace coverage currently is in 48 CFR 
part 23, subpart 23.5).



      Subpart B_Requirements for Recipients Other Than Individuals



Sec. 26.200  What must I do to comply with this part?

    There are two general requirements if you are a recipient other than 
an individual.
    (a) First, you must make a good faith effort, on a continuing basis, 
to maintain a drug-free workplace. You must agree to do so as a 
condition for receiving any award covered by this part. The specific 
measures that you must take in this regard are described in more detail 
in subsequent sections of this subpart. Briefly, those measures are to--
    (1) Publish a drug-free workplace statement and establish a drug-
free awareness program for your employees (see Sec. Sec. 26.205 through 
26.220); and
    (2) Take actions concerning employees who are convicted of violating 
drug statutes in the workplace (see Sec. 26.225).
    (b) Second, you must identify all known workplaces under your 
Federal awards (see Sec. 26.230).



Sec. 26.205  What must I include in my drug-free workplace statement?

    You must publish a statement that--
    (a) Tells your employees that the unlawful manufacture, 
distribution, dispensing, possession, or use of a controlled substance 
is prohibited in your workplace;
    (b) Specifies the actions that you will take against employees for 
violating that prohibition; and
    (c) Lets each employee know that, as a condition of employment under 
any award, he or she:
    (1) Will abide by the terms of the statement; and
    (2) Must notify you in writing if he or she is convicted for a 
violation of a criminal drug statute occurring in the workplace and must 
do so no more than five calendar days after the conviction.



Sec. 26.210  To whom must I distribute my drug-free workplace statement?

    You must require that a copy of the statement described in Sec. 
26.205 be given to each employee who will be engaged in the performance 
of any Federal award.



Sec. 26.215  What must I include in my drug-free awareness program?

    You must establish an ongoing drug-free awareness program to inform 
employees about--
    (a) The dangers of drug abuse in the workplace;
    (b) Your policy of maintaining a drug-free workplace;
    (c) Any available drug counseling, rehabilitation, and employee 
assistance programs; and
    (d) The penalties that you may impose upon them for drug abuse 
violations occurring in the workplace.



Sec. 26.220  By when must I publish my drug-free workplace statement and 

establish my drug-free awareness program?

    If you are a new recipient that does not already have a policy 
statement as described in Sec. 26.205 and an ongoing awareness program 
as described in Sec. 26.215, you must publish the statement and 
establish the program by the time given in the following table:

------------------------------------------------------------------------
                 If . . .                          then you . . .
------------------------------------------------------------------------
(a) The performance period of the award is  must have the policy
 less than 30 days.                          statement and program in
                                             place as soon as possible,
                                             but before the date on
                                             which performance is
                                             expected to be completed.
(b) The performance period of the award is  must have the policy
 30 days or more.                            statement and program in
                                             place within 30 days after
                                             award.
(c) You believe there are extraordinary     may ask the DOD Component
 circumstances that will require more than   awarding official to give
 30 days for you to publish the policy       you more time to do so. The
 statement and establish the awareness       amount of additional time,
 program.                                    if any, to be given is at
                                             the discretion of the
                                             awarding official.
------------------------------------------------------------------------



Sec. 26.225  What actions must I take concerning employees who are convicted 

of drug violations in the workplace?

    There are two actions you must take if an employee is convicted of a 
drug violation in the workplace:

[[Page 109]]

    (a) First, you must notify Federal agencies if an employee who is 
engaged in the performance of an award informs you about a conviction, 
as required by Sec. 26.205(c)(2), or you otherwise learn of the 
conviction. Your notification to the Federal agencies must--
    (1) Be in writing;
    (2) Include the employee's position title;
    (3) Include the identification number(s) of each affected award;
    (4) Be sent within ten calendar days after you learn of the 
conviction; and
    (5) Be sent to every Federal agency on whose award the convicted 
employee was working. It must be sent to every awarding official or his 
or her official designee, unless the Federal agency has specified a 
central point for the receipt of the notices.
    (b) Second, within 30 calendar days of learning about an employee's 
conviction, you must either--
    (1) Take appropriate personnel action against the employee, up to 
and including termination, consistent with the requirements of the 
Rehabilitation Act of 1973 (29 U.S.C. 794), as amended; or
    (2) Require the employee to participate satisfactorily in a drug 
abuse assistance or rehabilitation program approved for these purposes 
by a Federal, State or local health, law enforcement, or other 
appropriate agency.



Sec. 26.230  How and when must I identify workplaces?

    (a) You must identify all known workplaces under each DOD Component 
award. A failure to do so is a violation of your drug-free workplace 
requirements. You may identify the workplaces--
    (1) To the DOD Component official that is making the award, either 
at the time of application or upon award; or
    (2) In documents that you keep on file in your offices during the 
performance of the award, in which case you must make the information 
available for inspection upon request by DOD Component officials or 
their designated representatives.
    (b) Your workplace identification for an award must include the 
actual address of buildings (or parts of buildings) or other sites where 
work under the award takes place. Categorical descriptions may be used 
(e.g., all vehicles of a mass transit authority or State highway 
department while in operation, State employees in each local 
unemployment office, performers in concert halls or radio studios).
    (c) If you identified workplaces to the DOD Component awarding 
official at the time of application or award, as described in paragraph 
(a)(1) of this section, and any workplace that you identified changes 
during the performance of the award, you must inform the DOD Component 
awarding official.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec. 26.300  What must I do to comply with this part if I am an individual 

recipient?

    As a condition of receiving a(n) DOD Component award, if you are an 
individual recipient, you must agree that--
    (a) You will not engage in the unlawful manufacture, distribution, 
dispensing, possession, or use of a controlled substance in conducting 
any activity related to the award; and
    (b) If you are convicted of a criminal drug offense resulting from a 
violation occurring during the conduct of any award activity, you will 
report the conviction:
    (1) In writing.
    (2) Within 10 calendar days of the conviction.
    (3) To the DOD Component awarding official or other designee for 
each award that you currently have, unless Sec. 26.301 or the award 
document designates a central point for the receipt of the notices. When 
notice is made to a central point, it must include the identification 
number(s) of each affected award.



Sec. 26.301  [Reserved]



     Subpart D_Responsibilities of DOD Component Awarding Officials



Sec. 26.400  What are my responsibilities as a(n) DOD Component awarding 

official?

    As a(n) DOD Component awarding official, you must obtain each 
recipient's

[[Page 110]]

agreement, as a condition of the award, to comply with the requirements 
in--
    (a) Subpart B of this part, if the recipient is not an individual; 
or
    (b) Subpart C of this part, if the recipient is an individual.



           Subpart E_Violations of this Part and Consequences



Sec. 26.500  How are violations of this part determined for recipients other 

than individuals?

    A recipient other than an individual is in violation of the 
requirements of this part if the Head of the DOD Component or his or her 
designee determines, in writing, that--
    (a) The recipient has violated the requirements of subpart B of this 
part; or
    (b) The number of convictions of the recipient's employees for 
violating criminal drug statutes in the workplace is large enough to 
indicate that the recipient has failed to make a good faith effort to 
provide a drug-free workplace.



Sec. 26.505  How are violations of this part determined for recipients who are 

individuals?

    An individual recipient is in violation of the requirements of this 
part if the Head of the DOD Component or his or her designee determines, 
in writing, that--
    (a) The recipient has violated the requirements of subpart C of this 
part; or
    (b) The recipient is convicted of a criminal drug offense resulting 
from a violation occurring during the conduct of any award activity.



Sec. 26.510  What actions will the Federal Government take against a recipient 

determined to have violated this part?

    If a recipient is determined to have violated this part, as 
described in Sec. 26.500 or Sec. 26.505, the DOD Component may take 
one or more of the following actions--
    (a) Suspension of payments under the award;
    (b) Suspension or termination of the award; and
    (c) Suspension or debarment of the recipient under 32 CFR Part 25, 
for a period not to exceed five years.



Sec. 26.515  Are there any exceptions to those actions?

    The Secretary of Defense or Secretary of a Military Department may 
waive with respect to a particular award, in writing, a suspension of 
payments under an award, suspension or termination of an award, or 
suspension or debarment of a recipient if the Secretary of Defense or 
Secretary of a Military Department determines that such a waiver would 
be in the public interest. This exception authority cannot be delegated 
to any other official.



                          Subpart F_Definitions



Sec. 26.605  Award.

    Award means an award of financial assistance by the DOD Component or 
other Federal agency directly to a recipient.
    (a) The term award includes:
    (1) A Federal grant or cooperative agreement, in the form of money 
or property in lieu of money.
    (2) A block grant or a grant in an entitlement program, whether or 
not the grant is exempted from coverage under the Governmentwide rule 32 
CFR Part 33 that implements OMB Circular A-102 (for availability, see 5 
CFR 1310.3) and specifies uniform administrative requirements.
    (b) The term award does not include:
    (1) Technical assistance that provides services instead of money.
    (2) Loans.
    (3) Loan guarantees.
    (4) Interest subsidies.
    (5) Insurance.
    (6) Direct appropriations.
    (7) Veterans' benefits to individuals (i.e., any benefit to 
veterans, their families, or survivors by virtue of the service of a 
veteran in the Armed Forces of the United States).



Sec. 26.610  Controlled substance.

    Controlled substance means a controlled substance in schedules I 
through V of the Controlled Substances Act (21 U.S.C. 812), and as 
further defined by regulation at 21 CFR 1308.11 through 1308.15.

[[Page 111]]



Sec. 26.615  Conviction.

    Conviction means a finding of guilt (including a plea of nolo 
contendere) or imposition of sentence, or both, by any judicial body 
charged with the responsibility to determine violations of the Federal 
or State criminal drug statutes.



Sec. 26.620  Cooperative agreement.

    Cooperative agreement means an award of financial assistance that, 
consistent with 31 U.S.C. 6305, is used to enter into the same kind of 
relationship as a grant (see definition of grant in Sec. 26.650), 
except that substantial involvement is expected between the Federal 
agency and the recipient when carrying out the activity contemplated by 
the award. The term does not include cooperative research and 
development agreements as defined in 15 U.S.C. 3710a.



Sec. 26.625  Criminal drug statute.

    Criminal drug statute means a Federal or non-Federal criminal 
statute involving the manufacture, distribution, dispensing, use, or 
possession of any controlled substance.



Sec. 26.630  Debarment.

    Debarment means an action taken by a Federal agency to prohibit a 
recipient from participating in Federal Government procurement contracts 
and covered nonprocurement transactions. A recipient so prohibited is 
debarred, in accordance with the Federal Acquisition Regulation for 
procurement contracts (48 CFR part 9, subpart 9.4) and the common rule, 
Government-wide Debarment and Suspension (Nonprocurement), that 
implements Executive Order 12549 and Executive Order 12689.



Sec. 26.632  DOD Component.

    DOD Component means the Office of the Secretary of Defense, a 
Military Department, a Defense Agency, or the Office of Economic 
Adjustment.

[68 FR 66609, Nov. 26, 2003]



Sec. 26.635  Drug-free workplace.

    Drug-free workplace means a site for the performance of work done in 
connection with a specific award at which employees of the recipient are 
prohibited from engaging in the unlawful manufacture, distribution, 
dispensing, possession, or use of a controlled substance.



Sec. 26.640  Employee.

    (a) Employee means the employee of a recipient directly engaged in 
the performance of work under the award, including--
    (1) All direct charge employees;
    (2) All indirect charge employees, unless their impact or 
involvement in the performance of work under the award is insignificant 
to the performance of the award; and
    (3) Temporary personnel and consultants who are directly engaged in 
the performance of work under the award and who are on the recipient's 
payroll.
    (b) This definition does not include workers not on the payroll of 
the recipient (e.g., volunteers, even if used to meet a matching 
requirement; consultants or independent contractors not on the payroll; 
or employees of subrecipients or subcontractors in covered workplaces).



Sec. 26.645  Federal agency or agency.

    Federal agency or agency means any United States executive 
department, military department, government corporation, government 
controlled corporation, any other establishment in the executive branch 
(including the Executive Office of the President), or any independent 
regulatory agency.



Sec. 26.650  Grant.

    Grant means an award of financial assistance that, consistent with 
31 U.S.C. 6304, is used to enter into a relationship--
    (a) The principal purpose of which is to transfer a thing of value 
to the recipient to carry out a public purpose of support or stimulation 
authorized by a law of the United States, rather than to acquire 
property or services for the Federal Government's direct benefit or use; 
and
    (b) In which substantial involvement is not expected between the 
Federal agency and the recipient when carrying out the activity 
contemplated by the award.

[[Page 112]]



Sec. 26.655  Individual.

    Individual means a natural person.



Sec. 26.660  Recipient.

    Recipient means any individual, corporation, partnership, 
association, unit of government (except a Federal agency) or legal 
entity, however organized, that receives an award directly from a 
Federal agency.



Sec. 26.665  State.

    State means any of the States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, or any territory or 
possession of the United States.



Sec. 26.670  Suspension.

    Suspension means an action taken by a Federal agency that 
immediately prohibits a recipient from participating in Federal 
Government procurement contracts and covered nonprocurement transactions 
for a temporary period, pending completion of an investigation and any 
judicial or administrative proceedings that may ensue. A recipient so 
prohibited is suspended, in accordance with the Federal Acquisition 
Regulation for procurement contracts (48 CFR part 9, subpart 9.4) and 
the common rule, Government-wide Debarment and Suspension 
(Nonprocurement), that implements Executive Order 12549 and Executive 
Order 12689. Suspension of a recipient is a distinct and separate action 
from suspension of an award or suspension of payments under an award.



PART 28_NEW RESTRICTIONS ON LOBBYING--Table of Contents



                            Subpart A_General

Sec.
28.100 Conditions on use of funds.
28.105 Definitions.
28.110 Certification and disclosure.

                  Subpart B_Activities by Own Employees

28.200 Agency and legislative liaison.
28.205 Professional and technical services.
28.210 Reporting.

            Subpart C_Activities by Other Than Own Employees

28.300 Professional and technical services.

                   Subpart D_Penalties and Enforcement

28.400 Penalties.
28.405 Penalty procedures.
28.410 Enforcement.

                          Subpart E_Exemptions

28.500 Secretary of Defense.

                        Subpart F_Agency Reports

28.600 Semi-annual compilation.
28.605 Inspector General report.

Appendix A to Part 28--Certification Regarding Lobbying
Appendix B to Part 28--Disclosure Form To Report Lobbying

    Authority: Section 319, Public Law 102-121 (31 U.S.C. 1352); 5 
U.S.C. section 301; 10 U.S.C. 113.

    Source: 55 FR 6737, 6752, Feb. 26, 1990, unless otherwise noted. 
Redesignated at 57 FR 6199, Feb. 21, 1992.

    Cross reference: See also Office of Management and Budget notice 
published at 54 FR 52306, December 20, 1989.



                            Subpart A_General



Sec. 28.100  Conditions on use of funds.

    (a) No appropriated funds may be expended by the recipient of a 
Federal contract, grant, loan, or cooperative ageement to pay any person 
for influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with any of the following 
covered Federal actions: the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement.
    (b) Each person who requests or receives from an agency a Federal 
contract, grant, loan, or cooperative agreement shall file with that 
agency a certification, set forth in Appendix A, that the person has not 
made, and will not make, any payment prohibited by paragraph (a) of this 
section.

[[Page 113]]

    (c) Each person who requests or receives from an agency a Federal 
contract, grant, loan, or a cooperative agreement shall file with that 
agency a disclosure form, set forth in Appendix B, if such person has 
made or has agreed to make any payment using nonappropriated funds (to 
include profits from any covered Federal action), which would be 
prohibited under paragraph (a) of this section if paid for with 
appropriated funds.
    (d) Each person who requests or receives from an agency a commitment 
providing for the United States to insure or guarantee a loan shall file 
with that agency a statement, set forth in appendix A, whether that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.
    (e) Each person who requests or receives from an agency a commitment 
providing for the United States to insure or guarantee a loan shall file 
with that agency a disclosure form, set forth in Appendix B, if that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.



Sec. 28.105  Definitions.

    For purposes of this part:
    (a) Agency, as defined in 5 U.S.C. 552(f), includes Federal 
executive departments and agencies as well as independent regulatory 
commissions and Government corporations, as defined in 31 U.S.C. 
9101(1).
    (b) Covered Federal action means any of the following Federal 
actions:
    (1) The awarding of any Federal contract;
    (2) The making of any Federal grant;
    (3) The making of any Federal loan;
    (4) The entering into of any cooperative agreement; and,
    (5) The extension, continuation, renewal, amendment, or modification 
of any Federal contract, grant, loan, or cooperative agreement.

Covered Federal action does not include receiving from an agency a 
commitment providing for the United States to insure or guarantee a 
loan. Loan guarantees and loan insurance are addressed independently 
within this part.
    (c) Federal contract means an acquisition contract awarded by an 
agency, including those subject to the Federal Acquisition Regulation 
(FAR), and any other acquisition contract for real or personal property 
or services not subject to the FAR.
    (d) Federal cooperative agreement means a cooperative agreement 
entered into by an agency.
    (e) Federal grant means an award of financial assistance in the form 
of money, or property in lieu of money, by the Federal Government or a 
direct appropriation made by law to any person. The term does not 
include technical assistance which provides services instead of money, 
or other assistance in the form of revenue sharing, loans, loan 
guarantees, loan insurance, interest subsidies, insurance, or direct 
United States cash assistance to an individual.
    (f) Federal loan means a loan made by an agency. The term does not 
include loan guarantee or loan insurance.
    (g) Indian tribe and tribal organization have the meaning provided 
in section 4 of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions 
of Indian tribes in that Act.
    (h) Influencing or attempting to influence means making, with the 
intent to influence, any communication to or appearance before an 
officer or employee or any agency, a Member of Congress, an officer or 
employee of Congress, or an employee of a Member of Congress in 
connection with any covered Federal action.
    (i) Loan guarantee and loan insurance means an agency's guarantee or 
insurance of a loan made by a person.
    (j) Local government means a unit of government in a State and, if 
chartered, established, or otherwise recognized by a State for the 
performance of a governmental duty, including a local

[[Page 114]]

public authority, a special district, an intrastate district, a council 
of governments, a sponsor group representative organization, and any 
other instrumentality of a local government.
    (k) Officer or employee of an agency includes the following 
individuals who are employed by an agency:
    (1) An individual who is appointed to a position in the Government 
under title 5, U.S. Code, including a position under a temporary 
appointment;
    (2) A member of the uniformed services as defined in section 101(3), 
title 37, U.S. Code;
    (3) A special Government employee as defined in section 202, title 
18, U.S. Code; and,
    (4) An individual who is a member of a Federal advisory committee, 
as defined by the Federal Advisory Committee Act, title 5, U.S. Code 
appendix 2.
    (l) Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, and local government, 
regardless of whether such entity is operated for profit or not for 
profit. This term excludes an Indian tribe, tribal organization, or any 
other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    (m) Reasonable compensation means, with respect to a regularly 
employed officer or employee of any person, compensation that is 
consistent with the normal compensation for such officer or employee for 
work that is not furnished to, not funded by, or not furnished in 
cooperation with the Federal Government.
    (n) Reasonable payment means, with respect to perfessional and other 
technical services, a payment in an amount that is consistent with the 
amount normally paid for such services in the private sector.
    (o) Recipient includes all contractors, subcontractors at any tier, 
and subgrantees at any tier of the recipient of funds received in 
connection with a Federal contract, grant, loan, or cooperative 
agreement. The term excludes an Indian tribe, tribal organization, or 
any other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    (p) Regularly employed means, with respect to an officer or employee 
of a person requesting or receiving a Federal contract, grant, loan, or 
cooperative agreement or a commitment providing for the United States to 
insure or guarantee a loan, an officer or employee who is employed by 
such person for at least 130 working days within one year immediately 
preceding the date of the submission that initiates agency consideration 
of such person for receipt of such contract, grant, loan, cooperative 
agreement, loan insurance commitment, or loan guarantee commitment. An 
officer or employee who is employed by such person for less than 130 
working days within one year immediately preceding the date of the 
submission that initiates agency consideration of such person shall be 
considered to be regularly employed as soon as he or she is employed by 
such person for 130 working days.
    (q) State means a State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, a territory or possession of 
the United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and 
powers.



Sec. 28.110  Certification and disclosure.

    (a) Each person shall file a certification, and a disclosure form, 
if required, with each submission that initiates agency consideration of 
such person for:
    (1) Award of a Federal contract, grant, or cooperative agreement 
exceeding $100,000; or
    (2) An award of a Federal loan or a commitment providing for the 
United States to insure or guarantee a loan exceeding $150,000.
    (b) Each person shall file a certification, and a disclosure form, 
if required, upon receipt by such person of:
    (1) A Federal contract, grant, or cooperative agreement exceeding 
$100,000; or
    (2) A Federal loan or a commitment providing for the United States 
to insure or guarantee a loan exceeding $150,000,

Unless such person previously filed a certification, and a disclosure 
form, if

[[Page 115]]

required, under paragraph (a) of this section.
    (c) Each person shall file a disclosure form at the end of each 
calendar quarter in which there occurs any event that requires 
disclosure or that materially affects the accuracy of the information 
contained in any disclosure form previously filed by such person under 
paragraphs (a) or (b) of this section. An event that materially affects 
the accuracy of the information reported includes:
    (1) A cumulative increase of $25,000 or more in the amount paid or 
expected to be paid for influencing or attempting to influence a covered 
Federal action; or
    (2) A change in the person(s) or individual(s) influencing or 
attempting to influence a covered Federal action; or,
    (3) A change in the officer(s), employee(s), or Member(s) contacted 
to influence or attempt to influence a covered Federal action.
    (d) Any person who requests or receives from a person referred to in 
paragraphs (a) or (b) of this section:
    (1) A subcontract exceeding $100,000 at any tier under a Federal 
contract;
    (2) A subgrant, contract, or subcontract exceeding $100,000 at any 
tier under a Federal grant;
    (3) A contract or subcontract exceeding $100,000 at any tier under a 
Federal loan exceeding $150,000; or,
    (4) A contract or subcontract exceeding $100,000 at any tier under a 
Federal cooperative agreement,


Shall file a certification, and a disclosure form, if required, to the 
next tier above.
    (e) All disclosure forms, but not certifications, shall be forwarded 
from tier to tier until received by the person referred to in paragraphs 
(a) or (b) of this section. That person shall forward all disclosure 
forms to the agency.
    (f) Any certification or disclosure form filed under paragraph (e) 
of this section shall be treated as a material representation of fact 
upon which all receiving tiers shall rely. All liability arising from an 
erroneous representation shall be borne solely by the tier filing that 
representation and shall not be shared by any tier to which the 
erroneous representation is forwarded. Submitting an erroneous 
certification or disclosure constitutes a failure to file the required 
certification or disclosure, respectively. If a person fails to file a 
required certification or disclosure, the United States may pursue all 
available remedies, including those authorized by section 1352, title 
31, U.S. Code.
    (g) For awards and commitments in process prior to December 23, 
1989, but not made before that date, certifications shall be required at 
award or commitment, covering activities occurring between December 23, 
1989, and the date of award or commitment. However, for awards and 
commitments in process prior to the December 23, 1989 effective date of 
these provisions, but not made before December 23, 1989, disclosure 
forms shall not be required at time of award or commitment but shall be 
filed within 30 days.
    (h) No reporting is required for an activity paid for with 
appropriated funds if that activity is allowable under either subpart B 
or C.



                  Subpart B_Activities by Own Employees



Sec. 28.200  Agency and legislative liaison.

    (a) The prohibition on the use of appropriated funds, in Sec. 
28.100 (a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement if 
the payment is for agency and legislative liaison activities not 
directly related to a covered Federal action.
    (b) For purposes of paragraph (a) of this section, providing any 
information specifically requested by an agency or Congress is allowable 
at any time.
    (c) For purposes of paragraph (a) of this section, the following 
agency and legislative liaison activities are allowable at any time only 
where they are not related to a specific solicitation for any covered 
Federal action:
    (1) Discussing with an agency (including individual demonstrations) 
the qualities and characteristics of the person's products or services, 
conditions or terms of sale, and service capabilities; and,
    (2) Technical discussions and other activities regarding the 
application or

[[Page 116]]

adaptation of the person's products or services for an agency's use.
    (d) For purposes of paragraph (a) of this section, the following 
agencies and legislative liaison activities are allowable only where 
they are prior to formal solicitation of any covered Federal action:
    (1) Providing any information not specifically requested but 
necessary for an agency to make an informed decision about initiation of 
a covered Federal action;
    (2) Technical discussions regarding the preparation of an 
unsolicited proposal prior to its official submission; and,
    (3) Capability presentations by persons seeking awards from an 
agency pursuant to the provisions of the Small Business Act, as amended 
by Public Law 95-507 and other subsequent amendments.
    (e) Only those activities expressly authorized by this section are 
allowable under this section.

[55 FR 6737 and 6752, Feb. 26, 1990. Redesignated and amended at 57 FR 
6199 and 6200, Feb. 21, 1992]



Sec. 28.205  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec. 
28.100 (a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement or 
an extension, continuation, renewal, amendment, or modification of a 
Federal contract, grant, loan, or cooperative agreement if payment is 
for professional or technical services rendered directly in the 
preparation, submission, or negotiation of any bid, proposal, or 
application for that Federal contract, grant, loan, or cooperative 
agreement or for meeting requirements imposed by or pursuant to law as a 
condition for receiving that Federal contract, grant, loan, or 
cooperative agreement.
    (b) For purposes of paragraph (a) of this section, ``professional 
and technical services'' shall be limited to advice and analysis 
directly applying any professional or technical discipline. For example, 
drafting of a legal document accompanying a bid or proposal by a lawyer 
is allowable. Similarly, technical advice provided by an engineer on the 
performance or operational capability of a piece of equipment rendered 
directly in the negotiation of a contract is allowable. However, 
communications with the intent to influence made by a professional (such 
as a licensed lawyer) or a technical person (such as a licensed 
accountant) are not allowable under this section unless they provide 
advice and analysis directly applying their professional or technical 
expertise and unless the advice or analysis is rendered directly and 
solely in the preparation, submission or negotiation of a covered 
Federal action. Thus, for example, communications with the intent to 
influence made by a lawyer that do not provide legal advice or analysis 
directly and solely related to the legal aspects of his or her client's 
proposal, but generally advocate one proposal over another are not 
allowable under this section because the lawyer is not providing 
professional legal services. Similarly, communications with the intent 
to influence made by an engineer providing an engineering analysis prior 
to the preparation or submission of a bid or proposal are not allowable 
under this section since the engineer is providing technical services 
but not directly in the preparation, submission or negotiation of a 
covered Federal action.
    (c) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (d) Only those services expressly authorized by this section are 
allowable under this section.

[55 FR 6737 and 6752, Feb. 26, 1990. Redesignated and amended at 57 FR 
6199 and 6200, Feb. 21, 1992]



Sec. 28.210  Reporting.

    No reporting is required with respect to payments of reasonable 
compensation made to regularly employed officers or employees of a 
person.

[[Page 117]]



            Subpart C_Activities by Other Than Own Employees



Sec. 28.300  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec. 
28.100 (a), does not apply in the case of any reasonable payment to a 
person, other than an officer or employee of a person requesting or 
receiving a covered Federal action, if the payment is for professional 
or technical services rendered directly in the preparation, submission, 
or negotiation of any bid, proposal, or application for that Federal 
contract, grant, loan, or cooperative agreement or for meeting 
requirements imposed by or pursuant to law as a condition for receiving 
that Federal contract, grant, loan, or cooperative agreement.
    (b) The reporting requirments in Sec. 28.110 (a) and (b) regarding 
filing a disclosure form by each person, if required, shall not apply 
with respect to professional or technical services rendered directly in 
the preparation, submission, or negotiation of any commitment providing 
for the United States to insure or guarantee a loan.
    (c) For purposes of paragraph (a) of this section, ``professional 
and technical services'' shall be limited to advice and analysis 
directly applying any professional or technical discipline. For example, 
drafting of a legal document accompanying a bid or proposal by a lawyer 
is allowable. Similarly, technical advice provided by an engineer on the 
performance or operational capability of a piece of equipment rendered 
directly in the negotiation of a contract is allowable. However, 
communications with the intent to influence made by a professional (such 
as a licensed lawyer) or a technical person (such as a licensed 
accountant) are not allowable under this section unless they provide 
advice and analysis directly applying their professional or technical 
expertise and unless the advice or analysis is rendered directly and 
solely in the preparation, submission or negotiation of a covered 
Federal action. Thus, for example, communications with the intent to 
influence made by a lawyer that do not provide legal advice or analysis 
directly and solely related to the legal aspects of his or her client's 
proposal, but generally advocate one proposal over another are not 
allowable under this section because the lawyer is not providing 
professional legal services. Similarly, communications with the intent 
to influence made by an engineer providing an engineering analysis prior 
to the preparation or submission of a bid or proposal are not allowable 
under this section since the engineer is providing technical services 
but not directly in the preparation, submission or negotiation of a 
covered Federal action.
    (d) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (e) Persons other than officers or employees of a person requesting 
or receiving a covered Federal action include consultants and trade 
associations.
    (f) Only those services expressly authorized by this section are 
allowable under this section.

[55 FR 6737 and 6752, Feb. 26, 1990. Redesignated and amended at 57 FR 
6199 and 6200, Feb. 21, 1992]



                   Subpart D_Penalties and Enforcement



Sec. 28.400  Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see 
Appendix B) to be filed or amended if required herein, shall be subject 
to a civil penalty of not less than $10,000 and not more than $100,000 
for each such failure.
    (c) A filing or amended filing on or after the date on which an 
administrative action for the imposition of a civil penalty is commenced 
does not prevent the imposition of such civil penalty for a failure 
occurring before that date. An administrative action is commenced

[[Page 118]]

with respect to a failure when an investigating official determines in 
writing to commence an investigation of an allegation of such failure.
    (d) In determining whether to impose a civil penalty, and the amount 
of any such penalty, by reason of a violation by any person, the agency 
shall consider the nature, circumstances, extent, and gravity of the 
violation, the effect on the ability of such person to continue in 
business, any prior violations by such person, the degree of culpability 
of such person, the ability of the person to pay the penalty, and such 
other matters as may be appropriate.
    (e) First offenders under paragraphs (a) or (b) of this section 
shall be subject to a civil penalty of $10,000, absent aggravating 
circumstances. Second and subsequent offenses by persons shall be 
subject to an appropriate civil penalty between $10,000 and $100,000, as 
determined by the agency head or his or her designee.
    (f) An imposition of a civil penalty under this section does not 
prevent the United States from seeking any other remedy that may apply 
to the same conduct that is the basis for the imposition of such civil 
penalty.



Sec. 28.405  Penalty procedures.

    Agencies shall impose and collect civil penalties pursuant to the 
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 
3812, insofar as these provisions are not inconsistent with the 
requirements herein.



Sec. 28.410  Enforcement.

    The head of each agency shall take such actions as are necessary to 
ensure that the provisions herein are vigorously implemented and 
enforced in that agency.



                          Subpart E_Exemptions



Sec. 28.500  Secretary of Defense.

    (a) Exemption authority. The Secretary of Defense may exempt, on a 
case-by-case basis, a covered Federal action from the prohibition 
whenever the Secretary determines, in writing, that such an exemption is 
in the national interest. The Secretary shall transmit a copy of each 
such written exemption to Congress immediately after making such a 
determination.
    (b) Policy. It is the policy of the Department of Defense that 
exemptions under paragraph (a) of this section shall be requested only 
rarely and in exceptional circumstances.
    (c) Procedures. Each DoD Component that awards or administers 
Federal grants, Federal cooperative agreements, or Federal loans subject 
to this part shall establish procedures whereby:
    (1) A grants officer wishing to request an exemption for a grant, 
cooperative agreement, or loan shall transmit such request through 
appropriate channels to: Director for Research, ODDR&E(R), 3080 Defense 
Pentagon, Washington, DC. 20301-3080.
    (2) Each such request shall explain why an exemption is in the 
national interest, a justification that must be transmitted to Congress 
for each exemption that is approved.

[63 FR 12188, Mar. 12, 1998]



                        Subpart F_Agency Reports



Sec. 28.600  Semi-annual compilation.

    (a) The head of each agency shall collect and compile the disclosure 
reports (see appendix B) and, on May 31 and November 30 of each year, 
submit to the Secretary of the Senate and the Clerk of the House of 
Representatives a report containing a compilation of the information 
contained in the disclosure reports received during the six-month period 
ending on March 31 or September 30, respectively, of that year.
    (b) The report, including the compilation, shall be available for 
public inspection 30 days after receipt of the report by the Secretary 
and the Clerk.
    (c) Information that involves intelligence matters shall be reported 
only to the Select Committee on Intelligence of the Senate, the 
Permanent Select Committee on Intelligence of the House of 
Representatives, and the Committees on Appropriations of the Senate and 
the House of Representatives in accordance with procedures

[[Page 119]]

agreed to by such committees. Such information shall not be available 
for public inspection.
    (d) Information that is classified under Executive Order 12356 or 
any successor order shall be reported only to the Committee on Foreign 
Relations of the Senate and the Committee on Foreign Affairs of the 
House of Representatives or the Committees on Armed Services of the 
Senate and the House of Representatives (whichever such committees have 
jurisdiction of matters involving such information) and to the 
Committees on Appropriations of the Senate and the House of 
Representatives in accordance with procedures agreed to by such 
committees. Such information shall not be available for public 
inspection.
    (e) The first semi-annual compilation shall be submitted on May 31, 
1990, and shall contain a compilation of the disclosure reports received 
from December 23, 1989 to March 31, 1990.
    (f) Major agencies, designated by the Office of Management and 
Budget (OMB), are required to provide machine-readable compilations to 
the Secretary of the Senate and the Clerk of the House of 
Representatives no later than with the compilations due on May 31, 1991. 
OMB shall provide detailed specifications in a memorandum to these 
agencies.
    (g) Non-major agencies are requested to provide machine-readable 
compilations to the Secretary of the Senate and the Clerk of the House 
of Representatives.
    (h) Agencies shall keep the originals of all disclosure reports in 
the official files of the agency.



Sec. 28.605  Inspector General report.

    (a) The Inspector General, or other official as specified in 
paragraph (b) of this section, of each agency shall prepare and submit 
to Congress each year, commencing with submission of the President's 
Budget in 1991, an evaluation of the compliance of that agency with, and 
the effectiveness of, the requirements herein. The evaluation may 
include any recommended changes that may be necessary to strengthen or 
improve the requirements.
    (b) In the case of an agency that does not have an Inspector 
General, the agency official comparable to an Inspector General shall 
prepare and submit the annual report, or, if there is no such comparable 
official, the head of the agency shall prepare and submit the annual 
report.
    (c) The annual report shall be submitted at the same time the agency 
submits its annual budget justifications to Congress.
    (d) The annual report shall include the following: All alleged 
violations relating to the agency's covered Federal actions during the 
year covered by the report, the actions taken by the head of the agency 
in the year covered by the report with respect to those alleged 
violations and alleged violations in previous years, and the amounts of 
civil penalties imposed by the agency in the year covered by the report.



      Sec. Appendix A to Part 28--Certification Regarding Lobbying

 Certification for Contracts, Grants, Loans, and Cooperative Agreements

    The undersigned certifies, to the best of his or her knowledge and 
belief, that:
    (1) No Federal appropriated funds have been paid or will be paid, by 
or on behalf of the undersigned, to any person for influencing or 
attempting to influence an officer or employee of an agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement.
    (2) If any funds other than Federal appropriated funds have been 
paid or will be paid to any person for influencing or attempting to 
influence an officer or employee of any agency, a Member of Congress, an 
officer or employee of Congress, or an employee of a Member of Congress 
in connection with this Federal contract, grant, loan, or cooperative 
agreement, the undersigned shall complete and submit Standard Form-LLL, 
``Disclosure Form to Report Lobbying,'' in accordance with its 
instructions.
    (3) The undersigned shall require that the language of this 
certification be included in the award documents for all subawards at 
all tiers (including subcontracts, subgrants, and contracts under 
grants, loans, and cooperative agreements) and that all subrecipients 
shall certify and disclose accordingly.
    This certification is a material representation of fact upon which 
reliance was placed

[[Page 120]]

when this transaction was made or entered into. Submission of this 
certification is a prerequisite for making or entering into this 
transaction imposed by section 1352, title 31, U.S. Code. Any person who 
fails to file the required certification shall be subject to a civil 
penalty of not less than $10,000 and not more than $100,000 for each 
such failure.

            Statement for Loan Guarantees and Loan Insurance

    The undersigned states, to the best of his or her knowledge and 
belief, that:
    If any funds have been paid or will be paid to any person for 
influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with this commitment 
providing for the United States to insure or guarantee a loan, the 
undersigned shall complete and submit Standard Form-LLL, ``Disclosure 
Form to Report Lobbying,'' in accordance with its instructions.
    Submission of this statement is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S. 
Code. Any person who fails to file the required statement shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such failure.

[[Page 121]]



     Sec. Appendix B to Part 28--Disclosure Form To Report Lobbying

[GRAPHIC] [TIFF OMITTED] TC23OC91.000


[[Page 122]]


[GRAPHIC] [TIFF OMITTED] TC23OC91.001


[[Page 123]]


[GRAPHIC] [TIFF OMITTED] TC23OC91.002


[[Page 124]]





PART 32_ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH 

INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT 

ORGANIZATIONS--Table of Contents



                            Subpart A_General

Sec.
32.1 Purpose.
32.2 Definitions
32.3 Effect on other issuances.
32.4 Deviations.
32.5 Subawards.

                    Subpart B_Pre-Award Requirements

32.10 Purpose.
32.11 Pre-award policies.
32.12 Forms for applying for Federal assistance.
32.13 Debarment and suspension.
32.14 Special award conditions.
32.15 Metric system of measurement.
32.16 Resource Conservation and Recovery Act (RCRA).
32.17 Certifications and representations.

                    Subpart C_Post-Award Requirements

                    Financial and Program Management

32.20 Purpose of financial and program management.
32.21 Standards for financial management systems.
32.22 Payment.
32.23 Cost sharing or matching.
32.24 Program income.
32.25 Revision of budget and program plans.
32.26 Non-Federal audits.
32.27 Allowable costs.
32.28 Period of availability of funds.

                           Property Standards

32.30 Purpose of property standards.
32.31 Insurance coverage.
32.32 Real property.
32.33 Federally-owned and exempt property.
32.34 Equipment.
32.35 Supplies.
32.36 Intangible property.
32.37 Property trust relationship.

                          Procurement Standards

32.40 Purpose of procurement standards.
32.41 Recipient responsibilities.
32.42 Codes of conduct.
32.43 Competition.
32.44 Procurement procedures.
32.45 Cost and price analysis.
32.46 Procurement records.
32.47 Contract administration.
32.48 Contract provisions.
32.49 Resource Conservation and Recovery Act.

                           Reports and Records

32.50 Purpose of reports and records.
32.51 Monitoring and reporting program performance.
32.52 Financial reporting.
32.53 Retention and access requirements for records.

                       Termination and Enforcement

32.60 Purpose of termination and enforcement.
32.61 Termination.
32.62 Enforcement.

                 Subpart D_After-the-Award Requirements

32.70 Purpose.
32.71 Closeout procedures.
32.72 Subsequent adjustments and continuing responsibilities.
32.73 Collection of amounts due.

Appendix A to Part 32--Contract Provisions

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 63 FR 12188, Mar. 12, 1998, unless otherwise noted.



                            Subpart A_General



Sec. 32.1  Purpose.

    (a) General. This part implements OMB Circular A-110 \1\ and 
establishes uniform administrative requirements for awards and subawards 
to institutions of higher education, hospitals, and other non-
governmental, non-profit organizations.
---------------------------------------------------------------------------

    \1\ For copies of the Circular, contact the Office of Management and 
Budget, EOP Publications, 725 17th St. NW, New Executive Office 
Building, Washington, DC 20503.
---------------------------------------------------------------------------

    (b) Relationship to other parts. This part is an integral part of 
the DoD Grant and Agreement Regulations (DoDGARs), which comprise this 
subchapter of the Code of Federal Regulations. This part includes 
references to other parts of the DoDGARs that implement Governmentwide 
guidance and provide uniform internal policies and procedures for DoD 
Components that make or administer awards. Although parts 21 and 22 of 
this subchapter do not impose any direct requirements on recipients, and 
recipients therefore are not required to be familiar with those parts, 
the information in those parts

[[Page 125]]

concerning internal policies and procedures should be helpful to 
recipients of DoD awards.
    (c) Prime awards. DoD Components shall apply the provisions of this 
part to awards to recipients that are institutions of higher education, 
hospitals, and other non-profit organizations. DoD Components shall not 
impose additional or inconsistent requirements, except as provided in 
Sec. Sec. 32.4 and 32.14, or unless specifically required by Federal 
statute or executive order.
    (d) Subawards. Any legal entity that receives an award from a DoD 
Component shall apply the provisions of this part to subawards with 
institutions of higher education, hospitals, and other non-profit 
organizations. Thus, a governmental or for-profit organization, whose 
prime award from a DoD Component is subject to 32 CFR part 33 or part 
34, respectively, applies this part to subawards with institutions of 
higher education, hospitals, or other non-profit organizations. It 
should be noted that subawards are for the performance of substantive 
work under awards, and are distinct from contracts for procuring goods 
and services. It should be further noted that non-profit organizations 
that implement Federal programs for the States are also subject to State 
requirements.



Sec. 32.2  Definitions.

    The following are definitions of terms used in this part. Grants 
officers are cautioned that terms may be defined differently in this 
part than they are in other parts of the DoD Grant and Agreement 
Regulations, because this part implements OMB Circular A-110 and uses 
definitions as stated in that Circular. In such cases, the definition 
given in this section applies to the term as it is used in this part, 
and the definition given in other parts applies to the term as it is 
used in those parts. For example, ``suspension'' is defined in this 
section to mean temporary withdrawal of Federal sponsorship under an 
award, but is defined in the part of the DoD Grant and Agreement 
Regulations on nonprocurement suspension and debarment (2 CFR part 1125, 
which implements OMB guidance at 2 CFR part 180) to be an action taken 
to exclude a person from participating in a grant, cooperative 
agreement, or other covered transaction (see definition at 2 CFR 
180.1015).
    Accrued expenditures. The charges incurred by the recipient during a 
given period requiring the provision of funds for:
    (1) Goods and other tangible property received;
    (2) Services performed by employees, contractors, subrecipients, and 
other payees; and
    (3) Other amounts becoming owed under programs for which no current 
services or performance is required.
    Accrued income. The sum of:
    (1) Earnings during a given period from:
    (i) Services performed by the recipient; and
    (ii) Goods and other tangible property delivered to purchasers.
    (2) Amounts becoming owed to the recipient for which no current 
services or performance is required by the recipient.
    Acquisition cost of equipment. The net invoice price of the 
equipment, including the cost of modifications, attachments, 
accessories, or auxiliary apparatus necessary to make the property 
usable for the purpose for which it was acquired. Other charges, such as 
the cost of installation, transportation, taxes, duty or protective in-
transit insurance, shall be included or excluded from the unit 
acquisition cost in accordance with the recipient's regular accounting 
practices.
    Advance. A payment made by Treasury check or other appropriate 
payment mechanism to a recipient upon its request either before outlays 
are made by the recipient or through the use of predetermined payment 
schedules.
    Award. Financial assistance that provides support or stimulation to 
accomplish a public purpose. Awards include grants and other agreements 
in the form of money or property in lieu of money, by the Federal 
Government to an eligible recipient. The term does not include: 
Technical assistance, which provides services instead of money; other 
assistance in the form of loans, loan guarantees, interest subsidies, or 
insurance; direct payments of any kind to individuals; and, contracts 
which

[[Page 126]]

are required to be entered into and administered under procurement laws 
and regulations.
    Cash contributions. The recipient's cash outlay, including the 
outlay of money contributed to the recipient by third parties.
    Closeout. The process by which the grants officer administering an 
award made by a DoD Component determines that all applicable 
administrative actions and all required work of the award have been 
completed by the recipient and DoD Component.
    Contract. A procurement contract under an award or subaward, and a 
procurement subcontract under a recipient's or subrecipient's contract.
    Cost sharing or matching. That portion of project or program costs 
not borne by the Federal Government.
    Date of completion. The date on which all work under an award is 
completed or the date on the award document, or any supplement or 
amendment thereto, on which Federal sponsorship ends.
    Disallowed costs. Those charges to an award that the grants officer 
administering an award made by a DoD Component determines to be 
unallowable, in accordance with the applicable Federal cost principles 
or other terms and conditions contained in the award.
    DoD Component. A Military Department, Defense Agency, DoD field 
activity, or organization within the Office of the Secretary of Defense 
that provides or administers an award to a recipient.
    Equipment. Tangible nonexpendable personal property including exempt 
property charged directly to the award having a useful life of more than 
one year and an acquisition cost of $5,000 or more per unit. However, 
consistent with recipient policy, lower limits may be established.
    Excess property. Property under the control of any DoD Component 
that, as determined by the head thereof, is no longer required for its 
needs or the discharge of its responsibilities.
    Exempt property. Tangible personal property acquired in whole or in 
part with Federal funds, where the DoD Component has statutory authority 
to vest title in the recipient without further obligation to the Federal 
Government. An example of exempt property authority is contained in the 
Federal Grant and Cooperative Agreement Act (31 U.S.C. 6306), for 
property acquired under an award to conduct basic or applied research by 
a non-profit institution of higher education or non-profit organization 
whose principal purpose is conducting scientific research.
    Federal funds authorized. The total amount of Federal funds 
obligated by a DoD Component for use by the recipient. This amount may 
include any authorized carryover of unobligated funds from prior funding 
periods when permitted by agency regulations or agency implementing 
instructions.
    Federal share (of real property, equipment, or supplies). That 
percentage of the property's acquisition costs and any improvement 
expenditures paid with Federal funds.
    Funding period. The period of time when Federal funding is available 
for obligation by the recipient.
    Intangible property and debt instruments. Property that includes, 
but is not limited to, trademarks, copyrights, patents and patent 
applications and such property as loans, notes and other debt 
instruments, lease agreements, stock and other instruments of property 
ownership, whether considered tangible or intangible.
    Obligations. The amounts of orders placed, contracts and grants 
awarded, services received and similar transactions during a given 
period that require payment by the recipient during the same or a future 
period.
    Outlays or expenditures. Charges made to the project or program. 
They may be reported on a cash or accrual basis. For reports prepared on 
a cash basis, outlays are the sum of cash disbursements for direct 
charges for goods and services, the amount of indirect expense charged, 
the value of third party in-kind contributions applied and the amount of 
cash advances and payments made to subrecipients. For reports prepared 
on an accrual basis, outlays are the sum of cash disbursements for 
direct charges for goods and services, the amount of indirect expense 
incurred, the value of in-kind contributions applied, and the net 
increase (or decrease) in the amounts owed by the recipient for goods 
and other property received, for services performed by employees, 
contractors, subrecipients and

[[Page 127]]

other payees and other amounts becoming owed under programs for which no 
current services or performance are required.
    Personal property. Property of any kind except real property. It may 
be tangible, having physical existence, or intangible, having no 
physical existence, such as copyrights, patents, or securities.
    Prior approval. Written approval by an authorized official 
evidencing prior consent.
    Program income. Gross income earned by the recipient that is 
directly generated by a supported activity or earned as a result of the 
award (see exclusions in Sec. 32.24(e) and (h)). Program income 
includes, but is not limited to, income from fees for services 
performed, the use or rental of real or personal property acquired under 
federally-funded projects, the sale of commodities or items fabricated 
under an award, license fees and royalties on patents and copyrights, 
and interest on loans made with award funds. Interest earned on advances 
of Federal funds is not program income. Except as otherwise provided in 
program regulations or the terms and conditions of the award, program 
income does not include the receipt of principal on loans, rebates, 
credits, discounts, etc., or interest earned on any of them.
    Project costs. All allowable costs, as set forth in the applicable 
Federal cost principles, incurred by a recipient and the value of the 
contributions made by third parties in accomplishing the objectives of 
the award during the project period.
    Project period. The period established in the award document during 
which Federal sponsorship begins and ends.
    Property. Real property and personal property (equipment, supplies, 
intangible property and debt instruments), unless stated otherwise.
    Real property. Land, including land improvements, structures and 
appurtenances thereto, but excluding movable machinery and equipment.
    Recipient. An organization receiving financial assistance directly 
from DoD Components to carry out a project or program. The term includes 
public and private institutions of higher education, public and private 
hospitals, and other quasi-public and private non-profit organizations 
such as, but not limited to, community action agencies, research 
institutes, educational associations, and health centers. The term also 
includes consortia comprised of any combination of universities, other 
nonprofit organizations, governmental organizations, for-profit 
organizations, and other entities, to the extent that the consortia are 
legally incorporated as nonprofit organizations. The term does not 
include Government-owned contractor-operated facilities or research 
centers providing continued support for mission-oriented, large-scale 
programs that are Government-owned or controlled, or are designated as 
federally-funded research and development centers.
    Research and development. All research activities, both basic and 
applied, and all development activities that are supported at 
universities, colleges, and other non-profit institutions. Research is 
defined as a systematic study directed toward fuller scientific 
knowledge or understanding of the subject studied. Development is the 
systematic use of knowledge and understanding gained from research 
directed toward the production of useful materials, devices, systems, or 
methods, including design and development of prototypes and processes. 
The term research also includes activities involving the training of 
individuals in research techniques where such activities utilize the 
same facilities as other research and development activities and where 
such activities are not included in the instruction function.
    Small award. An award not exceeding the simplified acquisition 
threshold fixed at 41 U.S.C. 403(11) (currently $100,000).
    Subaward. An award of financial assistance in the form of money, or 
property in lieu of money, made under an award by a recipient to an 
eligible subrecipient or by a subrecipient to a lower tier subrecipient. 
The term includes financial assistance when provided by any legal 
agreement, even if the agreement is called a contract, but does not 
include procurement of goods and services nor does it include any form 
of assistance which is excluded

[[Page 128]]

from the definition of ``award'' in this section.
    Subrecipient. The legal entity to which a subaward is made and which 
is accountable to the recipient for the use of the funds provided.
    Supplies. All personal property excluding equipment, intangible 
property, and debt instruments as defined in this section, and 
inventions of a contractor conceived or first actually reduced to 
practice in the performance of work under a funding agreement (``subject 
inventions''), as defined in 37 CFR part 401, ``Rights to Inventions 
Made by Nonprofit Organizations and Small Business Firms Under 
Government Grants, Contracts, and Cooperative Agreements.''
    Suspension. An action by a DoD Component that temporarily withdraws 
Federal sponsorship under an award, pending corrective action by the 
recipient or pending a decision to terminate the award by the DoD 
Component. Suspension of an award is a separate action from suspension 
of a participant under 2 CFR part 1125.
    Termination. The cancellation of an award, in whole or in part, at 
any time prior to the date of completion.
    Third party in-kind contributions. The value of non-cash 
contributions provided by non-Federal third parties. Third party in-kind 
contributions may be in the form of real property, equipment, supplies, 
and the value of goods and services directly benefiting and specifically 
identifiable to the project or program.
    Unliquidated obligations. The amount of obligations incurred by the 
recipient:
    (1) That have not been paid, if financial reports are prepared on a 
cash basis.
    (2) For which an outlay has not been recorded, if reports are 
prepared on an accrued expenditure basis.
    Unobligated balance. The portion of the funds authorized by a DoD 
Component that has not been obligated by the recipient and is determined 
by deducting the cumulative obligations from the cumulative funds 
authorized.
    Unrecovered indirect cost. The difference between the amount awarded 
and the amount which could have been awarded under the recipient's 
approved negotiated indirect cost rate.
    Working capital advance. A procedure whereby funds are advanced to 
the recipient to cover its estimated disbursement needs for a given 
initial period.

[63 FR 12188, Mar. 12, 1998, as amended at 70 FR 49477, Aug. 23, 2005; 
72 FR 34998, June 26, 2007]



Sec. 32.3  Effect on other issuances.

    For awards subject to this part, all administrative requirements of 
codified program regulations, program manuals, handbooks and other 
nonregulatory materials which are inconsistent with the requirements of 
this part shall be superseded, except to the extent they are required by 
statute, or authorized in accordance with the deviations provision in 
Sec. 32.4.



Sec. 32.4  Deviations.

    (a) Individual deviations. Individual deviations affecting only one 
award may be approved by DoD Components in accordance with procedures 
stated in 32 CFR 21.335(a) and 21.340.
    (b) Small awards. DoD Components may apply less restrictive 
requirements than the provisions of this part when awarding small 
awards, except for those requirements which are statutory.
    (c) Other class deviations. (1) For classes of awards other than 
small awards, the Director of Defense Research and Engineering (DDR&E), 
or his or her designee, may grant exceptions from the requirements of 
this part:
    (i) With the written concurrence of the Office of the Management and 
Budget (OMB). The DDR&E, or his or her designee, shall provide written 
notification to OMB of the Department of Defense's intention to grant a 
class deviation; and
    (ii) When exceptions are not prohibited by statute.
    (2) DoD Components shall request approval for such deviations in 
accordance with 32 CFR 21.335(b) and 21.340. However, in the interest of 
maximum

[[Page 129]]

uniformity, exceptions from the requirements of this part shall be 
permitted only in unusual circumstances.

[63 FR 12188, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]



Sec. 32.5  Subawards.

    Unless sections of this part specifically exclude subrecipients from 
coverage, the provisions of this part shall be applied to subrecipients 
performing work under awards if such subrecipients are institutions of 
higher education, hospitals or other non-profit organizations. State and 
local government subrecipients are subject to the provisions of 32 CFR 
part 33. Subrecipients that are for-profit organizations are subject to 
32 CFR part 34.



                    Subpart B_Pre-Award Requirements



Sec. 32.10  Purpose.

    Sections 32.11 through 32.17 prescribe application forms and 
instructions and other pre-award matters.



Sec. 32.11  Pre-award policies.

    (a) Use of grants, cooperative agreements, and contracts. (1) OMB 
Circular A-110 states that:
    (i) In each instance, the Federal awarding agency shall decide on 
the appropriate award instrument (i.e., grant, cooperative agreement, or 
contract).
    (ii) The Federal Grant and Cooperative Agreement Act (31 U.S.C. 
6301-6308) governs the use of grants, cooperative agreements, and 
contracts. Under that Act:
    (A) A grant or cooperative agreement shall be used only when the 
principal purpose of a transaction is to accomplish a public purpose of 
support or stimulation authorized by Federal statute.
    (B) Contracts shall be used when the principal purpose is 
acquisition of property or services for the direct benefit or use of the 
Federal Government.
    (C) The statutory criterion for choosing between grants and 
cooperative agreements is that for the latter, ``substantial involvement 
is expected between the executive agency and the State, local 
government, or other recipient when carrying out the activity 
contemplated in the agreement.''
    (2) In selecting the appropriate award instruments, DoD Components' 
grants officers shall comply with the DoD implementation of the Federal 
Grant and Cooperative Agreement Act at 32 CFR part 22, subpart B.
    (b) Public notice and priority setting. As a matter of 
Governmentwide policy, Federal awarding agencies shall notify the public 
of intended funding priorities for programs that use discretionary 
awards, unless funding priorities are established by Federal statute. 
For DoD Components, compliance with competition policies and statutory 
requirements implemented in 32 CFR part 22, subpart C, shall constitute 
compliance with this Governmentwide policy.

[63 FR 12188, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]



Sec. 32.12  Forms for applying for Federal assistance.

    (a) DoD Components shall comply with the applicable report clearance 
requirements of 5 CFR part 1320, ``Controlling Paperwork Burdens on the 
Public,'' with regard to all forms used in place of or as a supplement 
to the Standard Form 424 \2\ (SF-424) series.
---------------------------------------------------------------------------

    \2\ For copies of Standard Forms listed in this part, contact 
regional grants administration offices of the Office of Naval Research. 
Addresses for the offices are listed in the ``DoD Directory of Contract 
Administration Services Components,'' DLAH 4105.4, which can be obtained 
from: Defense Logistics Agency, Publications Distribution Division 
(DASC-WDM), 8725 John J. Kingman Rd., Suite 0119, Fort Belvoir, VA 
22060-6220.
---------------------------------------------------------------------------

    (b) Applicants shall use the SF-424 series or those forms and 
instructions prescribed by DoD Components.
    (c) For Federal programs covered by E.O. 12372 (3 CFR, 1982 Comp., 
p. 197), ``Intergovernmental Review of Federal Programs,'' the applicant 
shall complete the appropriate sections of the SF-424 (Application for 
Federal Assistance) indicating whether the application was subject to 
review by the State Single Point of Contact (SPOC). The name and address 
of the SPOC for a particular State can be obtained from the DoD 
Component or the Catalog of Federal Domestic Assistance. The

[[Page 130]]

SPOC shall advise the applicant whether the program for which 
application is made has been selected by that State for review.
    (d) DoD Components that do not use the SF-424 form should indicate 
whether the application is subject to review by the State under E.O. 
12372.



Sec. 32.13  Debarment and suspension.

    DoD Components and recipients shall comply with the policy and 
procedural requirements in the OMB guidance on nonprocurement debarment 
and suspension (2 CFR part 180), as implemented by the Department of 
Defense in 2 CFR part 1125. Those policies and procedures restrict 
subawards and contracts with certain parties that are debarred, 
suspended or otherwise excluded from or ineligible for participation in 
Federal assistance programs or activities.

[72 FR 34998, June 26, 2007]



Sec. 32.14  Special award conditions.

    (a) DoD Components may impose additional requirements as needed, 
over and above those provided in this part, if an applicant or 
recipient:
    (1) Has a history of poor performance;
    (2) Is not financially stable;
    (3) Has a management system that does not meet the standards 
prescribed in this part;
    (4) Has not conformed to the terms and conditions of a previous 
award; or
    (5) Is not otherwise responsible.
    (b) Before imposing additional requirements, DoD Components shall 
notify the applicant or recipient in writing as to:
    (1) The nature of the additional requirements;
    (2) The reason why the additional requirements are being imposed;
    (3) The nature of the corrective action needed;
    (4) The time allowed for completing the corrective actions; and
    (5) The method for requesting reconsideration of the additional 
requirements imposed.
    (c) Any special conditions shall be promptly removed once the 
conditions that prompted them have been corrected.
    (d) Grants officers:
    (1) Should coordinate the imposition and removal of special award 
conditions with the cognizant grants administration office identified in 
32 CFR 22.710.
    (2) Shall include in the award file the written notification to the 
recipient, described in paragraph (b) of this section, and the 
documentation required by 32 CFR 22.410(b).



Sec. 32.15  Metric system of measurement.

    The Metric Conversion Act, as amended by the Omnibus Trade and 
Competitiveness Act (15 U.S.C. 205) declares that the metric system is 
the preferred measurement system for U.S. trade and commerce, and for 
Federal agencies' procurements, grants, and other business-related 
activities. DoD grants officers shall comply with requirements 
concerning the use of the metric system at 32 CFR 22.530.



Sec. 32.16  Resource Conservation and Recovery Act (RCRA).

    Recipients' procurements shall comply with applicable requirements 
of the Resource Conservation and Recovery Act (RCRA), as described at 
Sec. 32.49.



Sec. 32.17  Certifications and representations.

    (a) OMB Circular A-110 authorizes and encourages each Federal 
agency, unless prohibited by statute or codified regulation, to allow 
recipients to submit certifications and representations required by 
statute, executive order, or regulation on an annual basis, if the 
recipients have ongoing and continuing relationships with the agency. 
The Circular further states that annual certifications and 
representations, when used, shall be signed by responsible officials 
with the authority to ensure recipients' compliance with the pertinent 
requirements.
    (b) DoD grants officers shall comply with the provisions concerning 
certifications and representations at 32 CFR 22.510. Those provisions 
ease burdens on recipients to the extent possible, given current 
statutory and regulatory impediments to obtaining all certifications on 
an annual basis. The provisions thereby also comply with the intent of 
OMB Circular A-110, to use less

[[Page 131]]

burdensome methods for obtaining certifications and representations, as 
such methods become feasible.



                    Subpart C_Post-Award Requirements

                    Financial and Program Management



Sec. 32.20  Purpose of financial and program management.

    Sections 32.21 through 32.28 prescribe standards for financial 
management systems, methods for making payments and rules for: 
satisfying cost sharing and matching requirements, accounting for 
program income, budget revision approvals, making audits, determining 
allowability of cost, and establishing fund availability.



Sec. 32.21  Standards for financial management systems.

    (a) DoD Components shall require recipients to relate financial data 
to performance data and develop unit cost information whenever 
practical. For awards that support research, it should be noted that it 
is generally not appropriate to develop unit cost information.
    (b) Recipients' financial management systems shall provide for the 
following.
    (1) Accurate, current and complete disclosure of the financial 
results of each federally-sponsored project or program in accordance 
with the reporting requirements set forth in Sec. 32.52. If a DoD 
Component requires reporting on an accrual basis from a recipient that 
maintains its records on other than an accrual basis, the recipient 
shall not be required to establish an accrual accounting system. These 
recipients may develop such accrual data for its reports on the basis of 
an analysis of the documentation on hand.
    (2) Records that identify adequately the source and application of 
funds for federally-sponsored activities. These records shall contain 
information pertaining to Federal awards, authorizations, obligations, 
unobligated balances, assets, outlays, income and interest.
    (3) Effective control over and accountability for all funds, 
property and other assets. Recipients shall adequately safeguard all 
such assets and assure they are used solely for authorized purposes.
    (4) Comparison of outlays with budget amounts for each award. 
Whenever appropriate, financial information should be related to 
performance and unit cost data. As discussed in paragraph (a) of this 
section, unit cost data is generally not appropriate for awards that 
support research.
    (5) Written procedures to minimize the time elapsing between the 
transfer of funds to the recipient from the U.S. Treasury and the 
issuance or redemption of checks, warrants or payments by other means 
for program purposes by the recipient. To the extent that the provisions 
of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern, 
payment methods of State agencies, instrumentalities, and fiscal agents 
should be consistent with CMIA Treasury-State Agreements or the CMIA 
default procedures codified at 31 CFR part 205, ``Withdrawal of Cash 
from the Treasury for Advances under Federal Grant and Other Programs.''
    (6) Written procedures for determining the reasonableness, 
allocability and allowability of costs in accordance with the provisions 
of the applicable Federal cost principles (see Sec. 32.27) and the 
terms and conditions of the award.
    (7) Accounting records including cost accounting records that are 
supported by source documentation.
    (c) Where the Federal Government guarantees or insures the repayment 
of money borrowed by the recipient, the DoD Component, at its 
discretion, may require adequate bonding and insurance if the bonding 
and insurance requirements of the recipient are not deemed adequate to 
protect the interest of the Federal Government.
    (d) The DoD Component may require adequate fidelity bond coverage 
where the recipient lacks sufficient coverage to protect the Federal 
Government's interest.
    (e) Where bonds are required in the situations described above, the 
bonds shall be obtained from companies holding certificates of authority 
as acceptable sureties, as prescribed in 31 CFR part 223, ``Surety 
Companies Doing Business with the United States.''

[[Page 132]]



Sec. 32.22  Payment.

    (a) Payment methods shall minimize the time elapsing between the 
transfer of funds from the United States Treasury and the issuance or 
redemption of checks, warrants, or payment by other means by the 
recipients. Payment methods of State agencies or instrumentalities shall 
be consistent with Treasury-State agreements under the Cash Management 
Improvement Act (CMIA) (31 U.S.C. 3335 and 6503) or default procedures 
in 31 CFR part 205.
    (b) Recipients are to be paid in advance, provided they maintain or 
demonstrate the willingness to maintain:
    (1) Written procedures that minimize the time elapsing between the 
transfer of funds and disbursement by the recipient; and
    (2) Financial management systems that meet the standards for fund 
control and accountability as established in Sec. 32.21. Cash advances 
to a recipient organization shall be limited to the minimum amounts 
needed and be timed to be in accordance with the actual, immediate cash 
requirements of the recipient organization in carrying out the purpose 
of the approved program or project. The timing and amount of cash 
advances shall be as close as is administratively feasible to the actual 
disbursements by the recipient organization for direct program or 
project costs and the proportionate share of any allowable indirect 
costs.
    (c) Whenever possible, advances shall be consolidated to cover 
anticipated cash needs for all awards made by the DoD Component to the 
recipient.
    (1) Advance payment mechanisms include, but are not limited to, 
Treasury check and electronic funds transfer.
    (2) Advance payment mechanisms are subject to 31 CFR part 205.
    (3) Recipients shall be authorized to submit requests for advances 
and reimbursements at least monthly when electronic fund transfers are 
not used.
    (d) Requests for Treasury check advance payment shall be submitted 
on SF-270, \3\ ``Request for Advance or Reimbursement,'' or other forms 
as may be authorized by OMB. This form is not to be used when Treasury 
check advance payments are made to the recipient automatically through 
the use of a predetermined payment schedule or if inconsistent with DoD 
procedures for electronic funds transfer.
---------------------------------------------------------------------------

    \3\ See footnote 2 to Sec. 32.12(a).
---------------------------------------------------------------------------

    (e) Reimbursement is the preferred method when the requirements in 
paragraph (b) of this section cannot be met. DoD Components may also use 
this method on any construction agreement, or if the major portion of 
the construction project is accomplished through private market 
financing or Federal loans, and the Federal assistance constitutes a 
minor portion of the project.
    (1) When the reimbursement method is used, the responsible DoD 
payment office generally makes payment within 30 calendar days after 
receipt of the billing by the office designated to receive the billing, 
unless the billing is improper (for further information about timeframes 
for payments, see 32 CFR 22.810(c)(3)(ii)).
    (2) Recipients shall be authorized to submit requests for 
reimbursement at least monthly when electronic funds transfers are not 
used.
    (f) If a recipient cannot meet the criteria for advance payments and 
the grants officer, in consultation with the program manager, has 
determined that reimbursement is not feasible because the recipient 
lacks sufficient working capital, the award may provide for cash on a 
working capital advance basis. Under this procedure, the award shall 
provide for advancing cash to the recipient to cover its estimated 
disbursement needs for an initial period generally geared to the 
awardee's disbursing cycle. Thereafter, the award shall provide for 
reimbursing the recipient for its actual cash disbursements. The working 
capital advance method of payment shall not be used for recipients 
unwilling or unable to provide timely advances to their subrecipient to 
meet the subrecipient's actual cash disbursements.
    (g) To the extent available, recipients shall disburse funds 
available from repayments to and interest earned on a revolving fund, 
program income, rebates, refunds, contract settlements, audit recoveries 
and interest earned on such funds before requesting additional cash 
payments.

[[Page 133]]

    (h) Unless otherwise required by statute, grants officers shall not 
withhold payments for proper charges made by recipients at any time 
during the project period unless:
    (1) A recipient has failed to comply with the project objectives, 
the terms and conditions of the award, or Federal reporting 
requirements; or
    (2) The recipient or subrecipient is delinquent in a debt to the 
United States under OMB Circular A-129, ``Managing Federal Credit 
Programs'' (see definitions of ``debt'' and ``delinquent debt,'' at 32 
CFR 22.105). Under such conditions, the grants officer may, upon 
reasonable notice, inform the recipient that payments shall not be made 
for obligations incurred after a specified date until the conditions are 
corrected or the indebtedness to the Federal Government is liquidated 
(also see 32 CFR 22.420(b)(2) and 22.820).
    (i) Standards governing the use of banks and other institutions as 
depositories of funds advanced under awards are as follows:
    (1) Except for situations described in paragraph (i)(2) of this 
section, DoD Components shall not require separate depository accounts 
for funds provided to a recipient or establish any eligibility 
requirements for depositories for funds provided to a recipient. 
However, recipients must be able to account for the receipt, obligation 
and expenditure of funds.
    (2) Advances of Federal funds shall be deposited and maintained in 
insured accounts whenever possible.
    (j) Consistent with the national goal of expanding the opportunities 
for women-owned and minority-owned business enterprises, recipients 
shall be encouraged to use women-owned and minority-owned banks (a bank 
which is owned at least 50 percent by women or minority group members).
    (k) Recipients shall maintain advances of Federal funds in interest 
bearing accounts, unless:
    (1) The recipient receives less than $120,000 in Federal awards per 
year;
    (2) The best reasonably available interest bearing account would not 
be expected to earn interest in excess of $250 per year on Federal cash 
balances; or
    (3) The depository would require an average or minimum balance so 
high that it would not be feasible within the expected Federal and non-
Federal cash resources.
    (l)(1) Interest earned on Federal advances deposited in interest 
bearing accounts shall be remitted annually to Department of Health and 
Human Services, Payment Management System, PO Box 6021, Rockville, MD 
20852.
    (2) In keeping with Electronic Funds Transfer rules (31 CFR part 
206), interest should be remitted to the HHS Payment Management System 
through an electronic medium such as the FEDWIR Deposit System. 
Electronic remittances should be in the format and should include any 
data that are specified by the grants officer as being necessary to 
facilitate direct deposit in HHS' account at the Department of the 
Treasury.
    (3) Recipients that do not have electronic remittance capability 
should use a check.
    (4) Interest amounts up to $250 per year may be retained by the 
recipient for administrative expense.
    (m) Except as noted elsewhere in this part, only the following forms 
shall be authorized for the recipients in requesting advances and 
reimbursements. DoD Components shall not require more than an original 
and two copies of these forms.
    (1) SF-270, Request for Advance or Reimbursement. Each DoD Component 
shall adopt the SF-270 as a standard form for all nonconstruction 
programs when electronic funds transfer or predetermined advance methods 
are not used. DoD Components, however, have the option of using this 
form for construction programs in lieu of the SF-271, \4\ ``Outlay 
Report and Request for Reimbursement for Construction Programs.''
---------------------------------------------------------------------------

    \4\ See footnote 2 to Sec. 32.12(a).
---------------------------------------------------------------------------

    (2) SF-271, Outlay Report and Request for Reimbursement for 
Construction Programs. Each DoD Component shall adopt the SF-271 as the 
standard form to be used for requesting reimbursement for construction 
programs. However, a DoD Component may substitute the SF-270 when the 
DoD Component determines that it provides adequate information to meet 
Federal needs.

[[Page 134]]



Sec. 32.23  Cost sharing or matching.

    (a) All contributions, including cash and third party in-kind, shall 
be accepted as part of the recipient's cost sharing or matching when 
such contributions meet all of the following criteria:
    (1) Are verifiable from the recipient's records.
    (2) Are not included as contributions for any other federally-
assisted project or program.
    (3) Are necessary and reasonable for proper and efficient 
accomplishment of project or program objectives.
    (4) Are allowable under the applicable cost principles.
    (5) Are not paid by the Federal Government under another award, 
except where authorized by Federal statute to be used for cost sharing 
or matching.
    (6) Are provided for in the approved budget when required by the DoD 
Component.
    (7) Conform to other provisions of this part, as applicable.
    (b) Unrecovered indirect costs (see definition in Sec. 32.2) may be 
included as part of cost sharing or matching.
    (c) Values for recipient contributions of services and property 
shall be established in accordance with the applicable cost principles. 
If a DoD Component authorizes recipients to donate buildings or land for 
construction/facilities acquisition projects or long-term use, the value 
of the donated property for cost sharing or matching shall be the lesser 
of:
    (1) The certified value of the remaining life of the property 
recorded in the recipient's accounting records at the time of donation; 
or
    (2) The current fair market value. However, when there is sufficient 
justification, the DoD Component may approve the use of the current fair 
market value of the donated property, even if it exceeds the certified 
value at the time of donation to the project. The DoD Component may 
accept the use of any reasonable basis for determining the fair market 
value of the property.
    (d) Volunteer services furnished by professional and technical 
personnel, consultants, and other skilled and unskilled labor may be 
counted as cost sharing or matching if the service is an integral and 
necessary part of an approved project or program. Rates for volunteer 
services shall be consistent with those paid for similar work in the 
recipient's organization. In those instances in which the required 
skills are not found in the recipient organization, rates shall be 
consistent with those paid for similar work in the labor market in which 
the recipient competes for the kind of services involved. In either 
case, paid fringe benefits that are reasonable, allowable, and allocable 
may be included in the valuation.
    (e) When an employer other than the recipient furnishes the services 
of an employee, these services shall be valued at the employee's regular 
rate of pay (plus an amount of fringe benefits that are reasonable, 
allowable, and allocable, but exclusive of overhead costs), provided 
these services are in the same skill for which the employee is normally 
paid.
    (f) Donated supplies may include such items as office supplies, 
laboratory supplies or workshop and classroom supplies. Value assessed 
to donated supplies included in the cost sharing or matching share shall 
be reasonable and shall not exceed the fair market value of the property 
at the time of the donation.
    (g) The method used for determining cost sharing or matching for 
donated equipment, buildings and land for which title passes to the 
recipient may differ according to the purpose of the award, if the 
purpose of the award is to:
    (1) Assist the recipient in the acquisition of equipment, buildings 
or land, the total value of the donated property may be claimed as cost 
sharing or matching; or
    (2) Support activities that require the use of equipment, buildings 
or land, normally only depreciation or use charges for equipment and 
buildings may be made. However, the full value of equipment or other 
capital assets and fair rental charges for land may be allowed, provided 
that the DoD Component has approved the charges.
    (h) The value of donated property shall be determined in accordance 
with the usual accounting policies of the recipient, with the following 
qualifications.

[[Page 135]]

    (1) The value of donated land and buildings shall not exceed its 
fair market value at the time of donation to the recipient as 
established by an independent appraiser (e.g., certified real property 
appraiser or General Services Administration representative) and 
certified by a responsible official of the recipient.
    (2) The value of donated equipment shall not exceed the fair market 
value of equipment of the same age and condition at the time of 
donation.
    (3) The value of donated space shall not exceed the fair rental 
value of comparable space as established by an independent appraisal of 
comparable space and facilities in a privately-owned building in the 
same locality.
    (4) The value of loaned equipment shall not exceed its fair rental 
value.
    (i) The following requirements pertain to the recipient's supporting 
records for in-kind contributions from third parties:
    (1) Volunteer services shall be documented and, to the extent 
feasible, supported by the same methods used by the recipient for its 
own employees.
    (2) The basis for determining the valuation for personal service and 
property shall be documented.



Sec. 32.24  Program income.

    (a) DoD Components shall apply the standards set forth in this 
section in requiring recipient organizations to account for program 
income related to projects financed in whole or in part with Federal 
funds.
    (b) Except as provided in paragraph (h) of this section, program 
income earned during the project period shall be retained by the 
recipient and, in accordance with the terms and conditions of the award, 
shall be used in one or more of the following ways:
    (1) Added to funds committed to the project by the DoD Component and 
recipient and used to further eligible project or program objectives.
    (2) Used to finance the non-Federal share of the project or program.
    (3) Deducted from the total project or program allowable cost in 
determining the net allowable costs on which the Federal share of costs 
is based.
    (c) When a program regulation or award authorizes the disposition of 
program income as described in paragraphs (b)(1) or (b)(2) of this 
section, program income in excess of any limits stipulated shall be used 
in accordance with paragraph (b)(3) of this section.
    (d) In the event that program regulations or the terms and 
conditions of the award do not specify how program income is to be used, 
paragraph (b)(3) of this section shall apply automatically to all 
projects or programs except research. For awards that support research, 
paragraph (b)(1) of this section shall apply automatically unless the 
terms and conditions specify another alternative or the recipient is 
subject to special award conditions, as indicated in Sec. 32.14.
    (e) Unless program regulations or the terms and conditions of the 
award provide otherwise, recipients shall have no obligation to the 
Federal Government regarding program income earned after the end of the 
project period.
    (f) If authorized by program regulations or the terms and conditions 
of the award, costs incident to the generation of program income may be 
deducted from gross income to determine program income, provided these 
costs have not been charged to the award.
    (g) Proceeds from the sale of property shall be handled in 
accordance with the requirements of the Property Standards (see 
Sec. Sec. 32.30 through 32.37).
    (h) Unless program regulations or the terms and condition of the 
award provide otherwise, recipients shall have no obligation to the 
Federal Government with respect to program income earned from license 
fees and royalties for copyrighted material, patents, patent 
applications, trademarks, and inventions produced under an award. Note 
that the Patent and Trademark Amendments (35 U.S.C. chapter 18) apply to 
inventions made under an experimental, developmental, or research award.



Sec. 32.25  Revision of budget and program plans.

    (a) The budget plan is the financial expression of the project or 
program as approved during the award process. It may include either the 
sum of the Federal and non-Federal shares, or only the Federal share, 
depending upon DoD Component requirements. It shall be

[[Page 136]]

related to performance for program evaluation purposes whenever 
appropriate.
    (b) Recipients are required to report deviations from budget and 
program plans, and request prior approvals for budget and program plan 
revisions, in accordance with this section.
    (c) For nonconstruction awards, recipients shall request prior 
approvals from the cognizant grants officer for one or more of the 
following program or budget related reasons.
    (1) Change in the scope or the objective of the project or program 
(even if there is no associated budget revision requiring prior written 
approval).
    (2) Change in a key person specified in the application or award 
document.
    (3) The absence for more than three months, or a 25 percent 
reduction in time devoted to the project, by the approved project 
director or principal investigator.
    (4) The need for additional Federal funding.
    (5) The transfer of amounts budgeted for indirect costs to absorb 
increases in direct costs, or vice versa, if approval is required by the 
DoD Component. DoD Components should require this prior approval only in 
exceptional circumstances. The requirement in each such case must be 
stated in the award document.
    (6) The inclusion, unless waived by the DoD Component, of costs that 
require prior approval in accordance with OMB Circular A-21, \5\ ``Cost 
Principles for Institutions of Higher Education,'' OMB Circular A-122, 
\6\ ``Cost Principles for Non-Profit Organizations,'' or Appendix E to 
45 CFR part 74, ``Principles for Determining Costs Applicable to 
Research and Development under Grants and Contracts with Hospitals,'' or 
48 CFR part 31, ``Contract Cost Principles and Procedures,'' as 
applicable. However, it should be noted that many of the prior approvals 
in these cost principles are appropriately waived only after 
consultation with the cognizant federal agency responsible for 
negotiating the recipient's indirect costs.
---------------------------------------------------------------------------

    \5\ See footnote 1 to Sec. 32.1(a).
    \6\ See footnote 1 to Sec. 32.1(a).
---------------------------------------------------------------------------

    (7) The transfer of funds allotted for training allowances (direct 
payment to trainees) to other categories of expense.
    (8) Unless described in the application and funded in the approved 
awards, the subaward, transfer or contracting out of any work under an 
award. This provision does not apply to the purchase of supplies, 
material, equipment or general support services.
    (9) If required by the DoD Component, the transfer of funds among 
direct cost categories that is described in paragraph (e) of this 
section.
    (d) (1) Except for requirements listed in paragraphs (c)(1) and 
(c)(4) of this section, OMB Circular A-110 authorizes DoD Components, at 
their option, to waive cost-related and administrative prior written 
approvals required by this part and OMB Circulars A-21 and A-122 (but 
see cautionary note at end of paragraph (c)(5) of this section).
    (2) The two prior approvals listed in paragraphs (d)(2)(i) and (ii) 
of this section are automatically waived unless the award document 
states otherwise. DoD Components should override this automatic waiver 
and require the prior approvals, especially for research awards, only in 
exceptional circumstances. Absent an override in the award terms and 
conditions, recipients need not obtain prior approvals before:
    (i) Incurring pre-award costs 90 calendar days prior to award 
(incurring pre-award costs more than 90 calendar days prior to award 
would still require the prior approval of the DoD Component). All pre-
award costs are incurred at the recipient's risk (i.e., the DoD 
Component is under no obligation to reimburse such costs if for any 
reason the recipient does not receive an award or if the award is less 
than anticipated and inadequate to cover such costs).
    (ii) Carrying forward unobligated balances to subsequent funding 
periods.
    (3) Under certain conditions, a DoD Component may authorize a 
recipient to initiate, without prior approval, a one-time, no-cost 
extension (i.e., an extension in the expiration date of an award that 
does not require additional Federal funds) for a period of up to twelve 
months, as long as the no-cost extension does not involve a change in 
the approved objectives or scope of the

[[Page 137]]

project. The conditions for waiving this prior approval requirement are 
that the DoD Component must:
    (i) Judge that the recipient's subsequently initiating a one-time, 
no-cost extension would not cause the DoD Component to fail to comply 
with DoD funding policies (for further information on the location of 
DoD funding policies, grants officers may refer to Appendix C to 32 CFR 
part 22).
    (ii) Require a recipient that wishes to initiate a one-time, no-cost 
extension to so notify the office that made the award at least 10 
calendar days before the original expiration date of the award.
    (e) The DoD Component may, at its option, restrict the transfer of 
funds among direct cost categories, functions and activities for awards 
in which the Federal share of the project exceeds $100,000 and the 
cumulative amount of such transfers exceeds or is expected to exceed 10 
percent of the total budget as last approved by the DoD Component. As a 
matter of DoD policy, requiring prior approvals for such transfers 
generally is not appropriate for grants to support research. No DoD 
Component shall permit a transfer that would cause any Federal 
appropriation or part thereof to be used for purposes other than those 
consistent with the original intent of the appropriation.
    (f) For construction awards, recipients shall request prior written 
approval promptly from grants officers for budget revisions whenever:
    (1) The revision results from changes in the scope or the objective 
of the project or program;
    (2) The need arises for additional Federal funds to complete the 
project; or
    (3) A revision is desired which involves specific costs for which 
prior written approval requirements may be imposed consistent with 
applicable OMB cost principles listed in Sec. 32.27.
    (g) When a DoD Component makes an award that provides support for 
both construction and nonconstruction work, the DoD Component may 
require the recipient to request prior approval from the grants officer 
before making any fund or budget transfers between the two types of work 
supported.
    (h) No other prior approval requirements for specific items may be 
imposed unless a deviation has been approved, in accordance with the 
deviation procedures in Sec. 32.4(c).
    (i) For both construction and nonconstruction awards, DoD Components 
shall require recipients to notify the grants officer in writing 
promptly whenever the amount of Federal authorized funds is expected to 
exceed the needs of the recipient for the project period by more than 
$5000 or five percent of the Federal award, whichever is greater. This 
notification shall not be required if an application for additional 
funding is submitted for a continuation award.
    (j) When requesting approval for budget revisions, recipients shall 
use the budget forms that were used in the application unless the grants 
officer indicates a letter of request suffices.
    (k) Within 30 calendar days from the date of receipt of the request 
for budget revisions, the grants officer shall review the request and 
notify the recipient whether the budget revisions have been approved. If 
the revision is still under consideration at the end of 30 calendar 
days, the grants officer shall inform the recipient in writing of the 
date when the recipient may expect the decision.



Sec. 32.26  Non-Federal audits.

    (a) Recipients and subrecipients that are institutions of higher 
education or other non-profit organizations (including hospitals) shall 
be subject to the audit requirements contained in the Single Audit Act 
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, 
\7\ ``Audits of States, Local Governments, and Non-Profit 
Organizations.''
---------------------------------------------------------------------------

    \7\ See footnote 1 to Sec. 32.1(a).
---------------------------------------------------------------------------

    (b) State and local governments that are subrecipients shall be 
subject to the audit requirements contained in the Single Audit Act 
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, 
``Audits of States, Local Governments, and Non-Profit Organizations.''
    (c) Hospitals that are subrecipients and are not covered by the 
audit provisions of revised OMB Circular A-133

[[Page 138]]

shall be subject to the audit requirements specified in award terms and 
conditions.
    (d) For-profit organizations that are subrecipients shall be subject 
to the audit requirements specified in 32 CFR 34.16.



Sec. 32.27  Allowable costs.

    (a) General. For each kind of recipient or subrecipient of a cost-
type assistance award, or each contractor receiving a. cost-type 
contract under an assistance award, there is a set of Federal principles 
for determining allowable costs. Allowability of costs shall be 
determined in accordance with the cost principles applicable to the 
entity incurring the costs.
    (b) Governmental organizations. Allowability of costs incurred by 
State, local or federally-recognized Indian tribal governments that may 
be subrecipients or contractors under awards subject to this part is 
determined in accordance with the provisions of OMB Circular A-87, \8\ 
``Cost Principles for State and Local Governments.''
---------------------------------------------------------------------------

    \8\ See footnote 1 to Sec. 32.1(a).
---------------------------------------------------------------------------

    (c) Non-profit organizations. The allowability of costs incurred by 
non-profit organizations that may be recipients or subrecipients of 
awards subject to this part, or contractors under such awards, is 
determined in accordance with the provisions of OMB Circular A-122, 
``Cost Principles for Non-Profit Organizations.''
    (d) Higher educational institutions. The allowability of costs 
incurred by institutions of higher education that may be recipients, 
subrecipients, or contractors is determined in accordance with the 
provisions of OMB Circular A-21, ``Cost Principles for Educational 
Institutions.''
    (e) Hospitals. The allowability of costs incurred by hospitals that 
are recipients, subrecipients, or contractors is determined in 
accordance with the provisions of Appendix E to 45 CFR part 74, 
``Principles for Determining Costs Applicable to Research and 
Development Under Grants and Contracts with Hospitals.''
    (f) For-profit organizations. The allowability of costs incurred by 
subrecipients or contractors that are either for-profit organizations or 
non-profit organizations listed in Attachment C to Circular A-122 is 
determined in accordance with the provisions of the Federal Acquisition 
Regulation (FAR) at 48 CFR part 31; however, the grants officer or the 
award terms and conditions may in rare cases authorize a determination 
of allowable costs that are in accordance with uniform cost accounting 
standards and comply with cost principles acceptable to the Department 
of Defense.



Sec. 32.28  Period of availability of funds.

    Where a funding period is specified, a recipient may charge to the 
award only allowable costs resulting from obligations incurred during 
the funding period and any pre-award costs (see Sec. 32.25(d)(2)(i)) 
authorized by the DoD Component.

                           Property Standards



Sec. 32.30  Purpose of property standards.

    Sections 32.31 through 32.37 set forth uniform standards governing 
management and disposition of property furnished by the Federal 
Government and property whose cost was charged to a project supported by 
a Federal award. DoD Components shall require recipients to observe 
these standards under awards and shall not impose additional 
requirements, unless specifically required by Federal statute. The 
recipient may use its own property management standards and procedures 
provided it observes the provisions of Sec. Sec. 32.31 through 32.37.



Sec. 32.31  Insurance coverage.

    Recipients shall, at a minimum, provide the equivalent insurance 
coverage for real property and equipment acquired with Federal funds as 
provided to property owned by the recipient. Federally-owned property 
need not be insured unless required by the terms and conditions of the 
award.



Sec. 32.32  Real property.

    Each DoD Component that makes awards under which real property is 
acquired in whole or in part with Federal funds shall prescribe 
requirements for

[[Page 139]]

recipients concerning the use and disposition of such property. Unless 
otherwise provided by statute, such requirements, at a minimum, shall 
contain the following:
    (a) Title to real property shall vest in the recipient subject to 
the condition that the recipient shall use the real property for the 
authorized purpose of the project as long as it is needed and shall not 
encumber the property without approval of the DoD Component.
    (b) The recipient shall obtain written approval by the grants 
officer for the use of real property in other federally sponsored 
projects when the recipient determines that the property is no longer 
needed for the purpose of the original project. Use in other projects 
shall be limited to those under federally sponsored projects (i.e., 
awards) or programs that have purposes consistent with those authorized 
for support by the DoD Component.
    (c) When the real property is no longer needed as provided in 
paragraphs (a) and (b) of this section, the recipient shall request 
disposition instructions from the DoD Component or its successor Federal 
agency. The responsible Federal agency shall observe one or more of the 
following disposition instructions:
    (1) The recipient may be permitted to retain title without further 
obligation to the Federal Government after it compensates the Federal 
Government for that percentage of the current fair market value of the 
property attributable to the Federal participation in the project.
    (2) The recipient may be directed to sell the property under 
guidelines provided by the DoD Component and pay the Federal Government 
for that percentage of the current fair market value of the property 
attributable to the Federal participation in the project (after 
deducting actual and reasonable selling and fix-up expenses, if any, 
from the sales proceeds). When the recipient is authorized or required 
to sell the property, proper sales procedures shall be established that 
provide for competition to the extent practicable and result in the 
highest possible return.
    (3) The recipient may be directed to transfer title to the property 
to the Federal Government or to an eligible third party provided that, 
in such cases, the recipient shall be entitled to compensation for its 
attributable percentage of the current fair market value of the 
property.



Sec. 32.33  Federally-owned and exempt property.

    (a) Federally-owned property. (1) Title to federally-owned property 
remains vested in the Federal Government. Recipients shall submit 
annually an inventory listing of federally-owned property in their 
custody to the DoD Component that made the award. Upon completion of the 
award or when the property is no longer needed, the recipient shall 
report the property to the DoD Component for further Federal agency 
utilization.
    (2) If the DoD Component that made the award has no further need for 
the property, it shall be declared excess and either:
    (i) Reported to the General Services Administration, in accordance 
with the Federal Property and Administrative Services Act of 1949 (40 
U.S.C. 483(b)(2)), as implemented by General Services Administration 
regulations at 41 CFR 101-47.202; or
    (ii) Disposed of by alternative methods pursuant to other specific 
statutory authority. For example, DoD Components are authorized by the 
Federal Technology Transfer Act (15 U.S.C. 3710(i)), to donate research 
equipment to educational and non-profit organizations for the conduct of 
technical and scientific education and research activities--donations 
under this Act shall be in accordance with the DoD implementation of 
E.O. 12999 (3 CFR, 1996 Comp., p. 180), ``Educational Technology: 
Ensuring Opportunity for All Children in the Next Century,'' as 
applicable. Appropriate instructions shall be issued to the recipient by 
the DoD Component.
    (b) Exempt property. (1) When statutory authority exists, a DoD 
Component may vest title to property acquired with Federal funds in the 
recipient without further obligation to the Federal Government and under 
conditions the DoD Component considers appropriate. For example, under 
31 U.S.C. 6306, DoD Components may so vest title to tangible personal 
property

[[Page 140]]

under a grant or cooperative agreement for basic or applied research in 
a nonprofit institution of higher education or a nonprofit organization 
whose primary purpose is conducting scientific research. Such property 
is ``exempt property.''
    (2) As a matter of policy, DoD Components shall make maximum use of 
the authority of 31 U.S.C. 6306 to vest title to exempt property in 
institutions of higher education, without further obligation to the 
Government, to enhance the university infrastructure for future 
performance of defense research and related, science and engineering 
education.
    (3) DoD Components may establish conditions, in regulation or in 
award terms and conditions, for vesting title to exempt property. Should 
a DoD Component not establish conditions, title to exempt property upon 
acquisition shall vest in the recipient without further obligation to 
the Federal Government.



Sec. 32.34  Equipment.

    (a) Title to equipment acquired by a recipient with Federal funds 
shall vest in the recipient, subject to conditions of this section.
    (b) The recipient shall not use equipment acquired with Federal 
funds to provide services to non-Federal outside organizations for a fee 
that is less than private companies charge for equivalent services, 
unless specifically authorized by Federal statute, for as long as the 
Federal Government retains an interest in the equipment.
    (c) The recipient shall use the equipment in the project or program 
for which it was acquired as long as needed, whether or not the project 
or program continues to be supported by Federal funds and shall not 
encumber the property without approval of the DoD Component that made 
the award. When no longer needed for the original project or program, 
the recipient shall use the equipment in connection with its other 
federally-sponsored activities, in the following order of priority:
    (1) First, activities sponsored by the DoD Component that funded the 
original project.
    (2) Second, activities sponsored by other DoD Components.
    (3) Then, activities sponsored by other Federal agencies.
    (d) During the time that equipment is used on the project or program 
for which it was acquired, the recipient shall make it available for use 
on other projects or programs if such other use will not interfere with 
the work on the project or program for which the equipment was 
originally acquired. First preference for such other use shall be given 
to other projects or programs sponsored by the DoD Component that 
financed the equipment; second preference shall be given to projects or 
programs sponsored by other DoD Components; and third preference shall 
be given to projects or programs sponsored by other Federal agencies. If 
the property is owned by the Federal Government, use on other activities 
not sponsored by the Federal Government shall be permissible if 
authorized by the DoD Component that financed the property. User charges 
shall be treated as program income.
    (e) When acquiring replacement equipment, the recipient may use the 
equipment to be replaced as trade-in or sell the equipment and use the 
proceeds to offset the costs of the replacement equipment subject to the 
approval of the DoD Component that financed the equipment.
    (f) The recipient's property management standards for equipment 
acquired with Federal funds and federally-owned property shall include 
all of the following:
    (1) Records for equipment and federally-owned property shall be 
maintained accurately and shall include the following information:
    (i) A description of the equipment or federally-owned property.
    (ii) Manufacturer's serial number, model number, Federal stock 
number, national stock number, or other identification number.
    (iii) Source of the equipment or federally-owned property, including 
the award number.
    (iv) Whether title vests in the recipient or the Federal Government.
    (v) Acquisition date (or date received, if the property was 
furnished by the Federal Government) and cost.
    (vi) Information from which one can calculate the percentage of 
Federal

[[Page 141]]

participation in the cost of the equipment (not applicable to property 
furnished by the Federal Government).
    (vii) Location and condition of the equipment or federally-owned 
property and the date the information was reported.
    (viii) Unit acquisition cost.
    (ix) Ultimate disposition data, including date of disposal and sales 
price or the method used to determine current fair market value where a 
recipient compensates the DoD Component that made the award for its 
share.
    (2) Property owned by the Federal Government shall be identified to 
indicate Federal ownership.
    (3) A physical inventory of equipment and federally-owned property 
shall be taken and the results reconciled with the equipment records at 
least once every two years. Any differences between quantities 
determined by the physical inspection and those shown in the accounting 
records shall be investigated to determine the causes of the difference. 
The recipient shall, in connection with the inventory, verify the 
existence, current utilization, and continued need for the equipment or 
federally-owned property.
    (4) A control system shall be in effect to insure adequate 
safeguards to prevent loss, damage, or theft of the equipment or 
federally-owned property. Any loss, damage, or theft of equipment or 
federally-owned property shall be investigated and fully documented; if 
the property was owned by the Federal Government, the recipient shall 
promptly notify the DoD Component.
    (5) Adequate maintenance procedures shall be implemented to keep the 
equipment or federally-owned property in good condition.
    (6) Where the recipient is authorized or required to sell the 
equipment, proper sales procedures shall be established which provide 
for competition to the extent practicable and result in the highest 
possible return.
    (g) When the recipient no longer needs the equipment, the equipment 
may be used for other activities in accordance with the following 
standards.
    (1) For equipment with a current per unit fair market value of 
$5,000 or more, the recipient may retain the equipment for other uses 
provided that compensation is made to the DoD Component that originally 
made the award or its successor. The amount of compensation shall be 
computed by applying the percentage of Federal participation in the cost 
of the original project or program to the current fair market value of 
the equipment.
    (2) If the recipient has no need for the equipment, the recipient 
shall request disposition instructions from the DoD Component. The DoD 
Component shall issue instructions to the recipient no later than 120 
calendar days after the recipient's request and the following procedures 
shall govern:
    (i) The grants officer, in consultation with the program manager, 
shall judge whether the age and nature of the equipment warrant a 
screening procedure to determine whether the equipment is useful to a 
DoD Component or other Federal agency. If a screening procedure is 
warranted:
    (A) The DoD Component shall determine whether the equipment can be 
used to meet DoD requirements.
    (B) If no DoD requirement exists, the availability of the equipment 
shall be reported to the General Services Administration by the DoD 
Component to determine whether a requirement for the equipment exists in 
other Federal agencies.
    (ii) If so instructed or if disposition instructions are not issued 
within 120 calendar days after the recipient's request, the recipient 
shall sell the equipment and reimburse the DoD Component that made the 
award an amount computed by applying to the sales proceeds the 
percentage of Federal participation in the cost of the original project 
or program. However, the recipient shall be permitted to deduct and 
retain from the Federal share $500 or ten percent of the proceeds, 
whichever is less, for the recipient's selling and handling expenses.
    (iii) If the recipient is instructed to ship the equipment 
elsewhere, the recipient shall be reimbursed by the Federal Government 
by an amount which is computed by applying the percentage of the 
recipient's participation in the cost of the original project or program 
to the current fair market value of the equipment, plus any reasonable

[[Page 142]]

shipping or interim storage costs incurred.
    (iv) If the recipient is instructed to otherwise dispose of the 
equipment, the recipient shall be reimbursed by the DoD Component that 
made the award for such costs incurred in its disposition.
    (h) The DoD Component may reserve the right to transfer the title to 
the Federal Government or to a third party named by the Federal 
Government when such third party is otherwise eligible under existing 
statutes. Such transfer shall be subject to the following standards.
    (1) The equipment shall be appropriately identified in the award or 
otherwise made known to the recipient in writing. For exempt property, 
in accordance with Sec. 32.33(b)(3), note that this identification must 
occur by the time of award, or title to the property vests in the 
recipient without further obligation to the Government.
    (2) The DoD Component shall issue disposition instructions within 
120 calendar days after receipt of a final inventory. The final 
inventory shall list all equipment acquired with award funds and 
federally-owned property. If the DoD Component fails to issue 
disposition instructions for equipment within the 120 calendar day 
period, the recipient shall apply the standards of paragraph (g) of this 
section.
    (3) When the DoD Component exercises its right to take title, the 
equipment shall be subject to the provisions for federally-owned 
property.



Sec. 32.35  Supplies.

    (a) Title to supplies shall vest in the recipient upon acquisition. 
If there is a residual inventory of unused supplies exceeding $5,000 in 
total aggregate value upon termination or completion of the project or 
program and the supplies are not needed for any other federally-
sponsored project or program, the recipient shall retain the supplies 
for use on non-Federal sponsored activities or sell them, but shall, in 
either case, compensate the Federal Government for its share. The amount 
of compensation shall be computed in the same manner as for equipment.
    (b) The recipient shall not use supplies acquired with Federal funds 
to provide services to non-Federal outside organizations for a fee that 
is less than private companies charge for equivalent services, unless 
specifically authorized by Federal statute as long as the Federal 
Government retains an interest in the supplies.



Sec. 32.36  Intangible property.

    (a) The recipient may copyright any work that is subject to 
copyright and was developed, or for which ownership was purchased, under 
an award. DoD Components reserve a royalty-free, nonexclusive and 
irrevocable right to reproduce, publish, or otherwise use the work for 
Federal purposes, and to authorize others to do so.
    (b) Recipients are subject to applicable regulations governing 
patents and inventions, including Governmentwide regulations issued by 
the Department of Commerce at 37 CFR part 401, ``Rights to Inventions 
Made by Nonprofit Organizations and Small Business Firms Under 
Government Grants, Contracts and Cooperative Agreements.''
    (c) The Federal Government has the right to:
    (1) Obtain, reproduce, publish or otherwise use the data first 
produced under an award; and
    (2) Authorize others to receive, reproduce, publish, or otherwise 
use such data for Federal purposes.
    (d)(1) In addition, in response to a Freedom of Information Act 
(FOIA) request for research data relating to published research findings 
produced under an award that were used by the Federal Government in 
developing an agency action that has the force and effect of law, the 
DoD Component that made the award shall request, and the recipient shall 
provide, within a reasonable time, the research data so that they can be 
made available to the public through the procedures established under 
the FOIA. If the DoD Component that made the award obtains the research 
data solely in response to a FOIA request, the agency may charge the 
requester a reasonable fee equaling the full incremental cost of 
obtaining the research data. This fee should reflect costs incurred by 
the agency, the recipient, and applicable subrecipients. This fee is in 
addition to any fees the

[[Page 143]]

agency may assess under the FOIA (5 U.S.C. 552(a)(4)(A)).
    (2) The following definitions apply for purposes of this paragraph 
(d):
    (i) Research data is defined as the recorded factual material 
commonly accepted in the scientific community as necessary to validate 
research findings, but not any of the following: preliminary analyses, 
drafts of scientific papers, plans for future research, peer reviews, or 
communications with colleagues. This ``recorded'' material excludes 
physical objects (e.g., laboratory samples). Research data also do not 
include:
    (A) Trade secrets, commercial information, materials necessary to be 
held confidential by a researcher until they are published, or similar 
information which is protected under law; and
    (B) Personnel and medical information and similar information the 
disclosure of which would constitute a clearly unwarranted invasion of 
personal privacy, such as information that could be used to identify a 
particular person in a research study.
    (ii) Published is defined as either when:
    (A) Research findings are published in a peer-reviewed scientific or 
technical journal; or
    (B) A Federal agency publicly and officially cites the research 
findings in support of an agency action that has the force and effect of 
law.
    (iii) Used by the Federal Government in developing an agency action 
that has the force and effect of law is defined as when an agency 
publicly and officially cites the research findings in support of an 
agency action that has the force and effect of law.
    (e) Title to intangible property and debt instruments acquired under 
an award or subaward (rather than developed or produced under the award 
or subaward) vests upon acquisition in the recipient. The recipient 
shall use that property for the originally-authorized purpose, and the 
recipient shall not encumber the property without approval of the DoD 
Component that made the award. When no longer needed for the originally 
authorized purpose, disposition of the intangible property shall occur 
in accordance with the provisions of Sec. 32.34(g).

[63 FR 12188, Mar. 12, 1998, as amended at 65 FR 14407, 14416, Mar. 16, 
2000]



Sec. 32.37  Property trust relationship.

    Real property, equipment, intangible property and debt instruments 
that are acquired or improved with Federal funds shall be held in trust 
by the recipient as trustee for the beneficiaries of the project or 
program under which the property was acquired or improved. DoD 
Components may require recipients to record liens or other appropriate 
notices of record to indicate that personal or real property has been 
acquired or improved with Federal funds and that use and disposition 
conditions apply to the property.

                          Procurement Standards



Sec. 32.40  Purpose of procurement standards.

    Sections 32.41 through 32.48 set forth standards for use by 
recipients in establishing procedures for the procurement of supplies 
and other expendable property, equipment, real property and other 
services with Federal funds. These standards are furnished to ensure 
that such materials and services are obtained in an effective manner and 
in compliance with the provisions of applicable Federal statutes and 
executive orders.



Sec. 32.41  Recipient responsibilities.

    The standards contained in this section do not relieve the recipient 
of the contractual responsibilities arising under its contract(s). The 
recipient is the responsible authority, without recourse to the DoD 
Component that made the award, regarding the settlement and satisfaction 
of all contractual and administrative issues arising out of procurements 
entered into in support of an award or other agreement. This includes 
disputes, claims, protests of award, source evaluation or other matters 
of a contractual nature. Matters concerning violation of statute are to 
be referred to such Federal, State or local authority as may have proper 
jurisdiction.

[[Page 144]]



Sec. 32.42  Codes of conduct.

    The recipient shall maintain written standards of conduct governing 
the performance of its employees engaged in the award and administration 
of contracts. No employee, officer, or agent shall participate in the 
selection, award, or administration of a contract supported by Federal 
funds if a real or apparent conflict of interest would be involved. Such 
a conflict would arise when the employee, officer, or agent, any member 
of his or her immediate family, his or her partner, or an organization 
which employs or is about to employ any of the parties indicated herein, 
has a financial or other interest in the firm selected for an award. The 
officers, employees, and agents of the recipient shall neither solicit 
nor accept gratuities, favors, or anything of monetary value from 
contractors, or parties to subagreements. However, recipients may set 
standards for situations in which the financial interest is not 
substantial or the gift is an unsolicited item of nominal value. The 
standards of conduct shall provide for disciplinary actions to be 
applied for violations of such standards by officers, employees, or 
agents of the recipient.



Sec. 32.43  Competition.

    All procurement transactions shall be conducted in a manner to 
provide, to the maximum extent practical, open and free competition. The 
recipient shall be alert to organizational conflicts of interest as well 
as noncompetitive practices among contractors that may restrict or 
eliminate competition or otherwise restrain trade. In order to ensure 
objective contractor performance and eliminate unfair competitive 
advantage, contractors that develop or draft specifications, 
requirements, statements of work, invitations for bids and/or requests 
for proposals shall be excluded from competing for such procurements. 
Awards shall be made to the bidder or offeror whose bid or offer is 
responsive to the solicitation and is most advantageous to the 
recipient, price, quality and other factors considered. Solicitations 
shall clearly set forth all requirements that the bidder or offeror 
shall fulfill in order for the bid or offer to be evaluated by the 
recipient. Any and all bids or offers may be rejected when it is in the 
recipient's interest to do so.



Sec. 32.44  Procurement procedures.

    (a) All recipients shall establish written procurement procedures. 
These procedures shall provide, at a minimum, that:
    (1) Recipients avoid purchasing unnecessary items;
    (2) Where appropriate, an analysis is made of lease and purchase 
alternatives to determine which would be the most economical and 
practical procurement; and
    (3) Solicitations for goods and services provide for all of the 
following:
    (i) A clear and accurate description of the technical requirements 
for the material, product or service to be procured. In competitive 
procurements, such a description shall not contain features which unduly 
restrict competition.
    (ii) Requirements which the bidder/offeror must fulfill and all 
other factors to be used in evaluating bids or proposals.
    (iii) A description, whenever practicable, of technical requirements 
in terms of functions to be performed or performance required, including 
the range of acceptable characteristics or minimum acceptable standards.
    (iv) The specific features of ``brand name or equal'' descriptions 
that bidders are required to meet when such items are included in the 
solicitation.
    (v) The acceptance, to the extent practicable and economically 
feasible, of products and services dimensioned in the metric system of 
measurement.
    (vi) Preference, to the extent practicable and economically 
feasible, for products and services that conserve natural resources and 
protect the environment and are energy efficient.
    (b) Positive efforts shall be made by recipients to utilize small 
businesses, minority-owned firms, and women's business enterprises, 
whenever possible. Recipients of Federal awards shall take all of the 
following steps to further this goal:
    (1) Ensure that small businesses, minority-owned firms, and women's 
business enterprises are used to the fullest extent practicable.

[[Page 145]]

    (2) Make information on forthcoming opportunities available and 
arrange time frames for purchases and contracts to encourage and 
facilitate participation by small businesses, minority-owned firms, and 
women's business enterprises.
    (3) Consider in the contract process whether firms competing for 
larger contracts intend to subcontract with small businesses, minority-
owned firms, and women's business enterprises.
    (4) Encourage contracting with consortiums of small businesses, 
minority-owned firms and women's business enterprises when a contract is 
too large for one of these firms to handle individually.
    (5) Use the services and assistance, as appropriate, of such 
organizations as the Small Business Administration and the Department of 
Commerce's Minority Business Development Agency in the solicitation and 
utilization of small businesses, minority-owned firms and women's 
business enterprises.
    (c) The type of procuring instruments used (e.g., fixed price 
contracts, cost reimbursable contracts, purchase orders, and incentive 
contracts) shall be determined by the recipient but shall be appropriate 
for the particular procurement and for promoting the best interest of 
the program or project involved. The ``cost-plus-a-percentage-of-cost'' 
or ``percentage of construction cost'' methods of contracting shall not 
be used.
    (d) Contracts shall be made only with responsible contractors who 
possess the potential ability to perform successfully under the terms 
and conditions of the proposed procurement. Consideration shall be given 
to such matters as contractor integrity, record of past performance, 
financial and technical resources or accessibility to other necessary 
resources. In certain circumstances, contracts with certain parties are 
restricted by the DoD implementation, in 2 CFR part 1125, of OMB 
guidance on nonprocurement debarment and suspension (2 CFR part 180)
    (e) Recipients shall, on request, make available for the DoD 
Component's pre-award review, procurement documents such as request for 
proposals or invitations for bids, independent cost estimates, etc., 
when any of the following conditions apply:
    (1) A recipient's procurement procedures or operation fails to 
comply with the procurement standards in this part.
    (2) The procurement is expected to exceed the simplified acquisition 
threshold fixed at 41 U.S.C. 403 (11) (currently $100,000) and is to be 
awarded without competition or only one bid or offer is received in 
response to a solicitation.
    (3) The procurement, which is expected to exceed the simplified 
acquisition threshold, specifies a ``brand name'' product.
    (4) The proposed award over the simplified acquisition threshold is 
to be awarded to other than the apparent low bidder under a sealed bid 
procurement.
    (5) A proposed contract modification changes the scope of a contract 
or increases the contract amount by more than the amount of the 
simplified acquisition threshold.

[63 FR 12188, Mar. 12, 1998, as amended at 72 FR 34998, June 26, 2007]



Sec. 32.45  Cost and price analysis.

    Some form of cost or price analysis shall be made and documented in 
the procurement files in connection with every procurement action. Price 
analysis may be accomplished in various ways, including the comparison 
of price quotations submitted, market prices and similar indicia, 
together with discounts. Cost analysis is the review and evaluation of 
each element of cost to determine reasonableness, allocability and 
allowability.



Sec. 32.46  Procurement records.

    Procurement records and files for purchases in excess of the 
simplified acquisition threshold shall include the following at a 
minimum:
    (a) Basis for contractor selection;
    (b) Justification for lack of competition when competitive bids or 
offers are not obtained; and
    (c) Basis for award cost or price.



Sec. 32.47  Contract administration.

    A system for contract administration shall be maintained to ensure 
contractor conformance with the terms,

[[Page 146]]

conditions and specifications of the contract and to ensure adequate and 
timely follow up of all purchases. Recipients shall evaluate contractor 
performance and document, as appropriate, whether contractors have met 
the terms, conditions and specifications of the contract.



Sec. 32.48  Contract provisions.

    The recipient shall include, in addition to provisions to define a 
sound and complete agreement, the following provisions in all contracts. 
The following provisions shall also be applied to subcontracts:
    (a) Contracts in excess of the simplified acquisition threshold 
shall contain contractual provisions or conditions that allow for 
administrative, contractual, or legal remedies in instances in which a 
contractor violates or breaches the contract terms, and provide for such 
remedial actions as may be appropriate.
    (b) All contracts in excess of the simplified acquisition threshold 
shall contain suitable provisions for termination by the recipient, 
including the manner by which termination shall be effected and the 
basis for settlement. In addition, such contracts shall describe 
conditions under which the contract may be terminated for default as 
well as conditions where the contract may be terminated because of 
circumstances beyond the control of the contractor.
    (c) Except as otherwise required by statute, an award that requires 
the contracting (or subcontracting) for construction or facility 
improvements shall provide for the recipient to follow its own 
requirements relating to bid guarantees, performance bonds, and payment 
bonds unless the construction contract or subcontract exceeds $100,000. 
For those contracts or subcontracts exceeding $100,000, the DoD 
Component may accept the bonding policy and requirements of the 
recipient, provided the grants officer has made a determination that the 
Federal Government's interest is adequately protected. If such a 
determination has not been made, the minimum requirements shall be as 
follows:
    (1) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' shall consist of a firm commitment 
such as a bid bond, certified check, or other negotiable instrument 
accompanying a bid as assurance that the bidder shall, upon acceptance 
of his bid, execute such contractual documents as may be required within 
the time specified.
    (2) A performance bond on the part of the contractor for 100 percent 
of the contract price. A ``performance bond'' is one executed in 
connection with a contract to secure fulfillment of all the contractor's 
obligations under such contract.
    (3) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract to assure payment as required by statute of all persons 
supplying labor and material in the execution of the work provided for 
in the contract.
    (4) Where bonds are required in the situations described in 
Sec. Sec. 32.40 through 32.49, the bonds shall be obtained from 
companies holding certificates of authority as acceptable sureties 
pursuant to 31 CFR part 223, ``Surety Companies Doing Business with the 
United States.''
    (d) All negotiated contracts (except those for less than the 
simplified acquisition threshold) awarded by recipients shall include a 
provision to the effect that the recipient, the Department of Defense, 
the Comptroller General of the United States, or any of their duly 
authorized representatives, shall have access to any books, documents, 
papers and records of the contractor which are directly pertinent to a 
specific program for the purpose of making audits, examinations, 
excerpts and transcriptions.
    (e) All contracts, including those for amounts less than the 
simplified acquisition threshold, by recipients and their contractors 
shall contain the procurement provisions of Appendix A to this part, as 
applicable.



Sec. 32.49  Resource Conservation and Recovery Act.

    Under the Resource Conservation and Recovery Act (RCRA) (section 
6002, Pub. L. 94-580, 42 U.S.C. 6962), any State agency or agency of a 
political subdivision of a State which is using

[[Page 147]]

appropriated Federal funds must comply with section 6002. Section 6002 
requires that preference be given in procurement programs to the 
purchase of specific products containing recycled materials identified 
in guidelines developed by the Environmental Protection Agency (EPA) (40 
CFR parts 247-254). Accordingly, State and local institutions of higher 
education, hospitals, and non-profit organizations that receive direct 
Federal awards or other Federal funds shall give preference in their 
procurement programs funded with Federal funds to the purchase of 
recycled products pursuant to the EPA guidelines.

                           Reports and Records



Sec. 32.50  Purpose of reports and records.

    Sections 32.51 through 32.53 set forth the procedures for monitoring 
and reporting on the recipient's financial and program performance and 
the necessary standard reporting forms. They also set forth record 
retention requirements.



Sec. 32.51  Monitoring and reporting program performance.

    (a) Recipients are responsible for managing and monitoring each 
project, program, subaward, function or activity supported by the award. 
Recipients shall monitor subawards to ensure subrecipients have met the 
audit requirements as delineated in Sec. 32.26.
    (b) The award terms and conditions shall prescribe the frequency 
with which the performance reports shall be submitted. Except as 
provided in paragraph (f) of this section, performance reports shall not 
be required more frequently than quarterly or less frequently than 
annually. Annual reports shall be due 90 calendar days after the award 
year; quarterly or semi-annual reports shall be due 30 calendar days 
after the reporting period. DoD Components may require annual reports 
before the anniversary dates of multiple year awards in lieu of these 
requirements. The final performance reports are due 90 calendar days 
after the expiration or termination of the award.
    (c) If inappropriate, a final technical or performance report shall 
not be required after completion of the project.
    (d) When required, performance reports shall generally contain, for 
each award, brief information on each of the following:
    (1) A comparison of actual accomplishments with the goals and 
objectives established for the period, the findings of the investigator, 
or both. Whenever appropriate and the output of programs or projects can 
be readily quantified, such quantitative data should be related to cost 
data for computation of unit costs. However, unit costs are generally 
inappropriate for research (see Sec. 32.21 (a) and (b)(4)).
    (2) Reasons why established goals were not met, if appropriate.
    (3) Other pertinent information including, when appropriate, 
analysis and explanation of cost overruns or high unit costs.
    (e) Recipients shall not be required to submit more than the 
original and two copies of performance reports.
    (f) Recipients shall immediately notify the grants officer of 
developments that have a significant impact on the award-supported 
activities. Also, notification shall be given in the case of problems, 
delays, or adverse conditions which materially impair the ability to 
meet the objectives of the award. This notification shall include a 
statement of the action taken or contemplated, and any assistance needed 
to resolve the situation.
    (g) DoD Components' representatives may make site visits, as needed.
    (h) DoD Components shall comply with applicable clearance 
requirements of 5 CFR part 1320 when requesting performance data from 
recipients.



Sec. 32.52  Financial reporting.

    (a) The following forms or such other forms as may be approved by 
OMB are authorized for obtaining financial information from recipients:
    (1) SF-269 \9\ or SF-269A, \10\ Financial Status Report. (i) DoD 
Components shall require recipients to use the SF-269 or SF-269A to 
report the status of funds for all nonconstruction projects or programs. 
A DoD Component may, however, have the option of not requiring the SF-
269 or SF-269A when the SF-270,

[[Page 148]]

Request for Advance or Reimbursement, or SF-272, \11\ Report of Federal 
Cash Transactions, is determined to provide adequate information to meet 
agency needs, except that a final SF-269 or SF-269A shall be required at 
the completion of the project when the SF-270 is used only for advances.
---------------------------------------------------------------------------

    \9\ See footnote 2 to Sec. 32.12(a).
    \10\ See footnote 2 to Sec. 32.12(a).
    \11\ See footnote 2 to Sec. 32.12(a).
---------------------------------------------------------------------------

    (ii) The DoD Component shall prescribe whether the report shall be 
on a cash or accrual basis. If the award requires accrual information 
and the recipient's accounting records are not normally kept on the 
accrual basis, the recipient shall not be required to convert its 
accounting system, but shall develop such accrual information through 
best estimates based on an analysis of the documentation on hand.
    (iii) The DoD Component shall determine the frequency of the 
Financial Status Report for each project or program, considering the 
size and complexity of the particular project or program. However, the 
report shall not be required more frequently than quarterly or less 
frequently than annually. A final report shall be required at the 
completion of the award.
    (iv) The DoD Component shall require recipients to submit the SF-269 
or SF-269A (an original and no more than two copies) no later than 30 
calendar days after the end of each specified reporting period for 
quarterly and semi-annual reports, and 90 calendar days for annual and 
final reports. Extensions of reporting due dates may be approved by the 
grants officer upon request of the recipient.
    (2) SF-272, Report of Federal Cash Transactions. (i) When funds are 
advanced to recipients the DoD Component shall require each recipient to 
submit the SF-272 and, when necessary, its continuation sheet, SF-272a. 
\12\ The grants officer shall use this report to monitor cash advanced 
to recipients and to obtain disbursement information for each award to 
the recipients.
---------------------------------------------------------------------------

    \12\ See footnote 2 to Sec. 32.12(a).
---------------------------------------------------------------------------

    (ii) DoD Components may require forecasts of Federal cash 
requirements in the ``Remarks'' section of the report.
    (iii) When practical and deemed necessary, DoD Components may 
require recipients to report in the ``Remarks'' section the amount of 
cash advances received in excess of three working days. Recipients shall 
provide short narrative explanations of actions taken to reduce the 
excess balances.
    (iv) Recipients shall be required to submit not more than the 
original and two copies of the SF-272 15 calendar days following the end 
of each quarter. DoD Components may require a monthly report from those 
recipients receiving advances totaling $1 million or more per year.
    (v) DoD Components may waive the requirement for submission of the 
SF-272 for any one of the following reasons:
    (A) When monthly advances do not exceed $25,000 per recipient, 
provided that such advances are monitored through other forms contained 
in this section;
    (B) If, in the grants officer's opinion, the recipient's accounting 
controls are adequate to minimize excessive Federal advances; or
    (C) When electronic payment mechanisms or SF-270 forms provide 
adequate data.
    (b) When the DoD Component needs additional information or more 
frequent reports, the following shall be observed:
    (1) When additional information is needed to comply with legislative 
requirements, grants officers shall issue instructions to require 
recipients to submit such information under the ``Remarks'' section of 
the reports.
    (2) When a grants officer, after consultation with the Federal 
agency assigned cognizance for a recipient's audit and audit resolution, 
determines that the recipient's accounting system does not meet the 
standards in Sec. 32.21, additional pertinent information to further 
monitor awards may be obtained upon written notice to the recipient 
until such time as the system is brought up to standard. The grants 
officer, in obtaining this information, shall comply with applicable 
report clearance requirements of 5 CFR part 1320.

[[Page 149]]

    (3) Grants officers are encouraged to shade out any line item on any 
report if not necessary.
    (4) DoD Components are encouraged to accept the identical 
information from the recipients in machine readable format or computer 
printouts or electronic outputs in lieu of prescribed formats.
    (5) DoD Components may provide computer or electronic outputs to 
recipients when it expedites or contributes to the accuracy of 
reporting.



Sec. 32.53  Retention and access requirements for records.

    (a) This section sets forth requirements for record retention and 
access to records for awards to recipients. DoD Components shall not 
impose any other record retention or access requirements upon 
recipients.
    (b) Financial records, supporting documents, statistical records, 
and all other records pertinent to an award shall be retained for a 
period of three years from the date of submission of the final 
expenditure report. The only exceptions are the following:
    (1) If any litigation, claim, or audit is started before the 
expiration of the 3-year period, the records shall be retained until all 
litigation, claims or audit findings involving the records have been 
resolved and final action taken.
    (2) Records for real property and equipment acquired with Federal 
funds shall be retained for 3 years after final disposition.
    (3) When records are transferred to or maintained by the DoD 
Component that made the award, the 3-year retention requirement is not 
applicable to the recipient.
    (4) Indirect cost rate proposals, cost allocations plans, and 
related records, for which retention requirements are specified in 
paragraph (g) of this section.
    (c) Copies of original records may be substituted for the original 
records if authorized by the grants officer.
    (d) The grants officer shall request that recipients transfer 
certain records to DoD Component custody when he or she determines that 
the records possess long term retention value. However, in order to 
avoid duplicate recordkeeping, a grants officer may make arrangements 
for recipients to retain any records that are continuously needed for 
joint use.
    (e) DoD Components, the Inspector General, Comptroller General of 
the United States, or any of their duly authorized representatives, have 
the right of timely and unrestricted access to any books, documents, 
papers, or other records of recipients that are pertinent to the awards, 
in order to make audits, examinations, excerpts, transcripts and copies 
of such documents. This right also includes timely and reasonable access 
to a recipient's personnel for the purpose of interview and discussion 
related to such documents. The rights of access in this paragraph are 
not limited to the required retention period, but shall last as long as 
records are retained.
    (f) Unless required by statute, no DoD Component shall place 
restrictions on recipients that limit public access to the records of 
recipients that are pertinent to an award, except when the DoD Component 
can demonstrate that such records shall be kept confidential and would 
have been exempted from disclosure pursuant to the Freedom of 
Information Act (5 U.S.C. 552) if the records had belonged to the DoD 
Component making the award.
    (g) Indirect cost rate proposals, cost allocations plans, etc. 
Paragraphs (g)(1) and (g)(2) of this section apply to the following 
types of documents, and their supporting records: indirect cost rate 
computations or proposals, cost allocation plans, and any similar 
accounting computations of the rate at which a particular group of costs 
is chargeable (such as computer usage chargeback rates or composite 
fringe benefit rates).
    (1) If submitted for negotiation. If the recipient submits an 
indirect-cost proposal, plan, or other computation to the Federal agency 
responsible for negotiating the recipient's indirect cost rate, as the 
basis for negotiation of the rate, or the subrecipient submits such a 
proposal, plan, or computation to the recipient, then the 3-year 
retention period for its supporting records starts on the date of such 
submission.
    (2) If not submitted for negotiation. If the recipient is not 
required to submit

[[Page 150]]

to the cognizant Federal agency or the subrecipient is not required to 
submit to the recipient the proposal, plan, or other computation for 
negotiation purposes, then the 3-year retention period for the proposal, 
plan, or other computation and its supporting records starts at the end 
of the fiscal year (or other accounting period) covered by the proposal, 
plan, or other computation.
    (h) If the information described in this section is maintained on a 
computer, recipients shall retain the computer data on a reliable medium 
for the time periods prescribed. Recipients may transfer computer data 
in machine readable form from one reliable computer medium to another. 
Recipients' computer data retention and transfer procedures shall 
maintain the integrity, reliability, and security of the original 
computer data. Recipients shall also maintain an audit trail describing 
the data transfer. For the record retention time periods prescribed in 
this section, recipients shall not destroy, discard, delete, or write 
over such computer data.

                       Termination and Enforcement



Sec. 32.60  Purpose of termination and enforcement.

    Sections 32.61 and 32.62 set forth uniform suspension, termination 
and enforcement procedures.



Sec. 32.61  Termination.

    (a) Awards may be terminated in whole or in part only as follows:
    (1) By the grants officer, if a recipient materially fails to comply 
with the terms and conditions of an award;
    (2) By the grants officer with the consent of the recipient, in 
which case the two parties shall agree upon the termination conditions, 
including the effective date and, in the case of partial termination, 
the portion to be terminated; or
    (3) By the recipient upon sending to the grants officer written 
notification setting forth the reasons for such termination, the 
effective date, and, in the case of partial termination, the portion to 
be terminated. The recipient must provide such notice at least 30 
calendar days prior to the effective date of the termination. However, 
if the grants officer determines in the case of partial termination that 
the reduced or modified portion of the award will not accomplish the 
purposes for which the award was made, he or she may terminate the award 
in its entirety.
    (b) If costs are allowed under an award, the responsibilities of the 
recipient referred to in Sec. 32.71, including those for property 
management as applicable, shall be considered in the termination of the 
award, and provision shall be made for continuing responsibilities of 
the recipient after termination, as appropriate.



Sec. 32.62  Enforcement.

    (a) Remedies for noncompliance. If a recipient materially fails to 
comply with the terms and conditions of an award, whether stated in a 
Federal statute, regulation, assurance, application, or notice of award, 
the grants officer may, in addition to imposing any of the special 
conditions outlined in Sec. 32.14, take one or more of the following 
actions, as appropriate in the circumstances:
    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the recipient or more severe enforcement action by the 
grants officer and DoD Component.
    (2) Disallow (that is, deny both use of funds and any applicable 
matching credit for) all or part of the cost of the activity or action 
not in compliance.
    (3) Wholly or partly suspend or terminate the current award.
    (4) Withhold further awards for the project or program.
    (5) Take other remedies that may be legally available.
    (b) Hearings and appeals. In taking an enforcement action, the DoD 
Component shall provide the recipient an opportunity for hearing, 
appeal, or other administrative proceeding to which the recipient is 
entitled under any statute or regulation applicable to the action 
involved. Award terms or conditions will incorporate the procedures of 
32 CFR 22.815 for processing recipient claims and disputes and for 
deciding appeals of grants officers' decisions.
    (c) Effects of suspension and termination. Costs of a recipient 
resulting

[[Page 151]]

from obligations incurred by the recipient during a suspension or after 
termination of an award are not allowable unless the grants officer 
expressly authorizes them in the notice of suspension or termination or 
subsequently. Other recipient costs during suspension or after 
termination which are necessary and not reasonably avoidable are 
allowable if the costs:
    (1) Result from obligations which were properly incurred by the 
recipient before the effective date of suspension or termination, are 
not in anticipation of it, and in the case of a termination, are 
noncancellable; and
    (2) Would be allowable if the award were not suspended or expired 
normally at the end of the funding period in which the termination takes 
effect.
    (d) Relationship to debarment and suspension. The enforcement 
remedies identified in this section, including suspension and 
termination, do not preclude a recipient from being subject to debarment 
and suspension under 2 CFR part 1125.

[63 FR 12188, Mar. 12, 1998, as amended at 72 FR 34998, June 26, 2007]



                 Subpart D_After-the-Award Requirements



Sec. 32.70  Purpose.

    Sections 32.71 through 32.73 contain closeout procedures and other 
procedures for subsequent disallowances and adjustments.



Sec. 32.71  Closeout procedures.

    (a) Recipients shall submit, within 90 calendar days after the date 
of completion of the award, all financial, performance, and other 
reports required by the terms and conditions of the award. The grants 
officer may approve extensions when requested by the recipient.
    (b) Unless the grants officer authorizes an extension, a recipient 
shall liquidate all obligations incurred under the award not later than 
90 calendar days after the funding period or the date of completion as 
specified in the terms and conditions of the award or in agency 
implementing instructions.
    (c) The responsible grants officer and payment office shall expedite 
completion of steps needed to close out awards and make prompt, final 
payments to a recipient for allowable reimbursable costs under the award 
being closed out.
    (d) The recipient shall promptly refund any balances of unobligated 
cash that the DoD Component has advanced or paid and that is not 
authorized to be retained by the recipient for use in other projects. 
OMB Circular A-129 \13\ governs unreturned amounts that become 
delinquent debts (see 32 CFR 22.820).
---------------------------------------------------------------------------

    \13\ See footnote 1 to Sec. 32.1(a).
---------------------------------------------------------------------------

    (e) When authorized by the terms and conditions of the award, the 
grants officer shall make a settlement for any upward or downward 
adjustments to the Federal share of costs after closeout reports are 
received.
    (f) The recipient shall account for any real and personal property 
acquired with Federal funds or received from the Federal Government in 
accordance with Sec. Sec. 32.31 through 32.37.
    (g) In the event a final audit has not been performed prior to the 
closeout of an award, the DoD Component shall retain the right to 
recover an appropriate amount after fully considering the 
recommendations on disallowed costs resulting from the final audit.



Sec. 32.72  Subsequent adjustments and continuing responsibilities.

    (a) The closeout of an award does not affect any of the following:
    (1) The right of the Department of Defense to disallow costs and 
recover funds on the basis of a later audit or other review.
    (2) The obligation of the recipient to return any funds due as a 
result of later refunds, corrections, or other transactions.
    (3) Audit requirements in Sec. 32.26.
    (4) Property management requirements in Sec. Sec. 32.31 through 
32.37.
    (5) Records retention as required in Sec. 32.53.
    (b) After closeout of an award, a relationship created under an 
award may be modified or ended in whole or in part with the consent of 
the grants officer and the recipient, provided the responsibilities of 
the recipient referred to in Sec. 32.73(a), including those for 
property management as applicable, are

[[Page 152]]

considered and provisions made for continuing responsibilities of the 
recipient, as appropriate.



Sec. 32.73  Collection of amounts due.

    (a) Any funds paid to a recipient in excess of the amount to which 
the recipient is finally determined to be entitled under the terms and 
conditions of the award constitute a debt to the Federal Government.
    (b) OMB Circular A-110 informs each Federal agency that:
    (1) If a debt is not paid within a reasonable period after the 
demand for payment, the Federal agency may reduce the debt by:
    (i) Making administrative offset against other requests for 
reimbursement.
    (ii) Withholding advance payments otherwise due to the recipient.
    (iii) Taking other action permitted by statute.
    (2) Except as otherwise provided by law, the Federal awarding agency 
shall charge interest on an overdue debt in accordance with 4 CFR 
Chapter II, ``Federal Claims Collection Standards.''
    (c) DoD grants officers shall follow the procedures in 32 CFR 22.820 
for issuing demands for payment and transferring debts to DoD payment 
offices for collection. Recipients will be informed about pertinent 
procedures and timeframes through the written notices of grants 
officers' decisions and demands for payment.



             Sec. Appendix A to Part 32--Contract Provisions

    All contracts awarded by a recipient, including those for amounts 
less than the simplified acquisition threshold, shall contain the 
following provisions as applicable:
    1. Equal Employment Opportunity--All contracts shall contain a 
provision requiring compliance with E.O. 11246 (3 CFR, 1964-1965 Comp., 
p. 339), ``Equal Employment Opportunity,'' as amended by E.O. 11375 (3 
CFR, 1966-1970 Comp., p. 684), ``Amending Executive Order 11246 Relating 
to Equal Employment Opportunity,'' and as supplemented by regulations at 
41 CFR ch. 60, ``Office of Federal Contract Compliance Programs, Equal 
Employment Opportunity, Department of Labor.''
    2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C. 
276c)--All contracts and subawards in excess of $2000 for construction 
or repair awarded by recipients and subrecipients shall include a 
provision for compliance with the Copeland ``Anti-Kickback'' Act (18 
U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR 
part 3, ``Contractors and Subcontractors on Public Building or Public 
Work Financed in Whole or in Part by Loans or Grants from the United 
States''). The Act provides that each contractor or subrecipient shall 
be prohibited from inducing, by any means, any person employed in the 
construction, completion, or repair of public work, to give up any part 
of the compensation to which he is otherwise entitled. The recipient 
shall report all suspected or reported violations to the responsible DoD 
Component.
    3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--This Act 
applies to procurements under awards only when the Federal program 
legislation specifically makes it apply (i.e., Davis-Bacon does not by 
itself apply to procurements under awards). In cases where another 
statute does make the Davis-Bacon Act apply, all construction contracts 
awarded by the recipients and subrecipients of more than $2,000 shall 
include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 
276a to a-7) and as supplemented by Department of Labor regulations (29 
CFR part 5, ``Labor Standards Provisions Applicable to Contracts 
Governing Federally Financed and Assisted Construction''). Under this 
Act, contractors shall be required to pay wages to laborers and 
mechanics at a rate not less than the minimum wages specified in a wage 
determination made by the Secretary of Labor. In addition, contractors 
shall be required to pay wages not less than once a week. The recipient 
shall place a copy of the current prevailing wage determination issued 
by the Department of Labor in each solicitation and the award of a 
contract shall be conditioned upon the acceptance of the wage 
determination. The recipient shall report all suspected or reported 
violations to the Federal awarding agency.
    4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
333)--Where applicable, all contracts awarded by recipients in excess of 
$100,000 for construction or other purposes that involve the employment 
of mechanics or laborers shall include a provision for compliance with 
sections 102 and 107 of the Contract Work Hours and Safety Standards Act 
(40 U.S.C. 327-333), as supplemented by Department of Labor regulations 
(29 CFR part 5). Under section 102 of the Act, each contractor shall be 
required to compute the wages of every mechanic and laborer on the basis 
of a standard work week of 40 hours. Work in excess of the standard work 
week is permissible provided that the worker is compensated at a rate of 
not less than 1\1/2\ times the basic rate of pay for all hours worked in 
excess of 40 hours in the work week. Section

[[Page 153]]

107 of the Act is applicable to construction work and provides that no 
laborer or mechanic shall be required to work in surroundings or under 
working conditions which are unsanitary, hazardous or dangerous. These 
requirements do not apply to the purchases of supplies or materials or 
articles ordinarily available on the open market, or contracts for 
transportation or transmission of intelligence.
    5. Rights to Inventions Made Under a Contract, Grant or Cooperative 
Agreement--Contracts, grants, or cooperative agreements for the 
performance of experimental, developmental, or research work shall 
provide for the rights of the Federal Government and the recipient in 
any resulting invention in accordance with 37 CFR part 401, ``Rights to 
Inventions Made by Nonprofit Organizations and Small Business Firms 
Under Government Grants, Contracts and Cooperative Agreements.''
    6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water 
Pollution Control Act (33 U.S.C. 1251 et seq.), as amended--Contracts 
and subawards of amounts in excess of $100,000 shall contain a provision 
that requires the recipient to agree to comply with all applicable 
standards, orders or regulations issued pursuant to the Clean Air Act 
(42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as 
amended (33 U.S.C. 1251 et seq.). Violations shall be reported to the 
responsible DoD Component and the Regional Office of the Environmental 
Protection Agency (EPA).
    7. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--Contractors who 
apply or bid for an award of $100,000 or more shall file the required 
certification. Each tier certifies to the tier above that it will not 
and has not used Federal appropriated funds to pay any person or 
organization for influencing or attempting to influence an officer or 
employee of any agency, a member of Congress, officer or employee of 
Congress, or an employee of a member of Congress in connection with 
obtaining any Federal contract, grant or any other award covered by 31 
U.S.C. 1352. Each tier shall also disclose any lobbying with non-Federal 
funds that takes place in connection with obtaining any Federal award. 
Such disclosures are forwarded from tier to tier up to the recipient.
    8. Debarment and Suspension (E.O.s 12549 and 12689)--A contract 
award with an amount expected to equal or exceed $25,000 and certain 
other contract awards (see 2 CFR 1125.220, which implements OMB guidance 
at 2 CFR 180.220) shall not be made to parties listed on the 
Governmentwide Excluded Parties List System, in accordance with the DoD 
adoption at 2 CFR part 1125 of the OMB guidance implementing E.O.s 12549 
(3 CFR, 1986 Comp., p. 189) and 12689 (3 CFR, 1989 Comp., p. 235), 
``Debarment and Suspension.'' The Excluded Parties List System 
accessible on the Internet at www.epls.gov contains the names of parties 
debarred, suspended, or otherwise excluded by agencies, as well as 
parties declared ineligible under statutory or regulatory authority 
other than E.O. 12549.

[63 FR 12188, Mar. 12, 1998, as amended at 70 FR 49477, Aug. 23, 2005; 
72 FR 34998, June 26, 2007]



PART 33_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE 

AGREEMENTS TO STATE AND LOCAL GOVERNMENTS--Table of Contents



                            Subpart A_General

Sec.
33.1 Purpose and scope of this part.
33.2 Scope of subpart.
33.3 Definitions.
33.4 Applicability.
33.5 Effect on other issuances.
33.6 Additions and exceptions.

                    Subpart B_Pre-Award Requirements

33.10 Forms for applying for grants.
33.11 State plans.
33.12 Special grant or subgrant conditions for ``high-risk'' grantees.

                    Subpart C_Post-Award Requirements

                        Financial Administration

33.20 Standards for financial management systems.
33.21 Payment.
33.22 Allowable costs.
33.23 Period of availability of funds.
33.24 Matching or cost sharing.
33.25 Program income.
33.26 Non-Federal audit.

                    Changes, Property, and Subawards

33.30 Changes.
33.31 Real property.
33.32 Equipment.
33.33 Supplies.
33.34 Copyrights.
33.35 Subawards to debarred and suspended parties.
33.36 Procurement.
33.37 Subgrants.

               Reports, Records Retention, and Enforcement

33.40 Monitoring and reporting program performance.
33.41 Financial reporting.
33.42 Retention and access requirements for records.
33.43 Enforcement.
33.44 Termination for convenience.

[[Page 154]]

                 Subpart D_After-the-Grant Requirements

33.50 Closeout.
33.51 Later disallowances and adjustments.
33.52 Collections of amounts due.

Subpart E--Entitlements [Reserved]

    Authority: 5 U.S.C. 301; 10 U.S.C. 113.

    Source: 53 FR 8070, 8087, Mar. 11, 1988, unless otherwise noted. 
Redesignated at 57 FR 6200, Feb. 21, 1992.



                            Subpart A_General



Sec. 33.1  Purpose and scope of this part.

    This part establishes uniform administrative rules for Federal 
grants and cooperative agreements and subawards to State, local and 
Indian tribal governments.



Sec. 33.2  Scope of subpart.

    This subpart contains general rules pertaining to this part and 
procedures for control of exceptions from this part.



Sec. 33.3  Definitions.

    As used in this part:
    Accrued expenditures mean the charges incurred by the grantee during 
a given period requiring the provision of funds for:
    (1) Goods and other tangible property received;
    (2) Services performed by employees, contractors, subgrantees, 
subcontractors, and other payees; and
    (3) Other amounts becoming owed under programs for which no current 
services or performance is required, such as annuities, insurance 
claims, and other benefit payments.
    Accrued income means the sum of:
    (1) Earnings during a given period from services performed by the 
grantee and goods and other tangible property delivered to purchasers, 
and
    (2) Amounts becoming owed to the grantee for which no current 
services or performance is required by the grantee.
    Acquisition cost of an item of purchased equipment means the net 
invoice unit price of the property including the cost of modifications, 
attachments, accessories, or auxiliary apparatus necessary to make the 
property usable for the purpose for which it was acquired. Other charges 
such as the cost of installation, transportation, taxes, duty or 
protective in-transit insurance, shall be included or excluded from the 
unit acquisition cost in accordance with the grantee's regular 
accounting practices.
    Administrative requirements mean those matters common to grants in 
general, such as financial management, kinds and frequency of reports, 
and retention of records. These are distinguished from ``programmatic'' 
requirements, which concern matters that can be treated only on a 
program-by-program or grant-by-grant basis, such as kinds of activities 
that can be supported by grants under a particular program.
    Awarding agency means:
    (1) With respect to a grant, the Federal agency, and
    (2) With respect to a subgrant, the party that awarded the subgrant.
    Cash contributions means the grantee's cash outlay, including the 
outlay of money contributed to the grantee or subgrantee by other public 
agencies and institutions, and private organizations and individuals. 
When authorized by Federal legislation, Federal funds received from 
other assistance agreements may be considered as grantee or subgrantee 
cash contributions.
    Contract means (except as used in the definitions for ``grant'' and 
``subgrant'' in this section and except where qualified by ``Federal'') 
a procurement contract under a grant or subgrant, and means a 
procurement subcontract under a contract.
    Cost sharing or matching means the value of the third party in-kind 
contributions and the portion of the costs of a federally assisted 
project or program not borne by the Federal Government.
    Cost-type contract means a contract or subcontract under a grant in 
which the contractor or subcontractor is paid on the basis of the costs 
it incurs, with or without a fee.
    Equipment means tangible, nonexpendable, personal property having a 
useful life of more than one year and an acquisition cost of $5,000 or 
more per unit. A grantee may use its own definition of equipment 
provided that

[[Page 155]]

such definition would at least include all equipment defined above.
    Expenditure report means:
    (1) For nonconstruction grants, the SF-269 ``Financial Status 
Report'' (or other equivalent report);
    (2) For construction grants, the SF-271 ``Outlay Report and Request 
for Reimbursement'' (or other equivalent report).
    Federally recognized Indian tribal government means the governing 
body or a governmental agency of any Indian tribe, band, nation, or 
other organized group or community (including any Native village as 
defined in section 3 of the Alaska Native Claims Settlement Act, 85 
Stat. 688) certified by the Secretary of the Interior as eligible for 
the special programs and services provided by him through the Bureau of 
Indian Affairs.
    Government means a State or local government or a federally 
recognized Indian tribal government.
    Grant means an award of financial assistance, including cooperative 
agreements, in the form of money, or property in lieu of money, by the 
Federal Government to an eligible grantee. The term does not include 
technical assistance which provides services instead of money, or other 
assistance in the form of revenue sharing, loans, loan guarantees, 
interest subsidies, insurance, or direct appropriations. Also, the term 
does not include assistance, such as a fellowship or other lump sum 
award, which the grantee is not required to account for.
    Grantee means the government to which a grant is awarded and which 
is accountable for the use of the funds provided. The grantee is the 
entire legal entity even if only a particular component of the entity is 
designated in the grant award document.
    Local government means a county, municipality, city, town, township, 
local public authority (including any public and Indian housing agency 
under the United States Housing Act of 1937) school district, special 
district, intrastate district, council of governments (whether or not 
incorporated as a nonprofit corporation under State law), any other 
regional or interstate government entity, or any agency or 
instrumentality of a local government.
    Obligations means the amounts of orders placed, contracts and 
subgrants awarded, goods and services received, and similar transactions 
during a given period that will require payment by the grantee during 
the same or a future period.
    OMB means the United States Office of Management and Budget.
    Outlays (expenditures) mean charges made to the project or program. 
They may be reported on a cash or accrual basis. For reports prepared on 
a cash basis, outlays are the sum of actual cash disbursement for direct 
charges for goods and services, the amount of indirect expense incurred, 
the value of in-kind contributions applied, and the amount of cash 
advances and payments made to contractors and subgrantees. For reports 
prepared on an accrued expenditure basis, outlays are the sum of actual 
cash disbursements, the amount of indirect expense incurred, the value 
of inkind contributions applied, and the new increase (or decrease) in 
the amounts owed by the grantee for goods and other property received, 
for services performed by employees, contractors, subgrantees, 
subcontractors, and other payees, and other amounts becoming owed under 
programs for which no current services or performance are required, such 
as annuities, insurance claims, and other benefit payments.
    Percentage of completion method refers to a system under which 
payments are made for construction work according to the percentage of 
completion of the work, rather than to the grantee's cost incurred.
    Prior approval means documentation evidencing consent prior to 
incurring specific cost.
    Real property means land, including land improvements, structures 
and appurtenances thereto, excluding movable machinery and equipment.
    Share, when referring to the awarding agency's portion of real 
property, equipment or supplies, means the same percentage as the 
awarding agency's portion of the acquiring party's total costs under the 
grant to which the acquisition costs under the grant to which the 
acquisition cost of the property was charged. Only costs are to be 
counted--not the value of third-party in-kind contributions.

[[Page 156]]

    State means any of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or any agency or instrumentality of a 
State exclusive of local governments. The term does not include any 
public and Indian housing agency under United States Housing Act of 
1937.
    Subgrant means an award of financial assistance in the form of 
money, or property in lieu of money, made under a grant by a grantee to 
an eligible subgrantee. The term includes financial assistance when 
provided by contractual legal agreement, but does not include 
procurement purchases, nor does it include any form of assistance which 
is excluded from the definition of ``grant'' in this part.
    Subgrantee means the government or other legal entity to which a 
subgrant is awarded and which is accountable to the grantee for the use 
of the funds provided.
    Supplies means all tangible personal property other than 
``equipment'' as defined in this part.
    Suspension means depending on the context, either:
    (1) Temporary withdrawal of the authority to obligate grant funds 
pending corrective action by the grantee or subgrantee or a decision to 
terminate the grant, or
    (2) An action taken by a suspending official in accordance with 
agency regulations implementing E.O. 12549 to immediately exclude a 
person from participating in grant transactions for a period, pending 
completion of an investigation and such legal or debarment proceedings 
as may ensue.
    Termination means permanent withdrawal of the authority to obligate 
previously-awarded grant funds before that authority would otherwise 
expire. It also means the voluntary relinquishment of that authority by 
the grantee or subgrantee. ``Termination'' does not include:
    (1) Withdrawal of funds awarded on the basis of the grantee's 
underestimate of the unobligated balance in a prior period;
    (2) Withdrawal of the unobligated balance as of the expiration of a 
grant;
    (3) Refusal to extend a grant or award additional funds, to make a 
competing or noncompeting continuation, renewal, extension, or 
supplemental award; or
    (4) Voiding of a grant upon determination that the award was 
obtained fraudulently, or was otherwise illegal or invalid from 
inception.
    Terms of a grant or subgrant mean all requirements of the grant or 
subgrant, whether in statute, regulations, or the award document.
    Third party in-kind contributions mean property or services which 
benefit a federally assisted project or program and which are 
contributed by non-Federal third parties without charge to the grantee, 
or a cost-type contractor under the grant agreement.
    Unliquidated obligations for reports prepared on a cash basis mean 
the amount of obligations incurred by the grantee that has not been 
paid. For reports prepared on an accrued expenditure basis, they 
represent the amount of obligations incurred by the grantee for which an 
outlay has not been recorded.
    Unobligated balance means the portion of the funds authorized by the 
Federal agency that has not been obligated by the grantee and is 
determined by deducting the cumulative obligations from the cumulative 
funds authorized.



Sec. 33.4  Applicability.

    (a) General. Subparts A through D of this part apply to all grants 
and subgrants to governments, except where inconsistent with Federal 
statutes or with regulations authorized in accordance with the exception 
provision of Sec. 33.6, or:
    (1) Grants and subgrants to State and local institutions of higher 
education or State and local hospitals.
    (2) The block grants authorized by the Omnibus Budget Reconciliation 
Act of 1981 (Community Services; Preventive Health and Health Services; 
Alcohol, Drug Abuse, and Mental Health Services; Maternal and Child 
Health Services; Social Services; Low-Income Home Energy Assistance; 
States' Program of Community Development Block Grants for Small Cities; 
and Elementary and Secondary Education

[[Page 157]]

other than programs administered by the Secretary of Education under 
title V, subtitle D, chapter 2, section 583--the Secretary's 
discretionary grant program) and titles I-III of the Job Training 
Partnership Act of 1982 and under the Public Health Services Act 
(section 1921), Alcohol and Drug Abuse Treatment and Rehabilitation 
Block Grant and part C of title V, Mental Health Service for the 
Homeless Block Grant).
    (3) Entitlement grants to carry out the following programs of the 
Social Security Act:
    (i) Aid to Needy Families with Dependent Children (title IV-A of the 
Act, not including the Work Incentive Program (WIN) authorized by 
section 402(a)19(G); HHS grants for WIN are subject to this part);
    (ii) Child Support Enforcement and Establishment of Paternity (title 
IV-D of the Act);
    (iii) Foster Care and Adoption Assistance (title IV-E of the Act);
    (iv) Aid to the Aged, Blind, and Disabled (titles I, X, XIV, and 
XVI-AABD of the Act); and
    (v) Medical Assistance (Medicaid) (title XIX of the Act) not 
including the State Medicaid Fraud Control program authorized by section 
1903(a)(6)(B).
    (4) Entitlement grants under the following programs of The National 
School Lunch Act:
    (i) School Lunch (section 4 of the Act),
    (ii) Commodity Assistance (section 6 of the Act),
    (iii) Special Meal Assistance (section 11 of the Act),
    (iv) Summer Food Service for Children (section 13 of the Act), and
    (v) Child Care Food Program (section 17 of the Act).
    (5) Entitlement grants under the following programs of The Child 
Nutrition Act of 1966:
    (i) Special Milk (section 3 of the Act), and
    (ii) School Breakfast (section 4 of the Act).
    (6) Entitlement grants for State Administrative expenses under The 
Food Stamp Act of 1977 (section 16 of the Act).
    (7) A grant for an experimental, pilot, or demonstration project 
that is also supported by a grant listed in paragraph (a)(3) of this 
section;
    (8) Grant funds awarded under subsection 412(e) of the Immigration 
and Nationality Act (8 U.S.C. 1522(e)) and subsection 501(a) of the 
Refugee Education Assistance Act of 1980 (Pub. L. 96-422, 94 Stat. 
1809), for cash assistance, medical assistance, and supplemental 
security income benefits to refugees and entrants and the administrative 
costs of providing the assistance and benefits;
    (9) Grants to local education agencies under 20 U.S.C. 236 through 
241-1(a), and 242 through 244 (portions of the Impact Aid program), 
except for 20 U.S.C. 238(d)(2)(c) and 240(f) (Entitlement Increase for 
Handicapped Children); and
    (10) Payments under the Veterans Administration's State Home Per 
Diem Program (38 U.S.C. 641(a)).
    (b) Entitlement programs. Entitlement programs enumerated above in 
Sec. 33.4(a) (3) through (8) are subject to subpart E.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6200, Feb. 21, 1992]



Sec. 33.5  Effect on other issuances.

    All other grants administration provisions of codified program 
regulations, program manuals, handbooks and other nonregulatory 
materials which are inconsistent with this part are superseded, except 
to the extent they are required by statute, or authorized in accordance 
with the exception provision in Sec. 33.6.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6200, Feb. 21, 1992]



Sec. 33.6  Additions and exceptions.

    (a) For classes of grants and grantees subject to this part, Federal 
agencies may not impose additional administrative requirements except in 
codified regulations published in the Federal Register.
    (b) Exceptions for classes of grants or grantees may be authorized 
only by OMB.
    (c) Exceptions on a case-by-case basis and for subgrantees may be 
authorized by the affected Federal agencies.

[[Page 158]]



                    Subpart B_Pre-Award Requirements



Sec. 33.10  Forms for applying for grants.

    (a) Scope. (1) This section prescribes forms and instructions to be 
used by governmental organizations (except hospitals and institutions of 
higher education operated by a government) in applying for grants. This 
section is not applicable, however, to formula grant programs which do 
not require applicants to apply for funds on a project basis.
    (2) This section applies only to applications to Federal agencies 
for grants, and is not required to be applied by grantees in dealing 
with applicants for subgrants. However, grantees are encouraged to avoid 
more detailed or burdensome application requirements for subgrants.
    (b) Authorized forms and instructions for governmental 
organizations. (1) In applying for grants, applicants shall only use 
standard application forms or those prescribed by the granting agency 
with the approval of OMB under the Paperwork Reduction Act of 1980.
    (2) Applicants are not required to submit more than the original and 
two copies of preapplications or applications.
    (3) Applicants must follow all applicable instructions that bear OMB 
clearance numbers. Federal agencies may specify and describe the 
programs, functions, or activities that will be used to plan, budget, 
and evaluate the work under a grant. Other supplementary instructions 
may be issued only with the approval of OMB to the extent required under 
the Paperwork Reduction Act of 1980. For any standard form, except the 
SF-424 facesheet, Federal agencies may shade out or instruct the 
applicant to disregard any line item that is not needed.
    (4) When a grantee applies for additional funding (such as a 
continuation or supplemental award) or amends a previously submitted 
application, only the affected pages need be submitted. Previously 
submitted pages with information that is still current need not be 
resubmitted.



Sec. 33.11  State plans.

    (a) Scope. The statutes for some programs require States to submit 
plans before receiving grants. Under regulations implementing Executive 
Order 12372, ``Intergovernmental Review of Federal Programs,'' States 
are allowed to simplify, consolidate and substitute plans. This section 
contains additional provisions for plans that are subject to regulations 
implementing the Executive order.
    (b) Requirements. A State need meet only Federal administrative or 
programmatic requirements for a plan that are in statutes or codified 
regulations.
    (c) Assurances. In each plan the State will include an assurance 
that the State shall comply with all applicable Federal statutes and 
regulations in effect with respect to the periods for which it receives 
grant funding. For this assurance and other assurances required in the 
plan, the State may:
    (1) Cite by number the statutory or regulatory provisions requiring 
the assurances and affirm that it gives the assurances required by those 
provisions,
    (2) Repeat the assurance language in the statutes or regulations, or
    (3) Develop its own language to the extent permitted by law.
    (d) Amendments. A State will amend a plan whenever necessary to 
reflect: (1) New or revised Federal statutes or regulations or (2) a 
material change in any State law, organization, policy, or State agency 
operation. The State will obtain approval for the amendment and its 
effective date but need submit for approval only the amended portions of 
the plan.



Sec. 33.12  Special grant or subgrant conditions for ``high-risk'' grantees.

    (a) A grantee or subgrantee may be considered ``high risk'' if an 
awarding agency determines that a grantee or subgrantee:
    (1) Has a history of unsatisfactory performance, or
    (2) Is not financially stable, or
    (3) Has a management system which does not meet the management 
standards set forth in this part, or
    (4) Has not conformed to terms and conditions of previous awards, or

[[Page 159]]

    (5) Is otherwise not responsible; and if the awarding agency 
determines that an award will be made, special conditions and/or 
restrictions shall correspond to the high risk condition and shall be 
included in the award.
    (b) Special conditions or restrictions may include:
    (1) Payment on a reimbursement basis;
    (2) Withholding authority to proceed to the next phase until receipt 
of evidence of acceptable performance within a given funding period;
    (3) Requiring additional, more detailed financial reports;
    (4) Additional project monitoring;
    (5) Requiring the grantee or subgrantee to obtain technical or 
management assistance; or
    (6) Establishing additional prior approvals.
    (c) If an awarding agency decides to impose such conditions, the 
awarding official will notify the grantee or subgrantee as early as 
possible, in writing, of:
    (1) The nature of the special conditions/restrictions;
    (2) The reason(s) for imposing them;
    (3) The corrective actions which must be taken before they will be 
removed and the time allowed for completing the corrective actions and
    (4) The method of requesting reconsideration of the conditions/
restrictions imposed.



                    Subpart C_Post-Award Requirements

                        Financial Administration



Sec. 33.20  Standards for financial management systems.

    (a) A State must expand and account for grant funds in accordance 
with State laws and procedures for expending and accounting for its own 
funds. Fiscal control and accounting procedures of the State, as well as 
its subgrantees and cost-type contractors, must be sufficient to--
    (1) Permit preparation of reports required by this part and the 
statutes authorizing the grant, and
    (2) Permit the tracing of funds to a level of expenditures adequate 
to establish that such funds have not been used in violation of the 
restrictions and prohibitions of applicable statutes.
    (b) The financial management systems of other grantees and 
subgrantees must meet the following standards:
    (1) Financial reporting. Accurate, current, and complete disclosure 
of the financial results of financially assisted activities must be made 
in accordance with the financial reporting requirements of the grant or 
subgrant.
    (2) Accounting records. Grantees and subgrantees must maintain 
records which adequately identify the source and application of funds 
provided for financially-assisted activities. These records must contain 
information pertaining to grant or subgrant awards and authorizations, 
obligations, unobligated balances, assets, liabilities, outlays or 
expenditures, and income.
    (3) Internal control. Effective control and accountability must be 
maintained for all grant and subgrant cash, real and personal property, 
and other assets. Grantees and subgrantees must adequately safeguard all 
such property and must assure that it is used solely for authorized 
purposes.
    (4) Budget control. Actual expenditures or outlays must be compared 
with budgeted amounts for each grant or subgrant. Financial information 
must be related to performance or productivity data, including the 
development of unit cost information whenever appropriate or 
specifically required in the grant or subgrant agreement. If unit cost 
data are required, estimates based on available documentation will be 
accepted whenever possible.
    (5) Allowable cost. Applicable OMB cost principles, agency program 
regulations, and the terms of grant and subgrant agreements will be 
followed in determining the reasonableness, allowability, and 
allocability of costs.
    (6) Source documentation. Accounting records must be supported by 
such source documentation as cancelled checks, paid bills, payrolls, 
time and attendance records, contract and subgrant award documents, etc.
    (7) Cash management. Procedures for minimizing the time elapsing 
between the transfer of funds from the U.S. Treasury and disbursement by 
grantees and subgrantees must be followed

[[Page 160]]

whenever advance payment procedures are used. Grantees must establish 
reasonable procedures to ensure the receipt of reports on subgrantees' 
cash balances and cash disbursements in sufficient time to enable them 
to prepare complete and accurate cash transactions reports to the 
awarding agency. When advances are made by letter-of-credit or 
electronic transfer of funds methods, the grantee must make drawdowns as 
close as possible to the time of making disbursements. Grantees must 
monitor cash drawdowns by their subgrantees to assure that they conform 
substantially to the same standards of timing and amount as apply to 
advances to the grantees.
    (c) An awarding agency may review the adequacy of the financial 
management system of any applicant for financial assistance as part of a 
preaward review or at any time subsequent to award.



Sec. 33.21  Payment.

    (a) Scope. This section prescribes the basic standard and the 
methods under which a Federal agency will make payments to grantees, and 
grantees will make payments to subgrantees and contractors.
    (b) Basic standard. Methods and procedures for payment shall 
minimize the time elapsing between the transfer of funds and 
disbursement by the grantee or subgrantee, in accordance with Treasury 
regulations at 31 CFR part 205.
    (c) Advances. Grantees and subgrantees shall be paid in advance, 
provided they maintain or demonstrate the willingness and ability to 
maintain procedures to minimize the time elapsing between the transfer 
of the funds and their disbursement by the grantee or subgrantee.
    (d) Reimbursement. Reimbursement shall be the preferred method when 
the requirements in paragraph (c) of this section are not met. Grantees 
and subgrantees may also be paid by reimbursement for any construction 
grant. Except as otherwise specified in regulation, Federal agencies 
shall not use the percentage of completion method to pay construction 
grants. The grantee or subgrantee may use that method to pay its 
construction contractor, and if it does, the awarding agency's payments 
to the grantee or subgrantee will be based on the grantee's or 
subgrantee's actual rate of disbursement.
    (e) Working capital advances. If a grantee cannot meet the criteria 
for advance payments described in paragraph (c) of this section, and the 
Federal agency has determined that reimbursement is not feasible because 
the grantee lacks sufficient working capital, the awarding agency may 
provide cash or a working capital advance basis. Under this procedure 
the awarding agency shall advance cash to the grantee to cover its 
estimated disbursement needs for an initial period generally geared to 
the grantee's disbursing cycle. Thereafter, the awarding agency shall 
reimburse the grantee for its actual cash disbursements. The working 
capital advance method of payment shall not be used by grantees or 
subgrantees if the reason for using such method is the unwillingness or 
inability of the grantee to provide timely advances to the subgrantee to 
meet the subgrantee's actual cash disbursements.
    (f) Effect of program income, refunds, and audit recoveries on 
payment. (1) Grantees and subgrantees shall disburse repayments to and 
interest earned on a revolving fund before requesting additional cash 
payments for the same activity.
    (2) Except as provided in paragraph (f)(1) of this section, grantees 
and subgrantees shall disburse program income, rebates, refunds, 
contract settlements, audit recoveries and interest earned on such funds 
before requesting additional cash payments.
    (g) Withholding payments. (1) Unless otherwise required by Federal 
statute, awarding agencies shall not withhold payments for proper 
charges incurred by grantees or subgrantees unless--
    (i) The grantee or subgrantee has failed to comply with grant award 
conditions or
    (ii) The grantee or subgrantee is indebted to the United States.
    (2) Cash withheld for failure to comply with grant award condition, 
but without suspension of the grant, shall

[[Page 161]]

be released to the grantee upon subsequent compliance. When a grant is 
suspended, payment adjustments will be made in accordance with Sec. 
33.43(c).
    (3) A Federal agency shall not make payment to grantees for amounts 
that are withheld by grantees or subgrantees from payment to contractors 
to assure satisfactory completion of work. Payments shall be made by the 
Federal agency when the grantees or subgrantees actually disburse the 
withheld funds to the contractors or to escrow accounts established to 
assure satisfactory completion of work.
    (h) Cash depositories. (1) Consistent with the national goal of 
expanding the opportunities for minority business enterprises, grantees 
and subgrantees are encouraged to use minority banks (a bank which is 
owned at least 50 percent by minority group members). A list of minority 
owned banks can be obtained from the Minority Business Development 
Agency, Department of Commerce, Washington, DC 20230.
    (2) A grantee or subgrantee shall maintain a separate bank account 
only when required by Federal-State agreement.
    (i) Interest earned on advances. Except for interest earned on 
advances of funds exempt under the Intergovernmental Cooperation Act (31 
U.S.C. 6501 et seq.) and the Indian Self-Determination Act (23 U.S.C. 
450), grantees and subgrantees shall promptly, but at least quarterly, 
remit interest earned on advances to the Federal agency. The grantee or 
subgrantee may keep interest amounts up to $100 per year for 
administrative expenses.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6200, Feb. 21, 1992]



Sec. 33.22  Allowable costs.

    (a) Limitation on use of funds. Grant funds may be used only for:
    (1) The allowable costs of the grantees, subgrantees and cost-type 
contractors, including allowable costs in the form of payments to fixed-
price contractors; and
    (2) Reasonable fees or profit to cost-type contractors but not any 
fee or profit (or other increment above allowable costs) to the grantee 
or subgrantee.
    (b) Applicable cost principles. For each kind of organization, there 
is a set of Federal principles for determining allowable costs. 
Allowable costs will be determined in accordance with the cost 
principles applicable to the organization incurring the costs. The 
following chart lists the kinds of organizations and the applicable cost 
principles.

------------------------------------------------------------------------
           For the costs of a--                Use the principles in--
------------------------------------------------------------------------
State, local or Indian tribal government..  OMB Circular A-87.
Private nonprofit organization other than   OMB Circular A-122.
 an (1) institution of higher education,
 (2) hospital, or (3) organization named
 in OMB Circular A-122 as not subject to
 that circular.
Educational institutions..................  OMB Circular A-21.
For-profit organization other than a        48 CFR part 31. Contract
 hospital and an organization named in OBM   Cost Principles and
 Circular A-122 as not subject to that       Procedures, or uniform cost
 circular.                                   accounting standards that
                                             comply with cost principles
                                             acceptable to the Federal
                                             agency.
------------------------------------------------------------------------



Sec. 33.23  Period of availability of funds.

    (a) General. Where a funding period is specified, a grantee may 
charge to the award only costs resulting from obligations of the funding 
period unless carryover of unobligated balances is permitted, in which 
case the carryover balances may be charged for costs resulting from 
obligations of the subsequent funding period.
    (b) Liquidation of obligations. A grantee must liquidate all 
obligations incurred under the award not later than 90 days after the 
end of the funding period (or as specified in a program regulation) to 
coincide with the submission of the annual Financial Status Report (SF-
269). The Federal agency may extend this deadline at the request of the 
grantee.



Sec. 33.24  Matching or cost sharing.

    (a) Basic rule: Costs and contributions acceptable. With the 
qualifications and exceptions listed in paragraph (b) of this section, a 
matching or cost sharing requirement may be satisfied by either or both 
of the following:
    (1) Allowable costs incurred by the grantee, subgrantee or a cost-
type contractor under the assistance agreement. This includes allowable 
costs

[[Page 162]]

borne by non-Federal grants or by others cash donations from non-Federal 
third parties.
    (2) The value of third party in-kind contributions applicable to the 
period to which the cost sharing or matching requirements applies.
    (b) Qualifications and exceptions--(1) Costs borne by other Federal 
grant agreements. Except as provided by Federal statute, a cost sharing 
or matching requirement may not be met by costs borne by another Federal 
grant. This prohibition does not apply to income earned by a grantee or 
subgrantee from a contract awarded under another Federal grant.
    (2) General revenue sharing. For the purpose of this section, 
general revenue sharing funds distributed under 31 U.S.C. 6702 are not 
considered Federal grant funds.
    (3) Cost or contributions counted towards other Federal costs-
sharing requirements. Neither costs nor the values of third party in-
kind contributions may count towards satisfying a cost sharing or 
matching requirement of a grant agreement if they have been or will be 
counted towards satisfying a cost sharing or matching requirement of 
another Federal grant agreement, a Federal procurement contract, or any 
other award of Federal funds.
    (4) Costs financed by program income. Costs financed by program 
income, as defined in Sec. 33.25, shall not count towards satisfying a 
cost sharing or matching requirement unless they are expressly permitted 
in the terms of the assistance agreement. (This use of general program 
income is described in Sec. 33.25(g).)
    (5) Services or property financed by income earned by contractors. 
Contractors under a grant may earn income from the activities carried 
out under the contract in addition to the amounts earned from the party 
awarding the contract. No costs of services or property supported by 
this income may count toward satisfying a cost sharing or matching 
requirement unless other provisions of the grant agreement expressly 
permit this kind of income to be used to meet the requirement.
    (6) Records. Costs and third party in-kind contributions counting 
towards satisfying a cost sharing or matching requirement must be 
verifiable from the records of grantees and subgrantee or cost-type 
contractors. These records must show how the value placed on third party 
in-kind contributions was derived. To the extent feasible, volunteer 
services will be supported by the same methods that the organization 
uses to support the allocability of regular personnel costs.
    (7) Special standards for third party in-kind contributions. (i) 
Third party in-kind contributions count towards satisfying a cost 
sharing or matching requirement only where, if the party receiving the 
contributions were to pay for them, the payments would be allowable 
costs.
    (ii) Some third party in-kind contributions are goods and services 
that, if the grantee, subgrantee, or contractor receiving the 
contribution had to pay for them, the payments would have been an 
indirect costs. Costs sharing or matching credit for such contributions 
shall be given only if the grantee, subgrantee, or contractor has 
established, along with its regular indirect cost rate, a special rate 
for allocating to individual projects or programs the value of the 
contributions.
    (iii) A third party in-kind contribution to a fixed-price contract 
may count towards satisfying a cost sharing or matching requirement only 
if it results in:
    (A) An increase in the services or property provided under the 
contract (without additional cost to the grantee or subgrantee) or
    (B) A cost savings to the grantee or subgrantee.
    (iv) The values placed on third party in-kind contributions for cost 
sharing or matching purposes will conform to the rules in the succeeding 
sections of this part. If a third party in-kind contribution is a type 
not treated in those sections, the value placed upon it shall be fair 
and reasonable.
    (c) Valuation of donated services--(1) Volunteer services. Unpaid 
services provided to a grantee or subgrantee by individuals will be 
valued at rates consistent with those ordinarily paid for similar work 
in the grantee's or subgrantee's organization. If the grantee or 
subgrantee does not have employees performing similar work, the rates 
will

[[Page 163]]

be consistent with those ordinarily paid by other employers for similar 
work in the same labor market. In either case, a reasonable amount for 
fringe benefits may be included in the valuation.
    (2) Employees of other organizations. When an employer other than a 
grantee, subgrantee, or cost-type contractor furnishes free of charge 
the services of an employee in the employee's normal line of work, the 
services will be valued at the employee's regular rate of pay exclusive 
of the employee's fringe benefits and overhead costs. If the services 
are in a different line of work, paragraph (c)(1) of this section 
applies.
    (d) Valuation of third party donated supplies and loaned equipment 
or space. (1) If a third party donates supplies, the contribution will 
be valued at the market value of the supplies at the time of donation.
    (2) If a third party donates the use of equipment or space in a 
building but retains title, the contribution will be valued at the fair 
rental rate of the equipment or space.
    (e) Valuation of third party donated equipment, buildings, and land. 
If a third party donates equipment, buildings, or land, and title passes 
to a grantee or subgrantee, the treatment of the donated property will 
depend upon the purpose of the grant or subgrant, as follows:
    (1) Awards for capital expenditures. If the purpose of the grant or 
subgrant is to assist the grantee or subgrantee in the acquisition of 
property, the market value of that property at the time of donation may 
be counted as cost sharing or matching,
    (2) Other awards. If assisting in the acquisition of property is not 
the purpose of the grant or subgrant, paragraphs (e)(2) (i) and (ii) of 
this section apply:
    (i) If approval is obtained from the awarding agency, the market 
value at the time of donation of the donated equipment or buildings and 
the fair rental rate of the donated land may be counted as cost sharing 
or matching. In the case of a subgrant, the terms of the grant agreement 
may require that the approval be obtained from the Federal agency as 
well as the grantee. In all cases, the approval may be given only if a 
purchase of the equipment or rental of the land would be approved as an 
allowable direct cost. If any part of the donated property was acquired 
with Federal funds, only the non-Federal share of the property may be 
counted as cost-sharing or matching.
    (ii) If approval is not obtained under paragraph (e)(2)(i) of this 
section, no amount may be counted for donated land, and only 
depreciation or use allowances may be counted for donated equipment and 
buildings. The depreciation or use allowances for this property are not 
treated as third party in-kind contributions. Instead, they are treated 
as costs incurred by the grantee or subgrantee. They are computed and 
allocated (usually as indirect costs) in accordance with the cost 
principles specified in Sec. 33.22, in the same way as depreciation or 
use allowances for purchased equipment and buildings. The amount of 
depreciation or use allowances for donated equipment and buildings is 
based on the property's market value at the time it was donated.
    (f) Valuation of grantee or subgrantee donated real property for 
construction/acquisition. If a grantee or subgrantee donates real 
property for a construction or facilities acquisition project, the 
current market value of that property may be counted as cost sharing or 
matching. If any part of the donated property was acquired with Federal 
funds, only the non-Federal share of the property may be counted as cost 
sharing or matching.
    (g) Appraisal of real property. In some cases under paragraphs (d), 
(e) and (f) of this section, it will be necessary to establish the 
market value of land or a building or the fair rental rate of land or of 
space in a building. In these cases, the Federal agency may require the 
market value or fair rental value be set by an independent appraiser, 
and that the value or rate be certified by the grantee. This requirement 
will also be imposed by the grantee on subgrantees.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6200, Feb. 21, 1992]



Sec. 33.25  Program income.

    (a) General. Grantees are encouraged to earn income to defray 
program costs. Program income includes income

[[Page 164]]

from fees for services performed, from the use or rental of real or 
personal property acquired with grant funds, from the sale of 
commodities or items fabricated under a grant agreement, and from 
payments of principal and interest on loans made with grant funds. 
Except as otherwise provided in regulations of the Federal agency, 
program income does not include interest on grant funds, rebates, 
credits, discounts, refunds, etc. and interest earned on any of them.
    (b) Definition of program income. Program income means gross income 
received by the grantee or subgrantee directly generated by a grant 
supported activity, or earned only as a result of the grant agreement 
during the grant period. ``During the grant period'' is the time between 
the effective date of the award and the ending date of the award 
reflected in the final financial report.
    (c) Cost of generating program income. If authorized by Federal 
regulations or the grant agreement, costs incident to the generation of 
program income may be deducted from gross income to determine program 
income.
    (d) Governmental revenues. Taxes, special assessments, levies, 
fines, and other such revenues raised by a grantee or subgrantee are not 
program income unless the revenues are specifically identified in the 
grant agreement or Federal agency regulations as program income.
    (e) Royalties. Income from royalties and license fees for 
copyrighted material, patents, and inventions developed by a grantee or 
subgrantee is program income only if the revenues are specifically 
identified in the grant agreement or Federal agency regulations as 
program income. (See Sec. 33.34.)
    (f) Property. Proceeds from the sale of real property or equipment 
will be handled in accordance with the requirements of Sec. Sec. 33.31 
and 33.32.
    (g) Use of program income. Program income shall be deducted from 
outlays which may be both Federal and non-Federal as described below, 
unless the Federal agency regulations or the grant agreement specify 
another alternative (or a combination of the alternatives). In 
specifying alternatives, the Federal agency may distinguish between 
income earned by the grantee and income earned by subgrantees and 
between the sources, kinds, or amounts of income. When Federal agencies 
authorize the alternatives in paragraphs (g) (2) and (3) of this 
section, program income in excess of any limits stipulated shall also be 
deducted from outlays.
    (1) Deduction. Ordinarily program income shall be deducted from 
total allowable costs to determine the net allowable costs. Program 
income shall be used for current costs unless the Federal agency 
authorizes otherwise. Program income which the grantee did not 
anticipate at the time of the award shall be used to reduce the Federal 
agency and grantee contributions rather than to increase the funds 
committed to the project.
    (2) Addition. When authorized, program income may be added to the 
funds committed to the grant agreement by the Federal agency and the 
grantee. The program income shall be used for the purposes and under the 
conditions of the grant agreement.
    (3) Cost sharing or matching. When authorized, program income may be 
used to meet the cost sharing or matching requirement of the grant 
agreement. The amount of the Federal grant award remains the same.
    (h) Income after the award period. There are no Federal requirements 
governing the disposition of program income earned after the end of the 
award period (i.e., until the ending date of the final financial report, 
see paragraph (a) of this section), unless the terms of the agreement or 
the Federal agency regulations provide otherwise.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6200, Feb. 21, 1992]



Sec. 33.26  Non-Federal audit.

    (a) Basic rule. Grantees and subgrantees are responsible for 
obtaining audits in accordance with the Single Audit Act Amendments of 
1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of 
States, Local Governments, and Non-Profit Organizations.'' The audits 
shall be made by an independent auditor in accordance with generally 
accepted government

[[Page 165]]

auditing standards covering financial audits.
    (b) Subgrantees. State or local governments, as those terms are 
defined for purposes of the Single Audit Act Amendments of 1996, that 
provide Federal awards to a subgrantee, which expends $500,000 or more 
(or other amount as specified by OMB) in Federal awards in a fiscal 
year, shall:
    (1) Determine whether State or local subgrantees have met the audit 
requirements of the Act and whether subgrantees covered by OMB Circular 
A-110, ``Uniform Administrative Requirements for Grants and Agreements 
with Institutions of Higher Education, Hospitals, and Other Non-Profit 
Organizations,'' have met the audit requirements of the Act. Commercial 
contractors (private for-profit and private and governmental 
organizations) providing goods and services to State and local 
governments are not required to have a single audit performed. State and 
local governments should use their own procedures to ensure that the 
contractor has complied with laws and regulations affecting the 
expenditure of Federal funds;
    (2) Determine whether the subgrantee spent Federal assistance funds 
provided in accordance with applicable laws and regulations. This may be 
accomplished by reviewing an audit of the subgrantee made in accordance 
with the Act, Circular A-110, or through other means (e.g., program 
reviews) if the subgrantee has not had such an audit;
    (3) Ensure that appropriate corrective action is taken within six 
months after receipt of the audit report in instance of noncompliance 
with Federal laws and regulations;
    (4) Consider whether subgrantee audits necessitate adjustment of the 
grantee's own records; and
    (5) Require each subgrantee to permit independent auditors to have 
access to the records and financial statements.
    (c) Auditor selection. In arranging for audit services, Sec. 33.36 
shall be followed.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6200, Feb. 21, 1992; 62 FR 45939, 45943, Aug. 29, 1997; 70 FR 
49477, Aug. 23, 2005]

                    Changes, Property, and Subawards



Sec. 33.30  Changes.

    (a) General. Grantees and subgrantees are permitted to rebudget 
within the approved direct cost budget to meet unanticipated 
requirements and may make limited program changes to the approved 
project. However, unless waived by the awarding agency, certain types of 
post-award changes in budgets and projects shall require the prior 
written approval of the awarding agency.
    (b) Relation to cost principles. The applicable cost principles (see 
Sec. 33.22) contain requirements for prior approval of certain types of 
costs. Except where waived, those requirements apply to all grants and 
subgrants even if paragraphs (c) through (f) of this section do not.
    (c) Budget changes--(1) Nonconstruction projects. Except as stated 
in other regulations or an award document, grantees or subgrantees shall 
obtain the prior approval of the awarding agency whenever any of the 
following changes is anticipated under a nonconstruction award:
    (i) Any revision which would result in the need for additional 
funding.
    (ii) Unless waived by the awarding agency, cumulative transfers 
among direct cost categories, or, if applicable, among separately 
budgeted programs, projects, functions, or activities which exceed or 
are expected to exceed ten percent of the current total approved budget, 
whenever the awarding agency's share exceeds $100,000.
    (iii) Transfer of funds allotted for training allowances (i.e., from 
direct payments to trainees to other expense categories).
    (2) Construction projects. Grantees and subgrantees shall obtain 
prior written approval for any budget revision which would result in the 
need for additional funds.
    (3) Combined construction and nonconstruction projects. When a grant 
or subgrant provides funding for both construction and nonconstruction 
activities, the grantee or subgrantee must obtain prior written approval 
from the awarding agency before making any

[[Page 166]]

fund or budget transfer from nonconstruction to construction or vice 
versa.
    (d) Programmatic changes. Grantees or subgrantees must obtain the 
prior approval of the awarding agency whenever any of the following 
actions is anticipated:
    (1) Any revision of the scope or objectives of the project 
(regardless of whether there is an associated budget revision requiring 
prior approval).
    (2) Need to extend the period of availability of funds.
    (3) Changes in key persons in cases where specified in an 
application or a grant award. In research projects, a change in the 
project director or principal investigator shall always require approval 
unless waived by the awarding agency.
    (4) Under nonconstruction projects, contracting out, subgranting (if 
authorized by law) or otherwise obtaining the services of a third party 
to perform activities which are central to the purposes of the award. 
This approval requirement is in addition to the approval requirements of 
Sec. 33.36 but does not apply to the procurement of equipment, 
supplies, and general support services.
    (e) Additional prior approval requirements. The awarding agency may 
not require prior approval for any budget revision which is not 
described in paragraph (c) of this section.
    (f) Requesting prior approval. (1) A request for prior approval of 
any budget revision will be in the same budget formal the grantee used 
in its application and shall be accompanied by a narrative justification 
for the proposed revision.
    (2) A request for a prior approval under the applicable Federal cost 
principles (see Sec. 33.22) may be made by letter.
    (3) A request by a subgrantee for prior approval will be addressed 
in writing to the grantee. The grantee will promptly review such request 
and shall approve or disapprove the request in writing. A grantee will 
not approve any budget or project revision which is inconsistent with 
the purpose or terms and conditions of the Federal grant to the grantee. 
If the revision, requested by the subgrantee would result in a change to 
the grantee's approved project which requires Federal prior approval, 
the grantee will obtain the Federal agency's approval before approving 
the subgrantee's request.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6200, Feb. 21, 1992]



Sec. 33.31  Real property.

    (a) Title. Subject to the obligations and conditions set forth in 
this section, title to real property acquired under a grant or subgrant 
will vest upon acquisition in the grantee or subgrantee respectively.
    (b) Use. Except as otherwise provided by Federal statutes, real 
property will be used for the originally authorized purposes as long as 
needed for that purposes, and the grantee or subgrantee shall not 
dispose of or encumber its title or other interests.
    (c) Disposition. When real property is no longer needed for the 
originally authorized purpose, the grantee or subgrantee will request 
disposition instructions from the awarding agency. The instructions will 
provide for one of the following alternatives:
    (1) Retention of title. Retain title after compensating the awarding 
agency. The amount paid to the awarding agency will be computed by 
applying the awarding agency's percentage of participation in the cost 
of the original purchase to the fair market value of the property. 
However, in those situations where a grantee or subgrantee is disposing 
of real property acquired with grant funds and acquiring replacement 
real property under the same program, the net proceeds from the 
disposition may be used as an offset to the cost of the replacement 
property.
    (2) Sale of property. Sell the property and compensate the awarding 
agency. The amount due to the awarding agency will be calculated by 
applying the awarding agency's percentage of participation in the cost 
of the original purchase to the proceeds of the sale after deduction of 
any actual and reasonable selling and fixing-up expenses. If the grant 
is still active, the net proceeds from sale may be offset against the 
original cost of the property. When a grantee or subgrantee is directed 
to sell property, sales procedures shall be

[[Page 167]]

followed that provide for competition to the extent practicable and 
result in the highest possible return.
    (3) Transfer of title. Transfer title to the awarding agency or to a 
third-party designated/approved by the awarding agency. The grantee or 
subgrantee shall be paid an amount calculated by applying the grantee or 
subgrantee's percentage of participation in the purchase of the real 
property to the current fair market value of the property.



Sec. 33.32  Equipment.

    (a) Title. Subject to the obligations and conditions set forth in 
this section, title to equipment acquired under a grant or subgrant will 
vest upon acquisition in the grantee or subgrantee respectively.
    (b) States. A State will use, manage, and dispose of equipment 
acquired under a grant by the State in accordance with State laws and 
procedures. Other grantees and subgrantees will follow paragraphs (c) 
through (e) of this section.
    (c) Use. (1) Equipment shall be used by the grantee or subgrantee in 
the program or project for which it was acquired as long as needed, 
whether or not the project or program continues to be supported by 
Federal funds. When no longer needed for the original program or 
project, the equipment may be used in other activities currently or 
previously supported by a Federal agency.
    (2) The grantee or subgrantee shall also make equipment available 
for use on other projects or programs currently or previously supported 
by the Federal Government, providing such use will not interfere with 
the work on the projects or program for which it was originally 
acquired. First preference for other use shall be given to other 
programs or projects supported by the awarding agency. User fees should 
be considered if appropriate.
    (3) Notwithstanding the encouragement in Sec. 33.25(a) to earn 
program income, the grantee or subgrantee must not use equipment 
acquired with grant funds to provide services for a fee to compete 
unfairly with private companies that provide equivalent services, unless 
specifically permitted or contemplated by Federal statute.
    (4) When acquiring replacement equipment, the grantee or subgrantee 
may use the equipment to be replaced as a trade-in or sell the property 
and use the proceeds to offset the cost of the replacement property, 
subject to the approval of the awarding agency.
    (d) Management requirements. Procedures for managing equipment 
(including replacement equipment), whether acquired in whole or in part 
with grant funds, until disposition takes place will, as a minimum, meet 
the following requirements:
    (1) Property records must be maintained that include a description 
of the property, a serial number or other identification number, the 
source of property, who holds title, the acquisition date, and cost of 
the property, percentage of Federal participation in the cost of the 
property, the location, use and condition of the property, and any 
ultimate disposition data including the date of disposal and sale price 
of the property.
    (2) A physical inventory of the property must be taken and the 
results reconciled with the property records at least once every two 
years.
    (3) A control system must be developed to ensure adequate safeguards 
to prevent loss, damage, or theft of the property. Any loss, damage, or 
theft shall be investigated.
    (4) Adequate maintenance procedures must be developed to keep the 
property in good condition.
    (5) If the grantee or subgrantee is authorized or required to sell 
the property, proper sales procedures must be established to ensure the 
highest possible return.
    (e) Disposition. When original or replacement equipment acquired 
under a grant or subgrant is no longer needed for the original project 
or program or for other activities currently or previously supported by 
a Federal agency, disposition of the equipment will be made as follows:
    (1) Items of equipment with a current per-unit fair market value of 
less than $5,000 may be retained, sold or otherwise disposed of with no 
further obligation to the awarding agency.

[[Page 168]]

    (2) Items of equipment with a current per unit fair market value in 
excess of $5,000 may be retained or sold and the awarding agency shall 
have a right to an amount calculated by multiplying the current market 
value or proceeds from sale by the awarding agency's share of the 
equipment.
    (3) In cases where a grantee or subgrantee fails to take appropriate 
disposition actions, the awarding agency may direct the grantee or 
subgrantee to take excess and disposition actions.
    (f) Federal equipment. In the event a grantee or subgrantee is 
provided federally-owned equipment:
    (1) Title will remain vested in the Federal Government.
    (2) Grantees or subgrantees will manage the equipment in accordance 
with Federal agency rules and procedures, and submit an annual inventory 
listing.
    (3) When the equipment is no longer needed, the grantee or 
subgrantee will request disposition instructions from the Federal 
agency.
    (g) Right to transfer title. The Federal awarding agency may reserve 
the right to transfer title to the Federal Government or a third part 
named by the awarding agency when such a third party is otherwise 
eligible under existing statutes. Such transfers shall be subject to the 
following standards:
    (1) The property shall be identified in the grant or otherwise made 
known to the grantee in writing.
    (2) The Federal awarding agency shall issue disposition instruction 
within 120 calendar days after the end of the Federal support of the 
project for which it was acquired. If the Federal awarding agency fails 
to issue disposition instructions within the 120 calendar-day period the 
grantee shall follow Sec. 33.32(e).
    (3) When title to equipment is transferred, the grantee shall be 
paid an amount calculated by applying the percentage of participation in 
the purchase to the current fair market value of the property.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6201, Feb. 21, 1992]



Sec. 33.33  Supplies.

    (a) Title. Title to supplies acquired under a grant or subgrant will 
vest, upon acquisition, in the grantee or subgrantee respectively.
    (b) Disposition. If there is a residual inventory of unused supplies 
exceeding $5,000 in total aggregate fair market value upon termination 
or completion of the award, and if the supplies are not needed for any 
other federally sponsored programs or projects, the grantee or 
subgrantee shall compensate the awarding agency for its share.



Sec. 33.34  Copyrights.

    The Federal awarding agency reserves a royalty-free, nonexclusive, 
and irrevocable license to reproduce, publish or otherwise use, and to 
authorize others to use, for Federal Government purposes:
    (a) The copyright in any work developed under a grant, subgrant, or 
contract under a grant or subgrant; and
    (b) Any rights of copyright to which a grantee, subgrantee or a 
contractor purchases ownership with grant support.



Sec. 33.35  Subawards to debarred and suspended parties.

    Grantees and subgrantees must comply with the requirements of OMB 
guidance in Subpart C, 2 CFR part 180, as implemented by the Department 
of Defense in 2 CFR part 1125. Those requirements include restrictions 
on entering into a covered transaction with any party which is debarred 
or suspended or is otherwise excluded from or ineligible for 
participation in Federal assistance programs under Executive Order 
12549, ``Debarment and Suspension.''

[53 FR 8070, 8087, Mar. 11, 1988, as amended at 70 FR 49477, Aug. 23, 
2005; 72 FR 34998, June 26, 2007]



Sec. 33.36  Procurement.

    (a) States. When procuring property and services under a grant, a 
State will follow the same policies and procedures it uses for 
procurements from its non-Federal funds. The State will ensure that 
every purchase order or other contract includes any clauses required by

[[Page 169]]

Federal statutes and executive orders and their implementing 
regulations. Other grantees and subgrantees will follow paragraphs (b) 
through (i) in this section.
    (b) Procurement standards. (1) Grantees and subgrantees will use 
their own procurement procedures which reflect applicable State and 
local laws and regulations, provided that the procurements conform to 
applicable Federal law and the standards identified in this section.
    (2) Grantees and subgrantees will maintain a contract administration 
system which ensures that contractors perform in accordance with the 
terms, conditions, and specifications of their contracts or purchase 
orders.
    (3) Grantees and subgrantees will maintain a written code of 
standards of conduct governing the performance of their employees 
engaged in the award and administration of contracts. No employee, 
officer or agent of the grantee or subgrantee shall participate in 
selection, or in the award or administration of a contract supported by 
Federal funds if a conflict of interest, real or apparent, would be 
involved. Such a conflict would arise when:
    (i) The employee, officer or agent,
    (ii) Any member of his immediate family,
    (iii) His or her partner, or
    (iv) An organization which employs, or is about to employ, any of 
the above, has a financial or other interest in the firm selected for 
award. The grantee's or subgrantee's officers, employees or agents will 
neither solicit nor accept gratuities, favors or anything of monetary 
value from contractors, potential contractors, or parties to 
subagreements. Grantee and subgrantees may set minimum rules where the 
financial interest is not substantial or the gift is an unsolicited item 
of nominal intrinsic value. To the extent permitted by State or local 
law or regulations, such standards or conduct will provide for 
penalties, sanctions, or other disciplinary actions for violations of 
such standards by the grantee's and subgrantee's officers, employees, or 
agents, or by contractors or their agents. The awarding agency may in 
regulation provide additional prohibitions relative to real, apparent, 
or potential conflicts of interest.
    (4) Grantee and subgrantee procedures will provide for a review of 
proposed procurements to avoid purchase of unnecessary or duplicative 
items. Consideration should be given to consolidating or breaking out 
procurements to obtain a more economical purchase. Where appropriate, an 
analysis will be made of lease versus purchase alternatives, and any 
other appropriate analysis to determine the most economical approach.
    (5) To foster greater economy and efficiency, grantees and 
subgrantees are encouraged to enter into State and local 
intergovernmental agreements for procurement or use of common goods and 
services.
    (6) Grantees and subgrantees are encouraged to use Federal excess 
and surplus property in lieu of purchasing new equipment and property 
whenever such use is feasible and reduces project costs.
    (7) Grantees and subgrantees are encouraged to use value engineering 
clauses in contracts for construction projects of sufficient size to 
offer reasonable opportunities for cost reductions. Value engineering is 
a systematic and creative anaylsis of each contract item or task to 
ensure that its essential function is provided at the overall lower 
cost.
    (8) Grantees and subgrantees will make awards only to responsible 
contractors possessing the ability to perform successfully under the 
terms and conditions of a proposed procurement. Consideration will be 
given to such matters as contractor integrity, compliance with public 
policy, record of past performance, and financial and technical 
resources.
    (9) Grantees and subgrantees will maintain records sufficient to 
detail the significant history of a procurement. These records will 
include, but are not necessarily limited to the following: rationale for 
the method of procurement, selection of contract type, contractor 
selection or rejection, and the basis for the contract price.
    (10) Grantees and subgrantees will use time and material type 
contracts only--

[[Page 170]]

    (i) After a determination that no other contract is suitable, and
    (ii) If the contract includes a ceiling price that the contractor 
exceeds at its own risk.
    (11) Grantees and subgrantees alone will be responsible, in 
accordance with good administrative practice and sound business 
judgment, for the settlement of all contractual and administrative 
issues arising out of procurements. These issues include, but are not 
limited to source evaluation, protests, disputes, and claims. These 
standards do not relieve the grantee or subgrantee of any contractual 
responsibilities under its contracts. Federal agencies will not 
substitute their judgment for that of the grantee or subgrantee unless 
the matter is primarily a Federal concern. Violations of law will be 
referred to the local, State, or Federal authority having proper 
jurisdiction.
    (12) Grantees and subgrantees will have protest procedures to handle 
and resolve disputes relating to their procurements and shall in all 
instances disclose information regarding the protest to the awarding 
agency. A protestor must exhaust all administrative remedies with the 
grantee and subgrantee before pursuing a protest with the Federal 
agency. Reviews of protests by the Federal agency will be limited to:
    (i) Violations of Federal law or regulations and the standards of 
this section (violations of State or local law will be under the 
jurisdiction of State or local authorities) and
    (ii) Violations of the grantee's or subgrantee's protest procedures 
for failure to review a complaint or protest. Protests received by the 
Federal agency other than those specified above will be referred to the 
grantee or subgrantee.
    (c) Competition. (1) All procurement transactions will be conducted 
in a manner providing full and open competition consistent with the 
standards of Sec. 33.36. Some of the situations considered to be 
restrictive of competition include but are not limited to:
    (i) Placing unreasonable requirements on firms in order for them to 
qualify to do business,
    (ii) Requiring unnecessary experience and excessive bonding,
    (iii) Noncompetitive pricing practices between firms or between 
affiliated companies,
    (iv) Noncompetitive awards to consultants that are on retainer 
contracts,
    (v) Organizational conflicts of interest,
    (vi) Specifying only a ``brand name'' product instead of allowing 
``an equal'' product to be offered and describing the performance of 
other relevant requirements of the procurement, and
    (vii) Any arbitrary action in the procurement process.
    (2) Grantees and subgrantees will conduct procurements in a manner 
that prohibits the use of statutorily or administratively imposed in-
State or local geographical preferences in the evaluation of bids or 
proposals, except in those cases where applicable Federal statutes 
expressly mandate or encourage geographic preference. Nothing in this 
section preempts State licensing laws. When contracting for 
architectural and engineering (A/E) services, geographic location may be 
a selection criteria provided its application leaves an appropriate 
number of qualified firms, given the nature and size of the project, to 
compete for the contract.
    (3) Grantees will have written selection procedures for procurement 
transactions. These procedures will ensure that all solicitations:
    (i) Incorporate a clear and accurate description of the technical 
requirements for the material, product, or service to be procured. Such 
description shall not, in competitive procurements, contain features 
which unduly restrict competition. The description may include a 
statement of the qualitative nature of the material, product or service 
to be procured, and when necessary, shall set forth those minimum 
essential characteristics and standards to which it must conform if it 
is to satisfy its intended use. Detailed product specifications should 
be avoided if at all possible. When it is impractical or uneconomical to 
make a clear and accurate description of the technical requirements, a 
``brand name or equal'' description may be used as a means to define the 
performance or other salient requirements of a procurement. The specific 
features of the

[[Page 171]]

named brand which must be met by offerors shall be clearly stated; and
    (ii) Identify all requirements which the offerors must fulfill and 
all other factors to be used in evaluating bids or proposals.
    (4) Grantees and subgrantees will ensure that all prequalified lists 
of persons, firms, or products which are used in acquiring goods and 
services are current and include enough qualified sources to ensure 
maximum open and free competition. Also, grantees and subgrantees will 
not preclude potential bidders from qualifying during the solicitation 
period.
    (d) Methods of procurement to be followed--(1) Procurement by small 
purchase procedures. Small purchase procedures are those relatively 
simple and informal procurement methods for securing services, supplies, 
or other property that do not cost more than the simplified acquisition 
threshold fixed at 41 U.S.C. 403(11) (currently set at $100,000). If 
small purchase procedures are used, price or rate quotations shall be 
obtained from an adequate number of qualified sources.
    (2) Procurement by sealed bids (formal advertising). Bids are 
publicly solicited and a firm-fixed-price contract (lump sum or unit 
price) is awarded to the responsible bidder whose bid, conforming with 
all the material terms and conditions of the invitation for bids, is the 
lowest in price. The sealed bid method is the preferred method for 
procuring construction, if the conditions in Sec. 33.36(d)(2)(i) apply.
    (i) In order for sealed bidding to be feasible, the following 
conditions should be present:
    (A) A complete, adequate, and realistic specification or purchase 
description is available;
    (B) Two or more responsible bidders are willing and able to compete 
effectively and for the business; and
    (C) The procurement lends itself to a firm fixed price contract and 
the selection of the successful bidder can be made principally on the 
basis of price.
    (ii) If sealed bids are used, the following requirements apply:
    (A) The invitation for bids will be publicly advertised and bids 
shall be solicited from an adequate number of known suppliers, providing 
them sufficient time prior to the date set for opening the bids;
    (B) The invitation for bids, which will include any specifications 
and pertinent attachments, shall define the items or services in order 
for the bidder to properly respond;
    (C) All bids will be publicly opened at the time and place 
prescribed in the invitation for bids;
    (D) A firm fixed-price contract award will be made in writing to the 
lowest responsive and responsible bidder. Where specified in bidding 
documents, factors such as discounts, transportation cost, and life 
cycle costs shall be considered in determining which bid is lowest. 
Payment discounts will only be used to determine the low bid when prior 
experience indicates that such discounts are usually taken advantage of; 
and
    (E) Any or all bids may be rejected if there is a sound documented 
reason.
    (3) Procurement by competitive proposals. The technique of 
competitive proposals is normally conducted with more than one source 
submitting an offer, and either a fixed-price or cost-reimbursement type 
contract is awarded. It is generally used when conditions are not 
appropriate for the use of sealed bids. If this method is used, the 
following requirements apply:
    (i) Requests for proposals will be publicized and identify all 
evaluation factors and their relative importance. Any response to 
publicized requests for proposals shall be honored to the maximum extent 
practical;
    (ii) Proposals will be solicited from an adequate number of 
qualified sources;
    (iii) Grantees and subgrantees will have a method for conducting 
technical evaluations of the proposals received and for selecting 
awardees;
    (iv) Awards will be made to the responsible firm whose proposal is 
most advantageous to the program, with price and other factors 
considered; and
    (v) Grantees and subgrantees may use competitive proposal procedures 
for qualifications-based procurement of architectural/engineering (A/E) 
professional services whereby competitors' qualifications are evaluated 
and the most qualified competitor is selected,

[[Page 172]]

subject to negotiation of fair and reasonable compensation. The method, 
where price is not used as a selection factor, can only be used in 
procurement of A/E professional services. It cannot be used to purchase 
other types of services though A/E firms are a potential source to 
perform the proposed effort.
    (4) Procurement by noncompetitive proposals is procurement through 
solicitation of a proposal from only one source, or after solicitation 
of a number of sources, competition is determined inadequate.
    (i) Procurement by noncompetitive proposals may be used only when 
the award of a contract is infeasible under small purchase procedures, 
sealed bids or competitive proposals and one of the following 
circumstances applies:
    (A) The item is available only from a single source;
    (B) The public exigency or emergency for the requirement will not 
permit a delay resulting from competitive solicitation;
    (C) The awarding agency authorizes noncompetitive proposals; or
    (D) After solicitation of a number of sources, competition is 
determined inadequate.
    (ii) Cost analysis, i.e., verifying the proposed cost data, the 
projections of the data, and the evaluation of the specific elements of 
costs and profits, is required.
    (iii) Grantees and subgrantees may be required to submit the 
proposed procurement to the awarding agency for pre-award review in 
accordance with paragraph (g) of this section.
    (e) Contracting with small and minority firms, women's business 
enterprise and labor surplus area firms. (1) The grantee and subgrantee 
will take all necessary affirmative steps to assure that minority firms, 
women's business enterprises, and labor surplus area firms are used when 
possible.
    (2) Affirmative steps shall include:
    (i) Placing qualified small and minority businesses and women's 
business enterprises on solicitation lists;
    (ii) Assuring that small and minority businesses, and women's 
business enterprises are solicited whenever they are potential sources;
    (iii) Dividing total requirements, when economically feasible, into 
smaller tasks or quantities to permit maximum participation by small and 
minority business, and women's business enterprises;
    (iv) Establishing delivery schedules, where the requirement permits, 
which encourage participation by small and minority business, and 
women's business enterprises;
    (v) Using the services and assistance of the Small Business 
Administration, and the Minority Business Development Agency of the 
Department of Commerce; and
    (vi) Requiring the prime contractor, if subcontracts are to be let, 
to take the affirmative steps listed in paragraphs (e)(2) (i) through 
(v) of this section.
    (f) Contract cost and price. (1) Grantees and subgrantees must 
perform a cost or price analysis in connection with every procurement 
action including contract modifications. The method and degree of 
analysis is dependent on the facts surrounding the particular 
procurement situation, but as a starting point, grantees must make 
independent estimates before receiving bids or proposals. A cost 
analysis must be performed when the offeror is required to submit the 
elements of his estimated cost, e.g., under professional, consulting, 
and architectural engineering services contracts. A cost analysis will 
be necessary when adequate price competition is lacking, and for sole 
source procurements, including contract modifications or change orders, 
unless price resonableness can be established on the basis of a catalog 
or market price of a commercial product sold in substantial quantities 
to the general public or based on prices set by law or regulation. A 
price analysis will be used in all other instances to determine the 
reasonableness of the proposed contract price.
    (2) Grantees and subgrantees will negotiate profit as a separate 
element of the price for each contract in which there is no price 
competition and in all cases where cost analysis is performed. To 
establish a fair and reasonable profit, consideration will be given to 
the

[[Page 173]]

complexity of the work to be performed, the risk borne by the 
contractor, the contractor's investment, the amount of subcontracting, 
the quality of its record of past performance, and industry profit rates 
in the surrounding geographical area for similar work.
    (3) Costs or prices based on estimated costs for contracts under 
grants will be allowable only to the extent that costs incurred or cost 
estimates included in negotiated prices are consistent with Federal cost 
principles (see Sec. 33.22). Grantees may reference their own cost 
principles that comply with the applicable Federal cost principles.
    (4) The cost plus a percentage of cost and percentage of 
construction cost methods of contracting shall not be used.
    (g) Awarding agency review. (1) Grantees and subgrantees must make 
available, upon request of the awarding agency, technical specifications 
on proposed procurements where the awarding agency believes such review 
is needed to ensure that the item and/or service specified is the one 
being proposed for purchase. This review generally will take place prior 
to the time the specification is incorporated into a solicitation 
document. However, if the grantee or subgrantee desires to have the 
review accomplished after a solicitation has been developed, the 
awarding agency may still review the specifications, with such review 
usually limited to the technical aspects of the proposed purchase.
    (2) Grantees and subgrantees must on request make available for 
awarding agency pre-award review procurement documents, such as requests 
for proposals or invitations for bids, independent cost estimates, etc. 
when:
    (i) A grantee's or subgrantee's procurement procedures or operation 
fails to comply with the procurement standards in this section; or
    (ii) The procurement is expected to exceed the simplified 
acquisition threshold and is to be awarded without competition or only 
one bid or offer is received in response to a solicitation; or
    (iii) The procurement, which is expected to exceed the simplified 
acquisition threshold, specifies a ``brand name'' product; or
    (iv) The proposed award is more than the simplified acquisition 
threshold and is to be awarded to other than the apparent low bidder 
under a sealed bid procurement; or
    (v) A proposed contract modification changes the scope of a contract 
or increases the contract amount by more than the simplified acquisition 
threshold.
    (3) A grantee or subgrantee will be exempt from the pre-award review 
in paragraph (g)(2) of this section if the awarding agency determines 
that its procurement systems comply with the standards of this section.
    (i) A grantee or subgrantee may request that its procurement system 
be reviewed by the awarding agency to determine whether its system meets 
these standards in order for its system to be certified. Generally, 
these reviews shall occur where there is a continuous high-dollar 
funding, and third-party contracts are awarded on a regular basis.
    (ii) A grantee or subgrantee may self-certify its procurement 
system. Such self-certification shall not limit the awarding agency's 
right to survey the system. Under a self-certification procedure, 
awarding agencies may wish to rely on written assurances from the 
grantee or subgrantee that it is complying with these standards. A 
grantee or subgrantee will cite specific procedures, regulations, 
standards, etc., as being in compliance with these requirements and have 
its system available for review.
    (h) Bonding requirements. For construction or facility improvement 
contracts or subcontracts exceeding the simplified acquisition 
threshold, the awarding agency may accept the bonding policy and 
requirements of the grantee or subgrantee provided the awarding agency 
has made a determination that the awarding agency's interest is 
adequately protected. If such a determination has not been made, the 
minimum requirements shall be as follows:
    (1) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' shall consist of a firm commitment 
such as a bid bond,

[[Page 174]]

certified check, or other negotiable instrument accompanying a bid as 
assurance that the bidder will, upon acceptance of his bid, execute such 
contractual documents as may be required within the time specified.
    (2) A performance bond on the part of the contractor for 100 percent 
of the contract price. A ``performance bond'' is one executed in 
connection with a contract to secure fulfillment of all the contractor's 
obligations under such contract.
    (3) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract to assure payment as required by law of all persons 
supplying labor and material in the execution of the work provided for 
in the contract.
    (i) Contract provisions. A grantee's and subgrantee's contracts must 
contain provisions in paragraph (i) of this section. Federal agencies 
are permitted to require changes, remedies, changed conditions, access 
and records retention, suspension of work, and other clauses approved by 
the Office of Federal Procurement Policy.
    (1) Administrative, contractual, or legal remedies in instances 
where contractors violate or breach contract terms, and provide for such 
sanctions and penalties as may be appropriate. (Contracts more than the 
simplified acquisition threshold)
    (2) Termination for cause and for convenience by the grantee or 
subgrantee including the manner by which it will be effected and the 
basis for settlement. (All contracts in excess of $10,000)
    (3) Compliance with Executive Order 11246 of September 24, 1965, 
entitled ``Equal Employment Opportunity,'' as amended by Executive Order 
11375 of October 13, 1967, and as supplemented in Department of Labor 
regulations (41 CFR chapter 60). (All construction contracts awarded in 
excess of $10,000 by grantees and their contractors or subgrantees)
    (4) Compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C. 
874) as supplemented in Department of Labor regulations (29 CFR Part 3). 
(All contracts and subgrants for construction or repair)
    (5) Compliance with the Davis-Bacon Act (40 U.S.C. 276a to 276a-7) 
as supplemented by Department of Labor regulations (29 CFR Part 5). 
(Construction contracts in excess of $2000 awarded by grantees and 
subgrantees when required by Federal grant program legislation)
    (6) Compliance with Sections 103 and 107 of the Contract Work Hours 
and Safety Standards Act (40 U.S.C. 327-330) as supplemented by 
Department of Labor regulations (29 CFR Part 5). (Construction contracts 
awarded by grantees and subgrantees in excess of $2000, and in excess of 
$2500 for other contracts which involve the employment of mechanics or 
laborers)
    (7) Notice of awarding agency requirements and regulations 
pertaining to reporting.
    (8) Notice of awarding agency requirements and regulations 
pertaining to patent rights with respect to any discovery or invention 
which arises or is developed in the course of or under such contract.
    (9) Awarding agency requirements and regulations pertaining to 
copyrights and rights in data.
    (10) Access by the grantee, the subgrantee, the Federal grantor 
agency, the Comptroller General of the United States, or any of their 
duly authorized representatives to any books, documents, papers, and 
records of the contractor which are directly pertinent to that specific 
contract for the purpose of making audit, examination, excerpts, and 
transcriptions.
    (11) Retention of all required records for three years after 
grantees or subgrantees make final payments and all other pending 
matters are closed.
    (12) Compliance with all applicable standards, orders, or 
requirements issued under section 306 of the Clean Air Act (42 U.S.C. 
1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive 
Order 11738, and Environmental Protection Agency regulations (40 CFR 
part 15). (Contracts, subcontracts, and subgrants of amounts in excess 
of $100,000)
    (13) Mandatory standards and policies relating to energy efficiency 
which are contained in the state energy conservation plan issued in 
compliance with the

[[Page 175]]

Energy Policy and Conservation Act (Pub. L. 94-163, 89 Stat. 871).

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6201, Feb. 21, 1992; 60 FR 19639, Apr. 19, 1995]



Sec. 33.37  Subgrants.

    (a) States. States shall follow State law and procedures when 
awarding and administering subgrants (whether on a cost reimbursement or 
fixed amount basis) of financial assistance to local and Indian tribal 
governments. States shall:
    (1) Ensure that every subgrant includes any clauses required by 
Federal statute and executive orders and their implementing regulations;
    (2) Ensure that subgrantees are aware of requirements imposed upon 
them by Federal statute and regulation;
    (3) Ensure that a provision for compliance with Sec. 33.42 is 
placed in every cost reimbursement subgrant; and
    (4) Conform any advances of grant funds to subgrantees substantially 
to the same standards of timing and amount that apply to cash advances 
by Federal agencies.
    (b) All other grantees. All other grantees shall follow the 
provisions of this part which are applicable to awarding agencies when 
awarding and administering subgrants (whether on a cost reimbursement or 
fixed amount basis) of financial assistance to local and Indian tribal 
governments. Grantees shall:
    (1) Ensure that every subgrant includes a provision for compliance 
with this part;
    (2) Ensure that every subgrant includes any clauses required by 
Federal statute and executive orders and their implementing regulations; 
and
    (3) Ensure that subgrantees are aware of requirements imposed upon 
them by Federal statutes and regulations.
    (c) Exceptions. By their own terms, certain provisions of this part 
do not apply to the award and administration of subgrants:
    (1) Section 33.10;
    (2) Section 33.11;
    (3) The letter-of-credit procedures specified in Treasury 
Regulations at 31 CFR part 205, cited in Sec. 33.21; and
    (4) Section 33.50.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6201, Feb. 21, 1992]

              Reports, Records, Retention, and Enforcement



Sec. 33.40  Monitoring and reporting program performance.

    (a) Monitoring by grantees. Grantees are responsible for managing 
the day-to-day operations of grant and subgrant supported activities. 
Grantees must monitor grant and subgrant supported activities to assure 
compliance with applicable Federal requirements and that performance 
goals are being achieved. Grantee monitoring must cover each program, 
function or activity.
    (b) Nonconstruction performance reports. The Federal agency may, if 
it decides that performance information available from subsequent 
applications contains sufficient information to meet its programmatic 
needs, require the grantee to submit a performance report only upon 
expiration or termination of grant support. Unless waived by the Federal 
agency this report will be due on the same date as the final Financial 
Status Report.
    (1) Grantees shall submit annual performance reports unless the 
awarding agency requires quarterly or semi-annual reports. However, 
performance reports will not be required more frequently than quarterly. 
Annual reports shall be due 90 days after the grant year, quarterly or 
semi-annual reports shall be due 30 days after the reporting period. The 
final performance report will be due 90 days after the expiration or 
termination of grant support. If a justified request is submitted by a 
grantee, the Federal agency may extend the due date for any performance 
report. Additionally, requirements for unnecessary performance reports 
may be waived by the Federal agency.
    (2) Performance reports will contain, for each grant, brief 
information on the following:
    (i) A comparison of actual accomplishments to the objectives 
established for the period. Where the output of the project can be 
quantified, a computation of the cost per unit of output

[[Page 176]]

may be required if that information will be useful.
    (ii) The reasons for slippage if established objectives were not 
met.
    (iii) Additional pertinent information including, when appropriate, 
analysis and explanation of cost overruns or high unit costs.
    (3) Grantees will not be required to submit more than the original 
and two copies of performance reports.
    (4) Grantees will adhere to the standards in this section in 
prescribing performance reporting requirements for subgrantees.
    (c) Construction performance reports. For the most part, on-site 
technical inspections and certified percentage-of-completion data are 
relied on heavily by Federal agencies to monitor progress under 
construction grants and subgrants. The Federal agency will require 
additional formal performance reports only when considered necessary, 
and never more frequently than quarterly.
    (d) Significant developments. Events may occur between the scheduled 
performance reporting dates which have significant impact upon the grant 
or subgrant supported activity. In such cases, the grantee must inform 
the Federal agency as soon as the following types of conditions become 
known:
    (1) Problems, delays, or adverse conditions which will materially 
impair the ability to meet the objective of the award. This disclosure 
must include a statement of the action taken, or contemplated, and any 
assistance needed to resolve the situation.
    (2) Favorable developments which enable meeting time schedules and 
objectives sooner or at less cost than anticipated or producing more 
beneficial results than originally planned.
    (e) Federal agencies may make site visits as warranted by program 
needs.
    (f) Waivers, extensions. (1) Federal agencies may waive any 
performance report required by this part if not needed.
    (2) The grantee may waive any performance report from a subgrantee 
when not needed. The grantee may extend the due date for any performance 
report from a subgrantee if the grantee will still be able to meet its 
performance reporting obligations to the Federal agency.



Sec. 33.41  Financial reporting.

    (a) General. (1) Except as provided in paragraphs (a) (2) and (5) of 
this section, grantees will use only the forms specified in paragraphs 
(a) through (e) of this section, and such supplementary or other forms 
as may from time to time be authorized by OMB, for:
    (i) Submitting financial reports to Federal agencies, or
    (ii) Requesting advances or reimbursements when letters of credit 
are not used.
    (2) Grantees need not apply the forms prescribed in this section in 
dealing with their subgrantees. However, grantees shall not impose more 
burdensome requirements on subgrantees.
    (3) Grantees shall follow all applicable standard and supplemental 
Federal agency instructions approved by OMB to the extend required under 
the Paperwork Reduction Act of 1980 for use in connection with forms 
specified in paragraphs (b) through (e) of this section. Federal 
agencies may issue substantive supplementary instructions only with the 
approval of OMB. Federal agencies may shade out or instruct the grantee 
to disregard any line item that the Federal agency finds unnecessary for 
its decisionmaking purposes.
    (4) Grantees will not be required to submit more than the original 
and two copies of forms required under this part.
    (5) Federal agencies may provide computer outputs to grantees to 
expedite or contribute to the accuracy of reporting. Federal agencies 
may accept the required information from grantees in machine usable 
format or computer printouts instead of prescribed forms.
    (6) Federal agencies may waive any report required by this section 
if not needed.
    (7) Federal agencies may extend the due date of any financial report 
upon receiving a justified request from a grantee.
    (b) Financial Status Report--(1) Form. Grantees will use Standard 
Form 269 or

[[Page 177]]

269A, Financial Status Report, to report the status of funds for all 
nonconstruction grants and for construction grants when required in 
accordance with Sec. 33.41(e)(2)(iii).
    (2) Accounting basis. Each grantee will report program outlays and 
program income on a cash or accrual basis as prescribed by the awarding 
agency. If the Federal agency requires accrual information and the 
grantee's accounting records are not normally kept on the accural basis, 
the grantee shall not be required to convert its accounting system but 
shall develop such accrual information through and analysis of the 
documentation on hand.
    (3) Frequency. The Federal agency may prescribe the frequency of the 
report for each project or program. However, the report will not be 
required more frequently than quarterly. If the Federal agency does not 
specify the frequency of the report, it will be submitted annually. A 
final report will be required upon expiration or termination of grant 
support.
    (4) Due date. When reports are required on a quarterly or semiannual 
basis, they will be due 30 days after the reporting period. When 
required on an annual basis, they will be due 90 days after the grant 
year. Final reports will be due 90 days after the expiration or 
termination of grant support.
    (c) Federal Cash Transactions Report--(1) Form. (i) For grants paid 
by letter or credit, Treasury check advances or electronic transfer of 
funds, the grantee will submit the Standard Form 272, Federal Cash 
Transactions Report, and when necessary, its continuation sheet, 
Standard Form 272a, unless the terms of the award exempt the grantee 
from this requirement.
    (ii) These reports will be used by the Federal agency to monitor 
cash advanced to grantees and to obtain disbursement or outlay 
information for each grant from grantees. The format of the report may 
be adapted as appropriate when reporting is to be accomplished with the 
assistance of automatic data processing equipment provided that the 
information to be submitted is not changed in substance.
    (2) Forecasts of Federal cash requirements. Forecasts of Federal 
cash requirements may be required in the ``Remarks'' section of the 
report.
    (3) Cash in hands of subgrantees. When considered necessary and 
feasible by the Federal agency, grantees may be required to report the 
amount of cash advances in excess of three days' needs in the hands of 
their subgrantees or contractors and to provide short narrative 
explanations of actions taken by the grantee to reduce the excess 
balances.
    (4) Frequency and due date. Grantees must submit the report no later 
than 15 working days following the end of each quarter. However, where 
an advance either by letter of credit or electronic transfer of funds is 
authorized at an annualized rate of one million dollars or more, the 
Federal agency may require the report to be submitted within 15 working 
days following the end of each month.
    (d) Request for advance or reimbursement--(1) Advance payments. 
Requests for Treasury check advance payments will be submitted on 
Standard Form 270, Request for Advance or Reimbursement. (This form will 
not be used for drawdowns under a letter of credit, electronic funds 
transfer or when Treasury check advance payments are made to the grantee 
automatically on a predetermined basis.)
    (2) Reimbursements. Requests for reimbursement under nonconstruction 
grants will also be submitted on Standard Form 270. (For reimbursement 
requests under construction grants, see paragraph (e)(1) of this 
section.)
    (3) The frequency for submitting payment requests is treated in 
Sec. 33.41(b)(3).
    (e) Outlay report and request for reimbursement for construction 
programs--(1) Grants that support construction activities paid by 
reimbursement method. (i) Requests for reimbursement under construction 
grants will be submitted on Standard Form 271, Outlay Report and Request 
for Reimbursement for Construction Programs. Federal agencies may, 
however, prescribe the Request for Advance or Reimbursement form, 
specified in Sec. 33.41(d), instead of this form.
    (ii) The frequency for submitting reimbursement requests is treated 
in Sec. 33.41(b)(3).

[[Page 178]]

    (2) Grants that support construction activities paid by letter of 
credit, electronic funds transfer or Treasury check advance. (i) When a 
construction grant is paid by letter of credit, electronic funds 
transfer or Treasury check advances, the grantee will report its outlays 
to the Federal agency using Standard Form 271, Outlay Report and Request 
for Reimbursement for Construction Programs. The Federal agency will 
provide any necessary special instruction. However, frequency and due 
date shall be governed by Sec. 33.41(b) (3) and (4).
    (ii) When a construction grant is paid by Treasury check advances 
based on periodic requests from the grantee, the advances will be 
requested on the form specified in Sec. 33.41(d).
    (iii) The Federal agency may substitute the Financial Status Report 
specified in Sec. 33.41(b) for the Outlay Report and Request for 
Reimbursement for Construction Programs.
    (3) Accounting basis. The accounting basis for the Outlay Report and 
Request for Reimbursement for Construction Programs shall be governed by 
Sec. 33.41(b)(2).

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6201, Feb. 21, 1992]



Sec. 33.42  Retention and access requirements for records.

    (a) Applicability. (1) This section applies to all financial and 
programmatic records, supporting documents, statistical records, and 
other records of grantees or subgrantees which are:
    (i) Required to be maintained by the terms of this part, program 
regulations or the grant agreement, or
    (ii) Otherwise reasonably considered as pertinent to program 
regulations or the grant agreement.
    (2) This section does not apply to records maintained by contractors 
or subcontractors. For a requirement to place a provision concerning 
records in certain kinds of contracts, see Sec. 33.36(i)(10).
    (b) Length of retention period. (1) Except as otherwise provided, 
records must be retained for three years from the starting date 
specified in paragraph (c) of this section.
    (2) If any litigation, claim, negotiation, audit or other action 
involving the records has been started before the expiration of the 3-
year period, the records must be retained until completion of the action 
and resolution of all issues which arise from it, or until the end of 
the regular 3-year period, whichever is later.
    (3) To avoid duplicate recordkeeping, awarding agencies may make 
special arrangements with grantees and subgrantees to retain any records 
which are continuously needed for joint use. The awarding agency will 
request transfer of records to its custody when it determines that the 
records possess long-term retention value. When the records are 
transferred to or maintained by the Federal agency, the 3-year retention 
requirement is not applicable to the grantee or subgrantee.
    (c) Starting date of retention period--(1) General. When grant 
support is continued or renewed at annual or other intervals, the 
retention period for the records of each funding period starts on the 
day the grantee or subgrantee submits to the awarding agency its single 
or last expenditure report for that period. However, if grant support is 
continued or renewed quarterly, the retention period for each year's 
records starts on the day the grantee submits its expenditure report for 
the last quarter of the Federal fiscal year. In all other cases, the 
retention period starts on the day the grantee submits its final 
expenditure report. If an expenditure report has been waived, the 
retention period starts on the day the report would have been due.
    (2) Real property and equipment records. The retention period for 
real property and equipment records starts from the date of the 
disposition or replacement or transfer at the direction of the awarding 
agency.
    (3) Records for income transactions after grant or subgrant support. 
In some cases grantees must report income after the period of grant 
support. Where there is such a requirement, the retention period for the 
records pertaining to the earning of the income starts from the end of 
the grantee's fiscal year in which the income is earned.

[[Page 179]]

    (4) Indirect cost rate proposals, cost allocations plans, etc. This 
paragraph applies to the following types of documents, and their 
supporting records: indirect cost rate computations or proposals, cost 
allocation plans, and any similar accounting computations of the rate at 
which a particular group of costs is chargeable (such as computer usage 
chargeback rates or composite fringe benefit rates).
    (i) If submitted for negotiation. If the proposal, plan, or other 
computation is required to be submitted to the Federal Government (or to 
the grantee) to form the basis for negotiation of the rate, then the 3-
year retention period for its supporting records starts from the date of 
such submission.
    (ii) If not submitted for negotiation. If the proposal, plan, or 
other computation is not required to be submitted to the Federal 
Government (or to the grantee) for negotiation purposes, then the 3-year 
retention period for the proposal plan, or computation and its 
supporting records starts from end of the fiscal year (or other 
accounting period) covered by the proposal, plan, or other computation.
    (d) Substitution of microfilm. Copies made by microfilming, 
photocopying, or similar methods may be substituted for the original 
records.
    (e) Access to records--(1) Records of grantees and subgrantees. The 
awarding agency and the Comptroller General of the United States, or any 
of their authorized representatives, shall have the right of access to 
any pertinent books, documents, papers, or other records of grantees and 
subgrantees which are pertinent to the grant, in order to make audits, 
examinations, excerpts, and transcripts.
    (2) Expiration of right of access. The rights of access in this 
section must not be limited to the required retention period but shall 
last as long as the records are retained.
    (f) Restrictions on public access. The Federal Freedom of 
Information Act (5 U.S.C. 552) does not apply to records Unless required 
by Federal, State, or local law, grantees and subgrantees are not 
required to permit public access to their records.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6201, Feb. 21, 1992]



Sec. 33.43  Enforcement.

    (a) Remedies for noncompliance. If a grantee or subgrantee 
materially fails to comply with any term of an award, whether stated in 
a Federal statute or regulation, an assurance, in a State plan or 
application, a notice of award, or elsewhere, the awarding agency may 
take one or more of the following actions, as appropriate in the 
circumstances:
    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the grantee or subgrantee or more severe enforcement 
action by the awarding agency,
    (2) Disallow (that is, deny both use of funds and matching credit 
for) all or part of the cost of the activity or action not in 
compliance,
    (3) Wholly or partly suspend or terminate the current award for the 
grantee's or subgrantee's program,
    (4) Withhold further awards for the program, or
    (5) Take other remedies that may be legally available.
    (b) Hearings, appeals. In taking an enforcement action, the awarding 
agency will provide the grantee or subgrantee an opportunity for such 
hearing, appeal, or other administrative proceeding to which the grantee 
or subgrantee is entitled under any statute or regulation applicable to 
the action involved.
    (c) Effects of suspension and termination. Costs of grantee or 
subgrantee resulting from obligations incurred by the grantee or 
subgrantee during a suspension or after termination of an award are not 
allowable unless the awarding agency expressly authorizes them in the 
notice of suspension or termination or subsequently. Other grantee or 
subgrantee costs during suspension or after termination which are 
necessary and not reasonably avoidable are allowable if:
    (1) The costs result from obligations which were properly incurred 
by the grantee or subgrantee before the effective date of suspension or 
termination,

[[Page 180]]

are not in anticipation of it, and, in the case of a termination, are 
noncancellable, and,
    (2) The costs would be allowable if the award were not suspended or 
expired normally at the end of the funding period in which the 
termination takes effect.
    (d) Relationship to debarment and suspension. The enforcement 
remedies identified in this section, including suspension and 
termination, do not preclude grantee or subgrantee from being subject to 
``Debarment and Suspension'' under E.O. 12549 (see Sec. 33.35).

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6201, Feb. 21, 1992]



Sec. 33.44  Termination for convenience.

    Except as provided in Sec. 33.43 awards may be terminated in whole 
or in part only as follows:
    (a) By the awarding agency with the consent of the grantee or 
subgrantee in which case the two parties shall agree upon the 
termination conditions, including the effective date and in the case of 
partial termination, the portion to be terminated, or
    (b) By the grantee or subgrantee upon written notification to the 
awarding agency, setting forth the reasons for such termination, the 
effective date, and in the case of partial termination, the portion to 
be terminated. However, if, in the case of a partial termination, the 
awarding agency determines that the remaining portion of the award will 
not accomplish the purposes for which the award was made, the awarding 
agency may terminate the award in its entirety under either Sec. 33.43 
or paragraph (a) of this section.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6201, Feb. 21, 1992]



                 Subpart D_After-The-Grant Requirements



Sec. 33.50  Closeout.

    (a) General. The Federal agency will close out the award when it 
determines that all applicable administrative actions and all required 
work of the grant has been completed.
    (b) Reports. Within 90 days after the expiration or termination of 
the grant, the grantee must submit all financial, performance, and other 
reports required as a condition of the grant. Upon request by the 
grantee, Federal agencies may extend this timeframe. These may include 
but are not limited to:
    (1) Final performance or progress report.
    (2) Financial Status Report (SF 269) or Outlay Report and Request 
for Reimbursement for Construction Programs (SF-271) (as applicable).
    (3) Final request for payment (SF-270) (if applicable).
    (4) Invention disclosure (if applicable).
    (5) Federally-owned property report:

In accordance with Sec. 33.32(f), a grantee must submit an inventory of 
all federally owned property (as distinct from property acquired with 
grant funds) for which it is accountable and request disposition 
instructions from the Federal agency of property no longer needed.
    (c) Cost adjustment. The Federal agency will, within 90 days after 
receipt of reports in paragraph (b) of this section, make upward or 
downward adjustments to the allowable costs.
    (d) Cash adjustments. (1) The Federal agency will make prompt 
payment to the grantee for allowable reimbursable costs.
    (2) The grantee must immediately refund to the Federal agency any 
balance of unobligated (unencumbered) cash advanced that is not 
authorized to be retained for use on other grants.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6201, Feb. 21, 1992]



Sec. 33.51  Later disallowances and adjustments.

    The closeout of a grant does not affect:
    (a) The Federal agency's right to disallow costs and recover funds 
on the basis of a later audit or other review;
    (b) The grantee's obligation to return any funds due as a result of 
later refunds, corrections, or other transactions;
    (c) Records retention as required in Sec. 33.42;
    (d) Property management requirements in Sec. Sec. 33.31 and 33.32; 
and

[[Page 181]]

    (e) Audit requirements in Sec. 33.26.

[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR 
6199 and 6201, Feb. 21, 1992]



Sec. 33.52  Collection of amounts due.

    (a) Any funds paid to a grantee in excess of the amount to which the 
grantee is finally determined to be entitled under the terms of the 
award constitute a debt to the Federal Government. If not paid within a 
reasonable period after demand, the Federal agency may reduce the debt 
by:
    (1) Making an adminstrative offset against other requests for 
reimbursements,
    (2) Withholding advance payments otherwise due to the grantee, or
    (3) Other action permitted by law.
    (b) Except where otherwise provided by statutes or regulations, the 
Federal agency will charge interest on an overdue debt in accordance 
with the Federal Claims Collection Standards (4 CFR Ch. II). The date 
from which interest is computed is not extended by litigation or the 
filing of any form of appeal.

Subpart E--Entitlement [Reserved]



PART 34_ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH FOR-PROFIT 

ORGANIZATIONS--Table of Contents



                            Subpart A_General

Sec.
34.1 Purpose.
34.2 Definitions.
34.3 Deviations.
34.4 Special award conditions.

                    Subpart B_Post-Award Requirements

                    Financial and Program Management

34.10 Purpose of financial and program management.
34.11 Standards for financial management systems.
34.12 Payment.
34.13 Cost sharing or matching.
34.14 Program income.
34.15 Revision of budget and program plans.
34.16 Audits.
34.17 Allowable costs.
34.18 Fee and profit.

                           Property Standards

34.20 Purpose of property standards.
34.21 Real property and equipment.
34.22 Federally owned property.
34.23 Property management system.
34.24 Supplies.
34.25 Intellectual property developed or produced under awards.

                          Procurement Standards

34.30 Purpose of procurement standards.
34.31 Requirements.

                           Reports and Records

34.40 Purpose of reports and records.
34.41 Monitoring and reporting program and financial performance.
34.42 Retention and access requirements for records.

                       Termination and Enforcement

34.50 Purpose of termination and enforcement.
34.51 Termination.
34.52 Enforcement.
34.53 Disputes and appeals.

                 Subpart C_After-the-Award Requirements

34.60 Purpose.
34.61 Closeout procedures.
34.62 Subsequent adjustments and continuing responsibilities.
34.63 Collection of amounts due.

Appendix A to Part 34--Contract Provisions

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 63 FR 12204, Mar. 12, 1998, unless otherwise noted.



                            Subpart A_General



Sec. 34.1  Purpose.

    (a) This part prescribes administrative requirements for awards to 
for-profit organizations.
    (b) Applicability to prime awards and subawards is as follows:
    (1) Prime awards. DoD Components shall apply the provisions of this 
part to awards to for-profit organizations. DoD Components shall not 
impose requirements that are in addition to, or inconsistent with, the 
requirements provided in this part, except:
    (i) In accordance with the deviation procedures or special award 
conditions in Sec. 34.3 or Sec. 34.4, respectively; or
    (ii) As required by Federal statute, Executive order, or Federal 
regulation

[[Page 182]]

implementing a statute or Executive order.
    (2) Subawards. (i) Any legal entity (including any State, local 
government, university or other nonprofit organization, as well as any 
for-profit entity) that receives an award from a DoD Component shall 
apply the provisions of this part to subawards with for-profit 
organizations. It should be noted that subawards (see definition in 
Sec. 34.2) are financial assistance for substantive programmatic 
performance and do not include recipients' procurement of goods and 
services.
    (ii) For-profit organizations that receive prime awards covered by 
this part shall apply to each subaward the administrative requirements 
that are applicable to the particular type of subrecipient (e.g., 32 CFR 
part 33 specifies requirements for subrecipients that are States or 
local governments, and 32 CFR part 32 contains requirements for 
universities or other nonprofit organizations).



Sec. 34.2  Definitions.

    The following are definitions of terms as used in this part. Grants 
officers are cautioned that terms may be defined differently in this 
part than they are in other parts of the DoD Grant and Agreement 
Regulations (DoDGARs).
    Advance. A payment made by Treasury check or other appropriate 
payment mechanism to a recipient upon its request either before outlays 
are made by the recipient or through the use of predetermined payment 
schedules.
    Award. A grant or a cooperative agreement other than a technology 
investment agreement (TIA). TIAs are covered by part 37 of the DoDGARs 
(32 CFR part 37). Portions of this part may apply to a TIA, but only to 
the extent that 32 CFR part 37 makes them apply.
    Cash contributions. The recipient's cash outlay, including the 
outlay of money contributed to the recipient by third parties.
    Closeout. The process by which the grants officer administering an 
award made by a DoD Component determines that all applicable 
administrative actions and all required work of the award have been 
completed by the recipient and DoD Component.
    Contract. Either:
    (1) A procurement contract made by a recipient under a DoD 
Component's award or by a subrecipient under a subaward; or
    (2) A procurement subcontract under a contract awarded by a 
recipient or subrecipient.
    Cost sharing or matching. That portion of project or program costs 
not borne by the Federal Government.
    Disallowed costs. Those charges to an award that the grants officer 
administering an award made by a DoD Component determines to be 
unallowable, in accordance with the applicable Federal cost principles 
or other terms and conditions contained in the award.
    DoD Component. A Military Department, Defense Agency, DoD Field 
Activity, or organization within the Office of the Secretary of Defense 
that provides or administers an award to a recipient.
    Equipment. Tangible nonexpendable personal property charged directly 
to the award having a useful life of more than one year and an 
acquisition cost of $5,000 or more per unit. That definition applies for 
the purposes of the Federal administrative requirements in this part. 
However, the recipient's policy may be to use a lower dollar value for 
defining ``equipment,'' and nothing in this part should be construed as 
requiring the recipient to establish a higher limit for purposes other 
than the administrative requirements in this part.
    Excess property. Property under the control of any DoD Component 
that, as determined by the head thereof, is no longer required for its 
needs or the discharge of its responsibilities.
    Expenditures. See the definition for outlays in this section.
    Federally owned property. Property in the possession of, or directly 
acquired by, the Government and subsequently made available to the 
recipient.
    Funding period. The period of time when Federal funding is available 
for obligation by the recipient.

[[Page 183]]

    Intellectual property. Intangible personal property such as patents 
and patent applications, trademarks, copyrights, technical data, and 
software rights.
    Obligations. The amounts of orders placed, contracts and grants 
awarded, services received and similar transactions during a given 
period that require payment by the recipient during the same or a future 
period.
    Outlays or expenditures. Charges made to the project or program. 
They may be reported on a cash or accrual basis. For reports prepared on 
a cash basis, outlays are the sum of cash disbursements for direct 
charges for goods and services, the amount of indirect expense charged, 
the value of third party in-kind contributions applied and the amount of 
cash advances and payments made to subrecipients. For reports prepared 
on an accrual basis, outlays are the sum of cash disbursements for 
direct charges for goods and services, the amount of indirect expense 
incurred, the value of in-kind contributions applied, and the net 
increase (or decrease) in the amounts owed by the recipient for goods 
and other property received, for services performed by employees, 
contractors, subrecipients and other payees and other amounts becoming 
owed under programs for which no current services or performance are 
required.
    Personal property. Property of any kind except real property. It may 
be:
    (1) Tangible, having physical existence (i.e., equipment and 
supplies); or
    (2) Intangible, having no physical existence, such as patents, 
copyrights, data and software.
    Prior approval. Written or electronic approval by an authorized 
official evidencing prior consent.
    Program income. Gross income earned by the recipient that is 
directly generated by a supported activity or earned as a result of the 
award. Program income includes, but is not limited to, income from fees 
for services performed, the use or rental of real or personal property 
acquired under federally-funded projects, the sale of commodities or 
items fabricated under an award, license fees and royalties on patents 
and copyrights, and interest on loans made with award funds. Interest 
earned on advances of Federal funds is not program income. Except as 
otherwise provided in program regulations or the terms and conditions of 
the award, program income does not include the receipt of principal on 
loans, rebates, credits, discounts, etc., or interest earned on any of 
them.
    Project costs. All allowable costs, as set forth in the applicable 
Federal cost principles, incurred by a recipient and the value of the 
contributions made by third parties in accomplishing the objectives of 
the award during the project period.
    Project period. The period established in the award document during 
which Federal sponsorship begins and ends.
    Property. Real property and personal property (equipment, supplies, 
and intellectual property), unless stated otherwise.
    Real property. Land, including land improvements, structures and 
appurtenances thereto, but excludes movable machinery and equipment.
    Recipient. A for-profit organization receiving an award directly 
from a DoD Component to carry out a project or program.
    Research. Basic, applied, and advanced research activities. Basic 
research is defined as efforts directed toward increasing knowledge or 
understanding in science and engineering. Applied research is defined as 
efforts that attempt to determine and exploit the potential of 
scientific discoveries or improvements in technology, such as new 
materials, devices, methods, and processes. ``Advanced research,'' 
advanced technology development that creates new technology or 
demonstrates the viability of applying existing technology to new 
products and processes in a general way, is most closely analogous to 
precommercialization or precompetitive technology development in the 
commercial sector (it does not include development of military systems 
and hardware where specific requirements have been defined).
    Small award. An award not exceeding the simplified acquisition 
threshold fixed at 41 U.S.C. 403(11) (currently $100,000).

[[Page 184]]

    Small business concern. A concern, including its affiliates, that is 
independently owned and operated, not dominant in the field of operation 
in which it has applied for an award, and qualified as a small business 
under the criteria and size standards in 13 CFR part 121. For more 
details, grants officers should see 48 CFR part 19 in the ``Federal 
Acquisition Regulation.''
    Subaward. Financial assistance in the form of money, or property in 
lieu of money, provided under an award by a recipient to an eligible 
subrecipient or by a subrecipient to a lower tier subrecipient. The term 
includes financial assistance when provided by any legal agreement, even 
if the agreement is called a contract, but the term includes neither 
procurement of goods and services nor any form of assistance which is 
excluded from the definition of ``award'' in this section.
    Subrecipient. The legal entity to which a subaward is made and which 
is accountable to the recipient for the use of the funds provided.
    Supplies. Tangible expendable personal property that is charged 
directly to the award and that has a useful life of less than one year 
or an acquisition cost of less than $5000 per unit.
    Suspension. An action by a DoD Component that temporarily withdraws 
Federal sponsorship under an award, pending corrective action by the 
recipient or pending a decision to terminate the award by the DoD 
Component. Suspension of an award is a separate action from suspension 
of a participant under 2 CFR part 1125.
    Termination. The cancellation of an award, in whole or in part, 
under an agreement at any time prior to either:
    (1) The date on which all work under an award is completed; or
    (2) The date on which Federal sponsorship ends, as given on the 
award document or any supplement or amendment thereto.
    Third party in-kind contributions. The value of non-cash 
contributions provided by non-Federal third parties. Third party in-kind 
contributions may be in the form of real property, equipment, supplies 
and other expendable property, and the value of goods and services 
directly benefiting and specifically identifiable to the project or 
program.
    Unobligated balance. The portion of the funds authorized by a DoD 
Component that has not been obligated by the recipient and is determined 
by deducting the cumulative obligations from the cumulative funds 
authorized.

[63 FR 12204, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003; 72 
FR 34998, June 26, 2007]



Sec. 34.3  Deviations.

    (a) Individual deviations. Individual deviations affecting only one 
award may be approved by DoD Components in accordance with procedures 
stated in 32 CFR 21.335(a) and 21.340.
    (b) Small awards. DoD Components may apply less restrictive 
requirements than the provisions of this part when awarding small 
awards, except for those requirements which are statutory.
    (c) Other class deviations. For classes of awards other than small 
awards, the Director, Defense Research and Engineering, or his or her 
designee, may grant exceptions from the requirements of this part when 
exceptions are not prohibited by statute. DoD Components shall request 
approval for such deviations in accordance with 32 CFR 21.335 (b) and 
21.340.

[63 FR 12204, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]



Sec. 34.4  Special award conditions.

    (a) Grants officers may impose additional requirements as needed, 
over and above those provided in this part, if an applicant or 
recipient:
    (1) Has a history of poor performance;
    (2) Is not financially stable;
    (3) Has a management system that does not meet the standards 
prescribed in this part;
    (4) Has not conformed to the terms and conditions of a previous 
award; or
    (5) Is not otherwise responsible.
    (b) Before imposing additional requirements, DoD Components shall 
notify the applicant or recipient in writing as to:
    (1) The nature of the additional requirements;
    (2) The reason why the additional requirements are being imposed;

[[Page 185]]

    (3) The nature of the corrective action needed;
    (4) The time allowed for completing the corrective actions; and
    (5) The method for requesting reconsideration of the additional 
requirements imposed.
    (c) Any special conditions shall be promptly removed once the 
conditions that prompted them have been corrected.
    (d) Grants officers:
    (1) Should coordinate the imposition and removal of special award 
conditions with the cognizant grants administration office identified in 
32 CFR 22.710.
    (2) Shall include in the award file the written notification to the 
recipient, described in paragraph (b) of this section, and the 
documentation required by 32 CFR 22.410(b).



                    Subpart B_Post-award Requirements

                    Financial and Program Management



Sec. 34.10  Purpose of financial and program management.

    Sections 34.11 through 34.17 prescribe standards for financial 
management systems; methods for making payments; and rules for cost 
sharing and matching, program income, revisions to budgets and program 
plans, audits, allowable costs, and fee and profit.



Sec. 34.11  Standards for financial management systems.

    (a) Recipients shall be allowed and encouraged to use existing 
financial management systems established for doing business in the 
commercial marketplace, to the extent that the systems comply with 
Generally Accepted Accounting Principles (GAAP) and the minimum 
standards in this section. As a minimum, a recipient's financial 
management system shall provide:
    (1) Effective control of all funds. Control systems must be adequate 
to ensure that costs charged to Federal funds and those counted as the 
recipient's cost share or match are consistent with requirements for 
cost reasonableness, allowability, and allocability in the applicable 
cost principles (see Sec. 34.17) and in the terms and conditions of the 
award.
    (2) Accurate, current and complete records that document for each 
project funded wholly or in part with Federal funds the source and 
application of the Federal funds and the recipient's required cost share 
or match. These records shall:
    (i) Contain information about receipts, authorizations, assets, 
expenditures, program income, and interest.
    (ii) Be adequate to make comparisons of outlays with budgeted 
amounts for each award (as required for programmatic and financial 
reporting under Sec. 34.41. Where appropriate, financial information 
should be related to performance and unit cost data. Note that unit cost 
data are generally not appropriate for awards that support research.
    (3) To the extent that advance payments are authorized under Sec. 
34.12, procedures that minimize the time elapsing between the transfer 
of funds to the recipient from the Government and the recipient's 
disbursement of the funds for program purposes.
    (4) The recipient shall have a system to support charges to Federal 
awards for salaries and wages, whether treated as direct or indirect 
costs. Where employees work on multiple activities or cost objectives, a 
distribution of their salaries and wages will be supported by personnel 
activity reports which must:
    (i) Reflect an after the fact distribution of the actual activity of 
each employee.
    (ii) Account for the total activity for which each employee is 
compensated.
    (iii) Be prepared at least monthly, and coincide with one or more 
pay periods.
    (b) Where the Federal Government guarantees or insures the repayment 
of money borrowed by the recipient, the DoD Component, at its 
discretion, may require adequate bonding and insurance if the bonding 
and insurance requirements of the recipient are not deemed adequate to 
protect the interest of the Federal Government.
    (c) The DoD Component may require adequate fidelity bond coverage 
where the recipient lacks sufficient coverage to protect the Federal 
Government's interest.

[[Page 186]]

    (d) Where bonds are required in the situations described above, the 
bonds shall be obtained from companies holding certificates of authority 
as acceptable sureties, as prescribed in 31 CFR part 223, ``Surety 
Companies Doing Business with the United States.''



Sec. 34.12  Payment.

    (a) Methods available. Payment methods for awards with for-profit 
organizations are:
    (1) Reimbursement. Under this method, the recipient requests 
reimbursement for costs incurred during a time period. In cases where 
the recipient submits each request for payment to the grants officer, 
the DoD payment office reimburses the recipient by electronic funds 
transfer or check after approval of the request by the grants officer 
designated to do so.
    (2) Advance payments. Under this method, a DoD Component makes a 
payment to a recipient based upon projections of the recipient's cash 
needs. The payment generally is made upon the recipient's request, 
although predetermined payment schedules may be used when the timing of 
the recipient's needs to disburse funds can be predicted in advance with 
sufficient accuracy to ensure compliance with paragraph (b)(2)(iii) of 
this section.
    (b) Selecting a method. (1) The preferred payment method is the 
reimbursement method, as described in paragraph (a)(1) of this section
    (2) Advance payments, as described in paragraph (a)(2) of this 
section, may be used in exceptional circumstances, subject to the 
following conditions:
    (i) The grants officer, in consultation with the program official, 
must judge that advance payments are necessary or will materially 
contribute to the probability of success of the project contemplated 
under the award (e.g., as startup funds for a project performed by a 
newly formed company). The rationale for the judgment shall be 
documented in the award file.
    (ii) Cash advances shall be limited to the minimum amounts needed to 
carry out the program.
    (iii) Recipients and the DoD Component shall maintain procedures to 
ensure that the timing of cash advances is as close as is 
administratively feasible to the recipients' disbursements of the funds 
for program purposes, including direct program or project costs and the 
proportionate share of any allowable indirect costs.
    (iv) Recipients shall maintain advance payments of Federal funds in 
interest-bearing accounts, and remit annually the interest earned to the 
administrative grants officer responsible for post-award administration 
(the grants officer shall forward the payment to the responsible payment 
office, for return to the Department of Treasury's miscellaneous 
receipts account), unless one of the following applies:
    (A) The recipient receives less than $120,000 in Federal awards per 
year.
    (B) The best reasonably available interest bearing account would not 
be expected to earn interest in excess of $250 per year on Federal cash 
balances.
    (C) The depository would require an average or minimum balance so 
high that it would not be feasible within the expected Federal and non-
Federal cash resources.
    (c) Frequency of payments. For either reimbursements or advance 
payments, recipients shall be authorized to submit requests for payment 
at least monthly.
    (d) Forms for requesting payment. DoD Components may authorize 
recipients to use the SF-270, \1\ ``Request for Advance or 
Reimbursement;'' the SF-271, \2\ ``Outlay Report and Request for 
Reimbursement for Construction Programs;'' or prescribe other forms or 
formats as necessary.
---------------------------------------------------------------------------

    \1\ For copies of Standard Forms listed in this part, contact 
regional grants administration offices of the Office of Naval Research. 
Addresses for the offices are listed in the ``DoD Directory of Contract 
Administration Services Components,'' DLAH 4105.4, which can be obtained 
from either: Defense Logistics Agency, Publications Distribution 
Division (DASC-WDM), 8725 John J. Kingman Rd., Suite 0119, Fort Belvoir, 
VA 22060-6220; or the Defense Contract Management Command home page at 
http://www.dcmc.dcrb.dla.mil.
    \2\ See footnote 1 to this paragraph (d).

---------------------------------------------------------------------------

[[Page 187]]

    (e) Timeliness of payments. Payments normally will be made within 30 
calendar days of the receipt of a recipient's request for reimbursement 
or advance by the office designated to receive the request (for further 
information about timeframes for payments, see 32 CFR 22.810(c)(3)(ii)).
    (f) Precedence of other available funds. Recipients shall disburse 
funds available from program income, rebates, refunds, contract 
settlements, audit recoveries, and interest earned on such funds before 
requesting additional cash payments.
    (g) Withholding of payments. Unless otherwise required by statute, 
grants officers shall not withhold payments for proper charges made by 
recipients during the project period for reasons other than the 
following:
    (1) A recipient has failed to comply with project objectives, the 
terms and conditions of the award, or Federal reporting requirements, in 
which case the grants officer may suspend payments in accordance with 
Sec. 34.52.
    (2) The recipient is delinquent on a debt to the United States (see 
definitions of ``debt'' and ``delinquent debt'' in 32 CFR 22.105). In 
that case, the grants officer may, upon reasonable notice, withhold 
payments for obligations incurred after a specified date, until the debt 
is resolved.



Sec. 34.13  Cost sharing or matching.

    (a) Acceptable contributions. All contributions, including cash 
contributions and third party in-kind contributions, shall be accepted 
as part of the recipient's cost sharing or matching when such 
contributions meet all of the following criteria:
    (1) They are verifiable from the recipient's records.
    (2) They are not included as contributions for any other federally-
assisted project or program.
    (3) They are necessary and reasonable for proper and efficient 
accomplishment of project or program objectives.
    (4) They are allowable under Sec. 34.17.
    (5) They are not paid by the Federal Government under another award, 
except:
    (i) Costs that are authorized by Federal statute to be used for cost 
sharing or matching; or
    (ii) Independent research and development (IR&D) costs. In 
accordance with the for-profit cost principle in 48 CFR 31.205-18(e), 
use of IR&D as cost sharing is permitted, whether or not the Government 
decides at a later date to reimburse any of the IR&D as allowable 
indirect costs. In such cases, the IR&D must meet all of the criteria in 
paragraphs (a) (1) through (4) and (a) (6) through (8) of this section.
    (6) They are provided for in the approved budget, when approval of 
the budget is required by the DoD Component.
    (7) If they are real property or equipment, whether purchased with 
recipient's funds or donated by third parties, they must have the grants 
officer's prior approval if the contributions' value is to exceed 
depreciation or use charges during the project period (paragraphs (b)(1) 
and (b)(4)(ii) of this section discuss the limited circumstances under 
which a grants officer may approve higher values). If a DoD Component 
requires approval of a recipient's budget (see paragraph (a)(6) of this 
section), the grants officer's approval of the budget satisfies this 
prior approval requirement, for real property or equipment items listed 
in the budget.
    (8) They conform to other provisions of this part, as applicable.
    (b) Valuing and documenting contributions--(1) Valuing recipient's 
property or services of recipient's employees. Values shall be 
established in accordance with the applicable cost principles in Sec. 
34.17, which means that amounts chargeable to the project are determined 
on the basis of costs incurred. For real property or equipment used on 
the project, the cost principles authorize depreciation or use charges. 
The full value of the item may be applied when the item will be consumed 
in the performance of the award or fully depreciated by the end of the 
award. In cases where the full value of a donated capital asset is to be 
applied as cost sharing or matching, that full value shall be the lesser 
of the following:
    (i) The certified value of the remaining life of the property 
recorded in the recipient's accounting records at the time of donation; 
or

[[Page 188]]

    (ii) The current fair market value. However, when there is 
sufficient justification, the grants officer may approve the use of the 
current fair market value of the donated property, even if it exceeds 
the certified value at the time of donation to the project. The grants 
officer may accept the use of any reasonable basis for determining the 
fair market value of the property.
    (2) Valuing services of others' employees. When an employer other 
than the recipient furnishes the services of an employee, those services 
shall be valued at the employee's regular rate of pay plus an amount of 
fringe benefits and overhead (at an overhead rate appropriate for the 
location where the services are performed) provided these services are 
in the same skill for which the employee is normally paid.
    (3) Valuing volunteer services. Volunteer services furnished by 
professional and technical personnel, consultants, and other skilled and 
unskilled labor may be counted as cost sharing or matching if the 
service is an integral and necessary part of an approved project or 
program. Rates for volunteer services shall be consistent with those 
paid for similar work in the recipient's organization. In those 
instances in which the required skills are not found in the recipient 
organization, rates shall be consistent with those paid for similar work 
in the labor market in which the recipient competes for the kind of 
services involved. In either case, paid fringe benefits that are 
reasonable, allowable, and allocable may be included in the valuation.
    (4) Valuing property donated by third parties. (i) Donated supplies 
may include such items as office supplies or laboratory supplies. Value 
assessed to donated supplies included in the cost sharing or matching 
share shall be reasonable and shall not exceed the fair market value of 
the property at the time of the donation.
    (ii) Normally only depreciation or use charges for equipment and 
buildings may be applied. However, the fair rental charges for land and 
the full value of equipment or other capital assets may be allowed, when 
they will be consumed in the performance of the award or fully 
depreciated by the end of the award, provided that the grants officer 
has approved the charges. When use charges are applied, values shall be 
determined in accordance with the usual accounting policies of the 
recipient, with the following qualifications:
    (A) The value of donated space shall not exceed the fair rental 
value of comparable space as established by an independent appraisal of 
comparable space and facilities in a privately-owned building in the 
same locality.
    (B) The value of loaned equipment shall not exceed its fair rental 
value.
    (5) Documentation. The following requirements pertain to the 
recipient's supporting records for in-kind contributions from third 
parties:
    (i) Volunteer services shall be documented and, to the extent 
feasible, supported by the same methods used by the recipient for its 
own employees.
    (ii) The basis for determining the valuation for personal services 
and property shall be documented.



Sec. 34.14  Program income.

    (a) DoD Components shall apply the standards in this section to the 
disposition of program income from projects financed in whole or in part 
with Federal funds.
    (b) Recipients shall have no obligation to the Government, unless 
the terms and conditions of the award provide otherwise, for program 
income earned:
    (1) From license fees and royalties for copyrighted material, 
patents, patent applications, trademarks, and inventions produced under 
an award. Note, however, that the Patent and Trademark Amendments (35 
U.S.C. Chapter 18), as implemented in Sec. 34.25, apply to inventions 
made under a research award.
    (2) After the end of the project period. If a grants officer 
anticipates that an award is likely to generate program income after the 
end of the project period, the grants officer should indicate in the 
award document whether the recipient will have any obligation to the 
Federal Government with respect to such income.
    (c) If authorized by the terms and conditions of the award, costs 
incident to the generation of program income may be deducted from gross 
income to determine program income, provided

[[Page 189]]

these costs have not been charged to the award.
    (d) Other than any program income excluded pursuant to paragraphs 
(b) and (c) of this section, program income earned during the project 
period shall be retained by the recipient and used in one or more of the 
following ways, as specified in program regulations or the terms and 
conditions of the award:
    (1) Added to funds committed to the project by the DoD Component and 
recipient and used to further eligible project or program objectives.
    (2) Used to finance the non-Federal share of the project or program.
    (3) Deducted from the total project or program allowable cost in 
determining the net allowable costs on which the Federal share of costs 
is based.
    (e) If the terms and conditions of an award authorize the 
disposition of program income as described in paragraph (d)(1) or (d)(2) 
of this section, and stipulate a limit on the amounts that may be used 
in those ways, program income in excess of the stipulated limits shall 
be used in accordance with paragraph (d)(3) of this section.
    (f) In the event that the terms and conditions of the award do not 
specify how program income is to be used, paragraph (d)(3) of this 
section shall apply automatically to all projects or programs except 
research. For awards that support research, paragraph (d)(1) of this 
section shall apply automatically unless the terms and conditions 
specify another alternative or the recipient is subject to special award 
conditions, as indicated in Sec. 34.4.
    (g) Proceeds from the sale of property that is acquired, rather than 
fabricated, under an award are not program income and shall be handled 
in accordance with the requirements of the Property Standards (see 
Sec. Sec. 34.20 through 34.25).



Sec. 34.15  Revision of budget and program plans.

    (a) The budget plan is the financial expression of the project or 
program as approved during the award process. It may include either the 
sum of the Federal and non-Federal shares, or only the Federal share, 
depending upon DoD Component requirements. It shall be related to 
performance for program evaluation purposes whenever appropriate.
    (b) Recipients are required to report deviations from budget and 
program plans, and request prior approvals for budget and program plan 
revisions, in accordance with this section.
    (c) Recipients shall immediately request, in writing, prior approval 
from the cognizant grants officer when there is reason to believe that 
within the next seven calendar days a programmatic or budgetary revision 
will be necessary for certain reasons, as follows:
    (1) The recipient always must obtain the grants officer's prior 
approval when a revision is necessary for either of the following two 
reasons (i.e., these two requirements for prior approval may never be 
waived):
    (i) A change in the scope or the objective of the project or program 
(even if there is no associated budget revision requiring prior written 
approval).
    (ii) A need for additional Federal funding.
    (2) The recipient must obtain the grants officer's prior approval 
when a revision is necessary for any of the following six reasons, 
unless the requirement for prior approval is waived in the terms and 
conditions of the award (i.e., if the award document is silent, these 
prior approvals are required):
    (i) A change in a key person specified in the application or award 
document.
    (ii) The absence for more than three months, or a 25 percent 
reduction in time devoted to the project, by the approved project 
director or principal investigator.
    (iii) The inclusion of any additional costs that require prior 
approval in accordance with applicable cost principles for Federal funds 
and recipients' cost share or match, in Sec. 34.17 and Sec. 34.13, 
respectively.
    (iv) The inclusion of pre-award costs. All such costs are incurred 
at the recipient's risk (i.e., the DoD Component is under no obligation 
to reimburse such costs if for any reason the recipient does not receive 
an award, or if the award is less than anticipated and inadequate to 
cover such costs).
    (v) A ``no-cost'' extension of the project period that does not 
require additional Federal funds and does not

[[Page 190]]

change the approved objectives or scope of the project.
    (vi) Any subaward, transfer or contracting out of substantive 
program performance under an award, unless described in the application 
and funded in the approved awards. This provision does not apply to the 
purchase of supplies, material, or general support services, except that 
procurement of equipment or other capital items of property always is 
subject to the grants officer's prior approval under Sec. 34.21(a), if 
it is to be purchased with Federal funds, or Sec. 34.13(a)(7), if it is 
to be used as cost sharing or matching.
    (3) The recipient also must obtain the grants officer's prior 
approval when a revision is necessary for either of the following 
reasons, if specifically required in the terms and conditions of the 
award document (i.e., if the award document is silent, these prior 
approvals are not required):
    (i) The transfer of funds among direct cost categories, functions 
and activities for awards in which the Federal share of the project 
exceeds $100,000 and the cumulative amount of such transfers exceeds or 
is expected to exceed 10 percent of the total budget as last approved by 
the DoD Component. No DoD Component shall permit a transfer that would 
cause any Federal appropriation or part thereof to be used for purposes 
other than those consistent with the original intent of the 
appropriation.
    (ii) For awards that provide support for both construction and 
nonconstruction work, any fund or budget transfers between the two types 
of work supported.
    (d) Within 30 calendar days from the date of receipt of the 
recipient's request for budget revisions, the grants officer shall 
review the request and notify the recipient whether the budget revisions 
have been approved. If the revision is still under consideration at the 
end of 30 calendar days, the grants officer shall inform the recipient 
in writing of the date when the recipient may expect the decision.



Sec. 34.16  Audits.

    (a) Any recipient that expends $500,000 or more in a year under 
Federal awards shall have an audit made for that year by an independent 
auditor, in accordance with paragraph (b) of this section. The audit 
generally should be made a part of the regularly scheduled, annual audit 
of the recipient's financial statements. However, it may be more 
economical in some cases to have the Federal awards separately audited, 
and a recipient may elect to do so, unless that option is precluded by 
award terms and conditions, or by Federal laws or regulations applicable 
to the program(s) under which the awards were made.
    (b) The auditor shall determine and report on whether:
    (1) The recipient has an internal control structure that provides 
reasonable assurance that it is managing Federal awards in compliance 
with Federal laws and regulations, and with the terms and conditions of 
the awards.
    (2) Based on a sampling of Federal award expenditures, the recipient 
has complied with laws, regulations, and award terms that may have a 
direct and material effect on Federal awards.
    (c) The recipient shall make the auditor's report available to DoD 
Components whose awards are affected.
    (d) The requirement for an annual independent audit is intended to 
ascertain the adequacy of the recipient's internal financial management 
systems and to curtail the unnecessary duplication and overlap that 
usually results when Federal agencies request audits of individual 
awards on a routine basis. Therefore, a grants officer:
    (1) Shall consider whether the independent audit satisfies his or 
her requirements, before requesting any additional audits; and
    (2) When requesting an additional audit, shall:
    (i) Limit the scope of such additional audit to areas not adequately 
addressed by the independent audit.
    (ii) Coordinate the audit request with the Federal agency with the 
predominant fiscal interest in the recipient, as the agency responsible 
for the scheduling and distribution of audits. If DoD has the 
predominant fiscal interest in the recipient, the Defense Contract 
Management Command (DCMC) is responsible for monitoring audits, ensuring 
resolution of audit findings, and

[[Page 191]]

distributing audit reports. When an additional audit is requested and 
DoD has the predominant fiscal interest in the recipient, DCMC shall, to 
the extent practicable, ensure that the additional audit builds upon the 
independent audit or other audits performed in accordance with this 
section.
    (e) There may be instances in which Federal auditors have recently 
performed audits, are performing audits, or are planning to perform 
audits, of a recipient. In these cases, the recipient and its Federal 
cognizant agency should seek to have the non-Federal, independent 
auditors work with the Federal auditors to develop a coordinated audit 
approach, to minimize duplication of audit work.
    (f) Audit costs (including a reasonable allocation of the costs of 
the audit of the recipient's financial statement, based on the relative 
benefit to the Government and the recipient) are allowable costs of DoD 
awards.

[63 FR 12204, Mar. 12, 1998, as amended at 70 FR 49477, Aug. 23, 2005]



Sec. 34.17  Allowable costs.

    Allowability of costs shall be determined in accordance with the 
cost principles applicable to the type of entity incurring the costs, as 
follows:
    (a) For-profit organizations. Allowability of costs incurred by for-
profit organizations that are recipients of prime awards from DoD 
Components, and those that are subrecipients under prime awards to other 
organizations, is to be determined in accordance with:
    (1) The for-profit cost principles in 48 CFR parts 31 and 231 (in 
the Federal Acquisition Regulation, or FAR, and the Defense Federal 
Acquisition Regulation Supplement, or DFARS, respectively).
    (2) The supplemental information on allowability of audit costs, in 
Sec. 34.16(f).
    (b) Other types of organizations. Allowability of costs incurred by 
other types of organizations that may be subrecipients under a prime 
award to a for-profit organization is determined as follows:
    (1) Institutions of higher education. Allowability is determined in 
accordance with OMB Circular A-21, \3\ `` Cost Principles for 
Educational Institutions.''
---------------------------------------------------------------------------

    \3\ For copies of the Circular, contact the Office of Management and 
Budget, EOP Publications, 725 17th St. N.W., New Executive Office 
Building, Washington, D.C. 20503.
---------------------------------------------------------------------------

    (2) Other nonprofit organizations. Allowability is determined in 
accordance with OMB Circular A-122, \4\ ``Cost Principles for Non-Profit 
Organizations.'' Note that Attachment C of the Circular identifies 
selected nonprofit organizations for whom cost allowability is 
determined in accordance with the FAR cost principles for for-profit 
organizations.
---------------------------------------------------------------------------

    \4\ See footnote 3 to paragraph (b)(1) of this section.
---------------------------------------------------------------------------

    (3) Hospitals. Allowability is determined in accordance with the 
provisions of 45 CFR part 74, Appendix E, ``Principles for Determining 
Costs Applicable to Research and Development Under Grants and Contracts 
with Hospitals.''
    (4) Governmental organizations. Allowability for State, local, or 
federally recognized Indian tribal governments is determined in 
accordance with OMB Circular A-87, \5\ ``Cost Principles for State and 
Local Governments.''
---------------------------------------------------------------------------

    \5\ See footnote 3 to paragraph (b)(1) of this section.
---------------------------------------------------------------------------



Sec. 34.18  Fee and profit.

    In accordance with 32 CFR 22.205(b), grants and cooperative 
agreements shall not:
    (a) Provide for the payment of fee or profit to the recipient.
    (b) Be used to carry out programs where fee or profit is necessary 
to achieving program objectives.

                           Property Standards



Sec. 34.20  Purpose of property standards.

    Sections 34.21 through 34.25 set forth uniform standards for 
management, use, and disposition of property. DoD Components shall 
encourage recipients to use existing property-management systems, to the 
extent that the systems meet these minimum requirements.



Sec. 34.21  Real property and equipment.

    (a) Prior approval for acquisition with Federal funds. Recipients 
may purchase

[[Page 192]]

real property or equipment in whole or in part with Federal funds under 
an award only with the prior approval of the grants officer.
    (b) Title. Title to such real property or equipment shall vest in 
the recipient upon acquisition. Unless a statute specifically authorizes 
a DoD Component to vest title in the recipient without further 
obligation to the Government, and the DoD Component elects to do so, the 
title shall be a conditional title. Title shall vest in the recipient 
subject to the conditions that the recipient:
    (1) Use the real property or equipment for the authorized purposes 
of the project until funding for the project ceases, or until the 
property is no longer needed for the purposes of the project.
    (2) Not encumber the property without approval of the grants 
officer.
    (3) Use and dispose of the property in accordance with paragraphs 
(d) and (e) of this section.
    (c) Federal interest in real property or equipment offered as cost-
share. A recipient may offer the full value of real property or 
equipment that is purchased with recipient's funds or that is donated by 
a third party to meet a portion of any required cost sharing or 
matching, subject to the prior approval requirement in Sec. 
34.13(a)(7). If a recipient does so, the Government has a financial 
interest in the property, a share of the property value attributable to 
the Federal participation in the project. The property therefore shall 
be considered as if it had been acquired in part with Federal funds, and 
shall be subject to the provisions of paragraphs (b)(1), (b)(2) and 
(b)(3) of this section, and to the provisions of Sec. 34.23.
    (d) Use. If real property or equipment is acquired in whole or in 
part with Federal funds under an award, and the award provides that 
title vests conditionally in the recipient, the real property or 
equipment is subject to the following:
    (1) During the time that the real property or equipment is used on 
the project or program for which it was acquired, the recipient shall 
make it available for use on other projects or programs, if such other 
use will not interfere with the work on the project or program for which 
the real property or equipment was originally acquired. Use of the real 
property or equipment on other projects will be in the following order 
of priority:
    (i) Activities sponsored by DoD Components' grants, cooperative 
agreements, or other assistance awards;
    (ii) Activities sponsored by other Federal agencies' grants, 
cooperative agreements, or other assistance awards;
    (iii) Activities under Federal procurement contracts, or activities 
not sponsored by any Federal agency. If so used, use charges shall be 
assessed to those activities. For real property or equipment, the use 
charges shall be at rates equivalent to those for which comparable real 
property or equipment may be leased. The use charges shall be treated as 
program income.
    (2) After Federal funding for the project ceases, or when the real 
property or equipment is no longer needed for the purposes of the 
project, the recipient may use the real property or equipment for other 
projects, insofar as:
    (i) There are Federally sponsored projects for which the real 
property or equipment may be used. If the only use for the real property 
or equipment is for projects that have no Federal sponsorship, the 
recipient shall proceed with disposition of the real property or 
equipment, in accordance with paragraph (e) of this section.
    (ii) The recipient obtains written approval from the grants officer 
to do so. The grants officer shall ensure that there is a formal change 
of accountability for the real property or equipment to a currently 
funded, Federal award.
    (iii) The recipient's use of the real property or equipment for 
other projects is in the same order of priority as described in 
paragraph (d)(1) of this section.
    (e) Disposition. (1) When an item of real property or equipment is 
no longer needed for Federally sponsored projects, the recipient shall 
proceed as follows:
    (i) If the property that is no longer needed is equipment (rather 
than real property), the recipient may wish to replace it with an item 
that is needed

[[Page 193]]

currently for the project. In that case, the recipient may use the 
original equipment as trade-in or sell it and use the proceeds to offset 
the costs of the replacement equipment, subject to the approval of the 
responsible agency (i.e., the DoD Component or the Federal agency to 
which the DoD Component delegated responsibility for administering the 
equipment).
    (ii) The recipient may elect to retain title, without further 
obligation to the Federal Government, by compensating the Federal 
Government for that percentage of the current fair market value of the 
real property or equipment that is attributable to the Federal 
participation in the project.
    (iii) If the recipient does not elect to retain title to real 
property or equipment (see paragraph (e)(1)(ii) of this section), or 
request approval to use equipment as trade-in or offset for replacement 
equipment (see paragraph (e)(1)(i) of this section), the recipient shall 
request disposition instructions from the responsible agency.
    (2) If a recipient requests disposition instructions, in accordance 
with paragraph (e)(1)(iii) of this section, the responsible grants 
officer shall:
    (i) For equipment (but not real property), consult with the Federal 
program manager and judge whether the age and nature of the equipment 
warrant a screening procedure, to determine whether the equipment is 
useful to a DoD Component or other Federal agency. If a screening 
procedure is warranted, the responsible agency shall determine whether 
the equipment can be used to meet a DoD Component's requirement. If no 
DoD requirement is found, the responsible agency shall report the 
availability of the equipment to the General Services Administration, to 
determine whether a requirement for the equipment exists in other 
Federal agencies.
    (ii) For either real property or equipment, issue instructions to 
the recipient for disposition of the property no later than 120 calendar 
days after the recipient's request. The grants officer's options for 
disposition are to direct the recipient to:
    (A) Transfer title to the real property or equipment to the Federal 
Government or to an eligible third party provided that, in such cases, 
the recipient shall be entitled to compensation for its attributable 
percentage of the current fair market value of the real property or 
equipment, plus any reasonable shipping or interim storage costs 
incurred. If title is transferred to the Federal Government, it shall be 
subject thereafter to provisions for Federally owned property in Sec. 
34.22.
    (B) Sell the real property or equipment and pay the Federal 
Government for that percentage of the current fair market value of the 
property that is attributable to the Federal participation in the 
project (after deducting actual and reasonable selling and fix-up 
expenses, if any, from the sale proceeds). When the recipient is 
authorized or required to sell the real property or equipment, proper 
sales procedures shall be established that provide for competition to 
the extent practicable and result in the highest possible return.
    (3) If the responsible agency fails to issue disposition 
instructions within 120 calendar days of the recipient's request, as 
described in paragraph (e)(2)(ii) of this section, the recipient shall 
dispose of the real property or equipment through the option described 
in paragraph (e)(2)(ii)(B) of this section.



Sec. 34.22  Federally owned property.

    (a) Annual inventory. Recipients shall submit annually an inventory 
listing of all Federally owned property in their custody (property 
furnished by the Federal Government, rather than acquired by the 
recipient with Federal funds under the award), to the DoD Component or 
other Federal agency responsible for administering the property under 
the award.
    (b) Use on other activities. (1) Use of federally owned property on 
other activities is permissible, if authorized by the DoD Component 
responsible for administering the award to which the property currently 
is charged.
    (2) Use on other activities will be in the following order of 
priority:
    (i) Activities sponsored by DoD Components' grants, cooperative 
agreements, or other assistance awards;
    (ii) Activities sponsored by other Federal agencies' grants, 
cooperative

[[Page 194]]

agreements, or other assistance awards;
    (iii) Activities under Federal procurement contracts, or activities 
not sponsored by any Federal agency. If so used, use charges shall be 
assessed to those activities. For real property or equipment, the use 
charges shall be at rates equivalent to those for which comparable real 
property or equipment may be leased. The use charges shall be treated as 
program income.
    (c) Disposition of property. Upon completion of the award, the 
recipient shall report the property to the responsible agency. The 
agency may:
    (1) Use the property to meet another Federal Government need (e.g, 
by transferring accountability for the property to another Federal award 
to the same recipient, or by directing the recipient to transfer the 
property to a Federal agency that needs the property, or to another 
recipient with a currently funded award).
    (2) Declare the property to be excess property and either:
    (i) Report the property to the General Services Administration, in 
accordance with the Federal Property and Administrative Services Act of 
1949 (40 U.S.C. 483(b)(2)), as implemented by General Services 
Administration regulations at 41 CFR 101-47.202; or
    (ii) Dispose of the property by alternative methods, if there is 
statutory authority to do so (e.g., DoD Components are authorized by 15 
U.S.C. 3710(i), the Federal Technology Transfer Act, to donate research 
equipment to educational and nonprofit organizations for the conduct of 
technical and scientific education and research activities. Such 
donations shall be in accordance with the DoD implementation of E.O. 
12999 (3 CFR, 1996 Comp., p. 180), ``Educational Technology: Ensuring 
Opportunity for All Children in the Next Century,'' as applicable.) 
Appropriate instructions shall be issued to the recipient by the 
responsible agency.



Sec. 34.23  Property management system.

    The recipient's property management system shall include the 
following, for property that is Federally owned, and for equipment that 
is acquired in whole or in part with Federal funds, or that is used as 
matching share:
    (a) Property records shall be maintained, to include the following 
information:
    (1) A description of the property.
    (2) Manufacturer's serial number, model number, Federal stock 
number, national stock number, or any other identification number.
    (3) Source of the property, including the award number.
    (4) Whether title vests in the recipient or the Federal Government.
    (5) Acquisition date (or date received, if the property was 
furnished by the Federal Government) and cost.
    (6) Information from which one can calculate the percentage of 
Federal participation in the cost of the property (not applicable to 
property furnished by the Federal Government).
    (7) The location and condition of the property and the date the 
information was reported.
    (8) Ultimate disposition data, including date of disposal and sales 
price or the method used to determine current fair market value where a 
recipient compensates the Federal Government for its share.
    (b) Federally owned equipment shall be marked, to indicate Federal 
ownership.
    (c) A physical inventory shall be taken and the results reconciled 
with the property records at least once every two years. Any differences 
between quantities determined by the physical inspection and those shown 
in the accounting records shall be investigated to determine the causes 
of the difference. The recipient shall, in connection with the 
inventory, verify the existence, current utilization, and continued need 
for the property.
    (d) A control system shall be in effect to insure adequate 
safeguards to prevent loss, damage, or theft of the property. Any loss, 
damage, or theft of property shall be investigated and fully documented; 
if the property was owned by the Federal Government, the recipient shall 
promptly notify the Federal agency responsible for administering the 
property.
    (e) Adequate maintenance procedures shall be implemented to keep the 
property in good condition.

[[Page 195]]



Sec. 34.24  Supplies.

    (a) Title shall vest in the recipient upon acquisition for supplies 
acquired with Federal funds under an award.
    (b) Upon termination or completion of the project or program, the 
recipient shall retain any unused supplies. If the inventory of unused 
supplies exceeds $5,000 in total aggregate value and the items are not 
needed for any other Federally sponsored project or program, the 
recipient shall retain the items for use on non-Federal sponsored 
activities or sell them, but shall, in either case, compensate the 
Federal Government for its share.



Sec. 34.25  Intellectual property developed or produced under awards.

    (a) Patents. Grants and cooperative agreements with:
    (1) Small business concerns shall comply with 35 U.S.C. Chapter 18, 
as implemented by 37 CFR part 401, which applies to inventions made 
under grants and cooperative agreements with small business concerns for 
research and development. 37 CFR 401.14 provides a standard clause that 
is required in such grants and cooperative agreements in most cases, 37 
CFR 401.3 specifies when the clause shall be included, and 37 CFR 401.5 
specifies how the clause may be modified and tailored.
    (2) For-profit organizations other than small business concerns 
shall comply with 35 U.S.C. 210(c) and Executive Order 12591 (3 CFR, 
1987 Comp., p. 220) (which codifies a Presidential Memorandum on 
Government Patent Policy, dated February 18, 1983).
    (i) The Executive order states that, as a matter of policy, grants 
and cooperative agreements should grant to all for-profit organizations, 
regardless of size, title to patents made in whole or in part with 
Federal funds, in exchange for royalty-free use by or on behalf of the 
Government (i.e., it extends the applicability of 35 U.S.C. Chapter 18, 
to the extent permitted by law, to for-profit organizations other than 
small business concerns).
    (ii) 35 U.S.C. 210(c) states that 35 U.S.C. Chapter 18 is not 
intended to limit agencies' authority to agree to the disposition of 
rights in inventions in accordance with the Presidential memorandum 
codified by the Executive order. It also states that such grants and 
cooperative agreements shall provide for Government license rights 
required by 35 U.S.C. 202(c)(4) and march-in rights required by 35 
U.S.C. 203.
    (b) Copyright, data and software rights. Requirements concerning 
data and software rights are as follows:
    (1) The recipient may copyright any work that is subject to 
copyright and was developed under an award. DoD Components reserve a 
royalty-free, nonexclusive and irrevocable right to reproduce, publish, 
or otherwise use the work for Federal purposes, and to authorize others 
to do so.
    (2) Unless waived by the DoD Component making the award, the Federal 
Government has the right to:
    (i) Obtain, reproduce, publish or otherwise use for Federal 
Government purposes the data first produced under an award.
    (ii) Authorize others to receive, reproduce, publish, or otherwise 
use such data for Federal purposes.

                          Procurement Standards



Sec. 34.30  Purpose of procurement standards.

    Section 34.31 sets forth requirements necessary to ensure:
    (a) Compliance of recipients' procurements that use Federal funds 
with applicable Federal statutes and executive orders.
    (b) Proper stewardship of Federal funds used in recipients' 
procurements.



Sec. 34.31  Requirements.

    The following requirements pertain to recipients' procurements 
funded in whole or in part with Federal funds or with recipients' cost-
share or match:
    (a) Reasonable cost. Recipients procurement procedures shall make 
maximum practicable use of competition, or shall use other means that 
ensure reasonable cost for procured goods and services.
    (b) Pre-award review of certain procurements. Prior to awarding a 
procurement contract under an award, a recipient may be required to 
provide the grants officer administering the award with pre-award 
documents (e.g., requests for

[[Page 196]]

proposals, invitations for bids, or independent cost estimates) related 
to the procurement. Recipients will only be required to provide such 
documents for the grants officer's pre-award review in exceptional cases 
where the grants officer judges that there is a compelling need to do 
so. In such cases, the grants officer must include a provision in the 
award that states the requirement.
    (c) Contract provisions. (1) Contracts in excess of the simplified 
acquisition threshold shall contain contractual provisions or conditions 
that allow for administrative, contractual, or legal remedies in 
instances in which a contractor violates or breaches the contract terms, 
and provide for such remedial actions as may be appropriate.
    (2) All contracts in excess of the simplified acquisition threshold 
shall contain suitable provisions for termination for default by the 
recipient or for termination due to circumstances beyond the control of 
the contractor.
    (3) All negotiated contracts in excess of the simplified acquisition 
threshold shall include a provision permitting access of the Department 
of Defense, the Comptroller General of the United States, or any of 
their duly authorized representatives, to any books, documents, papers, 
and records of the contractor that are directly pertinent to a specific 
program, for the purpose of making audits, examinations, excerpts, and 
transcriptions.
    (4) All contracts, including those for amounts less than the 
simplified acquisition threshold, awarded by recipients and their 
contractors shall contain the procurement provisions of Appendix A to 
this part, as applicable.

                           Reports and Records



Sec. 34.40  Purpose of reports and records.

    Sections 34.41 and 34.42 prescribe requirements for monitoring and 
reporting financial and program performance and for records retention.



Sec. 34.41  Monitoring and reporting program and financial performance.

    Grants officers may use the provisions of 32 CFR 32.51 and 32.52 for 
awards to for-profit organizations, or may include equivalent technical 
and financial reporting requirements that ensure reasonable oversight of 
the expenditure of appropriated funds. As a minimum, equivalent 
requirements must include:
    (a) Periodic reports (at least annually, and no more frequently than 
quarterly) addressing both program status and business status, as 
follows:
    (1) The program portions of the reports must address progress toward 
achieving program performance goals, including current issues, problems, 
or developments.
    (2) The business portions of the reports shall provide summarized 
details on the status of resources (federal funds and non-federal cost 
sharing or matching), including an accounting of expenditures for the 
period covered by the report. The report should compare the resource 
status with any payment and expenditure schedules or plans provided in 
the original award; explain any major deviations from those schedules; 
and discuss actions that will be taken to address the deviations.
    (3) When grants officers previously authorized advance payments, 
pursuant to Sec. 34.12(a)(2), they should consult with the program 
official and consider whether program progress reported in the periodic 
report, in relation to reported expenditures, is sufficient to justify 
continued authorization of advance payments.
    (b) Unless inappropriate, a final performance report that addresses 
all major accomplishments under the award.



Sec. 34.42  Retention and access requirements for records.

    (a) This section sets forth requirements for records retention and 
access to records for awards to recipients.
    (b) Financial records, supporting documents, statistical records, 
and all other records pertinent to an award shall be retained for a 
period of three years from the date of submission of the final 
expenditure report. The only exceptions are the following:
    (1) If any litigation, claim, or audit is started before the 
expiration of the 3-year period, the records shall be retained until all 
litigation, claims or audit findings involving the records have been 
resolved and final action taken.

[[Page 197]]

    (2) Records for real property and equipment acquired with Federal 
funds shall be retained for 3 years after final disposition.
    (3) When records are transferred to or maintained by the DoD 
Component that made the award, the 3-year retention requirement is not 
applicable to the recipient.
    (4) Indirect cost rate proposals, cost allocations plans, and 
related records, for which retention requirements are specified in Sec. 
34.42(g).
    (c) Copies of original records may be substituted for the original 
records if authorized by the grants officer.
    (d) The grants officer shall request that recipients transfer 
certain records to DoD Component custody when he or she determines that 
the records possess long term retention value. However, in order to 
avoid duplicate recordkeeping, a grants officer may make arrangements 
for recipients to retain any records that are continuously needed for 
joint use.
    (e) DoD Components, the Inspector General, Comptroller General of 
the United States, or any of their duly authorized representatives, have 
the right of timely and unrestricted access to any books, documents, 
papers, or other records of recipients that are pertinent to the awards, 
in order to make audits, examinations, excerpts, transcripts and copies 
of such documents. This right also includes timely and reasonable access 
to a recipient's personnel for the purpose of interview and discussion 
related to such documents. The rights of access in this paragraph are 
not limited to the required retention period, but shall last as long as 
records are retained.
    (f) Unless required by statute, no DoD Component shall place 
restrictions on recipients that limit public access to the records of 
recipients that are pertinent to an award, except when the DoD Component 
can demonstrate that such records shall be kept confidential and would 
have been exempted from disclosure pursuant to the Freedom of 
Information Act (5 U.S.C. 552) if the records had belonged to the DoD 
Component making the award.
    (g) Indirect cost proposals, cost allocation plans, and other cost 
accounting documents (such as documents related to computer usage 
chargeback rates), along with their supporting records, shall be 
retained for a 3-year period, as follows:
    (1) If a recipient is required to submit an indirect-cost proposal, 
cost allocation plan, or other computation to the cognizant Federal 
agency, for purposes of negotiating an indirect cost rate or other 
rates, the 3-year retention period starts on the date of the submission. 
This retention requirement also applies to subrecipients submitting 
similar documents for negotiation to the recipient.
    (2) If the recipient or the subrecipient is not required to submit 
the documents or supporting records for negotiating an indirect cost 
rate or other rates, the 3-year retention period for the documents and 
records starts at the end of the fiscal year (or other accounting 
period) covered by the proposal, plan, or other computation.
    (h) If the information described in this section is maintained on a 
computer, recipients shall retain the computer data on a reliable medium 
for the time periods prescribed. Recipients may transfer computer data 
in machine readable form from one reliable computer medium to another. 
Recipients' computer data retention and transfer procedures shall 
maintain the integrity, reliability, and security of the original 
computer data. Recipients shall also maintain an audit trail describing 
the data transfer. For the record retention time periods prescribed in 
this section, recipients shall not destroy, discard, delete, or write 
over such computer data.

                       Termination and Enforcement



Sec. 34.50  Purpose of termination and enforcement.

    Sections 34.51 through 34.53 set forth uniform procedures for 
suspension, termination, enforcement, and disputes.



Sec. 34.51  Termination.

    (a) Awards may be terminated in whole or in part only in accordance 
with one of the following:
    (1) By the grants officer, if a recipient materially fails to comply 
with the terms and conditions of an award.

[[Page 198]]

    (2) By the grants officer with the consent of the recipient, in 
which case the two parties shall agree upon the termination conditions, 
including the effective date and, in the case of partial termination, 
the portion to be terminated.
    (3) By the recipient upon sending to the grants officer written 
notification setting forth the reasons for such termination, the 
effective date, and, in the case of partial termination, the portion to 
be terminated. The recipient must provide such notice at least 30 
calendar days prior to the effective date of the termination. However, 
if the grants officer determines in the case of partial termination that 
the reduced or modified portion of the award will not accomplish the 
purposes for which the award was made, he or she may terminate the award 
in its entirety.
    (b) If costs are allowed under an award, the responsibilities of the 
recipient referred to in Sec. 34.61(b), including those for property 
management as applicable, shall be considered in the termination of the 
award, and provision shall be made for continuing responsibilities of 
the recipient after termination, as appropriate.



Sec. 34.52  Enforcement.

    (a) Remedies for noncompliance. If a recipient materially fails to 
comply with the terms and conditions of an award, whether stated in a 
Federal statute, regulation, assurance, application, or notice of award, 
the grants officer may, in addition to imposing any of the special 
conditions outlined in Sec. 34.4, take one or more of the following 
actions, as appropriate in the circumstances:
    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the recipient or more severe enforcement action by the 
grants officer and DoD Component.
    (2) Disallow (that is, deny both use of funds and any applicable 
matching credit for) all or part of the cost of the activity or action 
not in compliance.
    (3) Wholly or partly suspend or terminate the current award. In the 
case of termination, the recipient will be reimbursed for allowable 
costs incurred prior to termination, with the possible exception of 
those for activities and actions described in paragraph (a)(2) of this 
section.
    (4) Withhold further awards for the project or program.
    (5) Take other remedies that may be legally available.
    (b) Hearings and appeals. In taking an enforcement action, the 
grants officer and DoD Component shall provide the recipient an 
opportunity for hearing, appeal, or other administrative proceeding to 
which the recipient is entitled under any statute or regulation 
applicable to the action involved (see Sec. 34.53 and 32 CFR 22.815).
    (c) Effects of suspension and termination. Costs of a recipient 
resulting from obligations incurred by the recipient during a suspension 
or after termination of an award are not allowable unless the grants 
officer expressly authorizes them in the notice of suspension or 
termination or subsequently. Other recipient costs during suspension or 
after termination which are necessary and not reasonably avoidable are 
allowable if the costs:
    (1) Result from obligations which were properly incurred by the 
recipient before the effective date of suspension or termination, are 
not in anticipation of it, and in the case of a termination, are 
noncancellable; and
    (2) Would be allowable if the award were not suspended or expired 
normally at the end of the funding period in which the termination takes 
effect.
    (d) Relationship to debarment and suspension. The enforcement 
remedies identified in this section, including suspension and 
termination, do not preclude a recipient from being subject to debarment 
and suspension under 2 CFR part 1125.

[63 FR 12188, Mar. 12, 1998, as amended at 72 FR 34998, June 26, 2007]



Sec. 34.53  Disputes and appeals.

    Recipients have the right to appeal certain decisions by grants 
officers. In resolving such issues, DoD policy is to use Alternative 
Dispute Resolution (ADR) techniques, to the maximum practicable extent. 
See 32 CFR 22.815 for standards for DoD Components' dispute resolution 
and formal, administrative appeal procedures.

[[Page 199]]



                 Subpart C_After-the-Award Requirements



Sec. 34.60  Purpose.

    Sections 34.61 through 34.63 contain procedures for closeout and for 
subsequent disallowances and adjustments.



Sec. 34.61  Closeout procedures.

    (a) The cognizant grants officer shall, at least six months prior to 
the expiration date of the award, contact the recipient to establish:
    (1) All steps needed to close out the award, including submission of 
financial and performance reports, liquidation of obligations, and 
decisions on property disposition.
    (2) A schedule for completing those steps.
    (b) The following provisions shall apply to the closeout:
    (1) The responsible grants officer and payment office shall expedite 
completion of steps needed to close out awards and make prompt, final 
payments to a recipient for allowable reimbursable costs under the award 
being closed out.
    (2) The recipient shall promptly refund any unobligated balances of 
cash that the DoD Component has advanced or paid and that is not 
authorized to be retained by the recipient for use in other projects. 
For unreturned amounts that become delinquent debts, see 32 CFR 22.820.
    (3) When authorized by the terms and conditions of the award, the 
grants officer shall make a settlement for any upward or downward 
adjustments to the Federal share of costs after closeout reports are 
received.
    (4) The recipient shall account for any real property and personal 
property acquired with Federal funds or received from the Federal 
Government in accordance with Sec. Sec. 34.21 through 34.25.
    (5) If a final audit is required and has not been performed prior to 
the closeout of an award, the DoD Component shall retain the right to 
recover an appropriate amount after fully considering the 
recommendations on disallowed costs resulting from the final audit.



Sec. 34.62  Subsequent adjustments and continuing responsibilities.

    (a) The closeout of an award does not affect any of the following:
    (1) The right of the Department of Defense to disallow costs and 
recover funds on the basis of a later audit or other review.
    (2) The obligation of the recipient to return any funds due as a 
result of later refunds, corrections, or other transactions.
    (3) Audit requirements in Sec. 34.16.
    (4) Property management requirements in Sec. Sec. 34.21 through 
34.25.
    (5) Records retention as required in Sec. 34.42.
    (b) After closeout of an award, a relationship created under an 
award may be modified or ended in whole or in part with the consent of 
the grants officer and the recipient, provided the responsibilities of 
the recipient referred to in Sec. 34.61(a), including those for 
property management as applicable, are considered and provisions made 
for continuing responsibilities of the recipient, as appropriate.



Sec. 34.63  Collection of amounts due.

    Any funds paid to a recipient in excess of the amount to which the 
recipient is finally determined to be entitled under the terms and 
conditions of the award constitute a debt to the Federal Government. 
Procedures for issuing the demand for payment and pursuing 
administrative offset and other remedies are described in 32 CFR 22.820.



             Sec. Appendix A to Part 34--Contract Provisions

    All contracts awarded by a recipient, including those for amounts 
less than the simplified acquisition threshold, shall contain the 
following provisions as applicable:
    1. Equal Employment Opportunity--All contracts shall contain a 
provision requiring compliance with E.O. 11246 (3 CFR, 1964-1965 Comp., 
p. 339), ``Equal Employment Opportunity,'' as amended by E.O. 11375 (3 
CFR, 1966-1970 Comp., p. 684), ``Amending Executive Order 11246 Relating 
to Equal Employment Opportunity,'' and as supplemented by regulations at 
41 CFR chapter 60, ``Office of Federal Contract Compliance Programs, 
Equal Employment Opportunity, Department of Labor.''
    2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C. 
276c)--All contracts and subawards in excess of $2000 for construction 
or

[[Page 200]]

repair awarded by recipients and subrecipients shall include a provision 
for compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C. 874), 
as supplemented by Department of Labor regulations (29 CFR part 3, 
``Contractors and Subcontractors on Public Building or Public Work 
Financed in Whole or in Part by Loans or Grants from the United 
States''). The Act provides that each contractor or subrecipient shall 
be prohibited from inducing, by any means, any person employed in the 
construction, completion, or repair of public work, to give up any part 
of the compensation to which he is otherwise entitled. The recipient 
shall report all suspected or reported violations to the responsible DoD 
Component.
    3. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
333)--Where applicable, all contracts awarded by recipients in excess of 
$100,000 for construction and other purposes that involve the employment 
of mechanics or laborers shall include a provision for compliance with 
Sections 102 and 107 of the Contract Work Hours and Safety Standards Act 
(40 U.S.C. 327-333), as supplemented by Department of Labor regulations 
(29 CFR part 5). Under Section 102 of the Act, each contractor shall be 
required to compute the wages of every mechanic and laborer on the basis 
of a standard work week of 40 hours. Work in excess of the standard work 
week is permissible provided that the worker is compensated at a rate of 
not less than 1\1/2\ times the basic rate of pay for all hours worked in 
excess of 40 hours in the work week. Section 107 of the Act is 
applicable to construction work and provides that no laborer or mechanic 
shall be required to work in surroundings or under working conditions 
which are unsanitary, hazardous or dangerous. These requirements do not 
apply to the purchases of supplies or materials or articles ordinarily 
available on the open market, or contracts for transportation or 
transmission of intelligence.
    4. Rights to Inventions Made Under a Contract, Grant or Cooperative 
Agreement--Contracts, grants, or cooperative agreements for the 
performance of experimental, developmental, or research work shall 
provide for the rights of the Federal Government and the recipient in 
any resulting invention in accordance with 37 CFR part 401, ``Rights to 
Inventions Made by Nonprofit Organizations and Small Business Firms 
Under Government Grants, Contracts and Cooperative Agreements.''
    5. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water 
Pollution Control Act (33 U.S.C. 1251 et seq.), as amended--Contracts 
and subawards of amounts in excess of $100,000 shall contain a provision 
that requires the recipient to agree to comply with all applicable 
standards, orders or regulations issued pursuant to the Clean Air Act 
(42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as 
amended (33 U.S.C. 1251 et seq.). Violations shall be reported to the 
responsible DoD Component and the Regional Office of the Environmental 
Protection Agency (EPA).
    6. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--Contractors who 
apply or bid for an award of $100,000 or more shall file the required 
certification. Each tier certifies to the tier above that it will not 
and has not used Federal appropriated funds to pay any person or 
organization for influencing or attempting to influence an officer or 
employee of any agency, a member of Congress, officer or employee of 
Congress, or an employee of a member of Congress in connection with 
obtaining any Federal contract, grant or any other award covered by 31 
U.S.C. 1352. Each tier shall also disclose any lobbying with non-Federal 
funds that takes place in connection with obtaining any Federal award. 
Such disclosures are forwarded from tier to tier up to the recipient.
    7. Debarment and Suspension (E.O.s 12549 and 12689)--A contract 
award with an amount expected to equal or exceed $25,000 and certain 
other contract awards (see 2 CFR 1125.220, which implements OMB guidance 
at 2 CFR 180.220) shall not be made to parties listed on the 
Governmentwide Excluded Parties List System, in accordance with the DoD 
adoption at 2 CFR part 1125 of the OMB guidance implementing E.O.s 12549 
(3 CFR, 1986 Comp., p. 189) and 12689 (3 CFR, 1989 Comp., p. 235), 
``Debarment and Suspension.'' The Excluded Parties List System 
accessible on the Internet at www.epls.gov contains the names of parties 
debarred, suspended, or otherwise excluded by agencies, as well as 
parties declared ineligible under statutory or regulatory authority 
other than E.O. 12549.

[63 FR 12204, Mar. 12, 1998, as amended at 70 FR 49477, Aug. 23, 2005; 
72 FR 34998, June 26, 2007]



PART 37_TECHNOLOGY INVESTMENT AGREEMENTS--Table of Contents



                            Subpart A_General

Sec.
37.100 What does this part do?
37.105 Does this part cover all types of instruments that 10 U.S.C. 2371 
          authorizes?
37.110 What type of instruments are technology investment agreements 
          (TIAs)?
37.115 For what purposes are TIAs used?
37.120 Can my organization award or administer TIAs?
37.125 May I award or administer TIAs if I am authorized to award or 
          administer other assistance instruments?
37.130 Which other parts of the DoD Grant and Agreement Regulations 
          apply to TIAs?

[[Page 201]]

      Subpart B_Appropriate Use of Technology Investment Agreements

37.200 What are my responsibilities as an agreements officer for 
          ensuring the appropriate use of TIAs?
37.205 What judgments must I make about the nature of the project?
37.210 To what types of recipients may I award a TIA?
37.215 What must I conclude about the recipient's commitment and cost 
          sharing?
37.220 How involved should the Government program official be in the 
          project?
37.225 What judgment must I make about the benefits of using a TIA?
37.230 May I use a TIA if a participant is to receive fee or profit?

  Subpart C_Expenditure-Based and Fixed-Support Technology Investment 
                               Agreements

37.300 What is the difference between an expenditure-based and fixed-
          support TIA?
37.305 When may I use a fixed-support TIA?
37.310 When would I use an expenditure-based TIA?
37.315 What are the advantages of using a fixed-support TIA?

                       Subpart D_Competition Phase

37.400 Must I use competitive procedures to award TIAs?
37.405 What must my announcement or solicitation include?
37.410 Should my announcement or solicitation state that TIAs may be 
          awarded?
37.415 Should I address cost sharing in the announcement or 
          solicitation?
37.420 Should I tell proposers that we will not disclose information 
          that they submit?

                 Subpart E_Pre-Award Business Evaluation

37.500 What must my pre-award business evaluation address?
37.505 What resources are available to assist me during the pre-award 
          business evaluation?

                         Recipient Qualification

37.510 What are my responsibilities for determining that a recipient is 
          qualified?
37.515 Must I do anything additional to determine the qualification of a 
          consortium?

                              Total Funding

37.520 What is my responsibility for determining that the total project 
          funding is reasonable?

                              Cost Sharing

37.525 What is my responsibility for determining the value and 
          reasonableness of the recipient's cost sharing contribution?
37.530 What criteria do I use in deciding whether to accept a 
          recipient's cost sharing?
37.535 How do I value cost sharing related to real property or 
          equipment?
37.540 May I accept fully depreciated real property or equipment as cost 
          sharing?
37.545 May I accept costs of prior research as cost sharing?
37.550 May I accept intellectual property as cost sharing?
37.555 How do I value a recipient's other contributions?

               Fixed-Support or Expenditure-Based Approach

37.560 Must I be able to estimate project expenditures precisely in 
          order to justify use of a fixed-support TIA?
37.565 May I use a hybrid instrument that provides fixed support for 
          only a portion of a project?

               Accounting, Payments, and Recovery of Funds

37.570 What must I do if a CAS-covered participant accounts differently 
          for its own and the Federal Government shares of project 
          costs?
37.575 What are my responsibilities for determining milestone payment 
          amounts?
37.580 What is recovery of funds and when should I consider including it 
          in my TIA?

 Subpart F_Award Terms Affecting Participants' Financial, Property, and 
                           Purchasing Systems

37.600 Which administrative matters are covered in this subpart?
37.605 What is the general policy on participants' financial, property, 
          and purchasing systems?
37.610 Must I tell participants what requirements they are to flow down 
          for subrecipients' systems?

                            Financial Matters

37.615 What standards do I include for financial systems of for-profit 
          firms?
37.620 What financial management standards do I include for nonprofit 
          participants?
37.625 What cost principles or standards do I require for for-profit 
          participants?
37.630 Must I require a for-profit firm to use Federally approved 
          indirect cost rates?
37.635 What cost principles do I require a nonprofit participant to use?
37.640 Must I include a provision for audits of for-profit participants?

[[Page 202]]

37.645 Must I require periodic system audits, as well as award-specific 
          audits, of for-profit participants?
37.650 Who must I identify as the auditor for a for-profit participant?
37.655 Must I specify the frequency of IPAs' periodic audits of for-
          profit participants?
37.660 What else must I specify concerning audits of for-profit 
          participants by IPAs?
37.665 Must I require nonprofit participants to have periodic audits?
37.670 Must I require participants to flow down audit requirements to 
          subrecipients?
37.675 Must I report when I enter into a TIA allowing a for-profit firm 
          to use an IPA?
37.680 Must I require a participant to report when it enters into a 
          subaward allowing a for-profit firm to use an IPA?

                                Property

37.685 May I allow for-profit firms to purchase real property and 
          equipment with project funds?
37.690 How are nonprofit participants to manage real property and 
          equipment?
37.695 What are the requirements for Federally owned property?
37.700 What are the requirements for supplies?

                               Purchasing

37.705 What standards do I include for purchasing systems of for-profit 
          firms?
37.710 What standards do I include for purchasing systems of nonprofit 
          organizations?

      Subpart G_Award Terms Related to Other Administrative Matters

37.800 Which administrative matters are covered in this subpart?

                                Payments

37.805 If I am awarding a TIA, what payment methods may I specify?
37.810 What should my TIA's provisions specify for the method and 
          frequency of recipients' payment requests?
37.815 May the Government withhold payments?
37.820 Must I require a recipient to return interest on advance 
          payments?

                  Revision of Budget and Program Plans

37.825 Must I require the recipient to obtain prior approval from the 
          Government for changes in plans?
37.830 May I let a recipient charge pre-award costs to the agreement?

                             Program Income

37.835 What requirements do I include for program income?

                          Intellectual Property

37.840 What general approach should I take in negotiating data and 
          patent rights?
37.845 What data rights should I obtain?
37.850 Should I require recipients to mark data?
37.855 How should I handle protected data?
37.860 What rights should I obtain for inventions?
37.865 Should my patent provision include march-in rights?
37.870 Should I require recipients to mark documents related to 
          inventions?
37.875 Should my TIA include a provision concerning foreign access to 
          technology?

                  Financial and Programmatic Reporting

37.880 What requirements must I include for periodic reports on program 
          and business status?
37.885 May I require updated program plans?
37.890 Must I require a final performance report?
37.895 How is the final performance report to be sent to the Defense 
          Technical Information Center?
37.900 May I tell a participant that information in financial and 
          programmatic reports will not be publicly disclosed?
37.905 Must I make receipt of the final performance report a condition 
          for final payment?

                Records Retention and Access Requirements

37.910 How long must I require participants to keep records related to 
          the TIA?
37.915 What requirement for access to a for-profit participant's records 
          do I include in a TIA?
37.920 What requirement for access to a nonprofit participant's records 
          do I include in a TIA?

                       Termination and Enforcement

37.925 What requirements do I include for termination and enforcement?

                      Subpart H_Executing the Award

37.1000 What are my responsibilities at the time of award?

                           The Award Document

37.1005 What are my general responsibilities concerning the award 
          document?
37.1010 What substantive issues should my award document address?
37.1015 How do I decide who must sign the TIA if the recipient is an 
          unincorporated consortium?

                  Reporting Information About the Award

37.1020 What must I document in my award file?

[[Page 203]]

37.1025 Must I report information to the Defense Assistance Awards Data 
          System?
37.1030 What information must I report to the Defense Technical 
          Information Center?
37.1035 How do I know if my TIA uses the 10 U.S.C. 2371 authority and I 
          must report additional data under Sec. 37.1030(b)?
37.1040 When and how do I report information required by Sec. 37.1035?

                Distributing Copies of the Award Document

37.1045 To whom must I send copies of the award document?

                   Subpart I_Post-Award Administration

37.1100 What are my responsibilities generally as an administrative 
          agreements officer for a TIA?
37.1105 What additional duties do I have as the administrator of a TIA 
          with advance payments or payable milestones?
37.1110 What other responsibilities related to payments do I have?
37.1115 What are my responsibilities related to participants' single 
          audits?
37.1120 When and how may I request an award-specific audit?

            Subpart J_Definitions of Terms Used in this Part

37.1205 Advance.
37.1210 Advanced research.
37.1215 Agreements officer.
37.1220 Applied research.
37.1225 Articles of collaboration.
37.1230 Assistance.
37.1235 Award-specific audit.
37.1240 Basic research.
37.1245 Cash contributions.
37.1250 Commercial firm.
37.1255 Consortium.
37.1260 Cooperative agreement.
37.1265 Cost sharing.
37.1270 Data.
37.1275 DoD Component.
37.1280 Equipment.
37.1285 Expenditure-based award.
37.1290 Expenditures or outlays.
37.1295 Grant.
37.1300 In-kind contributions.
37.1305 Institution of higher education.
37.1310 Intellectual property.
37.1315 Nonprofit organization.
37.1320 Participant.
37.1325 Periodic audit.
37.1330 Procurement contract.
37.1335 Program income.
37.1340 Program official.
37.1345 Property.
37.1350 Real property.
37.1355 Recipient.
37.1360 Research.
37.1365 Supplies.
37.1370 Termination.
37.1375 Technology investment agreements.

Appendix A to Part 37--What Is the Civil-Military Integration Policy 
          That Is the Basis for Technology Investment Agreements?
Appendix B to Part 37--What Type of Instrument Is a TIA and What 
          Statutory Authorities Does It Use?
Appendix C to Part 37--What Is the Desired Coverage for Periodic Audits 
          of For-Profit Participants To Be Audited by IPAs?
Appendix D to Part 37--What Common National Policy Requirements May 
          Apply and Need To Be Included in TIAs?
Appendix E to Part 37--What Provisions May a Participant Need To Include 
          When Purchasing Goods or Services Under a TIA?

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 68 FR 47160, Aug. 7, 2003, unless otherwise noted.



                            Subpart A_General



Sec. 37.100  What does this part do?

    This part establishes uniform policies and procedures for the DoD 
Components' award and administration of technology investment agreements 
(TIAs).



Sec. 37.105  Does this part cover all types of instruments that 10 U.S.C. 2371 

authorizes?

    No, this part covers only TIAs, some of which use the authority of 
10 U.S.C. 2371 (see appendix B to this part). This part does not cover 
assistance instruments other than TIAs that use the authority of 10 
U.S.C. 2371. It also does not cover acquisition agreements for prototype 
projects that use 10 U.S.C. 2371 authority augmented by the authority in 
section 845 of Public Law 103-160, as amended.



Sec. 37.110  What type of instruments are technology investment agreements 

(TIAs)?

    TIAs are assistance instruments used to stimulate or support 
research. As discussed in appendix B to this part, a TIA may be either a 
kind of cooperative agreement or a type of assistance transaction other 
than a grant or cooperative agreement.

[[Page 204]]



Sec. 37.115  For what purposes are TIAs used?

    The ultimate goal for using TIAs, like other assistance instruments 
used in defense research programs, is to foster the best technologies 
for future defense needs. TIAs differ from and complement other 
assistance instruments available to agreements officers, in that TIAs 
address the goal by fostering civil-military integration (see appendix A 
to this part). TIAs therefore are designed to:
    (a) Reduce barriers to commercial firms' participation in defense 
research, to give the Department of Defense (DoD) access to the broadest 
possible technology and industrial base.
    (b) Promote new relationships among performers in both the defense 
and commercial sectors of that technology and industrial base.
    (c) Stimulate performers to develop, use, and disseminate improved 
practices.



Sec. 37.120  Can my organization award or administer TIAs?

    Your office may award or administer TIAs if it has a delegation of 
the authorities in 10 U.S.C. 2371, as well as 10 U.S.C. 2358. If your 
office is in a Military Department, it must have a delegation of the 
authority of the Secretary of that Military Department under those 
statutes. If your office is in a Defense Agency, it must have a 
delegation of the authority of the Secretary of Defense under 10 U.S.C. 
2358 and 2371. Your office needs those authorities to be able to:
    (a) Enter into cooperative agreements to stimulate or support 
research, using the authority of 10 U.S.C. 2358, as well as assistance 
transactions other than grants or cooperative agreements, using the 
authority of 10 U.S.C. 2371. The reason that both authorities are needed 
is that a TIA, depending upon its patent rights provision (see appendix 
B to this part), may be either a cooperative agreement or a type of 
assistance transaction other than a grant or cooperative agreement.
    (b) Recover funds from a recipient and reuse the funds for program 
purposes, as authorized by 10 U.S.C. 2371 and described in Sec. 37.580.
    (c) Exempt certain information received from proposers from 
disclosure under the Freedom of Information Act, as authorized by 10 
U.S.C. 2371 and described in Sec. 37.420.



Sec. 37.125  May I award or administer TIAs if I am authorized to award or 

administer other assistance instruments?

    (a) You must have specific authorization to award or administer 
TIAs. Being authorized to award or administer grants and cooperative 
agreements is not sufficient; a grants officer is an agreements officer 
only if the statement of appointment also authorizes the award or 
administration of TIAs.
    (b) You receive that authorization in the same way that you receive 
authority to award other assistance instruments, as described in 32 CFR 
21.425 and 21.435 through 21.445.



Sec. 37.130  Which other parts of the DoD Grant and Agreement Regulations 

apply to TIAs?

    (a) TIAs are explicitly covered in this part and part 21 of the DoD 
Grant and Agreement Regulations (DoDGARs). Part 21 (32 CFR part 21) 
addresses deviation procedures and other general matters that relate to 
the DoDGARs, to DoD Components' authorities and responsibilities for 
assistance instruments, and to requirements for reporting information 
about assistance awards.
    (b) Two additional parts of the DoDGARs apply to TIAs, although they 
do not mention TIAs explicitly. They are:
    (1) Part 1125 (2 CFR part 1125) on nonprocurement debarment and 
suspension, which applies because it covers nonprocurement instruments 
in general;
    (2) Part 26 (32 CFR part 26), on drug-free workplace requirements, 
which applies because it covers financial assistance in general; and
    (3) Part 28 (32 CFR part 28), on lobbying restrictions, which 
applies by law (31 U.S.C. 1352) to TIAs that are cooperative agreements 
and as a matter of DoD policy to all other TIAs.
    (c) Portions of four other DoDGARs parts apply to TIAs only as cited 
by reference in this part. Those parts of

[[Page 205]]

the DoDGARs are parts 22, 32, 33, and 34 (32 CFR parts 22, 32, 33, and 
34).

[68 FR 47160, Aug. 7, 2003, as amended at 70 FR 49477, Aug. 23, 2005; 72 
FR 34999, June 26, 2007]



      Subpart B_Appropriate Use of Technology Investment Agreements



Sec. 37.200  What are my responsibilities as an agreements officer for 

ensuring the appropriate use of TIAs?

    You must ensure that you use TIAs only in appropriate situations. To 
do so, you must conclude that the use of a TIA is justified based on:
    (a) The nature of the project, as discussed in Sec. 37.205;
    (b) The type of recipient, addressed in Sec. 37.210;
    (c) The recipient's commitment and cost sharing, as described in 
Sec. 37.215;
    (d) The degree of involvement of the Government program official, as 
discussed in Sec. 37.220; and
    (e) Your judgment that the use of a TIA could benefit defense 
research objectives in ways that likely would not happen if another type 
of assistance instrument were used. Your answers to the four questions 
in Sec. 37.225 should be the basis for your judgment.



Sec. 37.205  What judgments must I make about the nature of the project?

    You must:
    (a) Conclude that the principal purpose of the project is 
stimulation or support of research (i.e., assistance), rather than 
acquiring goods or services for the benefit of the Government (i.e., 
acquisition);
    (b) Decide that the basic, applied, or advanced research project is 
relevant to the policy objective of civil-military integration (see 
appendix A of this part); and
    (c) Ensure that, to the maximum extent practicable, any TIA that 
uses the authority of 10 U.S.C. 2371 (see appendix B of this part) does 
not support research that duplicates other research being conducted 
under existing programs carried out by the Department of Defense. This 
is a statutory requirement of 10 U.S.C. 2371.
    (d) When your TIA is a type of assistance transaction other than a 
grant or cooperative agreement, satisfy the condition in 10 U.S.C. 2371 
to judge that the use of a standard grant or cooperative agreement for 
the research project is not feasible or appropriate. As discussed in 
appendix B to this part:
    (1) This situation arises if your TIA includes a patent provision 
that is less restrictive than is possible under the Bayh-Dole statute 
(because the patent provision is what distinguishes a TIA that is a 
cooperative agreement from a TIA that is an assistance transaction other 
than a grant or cooperative agreement).
    (2) You satisfy the requirement to judge that a standard cooperative 
agreement is not feasible or appropriate when you judge that execution 
of the research project warrants a less restrictive patent provision 
than is possible under Bayh-Dole.



Sec. 37.210  To what types of recipients may I award a TIA?

    (a) As a matter of DoD policy, you may award a TIA only when one or 
more for-profit firms are to be involved either in the:
    (1) Performance of the research project; or
    (2) The commercial application of the research results. In that 
case, you must determine that the nonprofit performer has at least a 
tentative agreement with specific for-profit partners who plan on being 
involved when there are results to transition. You should review the 
agreement between the nonprofit and for-profit partners, because the 
for-profit partners' involvement is the basis for using a TIA rather 
than another type of assistance instrument.
    (b) Consistent with the goals of civil-military integration, TIAs 
are most appropriate when one or more commercial firms (as defined at 
Sec. 37.1250) are to be involved in the project.
    (c) You are encouraged to make awards to consortia (a consortium may 
include one or more for-profit firms, as well as State or local 
government agencies, institutions of higher education, or other 
nonprofit organizations). The reasons are that:
    (1) When multiple performers are participating as a consortium, they 
are more equal partners in the research performance than usually is the 
case

[[Page 206]]

with a prime recipient and subawards. All of them therefore are more 
likely to be directly involved in developing and revising plans for the 
research effort, reviewing technical progress, and overseeing financial 
and other business matters. That feature makes consortia well suited to 
building new relationships among performers in the defense and 
commercial sectors of the technology and industrial base, a principal 
objective for the use of TIAs.
    (2) In addition, interactions among the participants within a 
consortium potentially provide a self-governance mechanism. The 
potential for additional self-governance is particularly good when a 
consortium includes multiple for-profit participants that normally are 
competitors within an industry.
    (d) TIAs also may be used for carrying out research performed by 
single firms or multiple performers in prime award-subaward 
relationships. In awarding TIAs in those cases, however, you should 
consider providing for greater involvement of the program official or a 
way to increase self-governance (e.g., a prime award with multiple 
subawards arranged so as to give the subrecipients more insight into and 
authority and responsibility for programmatic and business aspects of 
the overall project than they usually have).



Sec. 37.215  What must I conclude about the recipient's commitment and cost 

sharing?

    (a) You should judge that the recipient has a strong commitment to 
and self-interest in the success of the project. You should find 
evidence of that commitment and interest in the proposal, in the 
recipient's management plan, or through other means. A recipient's self-
interest might be driven, for example, by a research project's potential 
for fostering technology to be incorporated into products and processes 
for the commercial marketplace.
    (b) You must seek cost sharing. The purpose of cost share is to 
ensure that the recipient incurs real risk that gives it a vested 
interest in the project's success; the willingness to commit to 
meaningful cost sharing therefore is one good indicator of a recipient's 
self-interest. The requirements are that:
    (1) To the maximum extent practicable, the non-Federal parties 
carrying out a research project under a TIA are to provide at least half 
of the costs of the project. Obtaining this cost sharing, to the maximum 
extent practicable, is a statutory condition for any TIA under the 
authority of 10 U.S.C. 2371, and is a matter of DoD policy for all other 
TIAs.
    (2) The parties must provide the cost sharing from non-Federal 
resources that are available to them unless there is specific authority 
to use other Federal resources for that purpose (see Sec. 37.530(f)).
    (c) You may consider whether cost sharing is impracticable in a 
given case, unless there is a non-waivable, statutory requirement for 
cost sharing that applies to the particular program under which the 
award is to be made. Before deciding that cost sharing is impracticable, 
you should carefully consider whether there are other factors that 
demonstrate the recipient's self-interest in the success of the current 
project.



Sec. 37.220  How involved should the Government program official be in the 

project?

    (a) TIAs are used to carry out cooperative relationships between the 
Federal Government and the recipient, which requires a greater level of 
involvement of the Government program official in the execution of the 
research than the usual oversight of a research grant or procurement 
contract. For example, program officials will participate in recipients' 
periodic reviews of research progress and will be substantially involved 
with the recipients in the resulting revisions of plans for future 
effort. That increased programmatic involvement before and during 
program execution with a TIA can reduce the need for some Federal 
financial requirements that are problematic for commercial firms.
    (b) Some aspects of their involvement require program officials to 
have greater knowledge about and participation in business matters that 
traditionally would be your exclusive responsibility as the agreements 
officer. TIAs

[[Page 207]]

therefore also require closer cooperation between program officials and 
you, as the one who decides business matters.



Sec. 37.225  What judgment must I make about the benefits of using a TIA?

    Before deciding that a TIA is appropriate, you also must judge that 
using a TIA could benefit defense research objectives in ways that 
likely would not happen if another type of assistance instrument were 
used (e.g., a cooperative agreement subject to all of the requirements 
of 32 CFR part 34). You, in conjunction with Government program 
officials, must consider the questions in paragraphs (a) through (d) of 
this section, to help identify the benefits that may justify using a TIA 
and reducing some of the usual requirements. In accordance with Sec. 
37.1030, you will report your answers to these questions to help the DoD 
measure the Department-wide benefits of using TIAs and meet requirements 
to report to the Congress. Note that you must give full concise answers 
only to questions that relate to the benefits that you perceive for 
using the TIA, rather than another type of funding instrument, for the 
particular research project. A simple ``no'' or ``not applicable'' is a 
sufficient response for other questions. The questions are:
    (a) Will the use of a TIA permit the involvement in the research of 
any commercial firms or business units of firms that would not otherwise 
participate in the project? If so:
    (1) What are the expected benefits of those firms' or divisions' 
participation (e.g., is there a specific technology that could be 
better, more readily available, or less expensive)?
    (2) Why would they not participate if an instrument other than a TIA 
were used? You should identify specific provisions of the TIA or 
features of the TIA award process that enable their participation.
    (b) Will the use of a TIA allow the creation of new relationships 
among participants at the prime or subtier levels, among business units 
of the same firm, or between non-Federal participants and the Federal 
Government that will help the DoD get better technology in the future? 
If so:
    (1) Why do these new relationships have the potential for helping 
the DoD get technology in the future that is better, more affordable, or 
more readily available?
    (2) Are there provisions of the TIA or features of the TIA award 
process that enable these relationships to form? If so, you should be 
able to identify specifically what they are. If not, you should be able 
to explain specifically why you think that the relationships could not 
be created if an assistance instrument other than a TIA were used.
    (c) Will the use of a TIA allow firms or business units of firms 
that traditionally accept Government awards to use new business 
practices in the execution of the research that will help us get better 
technology, help us get new technology more quickly or less expensively, 
or facilitate partnering with commercial firms? If so:
    (1) What specific benefits will the DoD potentially get from the use 
of these new practices? You should be able to explain specifically why 
you foresee a potential for those benefits.
    (2) Are there provisions of the TIA or features of the TIA award 
process that enable the use of the new practices? If so, you should be 
able to identify those provisions or features and explain why you think 
that the practices could not be used if the award were made using an 
assistance instrument other than a TIA.
    (d) Are there any other benefits of the use of a TIA that could help 
the Department of Defense better meet its objectives in carrying out the 
research project? If so, you should be able to identify specifically 
what they are, how they can help meet defense objectives, what features 
of the TIA or award process enable the DoD to realize them, and why the 
benefits likely would not be realized if an assistance instrument other 
than a TIA were used.



Sec. 37.230  May I use a TIA if a participant is to receive fee or profit?

    In accordance with 32 CFR 22.205(b), you may not use a TIA if any 
participant is to receive fee or profit. Note that this policy extends 
to all performers of the research project carried

[[Page 208]]

out under the TIA, including any subawards for substantive program 
performance, but it does not preclude participants' or subrecipients' 
payment of reasonable fee or profit when making purchases from suppliers 
of goods (e.g., supplies and equipment) or services needed to carry out 
the research.



  Subpart C_Expenditure-Based and Fixed-Support Technology Investment 

                               Agreements



Sec. 37.300  What is the difference between an expenditure-based and fixed-

support TIA?

    The fundamental difference between an expenditure-based and fixed-
support TIA is that:
    (a) For an expenditure-based TIA, the amounts of interim payments or 
the total amount ultimately paid to the recipient are based on the 
amounts the recipient expends on project costs. If a recipient completes 
the project specified at the time of award before it expends all of the 
agreed-upon Federal funding and recipient cost sharing, the Federal 
Government may recover its share of the unexpended balance of funds or, 
by mutual agreement with the recipient, amend the agreement to expand 
the scope of the research project. An expenditure-based TIA therefore is 
analogous to a cost-type procurement contract or grant.
    (b) For a fixed-support TIA, the amount of assistance established at 
the time of award is not meant to be adjusted later if the research 
project is carried out to completion. In that sense, a fixed-support TIA 
is somewhat analogous to a fixed-price procurement contract (although 
``price,'' a concept appropriate to a procurement contract for buying a 
good or service, is not appropriate for a TIA or other assistance 
instrument for stimulation or support of a project).



Sec. 37.305  When may I use a fixed-support TIA?

    You may use a fixed-support TIA if:
    (a) The agreement is to support or stimulate research with outcomes 
that are well defined, observable, and verifiable;
    (b) You can reasonably estimate the resources required to achieve 
those outcomes well enough to ensure the desired level of cost sharing 
(see example in Sec. 37.560(b)); and
    (c) Your TIA does not require a specific amount or percentage of 
recipient cost sharing. In cases where the agreement does require a 
specific amount or percentage of cost sharing, a fixed-support TIA is 
not practicable because the agreement has to specify cost principles or 
standards for costs that may be charged to the project; require the 
recipient to track the costs of the project; and provide access for 
audit to allow verification of the recipient's compliance with the 
mandatory cost sharing. You therefore must use an expenditure-based TIA 
if you:
    (1) Have a non-waivable requirement (e.g., in statute) for a 
specific amount or percentage of recipient cost sharing; or
    (2) Have otherwise elected to include in the TIA a requirement for a 
specific amount or percentage of cost sharing.



Sec. 37.310  When would I use an expenditure-based TIA?

    In general, you must use an expenditure-based TIA under conditions 
other than those described in Sec. 37.305. Reasons for any exceptions 
to this general rule must be documented in the award file and must be 
consistent with the policy in Sec. 37.230 that precludes payment of fee 
or profit to participants.



Sec. 37.315  What are the advantages of using a fixed-support TIA?

    In situations where the use of fixed-support TIAs is permissible 
(see Sec. Sec. 37.305 and 37.310), their use may encourage some 
commercial firms' participation in the research. With a fixed-support 
TIA, you can eliminate or reduce some post-award requirements that 
sometimes are cited as disincentives for those firms to participate. For 
example, a fixed-support TIA need not:
    (a) Specify minimum standards for the recipient's financial 
management system.
    (b) Specify cost principles or standards stating the types of costs 
the recipient may charge to the project.

[[Page 209]]

    (c) Provide for financial audits by Federal auditors or independent 
public accountants of the recipient's books and records.
    (d) Set minimum standards for the recipient's purchasing system.
    (e) Require the recipient to prepare financial reports for 
submission to the Federal Government.



                       Subpart D_Competition Phase



Sec. 37.400  Must I use competitive procedures to award TIAs?

    DoD policy is to award TIAs using merit-based, competitive 
procedures, as described in 32 CFR 22.315:
    (a) In every case where required by statute; and
    (b) To the maximum extent practicable in all other cases.



Sec. 37.405  What must my announcement or solicitation include?

    Your announcement, to be considered as part of a competitive 
procedure, must include the basic information described in 32 CFR 
22.315(a). Additional elements for you to consider in the case of a 
program that may use TIAs are described in Sec. Sec. 37.410 through 
37.420.



Sec. 37.410  Should my announcement or solicitation state that TIAs may be awarded?

    Yes, once you consider the factors described in subpart B of this 
part and decide that TIAs are among the types of instruments that you 
may award pursuant to a solicitation, it is important for you to state 
that fact in the solicitation. You also should state that TIAs are more 
flexible than traditional Government funding instruments and that 
provisions are negotiable in areas such as audits and intellectual 
property rights that may cause concern for commercial firms. Doing so 
should increase the likelihood that commercial firms will be willing to 
submit proposals.



Sec. 37.415  Should I address cost sharing in the announcement or 

solicitation?

    To help ensure a competitive process that is fair and equitable to 
all potential proposers, you should state clearly in the solicitation:
    (a) That, to the maximum extent practicable, the non-Federal parties 
carrying out a research project under a TIA are to provide at least half 
of the costs of the project (see Sec. 37.215(b)).
    (b) The types of cost sharing that are acceptable;
    (c) How any in-kind contributions will be valued, in accordance with 
Sec. Sec. 37.530 through 37.555; and
    (d) Whether you will give any consideration to alternative 
approaches a proposer may offer to demonstrate its strong commitment to 
and self-interest in the project's success, in accordance with Sec. 
37.215.



Sec. 37.420  Should I tell proposers that we will not disclose information 

that they submit?

    Your solicitation should tell potential proposers that:
    (a) For all TIAs, information described in paragraph (b) of this 
section is exempt from disclosure requirements of the Freedom of 
Information Act (FOIA)(codified at 5 U.S.C. 552) for a period of five 
years after the date on which the DoD Component receives the information 
from them.
    (b) As provided in 10 U.S.C. 2371, disclosure is not required, and 
may not be compelled, under FOIA during that period if:
    (1) A proposer submits the information in a competitive or 
noncompetitive process that could result in their receiving a 
cooperative agreement for basic, applied, or advanced research under the 
authority of 10 U.S.C. 2358 or any other type of transaction authorized 
by 10 U.S.C. 2371 (as explained in appendix B to this part, that 
includes all TIAs); and
    (2) The type of information is among the following types that are 
exempt:
    (i) Proposals, proposal abstracts, and supporting documents; and
    (ii) Business plans and technical information submitted on a 
confidential basis.
    (c) If proposers desire to protect business plans and technical 
information for five years from FOIA disclosure requirements, they must 
mark them with a legend identifying them as documents submitted on a 
confidential

[[Page 210]]

basis. After the five-year period, information may be protected for 
longer periods if it meets any of the criteria in 5 U.S.C. 552(b) (as 
implemented by the DoD in subpart C of 32 CFR part 286) for exemption 
from FOIA disclosure requirements.



                 Subpart E_Pre-Award Business Evaluation



Sec. 37.500  What must my pre-award business evaluation address?

    (a) You must determine the qualification of the recipient, as 
described in Sec. Sec. 37.510 and 37.515.
    (b) As the business expert working with the program official, you 
also must address the financial aspects of the proposed agreement. You 
must:
    (1) Determine that the total amount of funding for the proposed 
effort is reasonable, as addressed in Sec. 37.520.
    (2) Assess the value and determine the reasonableness of the 
recipient's proposed cost sharing contribution, as discussed in 
Sec. Sec. 37.525 through 37.555.
    (3) If you are contemplating the use of a fixed-support rather than 
expenditure-based TIA, ensure that its use is justified, as explained in 
Sec. Sec. 37.560 and 37.565.
    (4) Address issues of inconsistent cost accounting by traditional 
Government contractors, should they arise, as noted in Sec. 37.570.
    (5) Determine amounts for milestone payments, if you use them, as 
discussed in Sec. 37.575.



Sec. 37.505  What resources are available to assist me during the pre-award 

business evaluation?

    Administrative agreements officers of the Defense Contract 
Management Agency and the Office of Naval Research can share lessons 
learned from administering other TIAs. Program officials can be a source 
of information when you are determining the reasonableness of proposed 
funding (e.g., on labor rates, as discussed in Sec. 37.520) or 
establishing observable and verifiable technical milestones for payments 
(see Sec. 37.575). Auditors at the Defense Contract Audit Agency can 
act in an advisory capacity to help you determine the reasonableness of 
proposed amounts, including values of in-kind contributions toward cost 
sharing.

                         Recipient Qualification



Sec. 37.510  What are my responsibilities for determining that a recipient is 

qualified?

    Prior to award of a TIA, your responsibilities for determining that 
the recipient is qualified are the same as those of a grants officer who 
is awarding a grant or cooperative agreement. Those responsibilities are 
described in subpart D of 32 CFR part 22. When the recipient is a 
consortium that is not formally incorporated, you have the additional 
responsibility described in Sec. 37.515.



Sec. 37.515  Must I do anything additional to determine the qualification of a 

consortium?

    (a) When the prospective recipient of a TIA is a consortium that is 
not formally incorporated, your determination that the recipient meets 
the standard at 32 CFR 22.415(a) requires that you, in consultation with 
legal counsel, review the management plan in the consortium's 
collaboration agreement. The purpose of your review is to ensure that 
the management plan is sound and that it adequately addresses the 
elements necessary for an effective working relationship among the 
consortium members. An effective working relationship is essential to 
increase the research project's chances of success.
    (b) The collaboration agreement, commonly referred to as the 
articles of collaboration, is the document that sets out the rights and 
responsibilities of each consortium member. It binds the individual 
consortium members together, whereas the TIA binds the Government and 
the consortium as a group (or the Government and a consortium member on 
behalf of the consortium, as explained in Sec. 37.1015). The document 
should discuss, among other things, the consortium's:
    (1) Management structure.
    (2) Method of making payments to consortium members.
    (3) Means of ensuring and overseeing members' efforts on the 
project.
    (4) Provisions for members' cost sharing contributions.

[[Page 211]]

    (5) Provisions for ownership and rights in intellectual property 
developed previously or under the agreement.

                              Total Funding



Sec. 37.520  What is my responsibility for determining that the total project 

funding is reasonable?

    In cooperation with the program official, you must assess the 
reasonableness of the total estimated budget to perform the research 
that will be supported by the agreement. Additional guidance follows 
for:
    (a) Labor. Much of the budget likely will involve direct labor and 
associated indirect costs, which may be represented together as a 
``loaded'' labor rate. The program official is an essential advisor on 
reasonableness of the overall level of effort and its composition by 
labor category. You also may rely on your experience with other awards 
as the basis for determining reasonableness. If you have any unresolved 
questions, two of the ways that you might find helpful in establishing 
reasonableness are to:
    (1) Consult the administrative agreements officers or auditors 
identified in Sec. 37.505.
    (2) Compare loaded labor rates of for-profit firms that do not have 
expenditure-based Federal procurement contracts or assistance awards 
with a standard or average for the particular industry. Note that the 
program official may have knowledge about customary levels of direct 
labor charges in the particular industry that is involved. You may be 
able to compare associated indirect charges with Government-approved 
indirect cost rates that exist for many nonprofit and for-profit 
organizations that have Federal procurement contracts or assistance 
awards (note the requirement in Sec. 37.630 for a for-profit 
participant to use Federally approved provisional indirect cost rates, 
if it has them).
    (b) Real property and equipment. In almost all cases, the project 
costs may include only depreciation or use charges for real property and 
equipment of for-profit participants, in accordance with Sec. 37.685. 
Remember that the budget for an expenditure-based TIA may not include 
depreciation of a participant's property as a direct cost of the project 
if that participant's practice is to charge the depreciation of that 
type of property as an indirect cost, as many organizations do.

                              Cost Sharing



Sec. 37.525  What is my responsibility for determining the value and 

reasonableness of the recipient's cost sharing contribution?

    You must:
    (a) Determine that the recipient's cost sharing contributions meet 
the criteria for cost sharing and determine values for them, in 
accordance with Sec. Sec. 37.530 through 37.555. In doing so, you must:
    (1) Ensure that there are affirmative statements from any third 
parties identified as sources of cash contributions.
    (2) Include in the award file an evaluation that documents how you 
determined the values of the recipient's contributions to the funding of 
the project.
    (b) Judge that the recipient's cost sharing contribution, as a 
percentage of the total budget, is reasonable. To the maximum extent 
practicable, the recipient must provide at least half of the costs of 
the project, in accordance with Sec. 37.215.



Sec. 37.530  What criteria do I use in deciding whether to accept a 

recipient's cost sharing?

    You may accept any cash or in-kind contributions that meet all of 
the following criteria:
    (a) In your judgment, they represent meaningful cost sharing that 
demonstrates the recipient's commitment to the success of the research 
project. Cash contributions clearly demonstrate commitment and they are 
strongly preferred over in-kind contributions.
    (b) They are necessary and reasonable for accomplishment of the 
research project's objectives.
    (c) They are costs that may be charged to the project under Sec. 
37.625 and Sec. 37.635, as applicable to the participant making the 
contribution.
    (d) They are verifiable from the recipient's records.

[[Page 212]]

    (e) They are not included as cost sharing contributions for any 
other Federal award.
    (f) They are not paid by the Federal Government under another award, 
except:
    (1) Costs that are authorized by Federal statute to be used for cost 
sharing; or
    (2) Independent research and development (IR&D) costs, as described 
at 32 CFR 34.13(a)(5)(ii), that meet all of the criteria in paragraphs 
(a) through (e) of this section. IR&D is acceptable as cost sharing, 
even though it may be reimbursed by the Government through other awards. 
It is standard business practice for all for-profit firms, including 
commercial firms, to recover their research and development (R&D) costs 
(which for Federal procurement contracts is recovered as IR&D) through 
prices charged to their customers. Thus, the cost principles at 48 CFR 
part 31 allow a for-profit firm that has expenditure-based, Federal 
procurement contracts to recover through those procurement contracts the 
allocable portion of its R&D costs associated with a technology 
investment agreement.



Sec. 37.535  How do I value cost sharing related to real property or 

equipment?

    You rarely should accept values for cost sharing contributions of 
real property or equipment that are in excess of depreciation or 
reasonable use charges, as discussed in Sec. 37.685 for for-profit 
participants. You may accept the full value of a donated capital asset 
if the real property or equipment is to be dedicated to the project and 
you expect that it will have a fair market value that is less than 
$5,000 at the project's end. In those cases, you should value the 
donation at the lesser of:
    (a) The value of the property as shown in the recipient's accounting 
records (i.e., purchase price less accumulated depreciation); or
    (b) The current fair market value. You may accept the use of any 
reasonable basis for determining the fair market value of the property. 
If there is a justification to do so, you may accept the current fair 
market value even if it exceeds the value in the recipient's records.



Sec. 37.540  May I accept fully depreciated real property or equipment as cost 

sharing?

    You should limit the value of any contribution of a fully 
depreciated asset to a reasonable use charge. In determining what is 
reasonable, you must consider:
    (a) The original cost of the asset;
    (b) Its estimated remaining useful life at the time of your 
negotiations;
    (c) The effect of any increased maintenance charges or decreased 
performance due to age; and
    (d) The amount of depreciation that the participant previously 
charged to Federal awards.



Sec. 37.545  May I accept costs of prior research as cost sharing?

    No, you may not count any participant's costs of prior research as a 
cost sharing contribution. Only the additional resources that the 
recipient will provide to carry out the current project (which may 
include pre-award costs for the current project, as described in Sec. 
37.830) are to be counted.



Sec. 37.550  May I accept intellectual property as cost sharing?

    (a) In most instances, you should not count costs of patents and 
other intellectual property (e.g., copyrighted material, including 
software) as cost sharing, because:
    (1) It is difficult to assign values to these intangible 
contributions;
    (2) Their value usually is a manifestation of prior research costs, 
which are not allowed as cost share under Sec. 37.545; and
    (3) Contributions of intellectual property rights generally do not 
represent the same cost of lost opportunity to a recipient as 
contributions of cash or tangible assets. The purpose of cost share is 
to ensure that the recipient incurs real risk that gives it a vested 
interest in the project's success.
    (b) You may include costs associated with intellectual property if 
the costs are based on sound estimates of market value of the 
contribution. For example, a for-profit firm may offer the use of 
commercially available software for

[[Page 213]]

which there is an established license fee for use of the product. The 
costs of the development of the software would not be a reasonable basis 
for valuing its use.



Sec. 37.555  How do I value a recipient's other contributions?

    For types of participant contributions other than those addressed in 
Sec. Sec. 37.535 through 37.550, the general rule is that you are to 
value each contribution consistently with the cost principles or 
standards in Sec. 37.625 and Sec. 37.635 that apply to the participant 
making the contribution. When valuing services and property donated by 
parties other than the participants, you may use as guidance the 
provisions of 32 CFR 34.13(b)(2) through (5).

               Fixed-Support or Expenditure-Based Approach



Sec. 37.560  Must I be able to estimate project expenditures precisely in 

order to justify use of a fixed-support TIA?

    (a) To use a fixed-support TIA, rather than an expenditure-based 
TIA, you must have confidence in your estimate of the expenditures 
required to achieve well-defined outcomes. Therefore, you must work 
carefully with program officials to select outcomes that, when the 
recipient achieves them, are reliable indicators of the amount of effort 
the recipient expended. However, your estimate of the required 
expenditures need not be a precise dollar amount, as illustrated by the 
example in paragraph (b) of this section, if:
    (1) The recipient is contributing a substantial share of the costs 
of achieving the outcomes, which must meet the criteria in Sec. 
37.305(a); and
    (2) You are confident that the costs of achieving the outcomes will 
be at least a minimum amount that you can specify and the recipient is 
willing to accept the possibility that its cost sharing percentage 
ultimately will be higher if the costs exceed that minimum amount.
    (b) To illustrate the approach, consider a project for which you are 
confident that the recipient will have to expend at least $800,000 to 
achieve the specified outcomes. You must determine, in conjunction with 
program officials, the minimum level of recipient cost sharing that you 
want to negotiate, based on the circumstances, to demonstrate the 
recipient's commitment to the success of the project. For purposes of 
this illustration, let that minimum recipient cost sharing be 40% of the 
total project costs. In that case, the Federal share should be no more 
than 60% and you could set a fixed level of Federal support at $480,000 
(60% of $800,000). With that fixed level of Federal support, the 
recipient would be responsible for the balance of the costs needed to 
complete the project.
    (c) Note, however, that the level of recipient cost sharing you 
negotiate is to be based solely on the level needed to demonstrate the 
recipient's commitment. You may not use a shortage of Federal Government 
funding for the program as a reason to try to persuade a recipient to 
accept a fixed-support TIA, rather than an expenditure-based instrument, 
or to accept responsibility for a greater share of the total project 
costs than it otherwise is willing to offer. If you lack sufficient 
funding to provide an appropriate Federal Government share for the 
entire project, you instead should rescope the effort covered by the 
agreement to match the available funding.



Sec. 37.565  May I use a hybrid instrument that provides fixed support for 

only a portion of a project?

    Yes, for a research project that is to be carried out by a number of 
participants, you may award a TIA that provides for some participants to 
perform under fixed-support arrangements and others to perform under 
expenditure-based arrangements. This approach may be useful, for 
example, if a commercial firm that is a participant will not accept an 
agreement with all of the post-award requirements of an expenditure-
based award. Before using a fixed-support arrangement for that firm's 
portion of the project, you must judge that it meets the criteria in 
Sec. 37.305.

[[Page 214]]

               Accounting, Payments, and Recovery of Funds



Sec. 37.570  What must I do if a CAS-covered participant accounts differently 

for its own and the Federal Government shares of project costs?

    (a) If a participant has Federal procurement contracts that are 
subject to the Cost Accounting Standards (CAS) in part 30 of the Federal 
Acquisition Regulation (FAR) and the associated FAR Appendix (48 CFR 
part 30 and 48 CFR 9903.201-1, respectively), you must alert the 
participant during the pre-award negotiations to the potential for a CAS 
violation, as well as the cognizant administrative contracting officer 
(ACO) for the participant's procurement contracts, if you learn that the 
participant plans to account differently for its own share and the 
Federal Government's share of project costs under the TIA. This may 
arise, for example, if a for-profit firm or other organization subject 
to the FAR cost principles in 48 CFR parts 31 and 231 proposes to 
charge:
    (1) Its share of project costs as independent research and 
development (IR&D) costs to enable recovery of the costs through Federal 
Government procurement contracts, as allowed under the FAR cost 
principles; and
    (2) The Federal Government's share to the project, rather than as 
IR&D costs.
    (b) The reason for alerting the participant and the ACO is that the 
inconsistent charging of the two shares could cause a noncompliance with 
Cost Accounting Standard (CAS) 402. Noncompliance with CAS 402 is a 
potential issue only for a participant that has CAS-covered Federal 
procurement contracts (note that CAS requirements do not apply to a for-
profit participant's TIAs).
    (c) For for-profit participants with CAS-covered procurement 
contracts, the cognizant ACO in most cases will be an individual within 
the Defense Contract Management Agency (DCMA). You can identify a 
cognizant ACO at the DCMA by querying the contract administration team 
locator that matches contractors with their ACOs (currently on the World 
Wide Web at http://alerts.dcmdw.dcma.mil/support, a site that also can 
be accessed through the DCMA home page at http://www.dcma.mil).



Sec. 37.575  What are my responsibilities for determining milestone payment 

amounts?

    (a) If you select the milestone payment method (see Sec. 37.805), 
you must assess the reasonableness of the estimated amount for reaching 
each milestone. This assessment enables you to set the amount of each 
milestone payment to approximate the Federal share of the anticipated 
resource needs for carrying out that phase of the research effort.
    (b) The Federal share at each milestone need not be the same as the 
Federal share of the total project. For example, you might deliberately 
set payment amounts with a larger Federal share for early milestones if 
a project involves a start-up company with limited resources.
    (c) For an expenditure-based TIA, if you have minimum percentages 
that you want the recipient's cost sharing to be at the milestones, you 
should indicate those percentages in the agreement or in separate 
instructions to the post-award administrative agreements officer. That 
will help the administrative agreements officer decide when a project's 
expenditures have fallen too far below the original projections, 
requiring adjustments of future milestone payment amounts (see Sec. 
37.1105(c)).
    (d) For fixed-support TIAs, the milestone payments should be 
associated with the well-defined, observable and verifiable technical 
outcomes (e.g., demonstrations, tests, or data analysis) that you 
establish for the project in accordance with Sec. Sec. 37.305(a) and 
37.560(a).



Sec. 37.580  What is recovery of funds and when should I consider including it 

in my TIA?

    (a) Recovery of funds refers to the use of the authority in 10 
U.S.C. 2371 to include a provision in certain types of agreements, 
including TIAs, that require a recipient to make payments to the 
Department of Defense or another Federal agency as a condition of the 
agreement. Recovery of funds is a good

[[Page 215]]

tool in the right circumstances, at the discretion of the agreements 
officer and the awarding organization, but its purpose is not to augment 
program budgets. It may be used to recover funds provided to a recipient 
through a TIA or another Federal procurement or assistance instrument, 
and the recovery should not exceed the amounts provided. Recovery of 
funds is distinct from program income, as described in Sec. 37.835.
    (b) In accordance with 10 U.S.C. 2371, as implemented by policy 
guidance from the Office of the Under Secretary of Defense 
(Comptroller), the payment amounts may be credited to an existing 
account of the Department of Defense and used for the same program 
purposes as other funds in that account.
    (c) Before you use the authority to include a provision for recovery 
of funds, note that 10 U.S.C. 2371 requires you to judge that it would 
not be feasible or appropriate to use for the research project a 
standard grant or cooperative agreement (in this instance, a ``standard 
cooperative agreement'' means a cooperative agreement without a 
provision for recovery of funds). You satisfy that 10 U.S.C. 2371 
requirement when you judge that execution of the research project 
warrants inclusion of a provision for recovery of funds.



 Subpart F_Award Terms Affecting Participants' Financial, Property, and 

                           Purchasing Systems



Sec. 37.600  Which administrative matters are covered in this subpart?

    This subpart addresses ``systemic'' administrative matters that 
place requirements on the operation of a participant's financial 
management, property management, or purchasing system. Each 
participant's systems are organization-wide and do not vary with each 
agreement. Therefore, all TIAs should address systemic requirements in a 
uniform way for each type of participant organization.



Sec. 37.605  What is the general policy on participants' financial, property, 

and purchasing systems?

    The general policy for expenditure-based TIAs is to avoid 
requirements that would force participants to use different financial 
management, property management, and purchasing systems than they 
currently use for:
    (a) Expenditure-based Federal procurement contracts and assistance 
awards in general, if they receive them; or
    (b) Commercial business, if they have no expenditure-based Federal 
procurement contracts and assistance awards.



Sec. 37.610  Must I tell participants what requirements they are to flow down 

for subrecipients' systems?

    If it is an expenditure-based award, your TIA must require 
participants to flow down the same financial management, property 
management, and purchasing systems requirements to a subrecipient that 
would apply if the subrecipient were a participant. For example, a for-
profit participant would flow down to a university subrecipient the 
requirements that apply to a university participant. Note that this 
policy applies to subawards for substantive performance of portions of 
the research project supported by the TIA, and not to participants' 
purchases of goods or services needed to carry out the research.

                            Financial Matters



Sec. 37.615  What standards do I include for financial systems of for-profit 

firms?

    (a) To avoid causing needless changes in participants' financial 
management systems, your expenditure-based TIAs will make for-profit 
participants that currently perform under other expenditure-based 
Federal procurement contracts or assistance awards subject to the same 
standards for financial management systems that apply to those other 
awards. Therefore, if a for-profit participant has expenditure-based DoD 
assistance awards other than TIAs, your TIAs are to apply the standards 
in 32 CFR 34.11. You may grant an exception and allow a for-profit 
participant that has other expenditure-based Federal Government awards 
to use an alternative set of standards that meets the minimum criteria 
in paragraph (b) of this section, if there is a compelling programmatic 
or business reason to do so. For each case in which you grant an

[[Page 216]]

exception, you must document the reason in the award file.
    (b) For an expenditure-based TIA, you are to allow and encourage 
each for-profit participant that does not currently perform under 
expenditure-based Federal procurement contracts or assistance awards 
(other than TIAs) to use its existing financial management system as 
long as the system, as a minimum:
    (1) Complies with Generally Accepted Accounting Principles.
    (2) Effectively controls all project funds, including Federal funds 
and any required cost share. The system must have complete, accurate, 
and current records that document the sources of funds and the purposes 
for which they are disbursed. It also must have procedures for ensuring 
that project funds are used only for purposes permitted by the agreement 
(see Sec. 37.625).
    (3) Includes, if advance payments are authorized under Sec. 37.805, 
procedures to minimize the time elapsing between the payment of funds by 
the Government and the firm's disbursement of the funds for program 
purposes.



Sec. 37.620  What financial management standards do I include for nonprofit 

participants?

    So as not to force system changes for any State, local government, 
institution of higher education, or other nonprofit organization, your 
expenditure-based TIA's requirements for the financial management system 
of any nonprofit participant are the same as those that apply to the 
participant's other Federal assistance awards. Specifically, the 
requirements are those in:
    (a) 32 CFR 33.20 for State and local governments; and
    (b) 32 CFR 32.21(b) for other nonprofit organizations, with the 
exception of Government-owned, contractor-operated (GOCO) facilities and 
Federally Funded Research and Development Centers (FFRDCs) that are 
excepted from the definition of ``recipient'' in 32 CFR part 32. 
Although it should occur infrequently, if a nonprofit GOCO or FFRDC is a 
participant, you must specify appropriate standards that conform as much 
as practicable with requirements in that participant's other Federal 
awards.



Sec. 37.625  What cost principles or standards do I require for for-profit 

participants?

    (a) So as not to require any firm to needlessly change its cost-
accounting system, your expenditure-based TIAs are to apply the 
Government cost principles in 48 CFR parts 31 and 231 to for-profit 
participants that currently perform under expenditure-based Federal 
procurement contracts or assistance awards (other than TIAs) and 
therefore have existing systems for identifying allowable costs under 
those principles. If there are programmatic or business reasons to do 
otherwise, you may grant an exception from this requirement and use 
alternative standards as long as the alternative satisfies the 
conditions described in paragraph (b) of this section; if you do so, you 
must document the reasons in your award file.
    (b) For other for-profit participants, you may establish alternative 
standards in the agreement as long as that alternative provides, as a 
minimum, that Federal funds and funds counted as recipients' cost 
sharing will be used only for costs that:
    (1) A reasonable and prudent person would incur in carrying out the 
research project contemplated by the agreement. Generally, elements of 
cost that appropriately are charged are those identified with research 
and development activities under the Generally Accepted Accounting 
Principles (see Statement of Financial Accounting Standards Number 2, 
``Accounting for Research and Development Costs,'' October 1974 \1\). 
Moreover, costs must be allocated to DoD and other projects in 
accordance with the relative benefits the projects receive. Costs 
charged to DoD projects must be given consistent treatment with costs 
allocated to the

[[Page 217]]

participants' other research and development activities (e.g., 
activities supported by the participants themselves or by non-Federal 
sponsors).
---------------------------------------------------------------------------

    \1\ Copies may be obtained from the Financial Accounting Standards 
Board (FASB), 401 Merritt 7, P.O. Box 5116, Norwalk, CT 06856-5116. 
Information about ordering also may be found at the Internet site http:/
/www.fasb.org or by telephoning the FASB at (800) 748-0659.
---------------------------------------------------------------------------

    (2) Are consistent with the purposes stated in the governing 
Congressional authorizations and appropriations. You are responsible for 
ensuring that provisions in the award document address any requirements 
that result from authorizations and appropriations.



Sec. 37.630  Must I require a for-profit firm to use Federally approved 

indirect cost rates?

    In accordance with the general policy in Sec. 37.605, you must 
require a for-profit participant that has Federally approved indirect 
cost rates for its Federal procurement contracts to use those rates to 
accumulate and report costs under an expenditure-based TIA. This 
includes both provisional and final rates that are approved up until the 
time that the TIA is closed out. You may grant an exception from this 
requirement if there are programmatic or business reasons to do 
otherwise (e.g., the participant offers you a lower rate). If you grant 
an exception, the participant must accumulate and report the costs using 
an accounting system and practices that it uses for other customers 
(e.g., its commercial customers). Also, you must document the reason for 
the exception in your award file.



Sec. 37.635  What cost principles do I require a nonprofit participant to use?

    So as not to force financial system changes for any nonprofit 
participant, your expenditure-based TIA will provide that costs to be 
charged to the research project by any nonprofit participant must be 
determined to be allowable in accordance with:
    (a) OMB Circular A-87, \2\ if the participant is a State or local 
governmental organization.
---------------------------------------------------------------------------

    \2\ Electronic copies may be obtained at Internet site http://
www.whitehouse.gov/OMB. For paper copies, contact the Office of 
Management and Budget, EOP Publications, 725 17th St. NW., New Executive 
Office Building, Washington, DC 20503.
---------------------------------------------------------------------------

    (b) OMB Circular A-21, \3\ if the participant is an institution of 
higher education.
---------------------------------------------------------------------------

    \3\ See footnote 2 to Sec. 37.635(a).
---------------------------------------------------------------------------

    (c) 45 CFR part 74, appendix E, if the participant is a hospital.
    (d) OMB Circular A-122, if the participant is any other type of 
nonprofit organization (the cost principles in 48 CFR parts 31 and 231 
are to be used by any nonprofit organization that is identified in 
Circular A-122 as being subject to those cost principles).



Sec. 37.640  Must I include a provision for audits of for-profit participants?

    If your TIA is an expenditure-based award, you must include in it an 
audit provision that addresses, for each for-profit participant:
    (a) Whether the for-profit participant must have periodic audits, in 
addition to any award-specific audits, as described in Sec. 37.645. 
Note that the DCAA or the Office of the Inspector General, DoD (OIG, 
DoD), can provide advice on the types and scope of audits that may be 
needed in various circumstances.
    (b) Whether the DCAA or an independent public accountant (IPA) will 
perform required audits, as discussed in Sec. 37.650.
    (c) How frequently any periodic audits are to be performed, 
addressed in Sec. 37.655.
    (d) Other matters described in Sec. 37.660, such as audit coverage, 
allowability of audit costs, auditing standards, and remedies for 
noncompliance.



Sec. 37.645  Must I require periodic audits, as well as award-specific audits, 

of for-profit participants?

    You need to consider requirements for both periodic audits and 
award-specific audits (as defined in Sec. 37.1325 and Sec. 37.1235, 
respectively). The way that your expenditure-based TIA addresses the two 
types of audits will vary, depending upon the type of for-profit 
participant.
    (a) For for-profit participants that are audited by the DCAA or 
other Federal auditors, as described in Sec. Sec. 37.650(b) and 37.655, 
you need not add specific requirements for periodic audits because the 
Federal audits should be sufficient to address whatever may be needed.

[[Page 218]]

Your inclusion in the TIA of the standard access-to-records provision 
for those for-profit participants, as discussed in Sec. 37.915(a), 
gives the necessary access in the event that you or administrative 
agreements officers later need to request audits to address award-
specific issues that arise.
    (b) For each other for-profit participant, you:
    (1) Should require that the participant have an independent auditor 
(i.e., the DCAA or an independent public accountant) conduct periodic 
audits of its systems if it expends $500,000 or more per year in TIAs 
and other Federal assistance awards. A prime reason for including this 
requirement is that the Federal Government, for an expenditure-based 
award, necessarily relies on amounts reported by the participant's 
systems when it sets payment amounts or adjusts performance outcomes. 
The periodic audit provides some assurance that the reported amounts are 
reliable.
    (2) Must ensure that the award provides an independent auditor the 
access needed for award-specific audits, to be performed at the request 
of the cognizant administrative agreements officer if issues arise that 
require audit support. However, consistent with the government-wide 
policies on single audits that apply to nonprofit participants (see 
Sec. 37.665), you should rely on periodic audits to the maximum extent 
possible to resolve any award-specific issues.



Sec. 37.650  Who must I identify as the auditor for a for-profit participant?

    The auditor that you will identify in the expenditure-based TIA to 
perform periodic and award-specific audits of a for-profit participant 
depends on the circumstances, as follows:
    (a) You may provide that an IPA will be the auditor for a for-profit 
participant that does not meet the criteria in paragraph (b) of this 
section, but only if the participant will not agree to give the DCAA 
access to the necessary books and records for audit purposes. Note that 
the allocable portion of the costs of the IPA's audit may be 
reimbursable under the TIA, as described in Sec. 37.660(b). The IPA 
should be the one that the participant uses to perform other audits 
(e.g., of its financial statement), to minimize added burdens and costs. 
You must document in the award file the participant's unwillingness to 
give the DCAA access. The DCAA is to be the auditor if the participant 
grants the necessary access.
    (b) Except as provided in paragraph (c) of this section, you must 
identify the DCAA as the auditor for any for-profit participant that is 
subject to DCAA audits because it is currently performing under a 
Federal award that is subject to the:
    (1) Cost principles in 48 CFR part 31 of the Federal Acquisition 
Regulation (FAR) and 48 CFR part 231 of the Defense FAR Supplement; or
    (2) Cost Accounting Standards in 48 CFR chapter 99.
    (c) If there are programmatic or business reasons that justify the 
use of an auditor other than the DCAA for a for-profit participant that 
meets the criteria in paragraph (b) of this section, you may provide 
that an IPA will be the auditor for that participant if you obtain prior 
approval from the Office of the Inspector General, DoD. You must submit 
requests for prior approval to the Assistant Inspector General 
(Auditing), 400 Army-Navy Drive, Arlington, VA 22202. Your request must 
include the name and address of the business unit(s) for which IPAs will 
be used. It also must explain why you judge that the participant will 
not give the DCAA the necessary access to records for audit purposes 
(e.g., you may submit a statement to that effect from the participant). 
The OIG, DoD, will respond within five working days of receiving the 
request for prior approval, either by notifying you of the decision 
(approval or disapproval) or giving you a date by which they will notify 
you of the decision.



Sec. 37.655  Must I specify the frequency of IPAs' periodic audits of for-

profit participants?

    If your expenditure-based TIA provides for periodic audits of a for-
profit participant by an IPA, you must specify the frequency for those 
audits. You should consider having an audit performed during the first 
year of the award, when the participant has its IPA do its next 
financial statement audit, unless the participant already

[[Page 219]]

had a systems audit due to other Federal awards within the past two 
years. The frequency thereafter may vary depending upon the dollars the 
participant is expending annually under the award, but it is not 
unreasonable to require an updated audit every two to three years to 
reverify that the participant's systems are reliable (the audit then 
would cover the two or three-year period between audits). The DCAA is a 
source of advice on audit frequencies if your TIA provides for audits by 
IPAs.



Sec. 37.660  What else must I specify concerning audits of for-profit 

participants by IPAs?

    If your expenditure-based TIA provides for audits of a for-profit 
participant by an IPA, you also must specify:
    (a) What periodic audits are to cover. It is important that you 
specify audit coverage that is only as broad as needed to provide 
reasonable assurance of the participant's compliance with award terms 
that have a direct and material effect on the research project. Appendix 
C to this part provides guidance to for-profit participants and their 
IPAs that you may use for this purpose. The DCAA and the OIG, DoD, also 
can provide advice to help you set appropriate limits on audit 
objectives and scope.
    (b) Who will pay for periodic and award-specific audits. The 
allocable portion of the costs of any audits by IPAs may be reimbursable 
under the TIA. The costs may be direct charges or allocated indirect 
costs, consistent with the participant's accounting system and 
practices.
    (c) The auditing standards that the IPA will use. Unless you receive 
prior approval from the OIG, DoD, to do otherwise, you must provide that 
the IPA will perform the audits in accordance with the Generally 
Accepted Government Auditing Standards. \4\
---------------------------------------------------------------------------

    \4\ The electronic document may be accessed at www.gao.gov. Printed 
copies may be purchased from the U.S. Government Printing Office; for 
ordering information, call (202) 512-1800 or access the Internet site at 
www.gpo.gov.
---------------------------------------------------------------------------

    (d) The available remedies for noncompliance. The agreement must 
provide that the participant may not charge costs to the award for any 
audit that the agreements officer, with the advice of the OIG, DoD, 
determines was not performed in accordance with the Generally Accepted 
Government Auditing Standards or other terms of the agreement. It also 
must provide that the Government has the right to require the 
participant to have the IPA take corrective action and, if corrective 
action is not taken, that the agreements officer has recourse to any of 
the remedies for noncompliance identified in 32 CFR 34.52(a).
    (e) The remedy if it later is found that the participant, at the 
time it entered into the TIA, was performing on a procurement contract 
or other Federal award subject to the Cost Accounting Standards at 48 
CFR part 30 and the cost principles at 48 CFR part 31. Unless the OIG, 
DoD, approves an exception (see Sec. 37.650(c)), the TIA's terms must 
provide that the DCAA will perform the audits for the agreement if it 
later is found that the participant, at the time the TIA was awarded, 
was performing under awards described in Sec. 37.650(b) that gave the 
DCAA audit access to the participant's books and records.
    (f) Where the IPA is to send audit reports. The agreement must 
provide that the IPA is to submit audit reports to the administrative 
agreements officer and the OIG, DoD. It also must require that the IPA 
report instances of fraud directly to the OIG, DoD.
    (g) The retention period for the IPA's working papers. You must 
specify that the IPA is to retain working papers for a period of at 
least three years after the final payment, unless the working papers 
relate to an audit whose findings are not fully resolved within that 
period or to an unresolved claim or dispute (in which case, the IPA must 
keep the working papers until the matter is resolved and final action 
taken).
    (h) Who will have access to the IPA's working papers. The agreement 
must provide for Government access to working papers.



Sec. 37.665  Must I require nonprofit participants to have periodic audits?

    Yes, expenditure-based TIAs are assistance instruments subject to 
the Single Audit Act (31 U.S.C. 7501-7507), so nonprofit participants 
are subject to

[[Page 220]]

their usual requirements under that Act and OMB Circular A-133. \5\ 
Specifically, the requirements are those in:
---------------------------------------------------------------------------

    \5\ See footnote 2 to Sec. 37.635(a).
---------------------------------------------------------------------------

    (a) 32 CFR 33.26 for State and local governments; and
    (b) 32 CFR 32.26 for other nonprofit organizations. Note that those 
requirements also are appropriate for Government-owned, contractor-
operated (GOCO) facilities and Federally Funded Research and Development 
Centers (FFRDCs) that are excluded from the definition of ``recipient'' 
in 32 CFR part 32, because nonprofit GOCOs and FFRDCs are subject to the 
Single Audit Act.



Sec. 37.670  Must I require participants to flow down audit requirements to 

subrecipients?

    (a) Yes, in accordance with Sec. 37.610, your expenditure-based TIA 
must require participants to flow down the same audit requirements to a 
subrecipient that would apply if the subrecipient were a participant.
    (b) For example, a for-profit participant that is audited by the 
DCAA:
    (1) Would flow down to a university subrecipient the Single Audit 
Act requirements that apply to a university participant.
    (2) Could enter into a subaward allowing a for-profit participant, 
under the circumstances described in Sec. 37.650(a), to use an IPA to 
do its audits.
    (c) This policy applies to subawards for substantive performance of 
portions of the research project supported by the TIA, and not to 
participants' purchases of goods or services needed to carry out the 
research.



Sec. 37.675  Must I report when I enter into a TIA allowing a for-profit firm 

to use an IPA?

    Yes, you must include that information with the data you provide for 
your DoD Component's annual submission to the Defense Technical 
Information Center (DTIC), as provided in Sec. 37.1030(c).



Sec. 37.680  Must I require a participant to report when it enters into a 

subaward allowing a for-profit firm to use an IPA?

    Yes, your expenditure-based TIA must require participants to report 
to you when they enter into any subaward allowing a for-profit 
subawardee to use an IPA, as described in Sec. 37.670(b)(2). You must 
provide that information about the new subaward under the TIA for your 
DoD Component's annual submission to the DTIC, even though the TIA may 
have been reported in a prior year and does not itself have to be 
reported again.

                                Property



Sec. 37.685  May I allow for-profit firms to purchase real property and 

equipment with project funds?

    (a) With the two exceptions described in paragraph (b) of this 
section, you must require a for-profit firm to purchase real property or 
equipment with its own funds that are separate from the research 
project. You should allow the firm to charge to an expenditure-based TIA 
only depreciation or use charges for real property or equipment (and 
your cost estimate for a fixed-support TIA only would include those 
costs). Note that the firm must charge depreciation consistently with 
its usual accounting practice. Many firms treat depreciation as an 
indirect cost. Any firm that usually charges depreciation indirectly for 
a particular type of property must not charge depreciation for that 
property as a direct cost to the TIA.
    (b) In two situations, you may grant an exception and allow a for-
profit firm to use project funds, which includes both the Federal 
Government and recipient shares, to purchase real property or equipment 
(i.e., to charge to the project the full acquisition cost of the 
property). The two circumstances, which should be infrequent for 
equipment and extremely rare for real property, are those in which you 
either:
    (1) Judge that the real property or equipment will be dedicated to 
the project and have a current fair market value that is less than 
$5,000 by the time the project ends; or

[[Page 221]]

    (2) Give prior approval for the firm to include the full acquisition 
cost of the real property or equipment as part of the cost of the 
project (see Sec. 37.535).
    (c) If you grant an exception in either of the circumstances 
described in paragraphs (b)(1) and (2) of this section, you must make 
the real property or equipment subject to the property management 
standards in 32 CFR 34.21(b) through (d). As provided in those 
standards, the title to the real property or equipment will vest 
conditionally in the for-profit firm upon acquisition. Your TIA, whether 
it is a fixed-support or expenditure-based award, must specify that any 
item of equipment that has a fair market value of $5,000 or more at the 
conclusion of the project also will be subject to the disposition 
process in 32 CFR 34.21(e), whereby the Federal Government will recover 
its interest in the property at that time.



Sec. 37.690  How are nonprofit participants to manage real property and 

equipment?

    For nonprofit participants, your TIA's requirements for vesting of 
title, use, management, and disposition of real property or equipment 
acquired under the award are the same as those that apply to the 
participant's other Federal assistance awards. Specifically, the 
requirements are those in:
    (a) 32 CFR 33.31 and 33.32, for participants that are States and 
local governmental organizations.
    (b) 32 CFR 32.32 and 32.33, for other nonprofit participants, with 
the exception of nonprofit GOCOs and FFRDCs that are exempted from the 
definition of ``recipient'' in 32 CFR part 32. Although it should occur 
infrequently, if a nonprofit GOCO or FFRDC is a participant, you must 
specify appropriate standards that conform as much as practicable with 
requirements in that participant's other Federal awards. Note also that:
    (1) If the TIA is a cooperative agreement (see appendix B to this 
part), 31 U.S.C. 6306 provides authority to vest title to tangible 
personal property in a nonprofit institution of higher education or in a 
nonprofit organization whose primary purpose is conducting scientific 
research, without further obligation to the Federal Government; and
    (2) Your TIA therefore must specify any conditions on the vesting of 
title to real property or equipment acquired by any such nonprofit 
participant, or the title will vest in the participant without further 
obligation to the Federal Government, as specified in 32 CFR 
32.33(b)(3).



Sec. 37.695  What are the requirements for Federally owned property?

    If you provide Federally owned property to any participant for the 
performance of research under a TIA, you must require that participant 
to account for, use, and dispose of the property in accordance with:
    (a) 32 CFR 34.22, if the participant is a for-profit firm.
    (b) 32 CFR 33.32(f), if the participant is a State or local 
governmental organization. Note that 32 CFR 33.32(f) requires you to 
provide additional information to the participant on the procedures for 
managing the property.
    (c) 32 CFR 32.33(a) and 32.34(f), if the participant is a nonprofit 
organization other than a GOCO or FFRDC (requirements for nonprofit 
GOCOs and FFRDCs should conform with the property standards that apply 
to their Federal procurement contracts).



Sec. 37.700  What are the requirements for supplies?

    Your expenditure-based TIA's provisions should permit participants 
to use their existing procedures to account for and manage supplies. A 
fixed-support TIA should not include requirements to account for or 
manage supplies.

                               Purchasing



Sec. 37.705  What standards do I include for purchasing systems of for-profit 

firms?

    (a) If your TIA is an expenditure-based award, it should require 
for-profit participants that currently perform under DoD assistance 
instruments subject to the purchasing standards in 32 CFR 34.31 to use 
the same requirements for TIAs, unless there are programmatic or 
business reasons to do otherwise (in which case you must document the 
reasons in the award file).

[[Page 222]]

    (b) You should allow other for-profit participants under 
expenditure-based TIAs to use their existing purchasing systems, as long 
as they flow down the applicable requirements in Federal statutes, 
Executive orders or Governmentwide regulations (see appendix E to this 
part for a list of those requirements).
    (c) If your TIA is a fixed-support award, you need only require for-
profit participants to flow down the requirements listed in appendix F 
to this part.



Sec. 37.710  What standards do I include for purchasing systems of nonprofit 

organizations?

    (a) So as not to force system changes for any nonprofit participant, 
your expenditure-based TIA will provide that each nonprofit 
participant's purchasing system comply with:
    (1) 32 CFR 33.36, if the participant is a State or local 
governmental organization.
    (2) 32 CFR 32.40 through 32.49 if the participant is a nonprofit 
organization other than a GOCO or FFRDC that is excepted from the 
definition of ``recipient'' in 32 CFR part 32. Although it should occur 
infrequently, if a nonprofit GOCO or FFRDC is a participant, you must 
specify appropriate standards that conform as much as practicable with 
requirements in that participant's other Federal awards.
    (b) If your TIA is a fixed-support award, you need only require 
nonprofit participants to flow down the requirements listed in appendix 
E to this part.



      Subpart G_Award Terms Related to Other Administrative Matters



Sec. 37.800  Which administrative matters are covered in this subpart?

    This subpart addresses ``non-systemic'' administrative matters that 
do not impose organization-wide requirements on a participant's 
financial management, property management, or purchasing system. Because 
an organization does not have to redesign its systems to accommodate 
award-to-award variations in these requirements, a TIA that you award 
may differ from other TIAs in the non-systemic requirements that it 
specifies for a given participant, based on the circumstances of the 
particular research project. To eliminate needless administrative 
complexity, you should handle some non-systemic requirements, such as 
the payment method, in a uniform way for the agreement as a whole.

                                Payments



Sec. 37.805  If I am awarding a TIA, what payment methods may I specify?

    Your TIA may provide for:
    (a) Reimbursement, as described in 32 CFR 34.12(a)(1), if it is an 
expenditure-based award.
    (b) Advance payments, as described in 32 CFR 34.12(a)(2), subject to 
the conditions in 32 CFR 34.12(b)(2)(i) through (iii).
    (c) Payments based on payable milestones. These are payments made 
according to a schedule that is based on predetermined measures of 
technical progress or other payable milestones. This approach relies 
upon the fact that, as research progresses throughout the term of the 
agreement, observable activity will be taking place. The recipient is 
paid upon the accomplishment of the predetermined measure of progress. 
Fixed-support TIAs must use this payment method and each measure of 
progress appropriately would be one of the well-defined outcomes that 
you identify in the agreement (this does not preclude use of an initial 
advance payment, if there is no alternative to meeting immediate cash 
needs). There are cash management considerations when this payment 
method is used as a means of financing for an expenditure-based TIA (see 
Sec. 37.575 and Sec. 37.1105).



Sec. 37.810  What should my TIA's provisions specify for the method and 

frequency of recipients' payment requests?

    The procedure and frequency for payment requests depend upon the 
payment method, as follows:
    (a) For either reimbursements or advance payments, your TIA must 
allow recipients to submit requests for payment at least monthly. You 
may authorize the recipients to use the forms or formats described in 32 
CFR 34.12(d).

[[Page 223]]

    (b) If the payments are based on payable milestones, the recipient 
will submit a report or other evidence of accomplishment to the program 
official at the completion of each predetermined activity. The agreement 
administrator may approve payment to the recipient after receiving 
validation from the program manager that the milestone was successfully 
reached.



Sec. 37.815  May the Government withhold payments?

    Your TIA must provide that the administrative agreements officer may 
withhold payments in the circumstances described in 32 CFR 34.12(g), but 
not otherwise.



Sec. 37.820  Must I require a recipient to return interest on advance 

payments?

    If your expenditure-based TIA provides for either advance payments 
or payable milestones, the agreement must require the recipient to:
    (a) Maintain in an interest-bearing account any advance payments or 
milestone payment amounts received in advance of needs to disburse the 
funds for program purposes unless:
    (1) The recipient receives less than $120,000 in Federal grants, 
cooperative agreements, and TIAs per year;
    (2) The best reasonably available interest-bearing account would not 
be expected to earn interest in excess of $1,000 per year on the advance 
or milestone payments; or
    (3) The depository would require an average or minimum balance so 
high that it would not be feasible within the expected Federal and non-
Federal cash resources for the project.
    (b) Remit annually the interest earned to the administrative 
agreements officer.

                  Revision of Budget and Program Plans



Sec. 37.825  Must I require the recipient to obtain prior approval from the 

Government for changes in plans?

    If it is an expenditure-based award, your agreement must require the 
recipient to obtain the agreement administrator's prior approval if 
there is to be a change in plans that results in a need for additional 
Federal funding (this is unnecessary for a fixed-support TIA because the 
recipient is responsible for additional costs of achieving the 
outcomes). Other than that, the program official's substantial 
involvement in the project should ensure that the Government has advance 
notice of changes in plans.



Sec. 37.830  May I let a recipient charge pre-award costs to the agreement?

    Pre-award costs, as long as they are otherwise allowable costs of 
the project, may be charged to an expenditure-based TIA only with the 
specific approval of the agreements officer. All pre-award costs are 
incurred at the recipient's risk (i.e., no DoD Component is obligated to 
reimburse the costs if for any reason the recipient does not receive an 
award or if the award is less than anticipated and inadequate to cover 
the costs).

                             Program Income



Sec. 37.835  What requirements do I include for program income?

    Your TIA should apply the standards of 32 CFR 34.14 for program 
income that may be generated. Note the need to specify whether the 
recipient is to have any obligation to the Federal Government with 
respect to program income generated after the end of the project period 
(the period, as established in the award document, during which Federal 
support is provided). Doing so is especially important if the TIA 
includes a provision for the recipient to return any amounts to the 
Federal Government (see Sec. 37.580).

                          Intellectual Property



Sec. 37.840  What general approach should I take in negotiating data and 

patent rights?

    (a) You should confer with program officials and legal counsel to 
develop an overall strategy for intellectual property that takes into 
account inventions and data that may result from the project and future 
needs the Government may have for rights in them. The strategy should 
take into account any intellectual property the Government is furnishing 
and any pre-existing proprietary information that the recipient is 
furnishing, as well as data

[[Page 224]]

and inventions that may be generated under the award (recognizing that 
new data and inventions may be less valuable without pre-existing 
information). All pre-existing intellectual property, both the 
Government's and the recipient's, should be marked to give notice of its 
status.
    (b) Because TIAs entail substantial cost sharing by recipients, you 
must use discretion in negotiating Government rights to data and 
patentable inventions resulting from research under the agreements. The 
considerations in Sec. Sec. 37.845 through 37.875 are intended to serve 
as guidelines, within which you necessarily have considerable latitude 
to negotiate provisions appropriate to a wide variety of circumstances 
that may arise. Your goal should be a good balance between DoD interests 
in:
    (1) Gaining access to the best technologies for defense needs, 
including technologies available in the commercial marketplace, and 
promoting commercialization of technologies resulting from the research. 
Either of these interests may be impeded if you negotiate excessive 
rights for the Government. One objective of TIAs is to help incorporate 
defense requirements into the development of what ultimately will be 
commercially available technologies, an objective that is best served by 
reducing barriers to commercial firms' participation in the research. In 
that way, the commercial technology and industrial base can be a source 
of readily available, reliable, and affordable components, subsystems, 
computer software, and other technological products and manufacturing 
processes for military systems.
    (2) Providing adequate protection of the Government's investment, 
which may be weakened if the Government's rights are inadequate. You 
should consider whether the Government may require access to data or 
inventions for Governmental purposes, such as a need to develop defense-
unique products or processes that the commercial marketplace likely will 
not address.



Sec. 37.845  What data rights should I obtain?

    (a) You should seek to obtain what you, with the advice of legal 
counsel, judge is needed to ensure future Government use of technology 
that emerges from the research, as long as doing so is consistent with 
the balance between DoD interests described in Sec. 37.840(b). You 
should consider data in which you wish to obtain license rights and data 
that you may wish to be delivered; since TIAs are assistance instruments 
rather than acquisition instruments, however, it is not expected that 
data would be delivered in most cases. What generally is needed is an 
irrevocable, world-wide license for the Government to use, modify, 
reproduce, release, or disclose for Governmental purposes the data that 
are generated under TIAs (including any data, such as computer software, 
in which a recipient may obtain a copyright). A Governmental purpose is 
any activity in which the United States Government participates, but a 
license for Governmental purposes does not include the right to use, or 
have or permit others to use, modify, reproduce, release, or disclose 
data for commercial purposes.
    (b) You may negotiate licenses of different scope than described in 
paragraph (a) of this section when necessary to accomplish program 
objectives or to protect the Government's interests. Consult with legal 
counsel before negotiating a license of different scope.
    (c) In negotiating data rights, you should consider the rights in 
background data that are necessary to fully utilize technology that is 
expected to result from the TIA, in the event the recipient does not 
commercialize the technology or chooses to protect any invention as a 
trade secret rather than by a patent. If a recipient intends to protect 
any invention as a trade secret, you should consult with your 
intellectual property counsel before deciding what information related 
to the invention the award should require the recipient to report.



Sec. 37.850  Should I require recipients to mark data?

    To protect the recipient's interests in data, your TIA should 
require the recipient to mark any particular data that it wishes to 
protect from disclosure with a legend identifying the data

[[Page 225]]

as licensed data subject to use, release, or disclosure restrictions.



Sec. 37.855  How should I handle protected data?

    Prior to releasing or disclosing data marked with a restrictive 
legend (as described in Sec. 37.850) to third parties, you should 
require those parties to agree in writing that they will:
    (a) Use the data only for governmental purposes; and
    (b) Not release or disclose the data without the permission of the 
licensor (i.e., the recipient).



Sec. 37.860  What rights should I obtain for inventions?

    (a) You should negotiate rights in inventions that represent a good 
balance between the Government's interests (see Sec. 37.840(b)) and the 
recipient's interests. As explained in appendix B to this part:
    (1) You have the flexibility to negotiate patent rights provisions 
that vary from what the Bayh-Dole statute (Chapter 18 of Title 35, 
U.S.C.) requires in many situations. You have that flexibility because 
TIAs include not only cooperative agreements, but also assistance 
transactions other than grants or cooperative agreements.
    (2) Your TIA becomes an assistance instrument other than a grant or 
cooperative agreement if its patent rights provision varies from what 
Bayh-Dole requires in your situation. However, you need not consider 
that difference in the type of transaction until the agreement is 
finalized, and it should not affect the provision you negotiate.
    (b) As long as it is consistent with the balance between DoD 
interests described in Sec. 37.840(b) and the recipient's interests, 
you should seek to obtain for the Government, when an invention is 
conceived or first actually reduced to practice under a TIA, a 
nonexclusive, nontransferrable, irrevocable, paid-up license to practice 
the invention, or to have it practiced, for or on behalf of the United 
States throughout the world. The license is for Governmental purposes, 
and does not include the right to practice the invention for commercial 
purposes.
    (c) To provide for the license described in paragraph (b) of this 
section, your TIA generally would include the patent-rights clause that 
37 CFR 401.14 specifies to implement the Bayh-Dole statute's 
requirements. Note that:
    (1) The clause is designed specifically for grants, contracts, and 
cooperative agreements awarded to small businesses and nonprofit 
organizations, the types of funding instruments and recipients to which 
the entire Bayh-Dole statute applies. As explained in appendix B to this 
part, only two Bayh-Dole requirements (in 35 U.S.C. sections 202(c)(4) 
and 203) apply to cooperative agreements with other performers, by 
virtue of an amendment to Bayh-Dole at 35 U.S.C. 210(c).
    (2) You may use the same clause, suitably modified, in cooperative 
agreements with performers other than small businesses and nonprofit 
organizations. Doing so is consistent with a 1983 Presidential 
memorandum that calls for giving other performers rights in inventions 
from Federally supported research that are at least as great as the 
rights that Bayh-Dole gives to small businesses and nonprofit 
organizations (see appendix B to this part for details). That 
Presidential memorandum is incorporated by reference in Executive Order 
12591 (52 FR 13414, 3 CFR, 1987 Comp., p. 220), as amended by Executive 
Order 12618 (52 FR 48661, 3 CFR, 1987 Comp., p. 262).
    (3) The clause provides for flow-down of Bayh-Dole patent-rights 
provisions to subawards with small businesses and nonprofit 
organizations.
    (4) There are provisions in 37 CFR part 401 stating when you must 
include the clause (37 CFR 401.3) and, in cases when it is required, how 
you may modify and tailor it (37 CFR 401.5).
    (d) You may negotiate Government rights of a different scope than 
the standard patent-rights provision described in paragraph (c) of this 
section when necessary to accomplish program objectives and foster the 
Government's interests. If you do so:
    (1) With the help of the program manager and legal counsel, you must 
decide what best represents a reasonable arrangement considering the 
circumstances, including past investments, contributions under the 
current TIA, and potential commercial markets. Taking past investments 
as an

[[Page 226]]

example, you should consider whether the Government or the recipient has 
contributed more substantially to the prior research and development 
that provides the foundation for the planned effort. If the predominant 
past contributor to the particular technology has been:
    (i) The Government, then the TIA's patent-rights provision should be 
at or close to the standard Bayh-Dole provision.
    (ii) The recipient, then a less restrictive patent provision may be 
appropriate, to allow the recipient to benefit more directly from its 
investments.
    (2) You should keep in mind that obtaining a nonexclusive license at 
the time of award, as described in paragraph (b) of this section, is 
valuable if the Government later requires access to inventions to enable 
development of defense-unique products or processes that the commercial 
marketplace is not addressing. If you do not obtain a license at the 
time of award, you should consider alternative approaches to ensure 
access, such as negotiating a priced option for obtaining nonexclusive 
licenses in the future to inventions that are conceived or reduced to 
practice under the TIA.
    (3) You also may consider whether you want to provide additional 
flexibility by giving the recipient more time than the standard patent-
rights provision does to:
    (i) Notify the Government of an invention, from the time the 
inventor discloses it within the for-profit firm.
    (ii) Inform the Government whether it intends to take title to the 
invention.
    (iii) Commercialize the invention, before the Government license 
rights in the invention become effective.



Sec. 37.865  Should my patent provision include march-in rights?

    Your TIA's patent rights provision should include the Bayh-Dole 
march-in rights clause at paragraph (j)(1) of 37 CFR 401.14, or an 
equivalent clause, concerning actions that the Government may take to 
obtain the right to use subject inventions, if the recipient fails to 
take effective steps to achieve practical application of the subject 
inventions within a reasonable time. The march-in provision may be 
modified to best meet the needs of the program. However, only 
infrequently should the march-in provision be entirely removed (e.g., 
you may wish to do so if a recipient is providing most of the funding 
for a research project, with the Government providing a much smaller 
share).



Sec. 37.870  Should I require recipients to mark documents related to 

inventions?

    To protect the recipient's interest in inventions, your TIA should 
require the recipient to mark documents disclosing inventions it desires 
to protect by obtaining a patent. The recipient should mark the 
documents with a legend identifying them as intellectual property 
subject to public release or public disclosure restrictions, as provided 
in 35 U.S.C. 205.



Sec. 37.875  Should my TIA include a provision concerning foreign access to 

technology?

    (a) Consistent with the objective of enhancing the national security 
by increasing DoD reliance on the U.S. commercial technology and 
industrial bases, you must include a provision in the TIA that addresses 
foreign access to technology developed under the TIA.
    (b) The provision must provide, as a minimum, that any transfer of 
the:
    (1) Technology must be consistent with the U.S. export laws, 
regulations and policies (e.g., the International Traffic in Arms 
Regulation at chapter I, subchapter M, title 22 of the CFR (22 CFR parts 
120 through 130), the DoD Industrial Security Regulation in DoD 5220.22-
R, \6\ and the Department of Commerce Export Regulation at chapter VII, 
subchapter C, title 15 of the CFR (15 CFR parts 730 through 774), as 
applicable.
---------------------------------------------------------------------------

    \6\ Electronic copies may be obtained at the Washington Headquarters 
Services Internet site http://www.dtic.mil/whs/directives. Paper copies 
may be obtained, at cost, from the National Technical Information 
Service, 5285 Port Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------

    (2) Exclusive right to use or sell the technology in the United 
States must, unless the Government grants a waiver, require that 
products embodying the technology or produced through

[[Page 227]]

the use of the technology will be manufactured substantially in the 
United States. The provision may further provide that:
    (i) In individual cases, the Government may waive the requirement of 
substantial manufacture in the United States upon a showing by the 
recipient that reasonable but unsuccessful efforts have been made to 
transfer the technology under similar terms to those likely to 
manufacture substantially in the United States or that under the 
circumstances domestic manufacture is not commercially feasible.
    (ii) In those cases, the DoD Component may require a refund to the 
Government of some or all the funds paid under the TIA for the 
development of the transferred technology.
    (c) You may, but are not required to, seek to negotiate a domestic 
manufacture condition for transfers of nonexclusive rights to use or 
sell the technology in the United States, to parallel the one described 
for exclusive licenses in paragraph (b)(2) of this section, if you judge 
that nonexclusive licenses for foreign manufacture could effectively 
preclude the establishment of domestic sources of the technology for 
defense purposes.

                  Financial and Programmatic Reporting



Sec. 37.880  What requirements must I include for periodic reports on program 

and business status?

    Your TIA must include either:
    (a) The requirements in 32 CFR 32.51 and 32.52 for status reports on 
programmatic performance and, if it is an expenditure-based award, on 
financial performance; or
    (b) Alternative requirements that, as a minimum, include periodic 
reports addressing program and, if it is an expenditure-based award, 
business status. You must require submission of the reports at least 
annually, and you may require submission as frequently as quarterly 
(this does not preclude a recipient from electing to submit more 
frequently than quarterly the financial information that is required to 
process payment requests if the award is an expenditure-based TIA that 
uses reimbursement or advance payments under Sec. 37.810(a)). The 
requirements for the content of the reports are as follows:
    (1) The program portions of the reports must address progress toward 
achieving program performance goals, including current issues, problems, 
or developments.
    (2) The business portions of the reports, applicable only to 
expenditure-based awards, must provide summarized details on the status 
of resources (federal funds and non-federal cost sharing), including an 
accounting of expenditures for the period covered by the report. The 
report should compare the resource status with any payment and 
expenditure schedules or plans provided in the original award; explain 
any major deviations from those schedules; and discuss actions that will 
be taken to address the deviations. You may require a recipient to 
separately identify in these reports the expenditures for each 
participant in a consortium and for each programmatic milestone or task, 
if you, after consulting with the program official, judge that those 
additional details are needed for good stewardship.



Sec. 37.885  May I require updated program plans?

    In addition to reports on progress to date, your TIA may include a 
provision requiring the recipient to annually prepare updated technical 
plans for the future conduct of the research effort. If your TIA does 
include a requirement for annual program plans, you also must require 
the recipient to submit the annual program plans to the agreements 
officer responsible for administering the TIA.



Sec. 37.890  Must I require a final performance report?

    You need not require a final performance report that addresses all 
major accomplishments under the TIA. If you do not do so, however, there 
must be an alternative that satisfies the requirement in DoD Instruction 
3200.14 \7\ to document all DoD Science and Technology efforts and 
disseminate the results through the Defense Technical Information Center 
(DTIC). An example

[[Page 228]]

of an alternative would be periodic reports throughout the performance 
of the research that collectively cover the entire project.
---------------------------------------------------------------------------

    \7\ See footnote 6 to Sec. 37.875(b)(1).
---------------------------------------------------------------------------



Sec. 37.895  How is the final performance report to be sent to the Defense 

Technical Information Center?

    (a) Whether your TIA requires a final performance report or uses an 
alternative means under Sec. 37.890, \8\ you may include an award term 
or condition or otherwise instruct the recipient to submit the 
documentation, electronically if available, either:
---------------------------------------------------------------------------

    \8\ Additional information on electronic submission to the DTIC can 
be found online, currently at http://www.dtic.mil/dtic/submitting/elec--
subm.html.
---------------------------------------------------------------------------

    (1) Directly to the DTIC; or
    (2) To the office that is administering the award (for subsequent 
transmission to the DTIC).
    (b) If you specify that the recipient is to submit the report 
directly to the DTIC, you also:
    (1) Must instruct the recipient to include a fully completed 
Standard Form 298, ``Report Documentation Page,'' with each document, so 
that the DTIC can recognize the document as being related to the 
particular award and properly record its receipt; and
    (2) Should advise the recipient to provide a copy of the completed 
Standard Form 298 to the agreements officer responsible for 
administering the TIA.



Sec. 37.900  May I tell a participant that information in financial and 

programmatic reports will not be publicly disclosed?

    You may tell a participant that:
    (a) We may exempt from disclosure under the Freedom of Information 
Act (FOIA) a trade secret or commercial and financial information that a 
participant provides after the award, if the information is privileged 
or confidential information. The DoD Component that receives the FOIA 
request will review the information in accordance with DoD procedures at 
32 CFR 286.23(h) (and any DoD Component supplementary procedures) to 
determine whether it is privileged or confidential information under the 
FOIA exemption at 5 U.S.C. 552(b)(4), as implemented by the DoD at 32 
CFR 286.12(d).
    (b) If the participant also provides information in the course of a 
competition prior to award, there is a statutory exemption for five 
years from FOIA disclosure requirements for certain types of information 
submitted at that time (see Sec. 37.420).



Sec. 37.905  Must I make receipt of the final performance report a condition 

for final payment?

    If a final report is required, your TIA should make receipt of the 
report a condition for final payment. If the payments are based on 
payable milestones, the submission and acceptance of the final report by 
the Government representative will be incorporated as an event that is a 
prerequisite for one of the payable milestones.

                Records Retention and Access Requirements



Sec. 37.910  How long must I require participants to keep records related to 

the TIA?

    Your TIA must require participants to keep records related to the 
TIA (for which the agreement provides Government access under Sec. 
37.915) for a period of three years after submission of the final 
financial status report for an expenditure-based TIA or final 
programmatic status report for a fixed-support TIA, with the following 
exceptions:
    (a) The participant must keep records longer than three years after 
submission of the final financial status report if the records relate to 
an audit, claim, or dispute that begins but does not reach its 
conclusion within the 3-year period. In that case, the participant must 
keep the records until the matter is resolved and final action taken.
    (b) Records for any real property or equipment acquired with project 
funds under the TIA must be kept for three years after final 
disposition.



Sec. 37.915  What requirement for access to a for-profit participant's records 

do I include in a TIA?

    (a) If a for-profit participant currently grants access to its 
records to the DCAA or other Federal Government auditors, your TIA must 
include

[[Page 229]]

for that participant the standard access-to-records requirements at 32 
CFR 34.42(e). If the agreement is a fixed-support TIA, the language in 
32 CFR 34.42(e) may be modified to provide access to records concerning 
the recipient's technical performance, without requiring access to the 
recipient's financial or other records. Note that any need to address 
access to technical records in this way is in addition to, not in lieu 
of, the need to address rights in data (see Sec. 37.845).
    (b) For other for-profit participants that do not currently give the 
Federal Government direct access to their records and are not willing to 
grant full access to records pertinent to the award, there is no set 
requirement to include a provision in your TIA for Government access to 
records. If the audit provision of an expenditure-based TIA gives an IPA 
access to the recipient's financial records for audit purposes, the 
Federal Government must have access to the IPA's reports and working 
papers and you need not include a provision requiring direct Government 
access to the recipient's financial records. For both fixed-support and 
expenditure-based TIAs, you may wish to negotiate Government access to 
recipient records concerning technical performance. Should you negotiate 
a provision giving access only to specific Government officials (e.g., 
the agreements officer), rather than a provision giving Government 
access generally, it is important to let participants know that the OIG, 
DoD, has a statutory right of access to records and other materials to 
which other DoD Component officials have access.



Sec. 37.920  What requirement for access to a nonprofit participant's records 

do I include in a TIA?

    Your TIA must include for any nonprofit participant the standard 
access-to-records requirement at:
    (a) 32 CFR 33.42(e), for a participant that is a State or local 
governmental organization.
    (b) 32 CFR 32.53(e), for a participant that is a nonprofit 
organization. The same requirement applies to any nonprofit GOCO or 
FFRDC, even though nonprofit GOCOs and FFRDCs are exempted from the 
definition of ``recipient'' in 32 CFR part 32.

                       Termination and Enforcement



Sec. 37.925  What requirements do I include for termination and enforcement?

    Your TIA must apply the standards of 32 CFR 34.51 for termination, 
32 CFR 34.52 for enforcement, and your organization's procedures 
implementing 32 CFR 22.815 for disputes and appeals.



                      Subpart H_Executing the Award



Sec. 37.1000  What are my responsibilities at the time of award?

    At the time of the award, you must:
    (a) Ensure that the award document contains the appropriate terms 
and conditions and is signed by the appropriate parties, in accordance 
with Sec. Sec. 37.1005 through 37.1015.
    (b) Document your analysis of the agreement in the award file, as 
discussed in Sec. 37.1020.
    (c) Provide information about the award to offices responsible for 
reporting, as described in Sec. Sec. 37.1025 through 37.1035.
    (d) Distribute copies of the award document, as required by Sec. 
37.1045.

                           The Award Document



Sec. 37.1005  What are my general responsibilities concerning the award 

document?

    You are responsible for ensuring that the award document is complete 
and accurate. Your objective is to create a document that:
    (a) Addresses all issues;
    (b) States requirements directly. It is not helpful to readers to 
incorporate statutes or rules by reference, without sufficient 
explanation of the requirements. You generally should not incorporate 
clauses from the Federal Acquisition Regulation (48 CFR parts 1-53) or 
Defense Federal Acquisition Regulation Supplement (48 CFR parts 201-
253), because those provisions are designed for procurement contracts 
that are used to acquire goods and services, rather than for TIAs or 
other assistance instruments.

[[Page 230]]

    (c) Is written in clear and concise language, to minimize potential 
ambiguity.



Sec. 37.1010  What substantive issues should my award document address?

    You necessarily will design and negotiate a TIA individually to meet 
the specific requirements of the particular project, so the complete 
list of substantive issues that you will address in the award document 
may vary. Every award document must address:
    (a) Project scope. The scope is an overall vision statement for the 
project, including a discussion of the project's purpose, objectives, 
and detailed military and commercial goals. It is a critical provision 
because it provides a context for resolving issues that may arise during 
post-award administration. In a fixed-support TIA, you also must clearly 
specify the well-defined outcomes that reliably indicate the amount of 
effort expended and serve as the basis for the level of the fixed 
support (see Sec. Sec. 37.305 and 37.560(a)).
    (b) Project management. You should describe the nature of the 
relationship between the Federal Government and the recipient; the 
relationship among the participants, if the recipient is an 
unincorporated consortium; and the overall technical and administrative 
management of the project. TIAs are used to carry out collaborative 
relationships between the Federal Government and the recipient. 
Consequently, there must be substantial involvement of the DoD program 
official (see Sec. 37.220) and usually the administrative agreements 
officer. The program official provides technical insight, which differs 
from the usual technical oversight of a project. The management 
provision also should discuss how you and the recipient will make any 
modifications to the TIA.
    (c) Termination, enforcement, and disputes. Your TIA must provide 
for termination, enforcement remedies, and disputes and appeals 
procedures, in accordance with Sec. 37.925.
    (d) Funding. You must:
    (1) Show the total amount of the agreement and the total period of 
performance.
    (2) If the TIA is an expenditure-based award, state the Government's 
and recipient's agreed-upon cost shares. The award document should 
identify values for any in-kind contributions, determined in accordance 
with Sec. Sec. 37.530 through 37.555, to preclude later disagreements 
about them.
    (3) Specify the amount of Federal funds obligated and the 
performance period for those obligated funds.
    (4) State, if the agreement is to be incrementally funded, that the 
Government's obligation for additional funding is contingent upon the 
availability of funds and that no legal obligation on the part of the 
Government exists until additional funds are made available and the 
agreement is amended. You also must include a prior approval requirement 
for changes in plans requiring additional Government funding, in 
accordance with Sec. 37.825.
    (e) Payment. You must choose the payment method and tell the 
recipient how, when, and where to submit payment requests, as discussed 
in Sec. Sec. 37.805 through 37.815. Your payment method must take into 
account sound cash management practices by avoiding unwarranted cash 
advances. For an expenditure-based TIA, your payment provision must 
require the return of interest should excess cash balances occur, in 
accordance with Sec. 37.820. For any TIA using the milestone payment 
method described in Sec. 37.805(c), you must include language notifying 
the recipient that post-award administrators may adjust amounts of 
future milestone payments if a project's expenditures fall too far below 
the projections that were the basis for setting the amounts (see Sec. 
37.575(c) and Sec. 37.1105(c)).
    (f) Records retention and access to records. You must include the 
records retention requirement at Sec. 37.910. You also must provide for 
access to for-profit and nonprofit participants' records, in accordance 
with Sec. 37.915 and Sec. 37.920.
    (g) Patents and data rights. In designing the patents and data 
rights provision, you must set forth the minimum required Federal 
Government rights in intellectual property generated under the award and 
address related matters, as provided in Sec. Sec. 37.840 through 
37.875. It

[[Page 231]]

is important to define all essential terms in the patent rights 
provision.
    (h) Foreign access to technology. You must include a provision, in 
accordance with Sec. 37.875, concerning foreign access and domestic 
manufacture of products using technology generated under the award.
    (i) Title to, management of, and disposition of tangible property. 
Your property provisions for for-profit and nonprofit participants must 
be in accordance with Sec. Sec. 37.685 through 37.700.
    (j) Financial management systems. For an expenditure-based award, 
you must specify the minimum standards for financial management systems 
of both for-profit and nonprofit participants, in accordance with 
Sec. Sec. 37.615 and 37.620.
    (k) Allowable costs. If the TIA is an expenditure-based award, you 
must specify the standards that both for-profit and nonprofit 
participants are to use to determine which costs may be charged to the 
project, in accordance with Sec. Sec. 37.625 through 37.635, as well as 
Sec. 37.830.
    (l) Audits. If your TIA is an expenditure-based award, you must 
include an audit provision for both for-profit and nonprofit 
participants and subrecipients, in accordance with Sec. Sec. 37.640 
through 37.670 and Sec. 37.680.
    (m) Purchasing system standards. You should include a provision 
specifying the standards in Sec. Sec. 37.705 and 37.710 for purchasing 
systems of for-profit and nonprofit participants, respectively.
    (n) Program income. You should specify requirements for program 
income, in accordance with Sec. 37.835.
    (o) Financial and programmatic reporting. You must specify the 
reports that the recipient is required to submit and tell the recipient 
when and where to submit them, in accordance with Sec. Sec. 37.880 
through 37.905.
    (p) Assurances for applicable national policy requirements. You must 
incorporate assurances of compliance with applicable requirements in 
Federal statutes, Executive orders, or regulations (except for national 
policies that require certifications). Appendix D to this part contains 
a list of commonly applicable requirements that you need to augment with 
any specific requirements that apply in your particular circumstances 
(e.g., general provisions in the appropriations act for the specific 
funds that you are obligating).
    (q) Other routine matters. The agreement should address any other 
issues that need clarification, including who in the Government will be 
responsible for post-award administration and the statutory authority or 
authorities for entering into the TIA (see appendix B to this part for a 
discussion of statutory authorities). In addition, the agreement must 
specify that it takes precedence over any inconsistent terms and 
conditions in collateral documents such as attachments to the TIA or the 
recipient's articles of collaboration.



Sec. 37.1015  How do I decide who must sign the TIA if the recipient is an 

unincorporated consortium?

    (a) If the recipient is a consortium that is not formally 
incorporated and the consortium members prefer to have the agreement 
signed by all of them individually, you may execute the agreement in 
that manner.
    (b) If they wish to designate one consortium member to sign the 
agreement on behalf of the consortium as a whole, you should not decide 
whether to execute the agreement in that way until you review the 
consortium's articles of collaboration with legal counsel.
    (1) The purposes of the review are to:
    (i) Determine whether the articles properly authorize one 
participant to sign on behalf of the other participants and are binding 
on all consortium members with respect to the research project; and
    (ii) Assess the risk that otherwise could exist when entering into 
an agreement signed by a single member on behalf of a consortium that is 
not a legal entity. For example, you should assess whether the articles 
of collaboration adequately address consortium members' future 
liabilities related to the research project (i.e., whether they will 
have joint and severable liability).
    (2) After the review, in consultation with legal counsel, you should 
determine whether it is better to have all of the consortium members 
sign the agreement individually or to allow them to designate one member 
to sign on all members' behalf.

[[Page 232]]

                  Reporting Information About the Award



Sec. 37.1020  What must I document in my award file?

    You should include in your award file an agreements analysis in 
which you:
    (a) Briefly describe the program and detail the specific military 
and commercial benefits that should result from the project supported by 
the TIA. If the recipient is a consortium that is not formally 
incorporated, you should attach a copy of the signed articles of 
collaboration.
    (b) Describe the process that led to the award of the TIA, including 
how you and program officials solicited and evaluated proposals and 
selected the one supported through the TIA.
    (c) Explain how you decided that a TIA was the most appropriate 
instrument, in accordance with the factors in Subpart B of this part. 
Your explanation must include your answers to the relevant questions in 
Sec. 37.225(a) through (d).
    (d) Explain how you valued the recipient's cost sharing 
contributions, in accordance with Sec. Sec. 37.530 through 37.555. For 
a fixed-support TIA, you must document the analysis you did (see Sec. 
37.560) to set the fixed level of Federal support; the documentation 
must explain how you determined the recipient's minimum cost share and 
show how you estimated the expenditures required to achieve the project 
outcomes.
    (e) Document the results of your negotiation, addressing all 
significant issues in the TIA's provisions. For example, this includes 
specific explanations if you:
    (1) Specify requirements for a participant's systems that vary from 
the standard requirements in Sec. Sec. 37.615(a), 37.625(a), 37.630, or 
37.705(a) in cases where those sections provide flexibility for you to 
do so.
    (2) Provide that any audits are to be performed by an IPA, rather 
than the DCAA, where permitted under Sec. 37.650. Your documentation 
must include:
    (i) The names and addresses of business units for which IPAs will be 
the auditors;
    (ii) Estimated amounts of Federal funds expected under the award for 
those business units; and
    (iii) The basis (e.g., a written statement from the recipient) for 
your judging that the business units do not currently perform under 
types of awards described in Sec. 37.650(b)(1) and (2) and are not 
willing to grant the DCAA audit access.
    (3) Include an intellectual property provision that varies from 
Bayh-Dole requirements.
    (4) Determine that cost sharing is impracticable.



Sec. 37.1025  Must I report information to the Defense Assistance Awards Data 

System?

    Yes, you must give the necessary information about the award to the 
office in your organization that is responsible for preparing DD Form 
2566, ``DoD Assistance Award Action Report,'' reports for the Defense 
Assistance Award Data System, to ensure timely and accurate reporting of 
data required by 31 U.S.C. 6101-6106 (see 32 CFR part 21, subpart E).



Sec. 37.1030  What information must I report to the Defense Technical 

Information Center?

    (a) For any TIA, you must give your answers to the questions in 
Sec. 37.225(a) through (d) to the office in your DoD Component that is 
responsible for providing data on TIAs to the DTIC. Contact DTIC staff 
either by electronic mail at [email protected], by telephone at 1-800-225-
3842, or at DTIC-OCA, 8725 John J. Kingman Rd., Suite 0944, Fort 
Belvoir, VA 22060-6218, if you are unsure about the responsible office 
in your DoD Component. The DTIC compiles the information to help the 
Department of Defense measure the Department-wide benefits of using TIAs 
and assess the instruments' value in helping to meet the policy 
objectives described in Sec. 37.205(b) and appendix A to this part.
    (b) If the TIA uses the authority of 10 U.S.C. 2371, as described in 
Sec. 37.1035, your information submission for the DTIC under paragraph 
(a) of this section must include the additional data required for the 
DoD's annual report to Congress.
    (c) If, as permitted under Sec. 37.650, the TIA includes a 
provision allowing a for-

[[Page 233]]

profit participant to have audits performed by an IPA, rather than the 
DCAA, you must report that fact with the other information you submit 
about the TIA. Note that you also must include information about any use 
of IPAs permitted by subawards that participants make to for-profit 
firms, as provided in Sec. 37.670. Information about a subaward under 
the TIA must be reported even if you receive the information in a 
subsequent year, when information about the TIA itself does not need to 
be reported.
    (d) The requirements in this section to report information to the 
DTIC should not be confused with the post-award requirement to forward 
copies of technical reports to the DTIC, as described at Sec. Sec. 
37.890 and 37.895. The reporting requirements in this section are 
assigned the Report Control Symbol DD-AT&L(A) 1936.



Sec. 37.1035  How do I know if my TIA uses the 10 U.S.C. 2371 authority and I 

must report additional data under Sec. 37.1030(b)?

    As explained in appendix B to this part, a TIA uses the authority of 
10 U.S.C. 2371 and therefore must be included in the DoD's annual report 
to Congress on the use of 10 U.S.C. 2371 authorities if it:
    (a) Is an assistance transaction other than a grant or cooperative 
agreement, by virtue of its patent rights provision; or
    (b) Includes a provision to recover funds from a recipient, as 
described at Sec. 37.580.



Sec. 37.1040  When and how do I report information required by Sec. 37.1035?

    Information that you report, in accordance with Sec. 37.1030, to 
the office that your DoD Component designates as the central point for 
reporting to the DTIC must be:
    (a) Submitted by the dates that your central point establishes 
(which is consistent with the schedule DTIC specifies to DoD 
Components).
    (b) In the format that your central point provides (which is 
consistent with the format that the DTIC specifies to DoD Components).

                Distributing Copies of the Award Document



Sec. 37.1045  To whom must I send copies of the award document?

    You must send a copy of the award document to the:
    (a) Recipient. You must include on the first page of the recipient's 
copy a prominent notice about the current DoD requirements for payment 
by electronic funds transfer (EFT).
    (b) Office you designate to administer the TIA. You are strongly 
encouraged to delegate post-award administration to the regional office 
of the Defense Contract Management Agency or Office of Naval Research 
that administers awards to the recipient. When delegating, you should 
clearly indicate on the cover sheet or first page of the award document 
that the award is a TIA, to help the post-award administrator 
distinguish it from other types of assistance instruments.
    (c) Finance and accounting office designated to make the payments to 
the recipient.



                   Subpart I_Post-Award Administration



Sec. 37.1100  What are my responsibilities generally as an administrative 

agreements officer for a TIA?

    As the administrative agreements officer for a TIA, you have the 
responsibilities that your office agreed to accept in the delegation 
from the office that made the award. Generally, you will have the same 
responsibilities as a post-award administrator of a grant or cooperative 
agreement, as described in 32 CFR 22.715. Responsibilities for TIAs 
include:
    (a) Advising agreements officers before they award TIAs on how to 
establish award terms and conditions that better meet research 
programmatic needs, facilitate effective post-award administration, and 
ensure good stewardship of Federal funds.
    (b) Participating as the business partner to the DoD program 
official to ensure the Government's substantial involvement in the 
research project. This may involve attendance with program officials at 
kickoff meetings or post-award conferences with recipients.

[[Page 234]]

It also may involve attendance at the consortium management's periodic 
meetings to review technical progress, financial status, and future 
program plans.
    (c) Tracking and processing of reports required by the award terms 
and conditions, including periodic business status reports, programmatic 
progress reports, and patent reports.
    (d) Handling payment requests and related matters. For a TIA using 
advance payments, that includes reviews of progress to verify that there 
is continued justification for advancing funds, as discussed in Sec. 
37.1105(b). For a TIA using milestone payments, it includes making any 
needed adjustments in future milestone payment amounts, as discussed in 
Sec. 37.1105(c).
    (e) Coordinating audit requests and reviewing audit reports for both 
single audits of participants' systems and any award-specific audits 
that may be needed, as discussed in Sec. Sec. 37.1115 and 37.1120.
    (f) Responding, after coordination with program officials, to 
recipient requests for permission to sell or exclusively license 
intellectual property to entities that do not agree to manufacture 
substantially in the United States, as described in Sec. 37.875(b). 
Before you grant approval for any technology, you must secure assurance 
that the Government will be able to use the technology (e.g., a 
reasonable license for Government use, if the recipient is selling the 
technology) or seek reimbursement of the Government's investments.
    (g) Notifying the agreements officer who made the award if a 
participant informs you about a subaward allowing a for-profit 
subrecipient to have audits performed by an IPA, rather than the DCAA. 
You should alert the awarding official that he or she must report the 
information, as required by Sec. 37.1030(c).



Sec. 37.1105  What additional duties do I have as the administrator of a TIA 

with advance payments or payable milestones?

    Your additional post-award responsibilities as an administrative 
agreements officer for an expenditure-based TIA with advance payments or 
payable milestones are to ensure good cash management. To do so, you 
must:
    (a) For any expenditure-based TIA with advance payments or payable 
milestones, forward to the responsible payment office any interest that 
the recipient remits in accordance with Sec. 37.820(b). The payment 
office will return the amounts to the Department of the Treasury's 
miscellaneous receipts account.
    (b) For any expenditure-based TIA with advance payments, consult 
with the program official and consider whether program progress reported 
in periodic reports, in relation to reported expenditures, is sufficient 
to justify your continued authorization of advance payments under Sec. 
37.805(b).
    (c) For any expenditure-based TIA using milestone payments, work 
with the program official at the completion of each payable milestone or 
upon receipt of the next business status report to:
    (1) Compare the total amount of project expenditures, as recorded in 
the payable milestone report or business status report, with the 
projected budget for completing the milestone; and
    (2) Adjust future payable milestones, as needed, if expenditures lag 
substantially behind what was originally projected and you judge that 
the recipient is receiving Federal funds sooner than necessary for 
program purposes. Before making adjustments, you should consider how 
large a deviation is acceptable at the time of the milestone. For 
example, suppose that the first milestone payment for a TIA you are 
administering is $50,000, and that the awarding official set the amount 
based on a projection that the recipient would have to expend $100,000 
to reach the milestone (i.e., the original plan was for the recipient's 
share at that milestone to be 50% of project expenditures). If the 
milestone payment report shows $90,000 in expenditures, the recipient's 
share at this point is 44% ($40,000 out of the total $90,000 expended, 
with the balance provided by the $50,000 milestone payment of Federal 
funds). For this example, you should adjust future milestones if you 
judge that a 6% difference in the recipient's share at the first 
milestone is too large, but not otherwise. Remember

[[Page 235]]

that milestone payment amounts are not meant to track expenditures 
precisely at each milestone and that a recipient's share will increase 
as it continues to perform research and expend funds, until it completes 
another milestone to trigger the next Federal payment.



Sec. 37.1110  What other responsibilities related to payments do I have?

    If you are the administrative agreements officer, you have the 
responsibilities described in 32 CFR 22.810(c), regardless of the 
payment method. You also must ensure that you do not withhold payments, 
except in one of the circumstances described in 32 CFR 34.12(g).



Sec. 37.1115  What are my responsibilities related to participants' single 

audits?

    For audits of for-profit participant's systems, under Sec. Sec. 
37.640 through 37.660, you are the focal point within the Department of 
Defense for ensuring that participants submit audit reports and for 
resolving any findings in those reports. Nonprofit participants send 
their single audit reports to a Governmentwide clearinghouse. For those 
participants, the Office of the Assistant Inspector General (Auditing) 
should receive any DoD-specific findings from the clearinghouse and 
refer them to you for resolution, if you are the appropriate official to 
do so.



Sec. 37.1120  When and how may I request an award-specific audit?

    Guidance on when and how you should request additional audits for 
expenditure-based TIAs is identical to the guidance for grants officers 
in 32 CFR 34.16(d). If you require an award-specific examination or 
audit of a for-profit participant's records related to a TIA, you must 
use the auditor specified in the award terms and conditions, which 
should be the same auditor who performs periodic audits of the 
participant. The DCAA and the OIG, DoD, are possible sources of advice 
on audit-related issues, such as appropriate audit objectives and scope.



            Subpart J_Definitions of Terms Used in This Part



Sec. 37.1205  Advance.

    A payment made to a recipient before the recipient disburses the 
funds for program purposes. Advance payments may be based upon 
recipients' requests or predetermined payment schedules.



Sec. 37.1210  Advanced research.

    Research that creates new technology or demonstrates the viability 
of applying existing technology to new products and processes in a 
general way. Advanced research is most closely analogous to 
precompetitive technology development in the commercial sector (i.e., 
early phases of research and development on which commercial competitors 
are willing to collaborate, because the work is not so coupled to 
specific products and processes that the results of the work must be 
proprietary). It does not include development of military systems and 
hardware where specific requirements have been defined. It is typically 
funded in Research, Development, Test and Evaluation programs within 
Budget Activity 3, Advanced Technology Development.



Sec. 37.1215  Agreements officer.

    An official with the authority to enter into, administer, and/or 
terminate TIAs (see Sec. 37.125).



Sec. 37.1220  Applied research.

    Efforts that attempt to determine and exploit the potential of 
scientific discoveries or improvements in technology such as new 
materials, devices, methods and processes. It typically is funded in 
Research, Development, Test and Evaluation programs within Budget 
Activity 2, Applied Research (also known informally as research category 
6.2) programs. Applied research normally follows basic research but may 
not be fully distinguishable from the related basic research. The term 
does not include efforts whose principal aim is the design, development, 
or testing of specific products, systems or processes to be considered 
for sale or acquisition; these efforts are within the definition of 
``development.''

[[Page 236]]



Sec. 37.1225  Articles of collaboration.

    An agreement among the participants in a consortium that is not 
formally incorporated as a legal entity, by which they establish their 
relative rights and responsibilities (see Sec. 37.515).



Sec. 37.1230  Assistance.

    The transfer of a thing of value to a recipient to carry out a 
public purpose of support or stimulation authorized by a law of the 
United States (see 31 U.S.C. 6101(3)). Grants, cooperative agreements, 
and technology investment agreements are examples of legal instruments 
used to provide assistance.



Sec. 37.1235  Award-specific audit.

    An audit of a single TIA, usually done at the cognizant agreements 
officer's request, to help resolve issues that arise during or after the 
performance of the research project. An award-specific audit of an 
individual award differs from a periodic audit of a participant (as 
defined in Sec. 37.1325).



Sec. 37.1240  Basic research.

    Efforts directed toward increasing knowledge and understanding in 
science and engineering, rather than the practical application of that 
knowledge and understanding. It typically is funded within Research, 
Development, Test and Evaluation programs in Budget Activity 1, Basic 
Research (also known informally as research category 6.1).



Sec. 37.1245  Cash contributions.

    A recipient's cash expenditures made as contributions toward cost 
sharing, including expenditures of money that third parties contributed 
to the recipient.



Sec. 37.1250  Commercial firm.

    A for-profit firm or segment of a for-profit firm (e.g., a division 
or other business unit) that does a substantial portion of its business 
in the commercial marketplace.



Sec. 37.1255  Consortium.

    A group of research-performing organizations that either is formally 
incorporated or that otherwise agrees to jointly carry out a research 
project (see definition of ``articles of collaboration,'' in Sec. 
37.1225).



Sec. 37.1260  Cooperative agreement.

    A legal instrument which, consistent with 31 U.S.C. 6305, is used to 
enter into the same kind of relationship as a grant (see definition of 
``grant,'' in Sec. 37.1295), except that substantial involvement is 
expected between the Department of Defense and the recipient when 
carrying out the activity contemplated by the cooperative agreement. The 
term does not include ``cooperative research and development 
agreements'' as defined in 15 U.S.C. 3710a.



Sec. 37.1265  Cost sharing.

    A portion of project costs that are borne by the recipient or non-
Federal third parties on behalf of the recipient, rather than by the 
Federal Government.



Sec. 37.1270  Data.

    Recorded information, regardless of form or method of recording. The 
term includes technical data, which are data of a scientific or 
technical nature, and computer software. It does not include financial, 
cost, or other administrative information related to the administration 
of a TIA.



Sec. 37.1275  DoD Component.

    The Office of the Secretary of Defense, a Military Department, a 
Defense Agency, or a DoD Field Activity.



Sec. 37.1280  Equipment.

    Tangible property, other than real property, that has a useful life 
of more than one year and an acquisition cost of $5,000 or more per 
unit.



Sec. 37.1285  Expenditure-based award.

    A Federal Government contract or assistance award for which the 
amounts of interim payments or the total amount ultimately paid (i.e., 
the sum of interim payments and final payment) are subject to 
redetermination or adjustment, based on the amounts expended by the 
recipient in carrying out the purposes for which the award was made. 
Most Federal Government grants and cooperative agreements are 
expenditure-based awards.

[[Page 237]]



Sec. 37.1290  Expenditures or outlays.

    Charges made to the project or program. They may be reported either 
on a cash or accrual basis, as shown in the following table:
[GRAPHIC] [TIFF OMITTED] TR07AU03.001



Sec. 37.1295  Grant.

    A legal instrument which, consistent with 31 U.S.C. 6304, is used to 
enter into a relationship:
    (a) The principal purpose of which is to transfer a thing of value 
to the recipient to carry out a public purpose of support or stimulation 
authorized by a law of the United States, rather than to acquire 
property or services for the Department of Defense's direct benefit or 
use.
    (b) In which substantial involvement is not expected between the 
Department of Defense and the recipient when carrying out the activity 
contemplated by the grant.



Sec. 37.1300  In-kind contributions.

    The value of non-cash contributions made by a recipient or non-
Federal third parties toward cost sharing.



Sec. 37.1305  Institution of higher education.

    An educational institution that:
    (a) Meets the criteria in section 101 of the Higher Education Act of 
1965 (20 U.S.C. 1001); and
    (b) Is subject to the provisions of OMB Circular A-110, 
``Administrative Requirements for Grants and Agreements with 
Institutions of Higher Education, Hospitals, and Other Non-Profit 
Organizations,'' as implemented by the Department of Defense at 32 CFR 
part 32.



Sec. 37.1310  Intellectual property.

    Inventions, data, works of authorship, and other intangible products 
of intellectual effort that can be owned by a person, whether or not 
they are patentable or may be copyrighted. The term also includes mask 
works, such as

[[Page 238]]

those used in microfabrication, whether or not they are tangible.



Sec. 37.1315  Nonprofit organization.

    (a) Any corporation, trust, association, cooperative or other 
organization that:
    (1) Is operated primarily for scientific, educational, service, or 
similar purposes in the public interest.
    (2) Is not organized primarily for profit; and
    (3) Uses its net proceeds to maintain, improve, or expand the 
operations of the organization.
    (b) The term includes any nonprofit institution of higher education 
or nonprofit hospital.



Sec. 37.1320  Participant.

    A consortium member or, in the case of an agreement with a single 
for-profit entity, the recipient. Note that a for-profit participant may 
be a firm or a segment of a firm (e.g., a division or other business 
unit).



Sec. 37.1325  Periodic audit.

    An audit of a participant, performed at an agreed-upon time (usually 
a regular time interval), to determine whether the participant as a 
whole is managing its Federal awards in compliance with the terms of 
those awards. Appendix C to this part describes what such an audit may 
cover. A periodic audit of a participant differs from an award-specific 
audit of an individual award (as defined in Sec. 37.1235).



Sec. 37.1330  Procurement contract.

    A Federal Government procurement contract. It is a legal instrument 
which, consistent with 31 U.S.C. 6303, reflects a relationship between 
the Federal Government and a State, a local government, or other 
recipient when the principal purpose of the instrument is to acquire 
property or services for the direct benefit or use of the Federal 
Government. See the more detailed definition of the term ``contract'' at 
48 CFR 2.101.



Sec. 37.1335  Program income.

    Gross income earned by the recipient or a participant that is 
generated by a supported activity or earned as a direct result of a TIA. 
Program income includes but is not limited to: income from fees for 
performing services; the use or rental of real property, equipment, or 
supplies acquired under a TIA; the sale of commodities or items 
fabricated under a TIA; and license fees and royalties on patents and 
copyrights. Interest earned on advances of Federal funds is not program 
income.



Sec. 37.1340  Program official.

    A Federal Government program manager, scientific officer, or other 
individual who is responsible for managing the technical program being 
carried out through the use of a TIA.



Sec. 37.1345  Property.

    Real property, equipment, supplies, and intellectual property, 
unless stated otherwise.



Sec. 37.1350  Real property.

    Land, including land improvements, structures and appurtenances 
thereto, but excluding movable machinery and equipment.



Sec. 37.1355  Recipient.

    An organization or other entity that receives a TIA from a DoD 
Component. Note that a for-profit recipient may be a firm or a segment 
of a firm (e.g., a division or other business unit).



Sec. 37.1360  Research.

    Basic, applied, and advanced research, as defined in this subpart.



Sec. 37.1365  Supplies.

    Tangible property other than real property and equipment. Supplies 
have a useful life of less than one year or an acquisition cost of less 
than $5,000 per unit.



Sec. 37.1370  Termination.

    The cancellation of a TIA, in whole or in part, at any time prior to 
either:
    (a) The date on which all work under the TIA is completed; or
    (b) The date on which Federal sponsorship ends, as given in the 
award document or any supplement or amendment thereto.

[[Page 239]]



Sec. 37.1375  Technology investment agreements.

    A special class of assistance instruments used to increase 
involvement of commercial firms in defense research programs and for 
other purposes (described in appendix A to this part) related to 
integrating the commercial and defense sectors of the nation's 
technology and industrial base. A technology investment agreement may be 
a cooperative agreement with provisions tailored for involving 
commercial firms (as distinct from a cooperative agreement subject to 
all of the requirements in 32 CFR part 34), or another kind of 
assistance transaction (see appendix B to this part).

[[Page 240]]



   Sec. Appendix A to Part 37--What Is the Civil-Military Integration 

     Policy That Is the Basis for Technology Investment Agreements?

[GRAPHIC] [TIFF OMITTED] TR07AU03.002


[[Page 241]]


[GRAPHIC] [TIFF OMITTED] TR07AU03.003


[[Page 242]]





 Sec. Appendix B to Part 37--What Type of Instrument Is a TIA and What 

                   Statutory Authorities Does It Use?

[GRAPHIC] [TIFF OMITTED] TR07AU03.004


[[Page 243]]


[GRAPHIC] [TIFF OMITTED] TR07AU03.005


[[Page 244]]


[GRAPHIC] [TIFF OMITTED] TR07AU03.006


[[Page 245]]





 Sec. Appendix C to Part 37--What Is the Desired Coverage for Periodic 

        Audits of For-Profit Participants To Be Audited by IPAs?

[GRAPHIC] [TIFF OMITTED] TR07AU03.007


[[Page 246]]


[GRAPHIC] [TIFF OMITTED] TR07AU03.008


[[Page 247]]


[GRAPHIC] [TIFF OMITTED] TR07AU03.009


[[Page 248]]


[GRAPHIC] [TIFF OMITTED] TR07AU03.010


[[Page 249]]


[GRAPHIC] [TIFF OMITTED] TR07AU03.011


[[Page 250]]


[GRAPHIC] [TIFF OMITTED] TR07AU03.012


[[Page 251]]


[GRAPHIC] [TIFF OMITTED] TR07AU03.013


[[Page 252]]


[GRAPHIC] [TIFF OMITTED] TR07AU03.014



Sec. Appendix D to Part 37--What Common National Policy Requirements May 

                 Apply and Need To Be Included in TIAs?

    Whether your TIA is a cooperative agreement or another type of 
assistance transaction, as discussed in Appendix B to this part, the 
terms and conditions of the agreement must provide for recipients' 
compliance with applicable Federal statutes and regulations. This 
appendix lists some of the more common requirements to aid you in 
identifying ones that apply to your TIA. The list is not intended to be 
all-inclusive, however, and you may need to consult legal

[[Page 253]]

counsel to verify whether there are others that apply in your situation 
(e.g., due to a provision in the appropriations act for the specific 
funds that you are using or due to a statute or rule that applies to a 
particular program or type of activity).

                            A. Certifications

    One requirement that applies to all TIAs currently requires you to 
obtain a certification at the time of proposal. That requirement is in a 
Governmentwide common rule about lobbying prohibitions, which is 
implemented by the DoD at 32 CFR part 28. The prohibitions apply to all 
financial assistance. Appendix A to 32 CFR part 22 includes a sample 
provision that you may use, to have proposers incorporate the 
certification by reference into their proposals.

                  B. Assurances That Apply to All TIAs

    DoD policy is to use a certification, as described in the preceding 
paragraph, only for a national policy requirement that specifically 
requires one. The usual approach to communicating other national policy 
requirements to recipients is to incorporate them as award terms or 
conditions, or assurances. Appendix B to 32 CFR part 22 lists national 
policy requirements that commonly apply to grants and cooperative 
agreements. It also has suggested language for assurances to incorporate 
the requirements in award documents. Of those requirements, the 
following six apply to all TIAs:
    1. Requirements concerning debarment and suspension in the OMB 
guidance in 2 CFR part 180, as implemented by the DoD at 2 CFR part 
1125. The requirements apply to all nonprocurement transactions.
    2. Requirements concerning drug-free workplace in the Governmentwide 
common rule that the DoD has codified at 32 CFR part 26. The 
requirements apply to all financial assistance.
    3. Prohibitions on discrimination on the basis of race, color, or 
national origin in Title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000d, et seq.). These apply to all financial assistance. They require 
recipients to flow down the prohibitions to any subrecipients performing 
a part of the substantive research program (as opposed to suppliers from 
whom recipients purchase goods or services). For further information, 
see item a. under the heading ``Nondiscrimination'' in Appendix B to 32 
CFR part 22.
    4. Prohibitions on discrimination on the basis of age, in the Age 
Discrimination Act of 1975 (42 U.S.C. 6101, et seq.). They apply to all 
financial assistance and require flow down to subrecipients. For further 
information, see item d. under the heading ``Nondiscrimination'' in 
Appendix B to 32 CFR part 22.
    5. Prohibitions on discrimination on the basis of handicap, in 
section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794). They 
apply to all financial assistance and require flow down to 
subrecipients. For further information, see item e.1. under the heading 
``Nondiscrimination'' in Appendix B to 32 CFR part 22.
    6. Preferences for use of U.S.-flag air carriers in the 
International Air Transportation Fair Competitive Practices Act of 1974 
(49 U.S.C. 40118), which apply to uses of U.S. Government funds.

                           C. Other Assurances

    Additional requirements listed in Appendix B to 32 CFR part 22 may 
apply in certain circumstances, as follows:
    1. If construction work is to be done under a TIA or its subawards, 
it is subject to the prohibitions in Executive Order 11246 on 
discrimination on the basis of race, color, religion, sex, or national 
origin. For further information, see item b. under the heading 
``Nondiscrimination'' in Appendix B to 32 CFR part 22.
    2. If the research involves human subjects or animals, it is subject 
to the requirements in item a. or b., respectively, under the heading 
``Live organisms'' in Appendix B to 32 CFR part 22.
    3. If the research involves actions that may affect the environment, 
it is subject to the National Environmental Policy Act, which is item 
b.1. under the heading ``Environmental Standards'' in Appendix B to 32 
CFR part 22. It also may be subject to one or more of the other 
requirements in items b.2. through b.6. under that heading, which 
concern flood-prone areas, coastal zones, coastal barriers, wild and 
scenic rivers, and underground sources of drinking water.
    4. If the project may impact a historic property, it is subject to 
the National Historic Preservation Act of 1966 (16 U.S.C. 470, et seq.), 
as described under the heading ``National Historic Preservation'' in 
Appendix B to 32 CFR part 22.

[68 FR 47160, Aug. 7, 2003, as amended at 70 FR 49477, Aug. 23, 2005; 72 
FR 34999, June 26, 2007]



 Sec. Appendix E to Part 37--What Provisions May a Participant Need To 

         Include When Purchasing Goods or Services Under a TIA?

    A. As discussed in Sec. 37.705, you must inform recipients of any 
national policy requirements that flow down to their purchases of goods 
or services (e.g., supplies or equipment) under their TIAs. Note that 
purchases of goods or services differ from subawards, which are for 
substantive research program performance.

[[Page 254]]

    B. Appendix A to 32 CFR part 34 lists seven national policy 
requirements that commonly apply to firms' purchases under grants or 
cooperative agreements. Of those seven, two that apply to all 
recipients' purchases under TIAs are:
    1. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). A contractor 
submitting a bid to the recipient for a contract award of $100,000 or 
more must file a certification with the recipient that it has not and 
will not use Federal appropriations for certain lobbying purposes. The 
contractor also must disclose any lobbying with non-Federal funds that 
takes place in connection with obtaining any Federal award. For further 
details, see 32 CFR part 28, the DoD's codification of the 
Governmentwide common rule implementing this amendment.
    2. Debarment and suspension. A contract award with an amount 
expected to equal or exceed $25,000 and certain other contract awards 
(see 2 CFR 1125.220, which implements OMB guidance in 2 CFR 180.220) 
shall not be made to parties listed on the Governmentwide Excluded 
Parties List System, in accordance with the DoD adoption at 2 CFR part 
1125 of the OMB guidance implementing E.O.s 12549 (3 CFR, 1986 Comp., p. 
189) and 12689 (3 CFR, 1989 Comp., p. 235), ``Debarment and 
Suspension.'' The Excluded Parties List System accessible on the 
Internet at www.epls.gov contains the names of parties debarred, 
suspended, or otherwise excluded by agencies, as well as parties 
declared ineligible under statutory or regulatory authority other than 
E.O. 12549.
    C. One other requirement applies only in cases where construction 
work is to be performed under the TIA with Federal funds or recipient 
funds counted toward required cost sharing:
    1. Equal Employment Opportunity. Although construction work should 
happen rarely under a TIA, the agreements officer in that case should 
inform the recipient that Department of Labor regulations at 41 CFR 60-
1.4(b) prescribe a clause that must be incorporated into construction 
awards and subawards. Further details are provided in Appendix B to Part 
22 of the DoDGARs (32 CFR part 22), in section b. under the heading 
``Nondiscrimination.''

[68 FR 47160, Aug. 7, 2003, as amended at 70 FR 49478, Aug. 23, 2005; 72 
FR 34999, June 26, 2007]

[[Page 255]]



              SUBCHAPTER D_PERSONNEL, MILITARY AND CIVILIAN


    Cross Reference: For a revision of Standards for a Merit System of 
Personnel Administration, see 5 CFR part 900.



PART 44_SCREENING THE READY RESERVE--Table of Contents



Sec.
44.1 Purpose.
44.2 Applicability.
44.3 Definitions.
44.4 Policy.
44.5 Responsibilities.

Appendix A to Part 44--Guidance

    Authority: 10 U.S.C. 10145.

    Source: 64 FR 72027, Dec. 23, 1999, unless otherwise noted.



Sec. 44.1  Purpose.

    Updates DoD policy and responsibilities for the screening of Ready 
Reservists under 10 U.S.C. 1003, 1005, and 1209.



Sec. 44.2  Applicability.

    This part applies to the Office of the Secretary of Defense, the 
Military Departments (including the Coast Guard, when it is not 
operating as a Military Service in the Navy by agreement with the 
Department of Transportation), the Chairman of the Joint Chiefs of 
Staff, the Combatant Commands, the Inspector General of the Department 
of Defense, the Defense Agencies, the DoD Field Activities and all other 
organizational entities within the Department of Defense (hereafter 
referred to collectively as the ``DoD Components''). The term ``Military 
Services'' as used in this part, refers to the Army, the Navy, the Air 
Force and the Marine Corps.



Sec. 44.3  Definitions.

    For purposes of this part, the following definitions apply:
    Extreme community hardship. A situation that, because of a 
Reservist's mobilization, may have a substantially adverse effect on the 
health, safety, or welfare of the community. Any request for a 
determination of such hardship shall be made by the Reservist and must 
be supported by documentation, as required by the Secretary concerned.
    Extreme personal hardship. An adverse impact on a Reservist's 
dependents resulting from his or her mobilization. Any request for a 
determination of such hardship shall be made by the Reservist and must 
be supported by documentation, as required by the Secretary concerned.
    Individual Ready Reserve. Within the Ready Reserve of each of the 
Reserve Components there is an Individual Ready Reserve. The Individual 
Ready Reserve consists of members of the Ready Reserve who are not in 
the Selected Reserve or the Inactive National Guard.
    Key employee. Any Federal employee occupying a key position.
    Key position. A Federal position that shall not be vacated during a 
national emergency or mobilization without SERIOUSLY impairing the 
capability of the parent Federal Agency or office to function 
effectively. The four categories of Federal key positions are set out in 
this paragraph. The first three categories are, by definition, key 
positions. However, the third category, Article III Judges, provides for 
exceptions on a case-by-case basis. The fourth category requires a case-
by-case determination and designation as described in the following:
    (1) The Vice President of the United States or any official 
specified in the order of presidential succession as in 3 U.S.C. 19.
    (2) The members of the Congress and the heads of the Federal 
Agencies appointed by the President with the consent of the Senate. For 
this part, the term ``the heads of the Federal Agencies'' does not-
include any person appointed by the President with the consent of the 
Senate to a Federal Agency as a member of a multimember board or 
commission. Such positions may be designated as key positions only in 
accordance with paragraph (4) of this definition.
    (3) Article III Judges. However, each Article III Judge, who is a 
member of the Ready Reserve and desires to remain in the Ready Reserve, 
must have his or her position reviewed by the

[[Page 256]]

Chief Judge of the affected Judge's Circuit. If the Chief Judge 
determines that mobilization of the Article III Judge concerned will not 
seriously impair the capability of the Judge's court to function 
effectively, the Chief Judge will provide a certification to that effect 
to the Secretary of the Military Department concerned. Concurrently, the 
affected Judge will provide a statement to the Secretary concerned 
requesting continued service in the Ready Reserve and acknowledging that 
he or she may be involuntarily called to active duty (AD) under the laws 
of the United States and the Directives and Regulations of the 
Department of Defense and pledging not to seek to be excused from such 
orders based upon his or her judicial duties.
    (4) Other Federal positions determined by the Federal Agency heads, 
or their designees, to be key positions in accordance with the 
guidelines in the appendix to this part.
    Mobilization. Involuntary call-up of Reserve component members in 
accordance with 10 U.S.C. 12301, 12302, or 12304. That includes full 
mobilization, partial mobilization and, selective mobilization 
(Presidential Reserve Call-Up Authority).
    Ready reserve. Reserve unit members or individual Reserve and 
National Guard members, or both, liable for AD, as provided in 10 U.S.C. 
12301, 12302, and, for some members, 10 U.S.C. 12304. It consists of the 
Selected Reserve, the Individual Ready Reserve, and the Inactive 
National Guard.
    Selected reserve. A category of the Ready Reserve in each of the 
Reserve components. The Selected Reserve consists of units, and, as 
designated by the Secretary concerned, of individual Reserve members, 
trained as prescribed in 10 U.S.C. 10147(a)(1) or 32 U.S.C. 502(a), as 
appropriate.
    Standby reserve. The Standby Reserve consists of those units or 
members, or both, of the Reserve components, other than those in the 
Ready Reserve or the Retired Reserve, who are liable for active duty 
only as provided for in 10 U.S.C. 12301 and 12306. The Standby Reserve 
consists of personnel who are maintaining their military affiliation 
without being in the Ready Reserve, but have been designated ``key 
civilian employees,'' or have a temporary hardship or disability. Those 
individuals are not required to perform training and are not part of the 
Ready Reserve. The Standby Reserve is a pool of trained individuals who 
may be mobilized as needed to fill manpower needs in specific skills. 
The Standby Reserve consists of the active status list and the inactive 
status list categories.



Sec. 44.4  Policy.

    It is DoD policy that:
    (a) Members of the Ready Reserve shall be screened (see the appendix 
to this part for specific screening guidance) at least annually to meet 
the provisions of 10 U.S.C. 10149 and to provide a Ready Reserve force 
composed of members who:
    (1) Meet Military Service wartime standards of mental, moral, 
professional, and physical fitness.
    (2) Possess the military qualifications required in the various 
ranks, ratings, and specialties.
    (3) Are available immediately for active duty (AD) during a 
mobilization or as otherwise required by law.
    (b) On mobilization under 10 U.S.C. 12301(a) or 10 U.S.C. 12302, all 
personnel actions relating to the screening program shall be held in 
abeyance, and all members remaining in the Ready Reserve shall be 
considered immediately available for AD service. After such a 
mobilization is ordered, no deferment, delay, or exemption from 
mobilization shall be granted to Ready Reservists because of their 
civilian employment. On involuntary activation of Reserve members under 
10 U.S.C. 12304 (Presidential Reserve Call-Up Authority), the Secretary 
of Defense, or designee, shall make a determination regarding the 
continuation or cessation of personnel actions related to the screening 
program.
    (c) All Ready Reservists shall be retained in the Ready Reserve for 
the entire period of their statutory obligation or voluntary contract. 
Exceptions to that policy are made in paragraphs (g), (h), and (i) of 
this section, or may be made by the Secretaries concerned, in accordance 
with 10 U.S.C. 10145 and 10146.
    (d) A member of the Army National Guard of the United States or the 
Air

[[Page 257]]

National Guard of the United States may be transferred to the Standby 
Reserve only with the consent of the governor or other applicable 
authority of the State, commonwealth, or territory concerned (including 
the District of Columbia) in accordance with 10 U.S.C. 10146.
    (e) Any eligible member of the Standby Reserve may be transferred 
back to the Ready Reserve when the reason for the member's transfer to 
the Standby Reserve no longer exists in accordance with 10 U.S.C. 10150 
and DoD Instruction 1200.15. \1\
---------------------------------------------------------------------------

    \1\ Copies may be obtained at http://web7.whs.osd.mil/corres.htm.
---------------------------------------------------------------------------

    (f) Ready Reservists whose immediate recall to AD during an 
emergency would create an extreme personal or community hardship shall 
be transferred to the Standby Reserve or the Retired Reserve, or shall 
be discharged, as applicable, except as specified in paragraph (b) of 
this section.
    (g) Ready Reservists who are designated key employees or who occupy 
key positions, as defined in this section, shall be transferred to the 
Standby Reserve or the Retired Reserve, or shall be discharged, as 
appropriate, except as specified in paragraph (b) of this section.
    (h) Ready Reservists who are also DoD civilian employees may not 
hold a mobilization assignment to the same positions that they fill as 
civilian employees. Those Ready Reservists shall be reassigned or 
transferred, as applicable. Reserve component military technicians (dual 
status), as members of Reserve units, are excluded from this provision.
    (i) Ready Reservists who are preparing for the ministry in an 
accredited theology or divinity school cannot be involuntarily called to 
AD or required to participate in inactive duty training (IDT) in 
accordance with 10 U.S.C. 12317. Accordingly, such Ready Reservists 
(other than those participating in a military Chaplain Candidate or 
Theology Student Program) shall be transferred to the Standby Reserve 
(active status list) for the duration of their ministerial studies and 
duties at accredited theology or divinity schools. Ready Reservists 
participating in a military Chaplain Candidate or Theology Student 
Program may continue their Ready Reserve affiliation and engage in AD 
and IDT.
    (j) Ready Reservists may not be transferred from the Ready Reserve 
solely because they are students, interns, residents, or fellows in the 
healthcare professions. On mobilization, they either shall be deferred 
or shall be mobilized in a student, intern, resident, or fellow status 
until qualified in the applicable medical specialty, as prescribed by 
the Secretaries of the Military Departments.
    (k) The Secretaries concerned, or their designees, shall make 
determinations for mobilization availability on a case-by-case basis, 
consistent with this part, and not by class or group determinations.



Sec. 44.5  Responsibilities.

    (a) The Deputy Secretary of Defense shall adjudicate, before 
mobilization, conflicts between the mobilization manpower needs of the 
civilian sector and the military that the Ready Reserve Screening 
process has identified, but has not resolved.
    (b) The Assistant Secretary of Defense for Reserve Affairs, under 
the Under Secretary of Defense for Personnel and Readiness, shall:
    (1) Provide oversight and policy support to the overall Ready 
Reserve screening program, and manage and control the Federal sector 
screening program in accordance with 10 U.S.C. 10149, Executive Order 
11190, and pp. 63-66 of House Appropriations Committee Report 95-451, 
which is available from the Government Printing Office, Washington, DC 
20401.
    (2) Annually, provide Federal Agencies with a listing of all Federal 
employees who are also Ready Reservists to assist them in conducting 
employer screening activities.
    (3) Prepare an annual report on the status of Ready Reservists 
employed by the Federal Government.
    (4) Employ the guidance in appendix A of this part in coordinating 
the screening program with employers of Ready Reservists.

[[Page 258]]

    (5) Coordinate conflicts between the mobilization manpower needs of 
the civilian sector and the military identified but not resolved through 
the Ready Reserve Screening process.
    (c) The Secretaries of the Military Departments shall:
    (1) Screen, at least annually, all Ready Reservists under their 
jurisdiction to ensure their immediate availability for active duty (AD) 
and to ensure compliance with 10 U.S.C. 10149.
    (2) Ensure coordination with the Assistant Secretary of Defense for 
Reserve Affairs to resolve conflicts (identified, but not resolved 
through the Ready Reserve screening process) between the mobilization 
manpower needs of the civilian sector and the military.
    (3) Review recommendations for removal of both Federal and other 
civilian employees from the Ready Reserve submitted by employers and 
take applicable action.
    (4) After making a removal determination in response to a petition 
for such action, promptly transmit the results of that determination to 
the Ready Reservist concerned and his/her employer.
    (5) Transfer Ready Reservists identified as occupying key positions 
to the Standby Reserve or the Retired Reserve, or discharge them, as 
applicable.
    (6) Ensure that Ready Reservists not on AD are examined as to 
physical fitness in accordance with DoD Directive 1332.18. \2\
---------------------------------------------------------------------------

    \2\ See footnote 1 to Sec. 44.4(e).
---------------------------------------------------------------------------

    (7) Process members of the Ready Reserve who do not participate 
satisfactorily in accordance with DoD Instruction 1200.15 and DoD 
Directive 1215.13. \3\
---------------------------------------------------------------------------

    \3\ See footnote 1 to Sec. 44.4(e).
---------------------------------------------------------------------------

    (8) Ensure that all Ready Reservists have a favorably completed 
background check for military service suitability on file (e.g., 
Entrance National Agency Check (ENTNAC), NAC).
    (9) Ensure that personnel records systems incorporate information on 
any factors that limit the mobilization availability of a Ready 
Reservist.
    (10) Develop and maintain current information pertaining to the 
mobilization availability of Ready Reservists.



                  Sec. Appendix A to Part 44--Guidance

                       Deputy Secretary of Defense

    The Deputy Secretary of Defense shall adjudicate, before 
mobilization, conflicts between the mobilization manpower needs of the 
civilian sector and the military that the Ready Reserve screening 
process has identified, but has not resolved.

                      Employers of Ready Reservists

                          (a) Federal Employers

    (1) To ensure that Federal employees essential to the continuity of 
the Federal Government are not retained as members of the Ready Reserve, 
the following guidance is provided:
    (i) Conduct annual screening program as provided for by the 
Assistant Secretary of Defense for Reserve Affairs.
    (ii) Responses from Federal Agencies shall be reported under 
Interagency Report Control Number 0912-DoD-AN, ``Ready Reservists in the 
Federal Government,'' in accordance with DoD 8910.1-M. \4\
---------------------------------------------------------------------------

    \4\ See footnote 1 to Sec. 44.4(e).
---------------------------------------------------------------------------

    (iii) Federal Agency heads, or their designees, concerned shall 
designate those positions that are of essential nature to, and within, 
the organization as ``key positions,'' and shall require that they shall 
NOT be filled by Ready Reservists to preclude such positions from being 
vacated during a mobilization. Upon request from Federal Agencies, 
Secretaries of the Military Departments shall verify the essential 
nature of the positions being designated as ``key,'' and shall transfer 
Ready Reservists occupying key positions to the Standby Reserve or the 
Retired Reserve or shall discharge them, as applicable, under 10 U.S.C. 
10149, except as specified in Sec. 44.4 (b).
    (iv) In determining whether or not a position should be designated 
as a ``key position,'' the following questions should be considered by 
the Federal Agency concerned:
    (A) Can the position be filled in a reasonable time after 
mobilization?
    (B) Does the position require technical or managerial skills that 
are possessed uniquely by the incumbent employee?
    (C) Is the position associated directly with defense mobilization?
    (D) Does the position include a mobilization or relocation 
assignment in an Agency having emergency functions, as designated by 
Executive Order 12656?
    (E) Is the position directly associated with industrial or manpower 
mobilization, as designated in Executive Orders 12656 and 12919?
    (F) Are there other factors related to the national defense, health, 
or safety that will make the incumbent of the position unavailable for 
mobilization?

[[Page 259]]

    (2) [Reserved]
    (b) Non-Federal Employers of Ready Reservists. Non-Federal employers 
of Ready Reservists, particularly in the fields of public health and 
safety and defense support industries, are encouraged to adopt personnel 
management procedures designed to preclude conflicts between the 
emergency manpower needs of civilian activities and the military during 
a mobilization. Employers also are encouraged to use the Federal key 
position guidelines contained in this appendix for making their own key 
position designations and, when applicable, for recommending key 
employees for removal from the Ready Reserve.
    (c) All employers who determine that a Ready Reservist is a key 
employee, in accordance with the guidelines in this appendix, should 
promptly report that determination, using the letter format at the end 
of this appendix, to the applicable Reserve personnel center, requesting 
the employee be removed from the Ready Reserve.

                       Individual Ready Reservists

    (a) Each Ready Reservist who is not a member of the Selected Reserve 
is obligated to notify the Secretary concerned of any change of address, 
marital status, number of dependents, or civilian employment and any 
other change that would prevent a member from meeting mobilization 
standards prescribed by the Military Service concerned (10 U.S.C. 
10205).
    (b) All Ready Reservists shall inform their employers of their 
Reserve military obligation.

      List of Reserve Personnel Centers to Which Reserve Screening 
          Determination and Removal Requests Shall be Forwarded

                              Army Reserve

Army Reserve Personnel Command
1 Reserve Way
ATTN: ARPC-PSP-T
St. Louis, MO 63132

                              Naval Reserve

Commander
Navy Personnel Command (Pers 91)
5720 Integrity Drive
Millington, TN 38055-9100

                          Marine Corps Reserve

Commanding General
Marine Corps Reserve Support Command
ATTN: IRR Division
15303 Andrews Road
Kansas City, MO 64147-1207

                            Air Force Reserve

Commander
Air Reserve Personnel Center/DPAF
6760 E. Irvington Pl. 2600
Denver, CO 80280-2600

                       Army and Air National Guard

    Submit requests to the adjutant general of the applicable State, 
commonwealth, or territory (including the District of Columbia).

                           Coast Guard Reserve

Commander (CGPC-RPM)
U.S. Coast Guard Personnel Command
2100 Second St. S.W.
Washington, DC 20593

 Letter Format To Reserve Personnel Centers Requesting That Employee Be 
                     Removed From the Ready Reserve

From: (Employer-Agency or Company)
To: (Appropriate Reserve Personnel Center)
Subject: Request for Employee To Be Removed From the Ready Reserve

    This is to certify that the employee identified below is vital to 
the nation's defense efforts in (his or her) civilian job and cannot be 
mobilized with the Military Services in an emergency for the following 
reasons: [STATE REASONS]
    Therefore, I request that (he/she) be removed from the Ready Reserve 
and that you advise me accordingly when this action has been completed.
    The employee is:

1. Name of employee (last, first, M.I.):
2. Military grade and Reserve component:
3. Social security number:
4. Current home address (street, city, State, and ZIP code):
5. Military unit to which assigned (location and unit number):
6. Title of employee's civilian position:
7. Grade or salary level of civilian position:
8. Date (YYMMDD) hired or assigned to position:

Signature and Title of Agency or Company Official.



PART 45_CERTIFICATE OF RELEASE OR DISCHARGE FROM ACTIVE DUTY (DD FORM 214/5 

SERIES)--Table of Contents



Sec.
45.1 Purpose.
45.2 Applicability and scope.
45.3 Policy and procedures.
45.4 Responsibilities.

Appendix A to Part 45--DD Form 214
Appendix B to Part 45--DD Form 214WS
Appendix C to Part 45--DD Form 215
Appendix D to Part 45--State Directors of Veterans Affairs

    Authority: 10 U.S.C. 1168 and 972.

    Source: 54 FR 7409, Feb. 21, 1989, unless otherwise noted.

[[Page 260]]



Sec. 45.1  Purpose.

    (a) This document revises 32 CFR part 45.
    (b) Prescribes procedures concerning the preparation and 
distribution of revised DD Form 214 to comport with the requirements of 
10 U.S.C. 1168, 972, and 32 CFR part 41 and the control and publication 
of separation program designators (SPDs).



Sec. 45.2  Applicability and scope.

    (a) The provisions of this part apply to the Office of the Secretary 
of Defense, the Military Services, the Joint Staff, and the Defense 
Agencies (hereafter referred to as ``DoD Components''). The term 
``Military Services,'' as used here, refers to the Army, Navy, the Air 
Force, the Marine Corps and, by agreement with the Department of 
Transportation, to the Coast Guard.
    (b) Its provisions include procedures on the preparation and 
distribution of DD Forms 214, 214WS, 215 (Appendices A, B, and C) which 
record and report the transfer or separation of military personnel from 
a period of active duty. (NOTE: Computer-generated formats are 
acceptable substitutes provided Assistant Secretary of Defense (Force 
Management and Personnel) approval is obtained.) DD Forms 214 and 215 
(or their substitutes) will provide:
    (1) The Military Services with a source of information relating to 
military personnel for administrative purposes, and for making 
determinations of eligibility for enlistment or reenlistment.
    (2) The Service member with a brief, clear-cut record of the 
member's active service with the Armed Forces at the time of transfer, 
release, or discharge, or when the member changes status or component 
while on active duty.
    (3) Appropriate governmental agencies with an authoritative source 
of information which they require in the administration of Federal and 
State laws applying to personnel who have been discharged, otherwise 
released, or transferred to a Reserve component while on active duty.
    (c) Its provisions include procedures on the control and 
distribution of all lists of SPDs.



Sec. 45.3  Policy and procedures.

    (a) Administrative issuance or reissuance of DD Forms 214 and 215.
    (1) The DD Form 214 will normally be issued by the command from 
which the member was separated. In those instances where a DD Form 214 
was not issued, the Services concerned may establish procedures for 
administrative issuance.
    (2) The DD Form 214, once issued, will not be reissued except:
    (i) When directed by appropriate appellate authority, Executive 
Order, or by the Secretary concerned.
    (ii) When it is determined by the Service concerned that the 
original DD Form 214 cannot be properly corrected by issuance of a DD 
Form 215 or if the correction would require issuance of more than two DD 
Forms 215.
    (iii) When two DD Forms 215 have been issued and an additional 
correction is required.
    (3) Whenever a DD Form 214 is administratively issued or reissued, 
an appropriate entry stating that fact and the date of such action will 
be made in Block 18, Remarks, of the DD Form 214 unless the appellate 
authority, Executive Order, or Secretarial directive specifies 
otherwise.
    (b) The Military Services will ensure that every member (except as 
limited in paragraph (b)(2) of this section and excluding those listed 
in paragraph (c) of this section being separated from the Military 
Services is given a completed DD Form 214 describing relevant data 
regarding the member's service, and the circumstances of termination. DD 
Form 214 may also be issued under other circumstances prescribed by the 
Military Service concerned. A continuation sheet, if required, will be 
bond paper, and will reference: The DD Form 214 being continued; 
information from blocks 1 through 4; the appropriate block(s) being 
continued; the member's signature, date; and the authorizing official's 
signature. DD Forms 214 are not intended to have any legal effect on 
termination of the member's service.
    (1) Release or discharge from active service. (i) The original of DD 
Form 214 showing separation from a period of active service with a 
Military Service, including release from a status that is legally 
determined to be void, will be

[[Page 261]]

physically delivered to the separate prior to departure from the 
separation activity on the effective date of separation; or on the date 
authorized travel time commences.
    (A) Copy No. 4, containing the statutory or regulatory authority, 
reentry code, SPD code, and narrative reason for separation also will be 
physically delivered to the separatee prior to departure, if he/she so 
requested by initiating Block 30, Member Requests Copy 4.
    (B) Remaining copies of DD Form 214 will be distributed on the day 
following the effective date of separation.
    (ii) When separation is effected under emergency conditions which 
preclude physical delivery, or when the recipient departs in advance of 
normal departure time (e.g., on leave in conjunction with retirement; or 
at home awaiting separation for disability), the original DD Form 214 
will be mailed to the recipient on the effective date of separation.
    (iii) If the separation activity is unable to complete all items on 
the DD Form 214, the form will be prepared as completely as possible and 
delivered to the separatee. The separatee will be advised that a DD Form 
215 will be issued by the Military Service concerned when the missing 
information becomes available; and that it will not be necessary for the 
separatee to request a DD Form 215 for such information.
    (iv) If an optical character recognition format is utilized by a 
Military Service, the first carbon copy of the document will be 
physically delivered or mailed to the separatee as prescribed in 
paragraphs (b) (i) through (iii) of this section.
    (2) Release from active duty for training, full-time training duty, 
or active duty for special work. Personnel being separated from a period 
of active duty for training, full-time training duty, or active duty for 
special work will be furnished a DD Form 214 when they have served 90 
days or more, or when required by the Secretary concerned for shorter 
periods. Personnel shall be furnished a DD Form 214 upon separation for 
cause or for physical disability regardless of the length of time served 
on active duty.
    (3) Continuing on active duty. Members who change their status or 
component, as outlined below, while they are serving on active duty will 
be provided a completed DD form 214 upon:
    (i) Discharge for immediate enlistment or reenlistment (optional--at 
the discretion of the Military Services). However, Military Services not 
providing the DD Form 214 will furnish the member a DD Form 256, 
``Honorable Discharge Certificate,'' and will issue instructions 
requiring those military offices which maintain a member's records to 
provide necessary Service data to the member for application to 
appropriate civilian individuals, groups, and governmental agencies. 
Such data will include Service component, entry data and grades.
    (ii) Termination of enlisted status to accept an appointment to 
warrant or commissioned officer grade.
    (iii) Termination of a temporary appointment to accept a permanent 
warrant or commission in the Regular or Reserve components of the Armed 
Forces.
    (iv) Termination of an officer appointment in one of the Military 
Services to accept appointment in another Service.
    (c) DD Form 214 need not be prepared for: (1) Personnel found 
disqualified upon reporting for active duty and who do not enter 
actively upon duties in accordance with orders.
    (2) Personnel whose active duty, active duty for training, full-time 
training duty or active duty for special work is terminated by death.
    (3) Personnel being removed from the Temporary Disability Retired 
List.
    (4) Enlisted personnel receiving temporary appointments to warrant 
or commissioned officer grades.
    (5) Personnel whose temporary warrant or commissioned officer status 
is terminated and who remain on active duty to complete an enlistment.
    (6) Personnel who terminate their Reserve component status to 
integrate into a Regular component.
    (7) Personnel separated or discharged who have been furnished a 
prior edition of this form, unless that form is in need of reissuance 
for some other reason.

[[Page 262]]

    (d) Preparation. The Military Departments will issue instructions 
governing the preparation of DD Form 214, consistent with the following:
    (1) DD Form 214 is an important record of service which must be 
prepared accurately and completely. Any unavoidable corrections and 
changes made in the unshaded areas of the form during preparation shall 
be neat, legible and initialed on all copies by the authenticating 
official. The recipient will be informed that making any unauthorized 
change or alteration of the form will render it void.
    (2) Since DD Form 214 is often used by civilian personnel, 
abbreviations should be avoided.
    (3) Copies of DD Form 214 transmitted to various governmental 
agencies shall be legible, especially those provided to the Veterans 
Administration (Department of Veterans Affairs, effective March 15, 
1989, in accordance with section 18(a), Public Law 100-527 and the 
Department of Labor).
    (4) The authority for a member's transfer or discharge will be cited 
by reference to the appropriate Military Service regulation, 
instruction, or manual, followed by the appropriate separation program 
designator on copies 2, 4, 7, and 8 only. A narrative description to 
identify the reason for transfer or separation will not be used on copy 
1.
    (5) To assist the former Service member in employment placement and 
job counseling, formal inservice training courses successfully completed 
during the period covered by the form will be listed in Block 14, 
Military Education; e.g., medical, dental, electronics, supply, 
administration, personnel or heavy equipment operations. Training 
courses for combat skills will not be listed. See 1978 Guide to the 
Evaluation of Educational Experiences in the Armed Services for commonly 
accepted course titles and abbreviations.
    (6) For the purpose of reemployment rights (DoD Directive 1205.12) 
\1\) all extensions of service, except those under 10 U.S.C. 972, are 
considered to be at the request and for the convenience of the 
Government. In these cases, Block 18 of DD Form 214 will be annotated to 
indicate ``Extension of service was at the request and for the 
convenience of the Government.''
---------------------------------------------------------------------------

    \1\ Copies may be obtained if needed, from the U.S. Naval 
Publications and forms Center, Attn: Code 1062, 5801 Tabor Avenue, 
Philadelphia, PA.
---------------------------------------------------------------------------

    (7) When one or more of the data items on the DD Form 214 are not 
available and the document is issued to the separatee, the applicable 
block(s) will be annotated ``See Remarks.'' In such cases, Block 18 will 
contain the entry ``DD Form 215 will be issued to provide missing 
information.'' When appropriate, Block 18 will also reflect the amount 
of disability pay, and the inclusive dates of any nonpay/excess leave 
days.
    (8) The authorizing official (E-7, GS-7 or above) will sign the 
original in ink ensuring that the signature is legible on all carbon 
copies. If not, a second signature may be necessary on a subsequent 
carbon copy. The authorized official shall be an E-7, GS-7, or higher 
grade, except that the Service concerned may authorize chiefs of 
installation separation activities (E-5, GS-5, or above) to serve in 
this capacity if designated in writing by the responsible commander and/
or director (0-4, or above).
    (9) The following are the only authorized entries in Block 24, 
Character of Service, as appropriate: ``Honorable,'' ``Under Honorable 
Conditions (General),'' ``Under Other Than Honorable Conditions,'' ``Bad 
Conduct,'' ``Dishonorable,'' or ``Uncharacterized.'' When a discharge 
has been upgraded, the DD Form 214 will be annotated on copies 2 through 
8 in Block 18 to indicate the character of service has been upgraded; 
the date the application for upgrade was made; and the effective date of 
the corrective action.
    (10) The date entered in Block 12.a. shall be the date of enlistment 
for the earliest period of continuous active service for which a DD Form 
214 was not previously issued. For members who have previously 
reenlisted without being issued a DD Form 214, and who are being 
separated with any discharge characterization except ``Honorable,'' the 
following statement shall appear as the first entry in Block 18., 
``Remarks,'' on the DD Form 214: ``CONTINUOUS HONORABLE ACTIVE

[[Page 263]]

SERVICE FROM (applicable date) UNTIL (applicable date).'' The ``from'' 
date shall be the date of initial entry into active duty, or the first 
day of service for which a DD Form 214 was not previously issued, as 
applicable; the ``until'' date shall be the date before commencement of 
the current enlistment.
    (11) For Service members retiring from active duty enter in Block 
18., ``Subject to active duty recall by Service Secretary.''
    (12) For Service members being transferred to the Individual Ready 
Reserve, enter in Block 18., ``Subject to active duty recall and/or 
annual screening.''
    (e) Distribution. The Military Services will prescribe procedures 
governing the distribution of copies of the DD Forms 214 and 215, 
consistent with their internal requirements, and the following:
    (1) DD Form 214--(i) Copy No. 1 (original). To the member.
    (ii) Copy No. 2. To be used as the Military Services' record copy.
    (iii) Copy No. 3. To the Veterans Administration (Department of 
Veterans Affairs, effective March 15, 1989, in accordance with section 
18(a), Data Processing Center (214), 1614 E. Woodword Street, Austin, 
Texas 78772. A reproduced copy will also be provided to the hospital 
with the medical records if the individual is transferred to a VA 
hospital. If the individual completes VA Form 21-5267, ``Veterans 
Application for Compensation or Pension,'' include a copy of the DD Form 
214 with medical records forwarded to the VA regional office having 
jurisdiction over the member's permanent address. When an individual is 
in Service and enlisting or reenlisting in an active duty status or 
otherwise continuing on active duty in another status, copy No. 3 will 
not be forwarded to the VA.
    (iv) Copy No. 4. To the member, if the member so requested by having 
initialed Block 30. If the member does not request this copy, it may be 
retained in the master military personnel record, to be available in 
case the member requests a copy later.
    (v) Copy No. 5. To Louisiana UCX/UCFE, Claims Control Center, 
Louisiana Department of Labor, P.O. Box 94246, Capitol Station, Baton 
Rouge, Louisiana 70804-9246.
    (vi) Copy No. 6. To the appropriate State Director of Veterans 
Affairs (see enclosure 4), if the member so requested by having checked 
``Yes'' in Block 20, ``Member Requests Copy Be Sent to Director of 
Veterans Affairs.'' The member must specify the State. If the member 
does not request the copy be mailed, it may be utilized as prescribed by 
the Military Service concerned.
    (vii) Copies No. 7 and 8. To be distributed in accordance with 
regulations issued by the Military Service concerned.
    (viii) Additional Copy Requirements. Discharged Alien Deserters. 
Provide one reproduced copy of Copy No. 1 to the U.S. Department of 
State, Visa Office--SCA/VO, State Annex No. 2, Washington, DC 20520, to 
assist the Visa Office in precluding the unwarranted issuance of visas 
to discharged and alien deserters in accordance with DoD Directive 
1325.2 \2\. Place of birth will be entered in Block 18.
---------------------------------------------------------------------------

    \2\ See footnote 1 to Sec. 545.3(d)(6).
---------------------------------------------------------------------------

    (2) DD Form 214-ws. Utilized to facilitate the preparation of DD 
Form 214. The document will be used and disposed of in accordance with 
regulations issued by the Military Service concerned.
    (3) DD Form 215. Utilized to correct errors in DD Form 214 
discovered after the original has been delivered and/or distribution of 
copies of the form has been made, and to furnish to separatee 
information not available when the DD Form 214 was prepared. The 
distribution of DD Form 215 will be identical to the distribution of DD 
Form 214.
    (4) Requests for Copies of DD Form 214 Subsequent to Separation. 
Agencies maintaining a separatee's DD Form 214 will provide a copy only 
upon written request by the member. Agencies will provide the member 
with 1 copy with the Special Additional Information section, and 1 copy 
with that information deleted. In the case of DD Form 214 issued prior 
to July 1, 1979, agencies will provide the member with 1 copy containing 
all items of information completed, and 1 copy with the following items 
deleted from the form:

[[Page 264]]

Specific authority and narrative reason for separation, reenlistment 
eligibility code, and separation program designator/number.
    (i) In those cases where the member has supplied an authorization to 
provide a copy of the DD Form 214 to another individual or group, the 
copy furnished will not contain the Special Additional Information 
section or, in the case of DD forms issued prior to July 1, 1979, those 
items listed in paragraph (e)(4) of this section.
    (ii) A copy will be provided to authorized personnel for official 
purposes only.
    (f) Procurement. Arrangements for procurement of DD Forms 214, 214-
ws, and 215 will be made by the Military Services.
    (g) Modification of Forms. The modification of the content or format 
of DD Forms 214, 214-ws, and 215 may not be accomplished without prior 
authorization of the Assistant Secretary of Defense (Force Management 
and Personnel) (ASD(FM&P)). Requests to add or delete information will 
be coordinated with the other Military Services in writing, prior to 
submission to the ASD(FM&P). If a Military Service uses computer 
capability to generate forms, the items of information may be arranged, 
the size of the information blocks may be increased or decreased, and 
copies 7 and/or 8 may be deleted at the discretion of the Service.



Sec. 45.4  Responsibilities.

    (a) The DD Forms 214 and 215 are a source of significant and 
authoritative information used by civilian and governmental agencies to 
validate veteran eligibility for benefits. As such, they are valuable 
forms and, therefore, vulnerable to fraudulent use. Since they are 
sensitive, the forms must be safeguarded at all times. They will be 
transmitted, stored, and destroyed in a manner which will prevent 
unauthorized use. The Military Services will issue instructions 
consistent with the following:
    (1) All DD Forms 214 will be surprinted with a reproducible screen 
tint using appropriate security ink on Blocks 1, 3, 4.a, 4.b, 12, and 18 
through 30. In addition Blocks 1, 3, 5, and 7 of the DD Form 215 will be 
similarly surprinted to make alterations readily discernible. No 
corrections will be permitted in the screened areas.
    (2) All forms will be secured after duty hours.
    (3) All obsolete forms will be destroyed.
    (4) All forms to be discarded, including those which are blank or 
partially completed, and reproduced copies of DD Form 214, will be 
destroyed. No forms will be discarded intact.
    (5) Blank forms given to personnel for educational or instructional 
purposes, and forms maintained for such use, are to be clearly voided in 
an unalterable manner.
    (6) The commander or commanding officer of each unit or activity 
authorized to issue DD Form 214 will appoint, in writing, a commissioned 
officer, warrant officer, enlisted member (grade E-7 or above), or DoD 
civilian (GS-7 or above) who will requisition, control, and issue blank 
DD Forms 214 and 215. The Service concerned may authorize an E-5 or GS-5 
to serve in this capacity.
    (7) The Military Services will monitor the use of DD Form 214 and 
review periodically its issuance to insure compliance with procedures 
for safeguarding.
    (b) The DD Form 214-ws will contain the word ``WORKSHEET'' on the 
body of the form (see Appendix B). This DD Form 214-ws will be treated 
in the same manner as the DD Form 214.
    (c) The Military Services will issue appropriate instructions to 
separation activities stressing the importance of the DD Forms 214 and 
215 in obtaining veterans benefits, reemployment rights, and 
unemployment insurance.
    (d) Standard separation program designator (SPD) codes for officer 
and enlisted personnel developed under the provisions of DoD Instruction 
5000.12 \3\ are published in DoD 5000.12-M.
---------------------------------------------------------------------------

    \3\ See footnote 1 to Sec. 45.3(d)(6).
---------------------------------------------------------------------------

    (1) Requests to add, change, or delete an SPD code shall be 
forwarded by the DoD Component concerned with appropriate justification 
to the Assigned Responsible Agency accountable for evaluating, 
recommending approval of, and maintaining such codes: Department of the 
Navy, Office of The Chief of Naval

[[Page 265]]

Operations, (Attention: OP-161), room 1514, Arlington Annex, Washington, 
DC 20350-2000.
    (2) Requests to add, change, or delete an SPD code will be submitted 
in accordance with section V., DoD Instruction 5000.12 with prior 
written approval by the ASD (FM&P), or his/her designee.
    (e) All lists of SPD codes, including supplemental lists, published 
by the DoD Components will be stamped ``For Official Use Only'' and will 
not be furnished to any agency or individual outside the Department of 
Defense.
    (1) Appropriate provisions of the Freedom of Information Act will be 
used to deny the release of the lists to the public. An individual being 
separated or discharged is entitled access only to his/her SPD code. It 
is not intended that these codes stigmatize an individual in any manner. 
They are intended for internal use by the Department of Defense in 
collecting data to analyze statistical reporting trends that may, in 
turn, influence changes in separation policy.
    (2) Agencies or individuals who come into the possession of these 
lists are cautioned on their use because a particular list may be 
outdated and not reveal correctly the full circumstances relating to an 
individual's separation or discharge.

[[Page 266]]



                 Sec. Appendix A to Part 45--DD Form 214

[GRAPHIC] [TIFF OMITTED] TC23OC91.003


[[Page 267]]


[GRAPHIC] [TIFF OMITTED] TC23OC91.004


[[Page 268]]


[GRAPHIC] [TIFF OMITTED] TC23OC91.005


[[Page 269]]


[GRAPHIC] [TIFF OMITTED] TC23OC91.006


[54 FR 9985, Mar. 9, 1989]

[[Page 270]]



                Sec. Appendix B to Part 45--DD Form 214ws

[GRAPHIC] [TIFF OMITTED] TC23OC91.007


[[Page 271]]





                 Sec. Appendix C to Part 45--DD Form 215

[GRAPHIC] [TIFF OMITTED] TC21OC91.050


[[Page 272]]





     Sec. Appendix D to Part 45--State Directors of Veterans Affairs

                                 Alabama

Director, Department of Veterans Affairs, P.O. Box 1509, Montgomery, AL 
36192-3701.

                                 Alaska

Director, Division of Veterans Affairs, Department of Military & 
Veterans Affairs, 3601 C Street, suite 620, Anchorage, AK 99503.

                             American Samoa

Veterans Affairs Officer, Office of Veterans Affairs, American Samoa 
Government, P.O. Box 2586, Pago Pago, AS 96799.

                                 Arizona

Director of Veterans Affairs, Arizona Veterans Service Commission, 3225 
N. Central Avenue, suite 910, Phoenix, AZ 85012.

                                Arkansas

Director, 1200 West 3rd, room 105, Box 1280, Little Rock, AR 72201.

                               California

Director, Department of Veterans Affairs, 1227 O Street, room 200A, 
Sacramento, CA 95814.

                                Colorado

Director, Division of Veterans Affairs, Department of Social Services, 
1575 Sherman Street, room 122, Denver, CO 80203.

                                Delaware

Chairman, Commission of Veterans Affairs, P.O. Box 1401, Dover, DE 
19901.

                          District of Columbia

Chief, Office of Veterans Affairs, 941 North Capitol Street NE., room 
1211 F, Washington, DC 20421.

                                 Florida

Director, Division of Veterans Affairs, P.O. Box 1437, St. Petersburg, 
FL 33731.

                                 Georgia

Commissioner, Department of Veterans Service, Floyd Veterans Memorial 
Bldg, suite E-970, Atlanta, GA 30334.

                                  Guam

Office of Veterans Affairs, P.O. Box 3279, Agana, Guam 96910.

                                 Hawaii

Director, Department of Social Services & Housing, Veterans Affairs 
Section, 3949 Diamond Head Road, Honolulu, HI 96809-0339.

                                  Idaho

Administrator, Division of Veterans Service, P.O. Box 6675, Boise, ID 
83707.

                               Connecticut

Commandant, Veterans Home and Hospital, 287 West Street, Rocky Hill, CT 
06067.

                                 Indiana

Director, Department of Veterans Affairs, 707 State Office Building, 100 
N. Senate Avenue, Indianapolis, IN 46204.

                                  Iowa

Administrator, Veterans Affairs Division, 7700 NW. Beaver Drive, Camp 
Dodge, Johnston, IA 50131-1902.

                                 Kansas

Executive Director, Kansas Veterans Commission, Jayhawk Tower, suite 
701, 700 SW. Jackson Street, Topeka, KS 66603-3150.

                                Kentucky

Director, Kentucky Center for Veterans Affairs, 600 Federal Place room 
1365, Louisville, KY 40202.

                                Louisiana

Executive Director, Department of Veterans Affairs, P.O. Box 94095, 
Capitol Station, Baton Rouge, LA 70804-4095.

                                  Maine

Director, Bureau of Veterans Services, State Office Building Station 
117, Augusta, ME 04333.

                                Maryland

Executive Director, Maryland Veterans Commission, Federal Bldg.--room 
110, 31 Hopkins Plaza, Baltimore, MD 21201.

                                Illinois

Director, Department of Veterans Affairs, 208 West Cook Street, 
Springfield, IL 62705.

                                Michigan

Director, Michigan Veterans Trust Fund, P.O. Box 30026, Ottawa Bldg, No. 
Tower, 3rd Floor, Lansing, MI 48909.

                                Minnesota

Commissioner, Department of Veterans Affairs, Veterans Service Building, 
2nd Floor, St. Paul, MN 55155.

                               Mississippi

President, State Veterans Affairs Board, 120 North State Street, War 
Memorial Building, room B-100, Jackson, MS 39201.

[[Page 273]]

                                Missouri

Director, Division of Veterans Affairs, P.O. Drawer 147, Jefferson City, 
MO 65101.

                                 Montana

Administrator, Veterans Affairs Division, P.O. Box 5715, Helena, MT 
59604.

                                Nebraska

Director, Department of Veterans Affairs, P.O. Box 95083, State Office 
Building, Lincoln, NE 68509.

                                 Nevada

Commissioner, Commission for Veterans Affairs, 1201 Terminal Way, room 
108, Reno, NV 89520.

                              Massachusetts

Commissioner, Department of Veterans Services, 100 Cambridge Street--
room 1002, Boston, MA 02202.

                               New Jersey

Director, Division of Veterans Programs & Special Services, 143 E. State 
Street, room 505, Trenton, NJ 08608.

                               New Mexico

Director, Veterans Service Commission, P.O. Box 2324, Santa Fe, NM 
87503.

                                New York

Director, Division of Veterans Affairs, State Office Building 
6A-19, Veterans Highway, Hauppauge, NY 11788.

                             North Carolina

Asst Secretary for Veterans Affairs, Division of Veterans Affairs, 227 
E. Edenton Street, Raleigh, NC 27601.

                              North Dakota

Commissioner, Department of Veterans Affairs, 15 North Broadway, suite 
613, Fargo, ND 58102.

                                  Ohio

Director, Division of Soldiers Claims & Veterans Affairs, State House 
Annex, room 11, Columbus, OH 43215.

                                Oklahoma

Director, Department of Veterans Affairs, P.O. Box 53067, Oklahoma City, 
OK 73152.

                              New Hampshire

Director, State Veterans Council, 359 Lincoln Street, Manchester, NH 
03103.

                                 Oregon

Director, Department of Veterans Affairs, Oregon Veterans Building, 700 
Summer Street NE., suite 150, Salem, OR 97310-1270.

                              Pennsylvania

Director, Department of Military Affairs, Bureau for Veterans Affairs, 
Fort Indiantown Gap, Bldg 5-0-47, Annville, PA 17003-5002.

                               Puerto Rico

Director, Bureau of Veterans Affairs & Human Resources, Department of 
Labor, 505 Munoz Rivera Avenue, Hato Rey, PR 00918.

                              Rhode Island

Chief, Veterans Affairs Office, Metacom Avenue, Bristol, RI 02809.

                             South Carolina

Director, Department of Veterans Affairs, Brown State Office Building, 
1205 Pendleton Street, Columbia, SC 29201.

                              South Dakota

Director, Division of Veterans Affairs, 500 East Capitol Avenue, State 
Capitol Building, Pierre, SD 57501-5083.

                                Tennessee

Commissioner, Department of Veterans Affairs, 215 8th Avenue, North, 
Nashville, TN 37203.

                                  Texas

Executive Director, Veterans Affairs Commission of Texas, Box 12277, 
Capitol Station, Austin, TX 78711.

                                  Utah

No DVA.

                                 Vermont

Director, Veterans Affairs Office, State Office Building, Montpelier, VT 
05602.

                                Virginia

Director, Division of War Veterans Claims, 210 Franklin Road, SW., room 
1002, P.O. Box 809, Roanoke, VA 24004.

                             Virgin Islands

Director, Division of Veterans Affairs, P.O. Box 890, Christiansted, St. 
Croix, VI 00820.

                               Washington

Director, Department of Veterans Affairs, P.O. Box 9778, Mail Stop PM-
41, Olympia, WA 95804.

[[Page 274]]

                              West Virginia

Director, Department of Veterans Affairs, 605 Atlas Building, 
Charleston, WV 25301-9778.

                                Wisconsin

Secretary, Department of Veterans Affairs, P.O. Box 7843, 77 North 
Dickinson Street, Madison, WI 53707.



PART 47_ACTIVE DUTY SERVICE FOR CIVILIAN OR CONTRACTUAL GROUPS--Table of 

Contents



Sec.
47.1 Purpose.
47.2 Applicability and scope.
47.3 Definitions.
47.4 Policy.
47.5 Responsibilities.
47.6 Procedures.

Appendix A to Part 47--Instructions for Submitting Group Applications 
          Under Public Law 95-202
Appendix B to Part 47--The DoD Civilian/Military Service Review Board 
          and the Advisory Panel

    Authority: 38 U.S.C. 106 note.

    Source: 54 FR 39993, Sept. 29, 1989, unless otherwise noted.



Sec. 47.1  Purpose.

    This document:
    (a) Revises 32 CFR part 47 and implements Public Law 95-202.
    (b) Directs the Secretary of the Air Force to determine if an 
established group of civilian employees or contract workers provided 
service to the U.S. Armed Forces in a manner considered active military 
service for Department of Veterans Affairs (VA) benefits.
    (c) Establishes the DoD Civilian/Military Service Review Board and 
the Advisory Panel.
    (d) Establishes policy, assigns responsibilities, prescribes 
application procedures for groups and individuals, and clarifies the 
factors used to determine active duty (AD) service.



Sec. 47.2  Applicability and scope.

    This part:
    (a) Applies to the Office of the Secretary of Defense (OSD), the 
Military Departments, and by agreement with the Department of 
Transportation (DoT), the U.S. Coast Guard.
    (b) Applies to any group application considered under Public Law 95-
202 after September 11, 1989 and to any individual who applies for 
discharge documents as a member of a group recognized by the Secretary 
of the Air Force.



Sec. 47.3  Definitions.

    Armed conflict. A prolonged period of sustained combat involving 
members of the U.S. Armed Forces against a foreign belligerent. The term 
connotes more than a military engagement of limited duration or for 
limited objectives, and involves a significant use of military and 
civilian forces.
    (a) Examples of armed conflict are World Wars I and II, and the 
Korean and Vietnam Conflicts.
    (b) Examples of military actions that are not armed conflicts are as 
follows:
    (1) The incursion into Lebanon in 1958, and the peacekeeping force 
there in 1983 and 1984.
    (2) The incursions into the Dominican Republic in 1965 and into 
Libya in 1986.
    (3) The intervention into Grenada in 1983.
    Civilian or contractual group. An organization similarly situated to 
the Women's Air Forces Service Pilots (a group of Federal civilian 
employees attached to the U.S. Army Air Force in World War II). Those 
organization members rendered service to the U.S. Armed Forces during a 
period of armed conflict in a capacity that was then considered civilian 
employment with the Armed Forces, or the result of a contract with the 
U.S. Government, to provide direct support to the Armed Forces.
    Recognized group. A group whose service the Secretary of the Air 
Force administratively has determined to have been ``active duty for the 
purposes of all laws administered by the Department of Veterans 
Affairs''; i.e., VA benefits under 38 U.S.C. 101.
    Similarly situated. A civilian or contractual group is similarly 
situated to the Women's Air Forces Service Pilots when it existed as an 
identifiable group at the time the service was being rendered to the 
U.S. Armed Forces during a period of armed conflict. Persons who 
individually provided support through civilian employment or contract, 
but

[[Page 275]]

who were not members of an identifiable group at the time the services 
were rendered, are not ``similarly situated'' to the Women's Air Forces 
Service Pilots of World War II.



Sec. 47.4  Policy.

    (a) Eligibility for consideration. To be eligible to apply for 
consideration under Public Law 95-202 and this part, a group must:
    (1) Have been similarly situated to the Women's Air Forces Service 
Pilots of World War II.
    (2) Have rendered service to the United States in what was 
considered civilian employment with the U.S. Armed Forces either through 
formal Civil Service hiring or less formal hiring if the engagement was 
created under the exigencies of war, or as the result of a contract with 
the U.S. Government to provide direct support to the U.S. Armed Forces.
    (3) Have rendered that service during a period of armed conflict.
    (4) Consist of living persons to whom VA benefits can accrue.
    (5) Not have already received benefits from the Federal Government 
for the service in question.
    (b) A determination of AD service that is considered to be 
equivalent to active military service is made on the extent to which the 
group was under the control of the U.S. Armed Forces in support of a 
military operation or mission during an armed conflict. The extent of 
control exerted over the group must be similar to that exerted over 
military personnel and shall be determined by, but not necessarily 
limited to, the following:
    (1) Incidents favoring equivalency--(i) Uniqueness of service. 
Civilian service (civilian employment or contractual service) is a vital 
element of the war-fighting capability of the Armed Forces. Civilian 
service during a period of armed conflict is not necessarily equivalent 
to active military service, even when performed in a combat zone. 
Service must be beyond that generally performed by civilian employees 
and must be occasioned by unique circumstances. For civilian service to 
be recognized under this part, the following factors must be present:
    (A) The group was created or organized by U.S. Government 
authorities to fill a wartime need or, if a group was not created 
specifically for a wartime need, but existed before that time, then its 
wartime mission was of a nature to substantially alter the 
organization's prewar character.
    (B) If the application is based on service in a combat zone, the 
mission of the group in a combat zone must have been substantially 
different from the mission of similar groups not in a combat zone.
    (ii) Organizational authority over the group. The concept of 
military control is reinforced if the military command authority 
determines such things as the structure of the civilian organization, 
the location of the group, the mission and activities of the group, and 
the staffing requirements to include the length of employment and pay 
grades of the members of the group.
    (iii) Integration into the military organization. Integrated 
civilian groups are subject to the regulations, standards, and control 
of the military command authority.
    (A) Examples include the following:
    (1) Exchanging military courtesies.
    (2) Wearing military clothing, insignia, and devices.
    (3) Assimilating the group into the military organizational 
structure.
    (4) Emoluments associated with military personnel; i.e., the use of 
commissaries and exchanges, and membership in military clubs.
    (B) A group fully integrated into the military would give the 
impression that the members of the group were military, except that they 
were paid and accounted for as civilians.
    (C) Integration into the military may lead to an expectation by 
members of the group that the service of the group imminently would be 
recognized as active military service. Such integration acts in favor of 
recognition.
    (iv) Subjection to military discipline. During past armed conflicts, 
U.S. military commanders sometimes restricted the rights or liberties of 
civilian members as if they were military members.
    (A) Examples include the following:
    (1) Placing members under a curfew.
    (2) Requiring members to work extended hours or unusual shifts.

[[Page 276]]

    (3) Changing duty assignments and responsibilities.
    (4) Restricting proximity travel to and from the military 
installation.
    (5) Imposing dress and grooming standards.
    (B) Consequences for noncompliance might include a loss of some 
privilege, dismissal from the group, or trial under military law. Such 
military discipline acts in favor of recognition.
    (v) Subjection to military justice. Military members are subject to 
the military criminal justice system. During times of war, ``persons 
serving with or accompanying an Armed Force in the field'' are subject 
to the military criminal justice code. Those who were serving with the 
U.S. Armed Forces may have been treated as if they were military and 
subjected to court-martial jurisdiction to maintain discipline. Such 
treatment is a factor in favor of recognition.
    (vi) Prohibition against members of the group joining the armed 
forces. Some organizations may have been formed to serve in a military 
capacity to overcome the operation of existing laws or treaty or because 
of a governmentally established policy to retain individuals in the 
group as part of a civilian force. These factors act in favor of 
recognition.
    (vii) Receipt of military training and/or achievement of military 
capability. If a group employed skills or resources that were enhanced 
as the result of military training or equipment designed or issued for 
that purpose, this acts toward recognition.
    (2) Incidents not favoring equivalency--(i) Submission to the U.S. 
Armed Forces for protection. A group that seeks protection and 
assistance from the U.S. Armed Forces and submits to military control 
for its own well-being is not deemed to have provided service to the 
Armed Forces equivalent to AD military service, even though the group 
may have been as follows:
    (A) Armed by the U.S. military for defensive purposes.
    (B) Routed by the U.S. military to avoid the enemy.
    (C) Instructed by the U.S. military for the defense of the group 
when attacked by, or in danger of attack by, the enemy.
    (D) Otherwise submitted themselves to the U.S. military for 
sustenance and protection.
    (ii) Permitted to resign. The ability of members to resign at will 
and without penalty acts against military control. Penalty may be direct 
and severe, such as confinement, or indirect and moderate, such as 
difficult and costly transportation from an overseas location.
    (iii) Prior recognition of group service. Recognition of a group's 
service by agencies of State or local government does not provide 
support in favor of recognition under this part.
    (3) Status of group in international law. In addition to other 
factors, consideration will be given to whether members of the group 
were regarded and treated as civilians, or assimilated to the Armed 
Forces as reflected in treaties, customary international law, judicial 
decisions, and U.S. diplomatic practice.
    (c) Reconsideration. Applications by groups previously denied a 
favorable determination by the Secretary of the Air Force shall be 
reconsidered under this part if the group submits evidence that is new, 
relevant, and substantive. Any request that the DoD Civilian/Military 
Service Review Board established hereunder (see Sec. 47.5(b)) 
determines does not provide new, relevant, and substantive evidence 
shall be returned to the applicant with the reasons for nonacceptance.
    (d) Counsel Representation. Neither the Department of Defense nor 
Department of Transportation shall provide representation by counsel or 
defray the cost of such representation with respect to any matter 
covered by this part.



Sec. 47.5  Responsibilities.

    (a) The Assistant Secretary of Defense (Force Management and 
Personnel) (ASD(FM&P)) shall:
    (1) Appoint a primary and an alternate member in the grade of O-6 or 
GM-15 or higher to the DoD Civilian/Military Service Review Board.
    (2) Exercise oversight over the Military Departments and the U.S. 
Coast Guard for compliance with this Directive and in the issuance of 
discharge documents and casualty reports to members of recognized 
groups.

[[Page 277]]

    (b) The Secretary of the Air Force, as the designated Executive 
Agent of the Secretary of Defense for the administration of Public Law 
95-202 shall:
    (1) Establish the DoD Civilian/Military Service Review Board and the 
Advisory Panel.
    (2) Appoint as board president a member or employee of the Air Force 
in grade O-6 or GM-15 or higher.
    (3) Request the Secretary of Transportation to appoint an additional 
voting member from the U.S. Coast Guard when the board is considering 
the application of a group claiming active Coast Guard service.
    (4) Provide a recorder and an assistant to maintain the records of 
the board and administer the functions of this part.
    (5) Provide nonvoting legal advisors and historians.
    (6) Publish notices of group applications and other Public Law 95-
202 announcements in the Federal Register.
    (7) Consider the rationale and recommendations of the DoD Civilian/
Military Service Review Board.
    (8) Determine whether the service rendered by a civilian or 
contractual group shall be considered AD service to the U.S. Armed 
Forces for all laws administered by the VA. The decision of the 
Secretary of the Air Force is final. There is no appeal.
    (9) Notify the following persons in writing when a group 
determination is made (if the Secretary of the Air Force disagrees with 
the rationale or recommendations of the board, the Secretary of the Air 
Force shall provide the decision and reasons for it in writing to these 
persons):
    (i) The applicant(s) for the group.
    (ii) The Secretary of the Department of Veterans Affairs.
    (iii) The Secretary of the Army.
    (iv) The Secretary of the Navy.
    (v) The ASD (FM&P).
    (vi) The Secretary of Transportation (when a group claims active 
Coast Guard service).
    (c) The Secretary of the Army, Secretary of the Navy, Secretary of 
the Air Force, and Commandant of the Coast Guard shall:
    (1) Appoint to the board a primary and an alternate member in the 
grades of O-6 or GM-15 or higher from their respective Military 
Services.
    (2) Process applications for discharge documents from individuals 
claiming membership in a recognized group in accordance with applicable 
laws, Directives, the Secretary of the Air Force rationale and 
instrument effecting a group determination, and any other instructions 
of the board.
    (3) Determine whether the applicant was a member of a recognized 
group after considering the individual's evidence of membership and 
verifying the service against available Government records.
    (4) Issue a DD Form 214, ``Certificate of Release or Discharge from 
Active Duty,'' and a DD Form 256, ``Honorable Discharge Certificate,'' 
or a DD Form 257, ``General Discharge Certificate,'' as appropriate, 
consistent with DoD Instruction 1336.1 \1\ and DoD Directive 1332.14 \2\ 
and the implementing documents of the appropriate statutes of the 
Military Department concerned or the DoT and the instructions of the DoD 
Civilian/Military Service Review Board.
---------------------------------------------------------------------------

    \1\ Copies may be obtained, if needed, from the U.S. Naval 
Publications and Forms Center, Attn: 1053, 5801 Tabor Avenue, 
Philadelphia, PA 19120.
    \2\ See footnote 1 to Sec. 47.5(c)(4).
---------------------------------------------------------------------------

    (5) Issue a DD Form 1300, ``Report of Casualty,'' in accordance with 
DoD Instruction 1300.9 \3\ if a verified member was killed during the 
period of AD service.
---------------------------------------------------------------------------

    \3\ See footnote 1 to Sec. 47.5(c)(4).
---------------------------------------------------------------------------

    (6) Ensure that each DD Form 214, ``Certificate of Release or 
Discharge from Active Duty,'' and each DD Form 1300, ``Report of 
Casualty,'' have the following statement entered in the ``Remarks'' 
section:

    This document, issued under Public Law 95-202 (38 U.S.C. 106 Note), 
administratively establishes active duty service for the purposes of 
Department of Veterans Affairs benefits.

    (7) Determine the equivalent military pay grade, when required by 
the Department of Veterans Affairs. For VA benefits, a pay grade is 
needed only in cases when an individual was killed or received service-
connected injuries or disease during the recognized period

[[Page 278]]

of AD service. A DD Form 1300 shall be issued with the equivalent pay 
grade annotated for a member who died during the recognized period of 
service. A DD Form 214 shall not include pay grade, unless the 
Department of Veterans Affairs requests that a grade determination be 
given. Determinations of equivalent grade shall be based on the 
following criteria in order of importance:
    (i) Officially recognized organizational grade or equivalent rank.
    (ii) The corresponding rank for civilian pay grade.
    (iii) If neither of the criteria in paragraphs (c)(7) (i) and (ii) 
of this section, and applies, only one of three grades may be issued; 
i.e., O-1, E-4, or E-1. Selection depends on the nature of the job 
performed, the level of supervision exercised, and the military 
privileges to which the individual was entitled.
    (8) Adjudicate applicant challenges to the period of AD service, 
characterization of service, or other administrative aspects of the 
discharge documents issued.



Sec. 47.6  Procedures.

    (a) Submitting group applications. Applications on behalf of a 
civilian or contractual group shall be submitted to the Secretary of the 
Air Force using the instructions in appendix A to this part.
    (b) Processing group applications. (1) When received, the recorder 
shall review the application for sufficiency and either return it for 
more information or accept it for consideration and announce acceptance 
in the Federal Register.
    (2) The recorder shall send the application to the appropriate 
advisory panel for historical review and analysis.
    (3) When received, the recorder shall send the advisory panel's 
report to the applicant for comment. The applicant's comments shall be 
referred to the advisory panel if significant disagreement requires 
resolution. Additional comments from the historians also shall be 
referred to the applicant for comment.
    (4) The DoD Civilian/Military Service Board shall consider the group 
application, as established, in paragraph (a) and paragraphs (b) (1) 
through (3) of this section.
    (5) After the Secretary of the Air Force makes a decision, the 
recorder shall notify the applicant of the decision and announce it in 
the ``Federal Register.''
    (c) Submitting individual applications. When a group is recognized, 
individual members may apply to the appropriate Military Department or 
to the Coast Guard for discharge documents. Submit applications on DD 
Form 2168, ``Application for Discharge of Member or Survivor of Member 
of Group Certified to Have Performed Active Duty with the Armed Forces 
of the United States.'' An application on behalf of a deceased or 
incompetent member submitted by the next of kin must be accompanied by 
proof of death or incompetence.



     Sec. Appendix A to Part 47--Instructions for Submitting Group 

                  Applications Under Public Law 95-202

    A. In Submitting a Group Application: 1. Define the group to include 
the time period that your group provided service to the U.S. Armed 
Forces.
    2. Show the relationship that the group had with the U.S. Armed 
Forces, the manner in which members of the group were employed, and the 
services the members of the group provided to the Armed Forces.
    3. Address each of the factors in Sec. 47.4.
    4. Substantiate and document the application. (The burden of proof 
rests with the applicant.)
    B. Send Completed Group Applications To: Secretary of the Air Force 
(SAF/MRC), DoD Civilian/Military Service Review Board, Washington, DC 
20330-1000.



  Sec. Appendix B to Part 47--The DoD Civilian/Military Service Review 

                      Board and the Advisory Panel

                     A. Organization and Management

    1. The board shall consist of a president selected from the 
Department of the Air Force and one representative each from the OSD, 
the Department of the Army, the Department of the Navy, the Department 
of the Air Force, and the U.S. Coast Guard (when the group claims active 
Coast Guard service). Each member shall have one vote except that the 
president shall vote only to break a tie. The board's decision is 
determined by majority vote. The president and two voting members shall 
constitute a quorum.
    2. The advisory panel shall act as a nonvoting adjunct to the board. 
It shall consist

[[Page 279]]

of historians selected by the Secretaries of the Military Departments 
and, if required, by the Secretary of Transportation. The respective 
Military Departments and the DOT shall ensure that the advisory panel is 
provided with administrative and legal support.

                              B. Functions

    1. The board shall meet in executive session at the call of the 
president, and shall limit its reviews to the following:
    a. Written submissions by an applicant on behalf of a civilian or 
contractual group. Presentations to the board are not allowed.
    b. Written report(s) prepared by the advisory panel.
    c. Any other relevant written information available.
    d. Factors established in this part for determining AD service.
    2. The board shall return to the applicant any application that does 
not meet the eligibility criteria established in Sec. 47.4(a). The 
board only needs to state the reasons why the group is ineligible for 
consideration under this part.
    3. If the board determines that an application is eligible for 
consideration under Sec. 47.4(a), the board shall provide, to the 
Secretary of the Air Force, a recommendation on the AD service 
determination for the group and the rationale for that recommendation 
that shall include, but not be limited to, a discussion of the factors 
listed in Sec. 47.4.
    a. No factors shall be established that require automatic 
recognition. Neither the board nor the Secretary of the Air Force shall 
be bound by any method in reaching a decision.
    b. Prior group determinations made under Public Law 95-202 do not 
bind the board or the Secretary of the Air Force. The board and the 
Secretary of the Air Force fully and impartially shall consider each 
group on its own merit in relation to the factors listed in section D. 
of this Directive.



PART 48_RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN--Table of Contents



                      Subpart A_General Information

Sec.
48.101 Purpose.
48.102 Definitions.

                      Subpart B_Election of Options

48.201 Options.
48.202 Limitation on number of annuities.
48.203 Election of options.
48.204 Change or revocation of election.
48.205 Election form.
48.206 Information regarding elections.

                 Subpart C_Designation of Beneficiaries

48.301 Designation.
48.302 Substantiating evidence regarding dependency and age of 
          dependents.
48.303 Condition affecting entitlement of widow or widower.

                   Subpart D_Reduction of Retired Pay

48.401 Computation of reduction.
48.402 Effective date of reduction.
48.403 Payment of nonwithheld reduction of retired pay.
48.404 Ages to be used.
48.405 Action upon removal from temporary disability retired list.
48.406 Withdrawal and reduction of percentage or amount of 
          participation.

                            Subpart E_Annuity

48.501 General information.
48.502 Effective date of annuity.
48.503 Claims for annuity payments.
48.504 Payment to children.
48.505 Establishing eligibility of annuitants.
48.506 Recovery of erroneous annuity payments.
48.507 Restriction on participation.
48.508 Certain 100 percent disability retirements.

                         Subpart F_Miscellaneous

48.601 Annual report.
48.602 Organization.
48.603 Correction of administrative deficiencies.
48.604 Transition and protective clauses.

    Authority: Sec. 1444, 70A Stat. 111; 10 U.S.C. 1444.

    Source: 34 FR 12092, July 18, 1969, unless otherwise noted.



                      Subpart A_General Information



Sec. 48.101  Purpose.

    The purpose of the Retired Serviceman's Family Protection Plan is to 
permit each member of the uniformed services to elect to receive a 
reduced amount of any retired pay which may be awarded him as a result 
of service in his uniformed service in order to provide an annuity 
payable after his death (while entitled to retired pay) to his widow, 
child, or children, subject to certain limitations specified in the law 
and elaborated in the regulations in this part.

[[Page 280]]



Sec. 48.102  Definitions.

    (a) The terms Plan or RSFPP as hereinafter used means the Retired 
Serviceman's Family Protection Plan (formerly called the Uniformed 
Services Contingency Option Act).
    (b) The term uniformed services means the Army, Navy, Air Force, 
Marine Corps, Coast Guard, Commissioned Corps of Environmental Science 
Services Administration, and Commissioned Corps of Public Health 
Service.
    (c) The term member means a commissioned officer, commissioned 
warrant officer, warrant officer, nurse, flight officer, or a person in 
an enlisted grade (including an aviation cadet) of any of the uniformed 
services, and a person in any of these categories who is entitled to or 
is in receipt of retired pay, except persons excluded in title 10, U.S. 
Code, section 1431(a), as amended.
    (d) The term widow includes widower and refers to the lawful spouse 
of the member on the date of retirement with pay.
    (e) The term child means, in all cases, a member's child, who is 
living on the date of retirement of the member with pay and who meets 
the following requirements:
    (1) A legitimate child under 18 years of age and unmarried.
    (2) A stepchild, under 18 years of age and unmarried, who is in fact 
dependent on the member for support (see paragraphs (f) and (g) of this 
section).
    (3) A legally adopted child, under 18 years of age and unmarried.
    (4) A child, as defined above, who is 18 or more years of age and 
unmarried, and who is incapable of self-support because of being 
mentally defective or physically incapacitated if that condition existed 
prior to reaching age 18.
    (5) A child as defined above, who is at least 18, but under 23 years 
of age and unmarried, who is pursuing a full-time course of study or 
training in a high school, trade school, technical or vocational 
institute, junior college, college, university, or comparable recognized 
educational institution. (Applicable only in the case of members who 
retired on or after Nov. 1, 1968).
    (6) A child loses his eligibility for an annuity under this part if 
he is adopted by a third person before the parent-member's death. His 
eligibility is not affected if he is adopted by a third person after the 
parent-member's death (36 Comp. Gen. 325).
    (f) The term stepchild means a child of a member's spouse by a 
former marriage. The stepchild relationship terminates upon the divorce 
of the parent spouse, but not upon the death of the parent spouse.
    (g) The term in fact dependent means that the stepchild must be 
dependent on the member for over half of his or her support.
    (h) The term retirement means retirement with eligibility to receive 
retired pay.
    (i) The term retired pay includes retired, retirement, equivalent 
and retainer pay awarded as a result of service in the uniformed 
services.
    (j) The term reduced retired pay means the retired pay remaining 
after the cost of participation in RSFPP has been subtracted.
    (k) The term department concerned means (1) the Department of the 
Army with respect to the Army, (2) the Department of the Navy with 
respect to the Navy and Marine Corps, (3) the Department of the Air 
Force with respect to the Air Force, (4) the Department of 
Transportation with respect to the Coast Guard, (5) the Department of 
Commerce with respect to the Environmental Science Services 
Administration, and (6) the Department of Health, Education, and Welfare 
with respect to the Public Health Service.
    (l) The term dependent means the prospective annuitants described in 
paragraphs (d) and (e) of this section.
    (m) The term Board of Actuaries means the Government Actuary in the 
Department of the Treasury, the Chief Actuary of the Social Security 
Administration, and a member of the Society of Actuaries appointed by 
the President to advise the Secretary of Defense on the administration 
of the Plan.
    (n) The term Joint Board means representatives of the uniformed 
services appointed under the provisions of Sec. 48.602.
    (o) The term years of service means years of service creditable in 
the computation of basic pay.
    (p) The term election means the choice of options made by the member 
under the RSFPP. This term includes a

[[Page 281]]

modification of a previous election or an election submitted after a 
revocation of a previous option(s) elected.
    (q) The term elections in effect means valid elections existing on 
the day of retirement.
    (r) A recognized educational institution is defined as a high 
school, trade school, technical or vocational institute, junior college, 
college, university, or comparable recognized educational institution 
which meets one or more of the following criteria:
    (1) It is operated or directly supported by the United States, or a 
State, or local governmental agency.
    (2) It is accredited by a nationally recognized or State recognized 
accrediting agency.
    (3) It is approved as an educational institution by a State or local 
governmental agency.
    (4) Its credits are accepted for transfer (or for admission) by 
three or more accredited schools on the same basis as credits from an 
accredited school.



                      Subpart B_Election of Options



Sec. 48.201  Options.

    As provided in Sec. 48.203, a member may elect one or more of the 
following annuities. The amount must be specified at time of election, 
and may not be for more than 50 per centum nor less than 12\1/2\ per 
centum of his retired pay, in no case may be less than a $25 monthly 
annuity be elected. If the election is made in terms of dollars, the 
amount may be more than 50 per centum of the retired pay that he would 
receive if he were to retire at the time of election; however, if such 
elected amount exceeds 50 per centum of his retired pay when he does 
retire, it shall be reduced to an amount equal to such 50 per centum. 
Also, if the dollar amount elected is less than 12\1/2\ per centum of 
his retired pay when he does retire, it shall be increased to an amount 
equal to such 12\1/2\ per centum.
    (a) Option 1 is an annuity payable to or on behalf of his widow, the 
annuity to terminate upon her death or remarriage.
    (b) Option 2 is an annuity payable to or on behalf of his surviving 
child or children as defined in Sec. 48.102, the annuity to terminate 
when there ceases to be at least one such surviving child eligible to 
receive the annuity. Each payment under such annuity shall be paid in 
equal shares to or on behalf of the surviving children remaining 
eligible at the time the payment is due. A member who had this option in 
effect on the date of retirement, and who retired on or after November 
1, 1968, may apply to the Secretary concerned to have a child (other 
than a child described in Sec. 48.102(e)(4)) who is at least 18 but 
less than 23 years of age considered not to be an eligible beneficiary 
under this paragraph (b) or Sec. 48.202. Normally such applications 
will be approved.
    (c) Option 3 is an annuity to or on behalf of his widow and 
surviving child or children. Such annuity shall be paid to the widow 
until death or remarriage, and thereafter each payment under such 
annuity shall be paid in equal shares to or on behalf of the surviving 
children remaining eligible at the time the payment is due. A member may 
provide for allocating, during the period of the surviving spouse's 
eligibility, a part of the annuity under this subpart B for payment to 
those of his surviving children who are not children of that spouse. The 
sum allotted will not exceed the equitable share for which such children 
would be eligible after the death of the widow.
    (d) When no eligible beneficiary remains to benefit from the option 
elected, the member's retired pay will be restored (except as provided 
in Sec. 48.604, for certain members retired before Aug. 13, 1968). All 
elections on file on Aug. 13, 1968, for members not entitled to receive 
retired pay will be considered to include the restoration feature with 
attendant cost factors being applied at time of retirement. For the 
purpose of this paragraph, a child (other than a child described in 
Sec. 48.102(e)(4)) who is at least 18 but less than 23 years of age, 
and is not pursuing a course of study as defined in Sec. 48.102(e)(5), 
shall be considered an eligible beneficiary unless an approved 
application by the member pursuant to Sec. 48.201(b) that such a child 
is not to be considered an eligible beneficiary is in effect (for 
members who retire on or after Nov. 1, 1968).

[[Page 282]]



Sec. 48.202  Limitation on number of annuities.

    When a member desires to provide both the annuity provided by Option 
1 and Option 2, he may elect amounts that, in total, meet the 
limitations specified in Sec. 48.201. The cost of each annuity, and the 
amount of each annuity shall be determined separately. A member may not 
elect the combination of Options 1 and 3 or Options 2 and 3 in any case. 
The combined amount of the annuities may not be more than 50 per centum 
nor less than 12\1/2\ per centum of his retired pay. In no case may less 
than a $25 per month combined annuity be provided.



Sec. 48.203  Election of options.

    (a) A member who has completed less than 19 years of service as 
defined in Sec. 48.102(o) may elect to receive a reduced amount of 
retired pay in order to provide one or more of the annuities as 
specified in Sec. Sec. 48.201 and 48.202, payable after his death while 
entitled to retired pay to or on behalf of his surviving widow, child, 
or children. To be effective, the election by such a member must be 
dated, signed, witnessed, and delivered to appropriate service 
officials, or postmarked not later than midnight on the day in which he 
completes 19 years of service. Such an election will become effective 
immediately upon subsequent retirement. The latest election, change, or 
revocation made in accordance with this subsection will, if otherwise 
valid, be the effective election, unless superseded by a change as 
provided in paragraph (b) of this section.
    (b) Except as provided in paragraph (c) of this section, a member 
who fails or declines to make an election before completion of 19 years 
of service may make an election after that time. However, unless the 
election is made at least 2 years prior to the date the member becomes 
entitled to receive retired pay, it will not be effective. The same 
applies to subsequent changes or revocations made prior to retirement.
    (c) If an election, revocation, or change was made prior to August 
13, 1968, the 19-year and 2-year provisions are automatically in effect 
on August 13, 1968, for members who were not entitled to retired pay on 
such date, unless the member applies under Sec. 48.604(d) to remain 
under the provisions of the law prior to August 13, 1968. In this case 
the ``18 years of service'' and ``3 years prior to receipt of retired 
pay'' rules will apply.
    (d) A member retired for physical disability on or after November 1, 
1968 who is awarded retired pay prior to completion of 19 years of 
service may make an election which is subject to the restrictions set 
forth in Sec. 48.507. The election by such member shall be made before 
the first day for which he is entitled to retired pay. Elections made 
under this paragraph prior to November 1, 1968, must be made by the 
member retiring for physical disability prior to completing 18 years.
    (e) If, because of military operations, a member is assigned to an 
isolated station, or is missing, interned in a neutral country, captured 
by a hostile force, or beleaguered or besieged, and for that reason is 
unable to make an election before completing 19 years of service, he may 
make the election within 1 year after he ceases to be assigned to that 
station or returns to the jurisdiction of his service as the case may 
be, and such election shall become effective immediately upon subsequent 
retirement.
    (f) A member to whom retired pay is granted retroactively, and who 
is otherwise eligible to make an election, may make the election within 
90 days after receiving notice that such pay has been granted him.
    (g) Whenever a member is determined to be mentally incompetent by 
medical officers of the uniformed services or of the Veterans 
Administration, or is adjudged mentally incompetent by a court of 
competent jurisdiction and because of such mental incompetency is 
incapable of making any election within the time limitations prescribed 
by the Plan, the Secretary of the Department concerned may make the 
appropriate election on behalf of such member upon request of the 
spouse, or if there be no spouse, by or on behalf of the child or 
children of such member. If such member is subsequently determined to be 
mentally competent by the Veterans Administration or a court of 
competent jurisdiction, he may, within 180 days after such determination 
or

[[Page 283]]

judgment, change or revoke the election made on his behalf. In such a 
case, the change or revocation will be effective on the date of the 
member's request for such change or revocation. Deductions previously 
made shall not be refunded.
    (h) All elections on file on August 13, 1968, for members not 
entitled to receive retired pay shall be subject to the provisions of 
this section unless the member makes the application specified in Sec. 
48.604(d).
    (i) A person who was a former member of the armed forces on November 
1, 1953, and who is granted retired pay after that date, may, at the 
time he is granted that pay, make an election as provided in Sec. 
48.201.



Sec. 48.204  Change or revocation of election.

    (a) A change of election is a change in the amount of the annuity or 
annuities under any option, or a change in any option or options 
selected. A revocation is a cancellation of a previous election and 
constitutes a withdrawal from coverage under the Plan.
    (b) A member may change or revoke his election as often as he 
desires prior to the completion of 19 years of service. Such a change or 
revocation must be dated, signed, witnessed, and delivered to 
appropriate service officials, or postmarked not later than midnight on 
the day in which the member completes 19 years of service. The latest 
election, change, or revocation which is submitted in accordance with 
this subsection will be effective at retirement.
    (c) A member who desires to make an election or change or revoke his 
election after he has completed 19 years of service may do so prior to 
his retirement. However, such an election, change or revocation will be 
effective only if at least 2 years elapse between the date of the 
election, change, or revocation and the date of eligibility to receive 
retired pay.
    (d) A revocation will not prohibit the filing of a new election at a 
later date which will become valid under applicable validation 
provisions.
    (e) A member may, on or after November 1, 1968, at any time prior to 
his retirement, change or revoke his election (provided the change does 
not increase the amount of the annuity elected) to reflect a change in 
the marital or dependency status of the member of his family caused by 
death, divorce, annulment, remarriage, or acquisition of a child, if 
such change or revocation is made within 2 years of such change in 
status.
    (f) Notification of a change in family status is not a change of 
election.
    (g) All changes and revocations on file on August 13, 1968, for 
members not entitled to retired pay shall be subject to the provisions 
of this section unless the member makes the application specified in 
Sec. 48.604(d).



Sec. 48.205  Election form.

    The form for making election after October 31, 1968, is prescribed 
as Election of Options, Retired Serviceman's Family Protection Plan, DD 
Form 1688. \1\ It will be submitted as directed herein. All copies will 
be signed, and any otherwise complete, signed copy, when properly 
submitted, may be used to substantiate the fact of election, 
modification, revocation, or change in family status.
---------------------------------------------------------------------------

    \1\ Filed as part of the original document. Copies may be obtained 
from Military Personnel Office.
---------------------------------------------------------------------------



Sec. 48.206  Information regarding elections.

    (a) All members of the Reserve component who will have accumulated 
sufficient service to be eligible for retired pay at age 60, will be 
counseled on the Plan before reaching their 57th birth dates in order to 
insure that valid elections can be made prior to their 58th birth dates. 
An election, modification, or revocation submitted subsequent to 
attaining age 58 will be valid only if it is made and submitted at least 
2 years prior to the first date for which retired pay is granted.
    (b) It is the responsibility of the department concerned to provide 
election forms and to promulgate information concerning the benefits of 
the Plan to all members so as to allow a timely election.
    (c) Members retiring for physical disability prior to the completion 
of 19

[[Page 284]]

years of service will, prior to retirement, be counseled and furnished 
information concerning the operation of the Plan.



                 Subpart C_Designation of Beneficiaries



Sec. 48.301  Designation.

    (a) All legal beneficiaries described in Sec. 48.102 must be named 
at the date of retirement pursuant to the option elected. Although a 
member without dependents may make an election, it will not be effective 
unless he has eligible dependents at the time of his retirement.
    (b) When a change in family status occurs prior to retirement which 
would effect a change as provided in Sec. 48.204(e), new DD Form 1688, 
\1\ Election of Options, Retired Servicemen's Family Protection Plan, 
should be filed to evidence such change.
---------------------------------------------------------------------------

    \1\ See footnote 1 to Sec. 48.205.
---------------------------------------------------------------------------



Sec. 48.302  Substantiating evidence regarding dependency and age of 

dependents.

    At the time of submitting the election, or prior to retirement, the 
member must indicate his wife's and youngest child birth date as 
applicable to the option elected. At or before the time of his 
retirement, he must submit proof of final dissolution of prior 
marriages, if any, both for himself and his spouse. The age of the 
dependents must be substantiated by a birth certificate or other 
competent evidence. The birth date of a member must be verified by his 
service record. All required substantiating evidence must be at the 
disbursing office which would normally pay the member retired pay or 
retainer pay immediately following retirement so as to permit the 
establishment of accurate pay accounts and to prevent the creation of 
indebtedness or overpayments.



Sec. 48.303  Condition affecting entitlement of widow or widower.

    A member may have a different lawful spouse at the time of 
retirement from the lawful spouse he had at the time of election. The 
lawful spouse at the time of retirement is the spouse eligible for an 
annuity at the time of member's death. Divorce of the member will remove 
the former spouse as a prospective annuitant.



                   Subpart D_Reduction of Retired Pay



Sec. 48.401  Computation of reduction.

    (a) The reduction to be made in the retired pay of a member who has 
made an election shall be computed by the uniformed service concerned in 
each individual case, based upon tables of factors prepared by the Board 
of Actuaries. The computation shall be based upon the applicable table 
in effect on the date of retirement.
    (b) An adjustment may be made in the reduction of retired pay upon 
the finding of an administrative error or a mistake of fact (see Sec. 
48.603).
    (c) If a member elects to be covered by option 3, and on the date he 
is awarded retired pay has no children eligible to receive the annuity, 
or has only a child or children aged 18-22 (other than a child described 
in Sec. 48.102(e)(4) and elects, at retirement, that such child or 
children shall not be considered to be eligible beneficiaries, he shall 
have his costs computed as though he had elected option 1. If he elects 
option 3, and on the date he is awarded retired pay has no wife eligible 
for the annuity, he shall have his costs computed as though he had 
elected option 2.
    (d) If a member elects option 3, and after he becomes entitled to 
retired pay, there is no eligible spouse because of death or divorce, 
upon the retired member's application, no deductions from his retired 
pay shall be made after the last day of the month in which there ceases 
to be an eligible spouse. Children otherwise eligible will continue to 
be eligible for the annuity in event of the member's death. No amounts 
by which the member's retired pay is reduced before that date may be 
refunded to or credited on behalf of that person.
    (e) The amount of reduction in retired pay and the annuity payable 
established for each individual at the time of his retirement shall 
remain unaltered except as provided in Sec. 48.203(g), paragraphs (b) 
and (d) of this

[[Page 285]]

section, and Sec. 48.406, regardless of future pay increases or 
decreases.



Sec. 48.402  Effective date of reduction.

    The effective date of reduction in retired pay will be the effective 
date of retirement with pay. The reduction in retired pay will be 
terminated on the date the member ceases to be entitled to retired pay 
or on the first day of the month following that in which there is no 
eligible beneficiary (for exception to this rule see Sec. 48.604).



Sec. 48.403  Payment of nonwithheld reduction of retired pay.

    (a) A member of a uniformed service who is entitled to retired pay 
and has made an election shall, during any period in which he is not 
receiving retired pay (including periods of active duty), deposit the 
amount which would have been withheld from his retired pay had he been 
receiving that pay.
    (b) Such deposit will be payable to Treasurer of the United States 
and shall be forwarded monthly to the disbursing office which would 
normally pay the member his retired pay.
    (c) The disbursing office will in all cases inform the member of the 
amount to be deposited and when such deposits are to be made.
    (d) In the event deposits are not made within 30 days of the due 
date, the disbursing office will inform the member concerned that he is 
delinquent from such due date and thereafter his designated 
beneficiaries will not be eligible for the annuity provided under the 
Plan until the arrears have been paid. The notification of delinquency 
will advise the member that 15 additional days have been granted to him 
in which to remit his deposit, and that if the arrears are not deposited 
within that period, the member will be charged interest to include the 
first day of delinquency. In no case will the expiration date of the 15 
days exceed a date later than 45 days from the date the deposit was due. 
The interest will be computed monthly and the rate will be that used in 
computing the cost tables in effect on the date of the member's 
retirement. If such member later becomes in receipt of retired pay, any 
arrears with compound interest will be withheld.



Sec. 48.404  Ages to be used.

    Ages to be used for calculating reductions of retired pay will be 
the ages of the member and his eligible dependents on their nearest 
birth dates as of the date of the member's retirement.



Sec. 48.405  Action upon removal from temporary disability retired list.

    (a) Any member on the temporary disability retired list established 
pursuant to title 10, United States Code, chapter 61, who has elected to 
receive reduced retired pay in order to provide one or more of the 
annuities specified in the Plan, and who is subsequently removed from 
the list due to any reason other than permanent retirement, shall have 
refunded to him a sum which represents the difference between the amount 
by which his retired pay has been reduced and the cost of an amount of 
term insurance which is equal to the protection provided his dependents 
during the period he was on the temporary disability retired list.
    (b) If the member concerned is returned to active duty, his election 
as previously made will continue or he may change or revoke the election 
as provided in Sec. 48.204.
    (c) Time creditable for the purpose of the two year interval 
required to make a change, revocation or new election valid includes 
service before, during, and after temporary disability retirement. (See 
Sec. Sec. 48.203 and 48.204 and Comptroller Decision B-144158, Dec. 23, 
1960.) Active duty after removal from a temporary disability retired 
list is a necessity in such a case.



Sec. 48.406  Withdrawal and reduction of percentage or amount of 

participation.

    A retired member who is participating in the Plan may revoke his 
election and withdraw from participation, or he may reduce the amount of 
the survivor annuity; however, an approved withdrawal or reduction will 
not be effective earlier than the first day of the seventh month 
beginning after the date his application is received by the Finance 
Center controlling his pay record. (For special rules covering 
participating members retired before Aug. 13, 1968, without option 4, 
see Sec. 48.604.)

[[Page 286]]

No application for reduction will be approved which requests a change in 
options. A request to reduce an annuity or to withdraw from the Plan is 
irrevocable, and a retired member who withdraws may never again 
participate in the Plan. Approval of a request for a reduction will not 
be made when such reduction results in an annuity of less than 12\1/2\ 
per centum of the member's retired pay or less than a $25 monthly 
annuity. The new cost, after such reduction in survivor annuity, will be 
computed from the applicable cost table at the time of retirement. No 
amounts by which a member's retired pay is reduced may be refunded to, 
or credited on behalf of, the member by virtue of an application made by 
him under this section.



                            Subpart E_Annuity



Sec. 48.501  General information.

    Except as provided in Sec. 48.506(a), no annuity payable under the 
Plan shall be assignable, or subject to execution, levy, attachment, 
garnishment, or other legal process. Annuities payable under this Plan 
shall be in addition to any pensions or other payments to which the 
beneficiaries may now or hereafter be entitled under other provisions of 
law (except as provided in Sec. 48.507), and may not be considered as 
income under any law administered by the Veterans Administration, except 
for the purpose of title 38 U.S. Code, section 415(g) and chapter 15.



Sec. 48.502  Effective date of annuity.

    All annuities payable under this Plan except those payable to 
beneficiaries described in Sec. 48.102(e)(5) shall accrue from the 
first day of the month in which the retired member dies and shall be due 
and payable not later than the 15th day of each month following that 
month and in equal monthly installments thereafter, except that no 
annuity shall accrue or be paid for the month in which entitlement to 
that annuity terminates.



Sec. 48.503  Claims for annuity payments.

    Upon official notification of the death of a retired member who has 
elected under the Plan, the department concerned shall forward to the 
eligible surviving beneficiaries the necessary information and forms (DD 
Form 768. Application for Annuity Under Retired Serviceman's Family 
Protection Plan) for making application for annuity payments. Such 
information shall include the place to which the application should be 
forwarded and to which questions regarding annuity payments should be 
addressed.



Sec. 48.504  Payment to children.

    (a) Annuities for a child or children will be paid to the child's 
guardian, or if there is no guardian, to the person(s) who has care, 
custody, and control of the child or children.
    (b) Annuities payable to or on behalf of an eligible child as 
defined in Sec. 48.102(e)(5) accrue as of the first day of the month in 
which--
    (1) The member (upon whose retired pay the annuity is based) dies if 
the eligible child's 18th birthday occurs in the same or a preceding 
month, or
    (2) The 18th birthday of an eligible child occurs if the member 
(upon whose retired pay the annuity is based) died in a preceding month, 
or
    (3) A child first becomes (or again becomes) eligible, if that 
eligible child's 18th birthday and the death of the member (upon whose 
retired pay the annuity is based) both occurred in a preceding month or 
months. An eligible child under this paragraph might become ineligible 
at age 18 and again become eligible by furnishing proof of pursuit of a 
full time course of study or training as enumerated in Sec. 
48.102(e)(5).



Sec. 48.505  Establishing eligibility of annuitants.

    (a) Eligibility for the annuity will be established by such evidence 
as may be required by the department concerned.
    (b) If a child as defined in Sec. 48.102(e)(4) is a designated 
annuitant, the department concerned shall require proof that the 
incapacity for self-support existed prior to the child's reaching age 
18. Proof that continued incapacitation exists will be required every 2 
years after the child passes the age of 18 years, except in a case where 
medical prognosis indicates recovery is impossible.
    (c) If a child as defined in Sec. 48.102(e)(5) is a designated 
annuitant, as specified

[[Page 287]]

in Sec. 48.504(b), the department concerned shall require proof from 
the institution at least semiannually that the child is pursuing a full-
time course of training as prescribed. For the purpose of proving 
eligibility, a child is considered to be pursuing a full-time course of 
study or training during an interval between school periods that does 
not exceed 150 days if he has demonstrated to the satisfaction of the 
department concerned that he has a bona fide intention of commencing, 
resuming, or continuing to pursue a full-time course of study or 
training in a recognized educational institution immediately after that 
interval.



Sec. 48.506  Recovery of erroneous annuity payments.

    (a) The Secretary of the Department concerned is empowered to use 
any means provided by law to recover amounts of annuities erroneously 
paid to any individual under the Plan. He may authorize such recovery by 
adjustment in subsequent payments to which the individual is entitled.
    (b) There need be no recovery when in the judgment of the Secretary 
of the Department concerned and the Comptroller General of the United 
States, the individual to whom the erroneous payment was made is without 
fault and recovery would be contrary to the purpose of the Plan or would 
be against equity and good conscience.



Sec. 48.507  Restriction on participation.

    (a) If a person who has made an election under the Plan retires with 
a physical disability before the completion of 19 years of service and 
then dies in retirement, his widow and eligible children can receive 
monthly survivor annuities only if they are not eligible for Dependency 
and Indemnity Compensation payments from the Veterans Administration. If 
either the widow or children are eligible for dependency and indemnity 
compensation payments, then payment of annuities under the Plan may not 
be made to any member of the family. If the retired member's death was 
not service connected and his widow or children are not eligible for 
payments from the Veterans Administration, they may receive the provided 
annuity payments under the Plan.
    (b) If the beneficiaries on whose behalf the election was made are 
restricted as in paragraph (a) of this section, from receiving 
annuities, the amounts withheld from the elector's retired pay as a 
result of the election will be refunded to the beneficiaries, less the 
amount of any annuity paid, and without interest.
    (c) Upon notification of the death of the member in such a case, the 
department concerned will take the following actions:
    (1) Notify the Central Office of the Veterans Administration of the 
death of the member and request that the department concerned be advised 
if an award is made under chapter 11 or 13, title 38 U.S. Code.
    (2) Request the Central Office of the Veterans Administration to 
forward to the eligible widow and/or children an application form for 
survivor benefits under chapter 11 or 13, title 38 U.S. Code, with 
instructions for completion and submission.



Sec. 48.508  Certain 100 percent disability retirement.

    An election filed on or after August 13, 1968 is not effective if 
the member dies within 30 days following retirement from a disability of 
100 per centum (under the standard schedule of rating disabilities in 
use by the Veterans Administration) for which he was retired under 
chapter 61, title 10 U.S. Code, unless--
    (a) Such disability was the result of injury or disease received in 
line of duty as a direct result of armed conflict, or
    (b) His widow or children are not entitled to dependency and 
indemnity compensation under chapter 13, title 38 U.S. Code.



                         Subpart F_Miscellaneous



Sec. 48.601  Annual report.

    Information and data for the preparation of the annual report of the 
Board of Actuaries will be compiled by the Office of the Secretary of 
Defense after promulgation of appropriate instructions to each of the 
uniformed services.

[[Page 288]]

These instructions will be in consonance with Executive Order 10499 
directing the Secretary of Defense to administer the provisions of the 
law.



Sec. 48.602  Organization.

    (a) The Joint Board for the Retired Serviceman's Family Protection 
Plan shall consist of a principal and alternate member for each of the 
uniformed services appointed by the Department Secretary concerned. 
Alternate members will be authorized to act in the absence of the 
principal. The Board shall meet on call of the Chairman. A quorum shall 
consist of representatives of at least four of the participating 
services.
    (b) The Board shall establish procedures for the orderly conduct of 
business to be approved by the Assistant Secretary of Defense (Manpower 
and Reserve Affairs).
    (c) The duties of the Board will include but not be limited to the 
following:
    (1) Making recommendations to the Secretary of Defense for:
    (i) Changes to the Executive order delegating to him functions 
conferred on the President by law,
    (ii) Changes to these regulations,
    (iii) Changes to the law, and
    (iv) Measures to insure uniform operating policies.
    (2) Promulgating tables of annuity costs as prescribed by the Board 
of Actuaries.
    (3) Promulgating cost of term insurance as required in Sec. 48.405.
    (d) The Chairmanship of the Joint Board will be designated by the 
Assistant Secretary of Defense (Manpower and Reserve Affairs).



Sec. 48.603  Correction of administrative deficiencies.

    (a) The Secretary of the Department concerned may correct any 
election or any change or revocation of an election when he considers it 
necessary to correct an administrative error. Information on such 
corrections shall be compiled by each department for inclusion in the 
report prescribed by Sec. 48.601.
    (b) Except when procured by fraud, a correction under the section is 
final and conclusive on all officers of the United States.
    (c) Information on all corrections to elections under this Plan 
which are made under title 10, section 1552, United States Code, shall 
be compiled and this information forwarded to the Board of Actuaries for 
an actuarial analysis.



Sec. 48.604  Transition and protective clauses.

    (a) A retired member who is participating in the Plan without 
inclusion of former option 4, which provided for restoration of retired 
pay when no eligible beneficiary remained in his election, may before 
September 1, 1969, elect to have that option included in his election. 
The election to include such option 4 becomes effective on the first day 
of the month following the month in which that election was made. The 
retired member must on or before the effective date agree to pay to the 
Treasury both the total additional amount to cover the option had it 
been effective when he retired, and the interest which would have 
accrued on the additional amount up to the effective date of the new 
option 4. No such additional amount (except interest) shall accrue for 
months after the first month for which the individual had no eligible 
beneficiary. However, if undue hardship or financial burden would 
result, payments may be made in from 2 to 12 monthly installments when 
the monthly amount involved is $25 or less, or in from 2 to 36 
installments when the monthly amounts involved exceed $25. No amounts by 
which a member's retired pay was reduced may be refunded to, or credited 
on behalf of, the retired member by virtue of an application made by him 
under this section. A retired member who does not make the additional 
election provided under this section within the time limits will not be 
allowed to reduce an annuity or withdraw from participation in the Plan 
as provided by Sec. 48.406.
    (b) Members who have elected and are not yet retired will 
automatically participate under the provisions of Sec. 48.201.
    (c) Elections in effect on August 13, 1968, will remain under the 
cost tables applicable on the date of the member's retirement.

[[Page 289]]

    (d) Any member who has filed an election, modification, or 
revocation prior to August 13, 1968, may before September 1, 1969, 
submit a written application to the Secretary concerned requesting that 
such election, modification, or revocation remain under the time-of-
election provisions of the law applicable on the date it was filed.



PART 50_PERSONAL COMMERCIAL SOLICITATION ON DOD INSTALLATIONS--Table of 

Contents



                           General Provisions

Sec.
50.1 Purpose.
50.2 Applicability.
50.3 Definitions.
50.4 Policy.
50.5 Responsibilities.
50.6 Procedures.
50.7 Information requirements.

Appendix A to Part 50--Life Insurance Products and Securities
Appendix B to Part 50--Overseas Life Insurance Registration Program

    Authority: 5 U.S.C. 301.

    Source: 71 FR 38764, July 10, 2006, unless otherwise noted.

                           General Provisions



Sec. 50.1  Purpose.

    This part:
    (a) Implements section 577 of Public Law No. 109-163 (2006) and 
establishes policy and procedures for personal commercial solicitation 
on DoD installations.
    (b) Continues the established annual DoD registration requirement 
for the sale of insurance and securities on DoD installations overseas.
    (c) Identifies prohibited practices that may cause withdrawal of 
commercial solicitation privileges on DoD installations and establishes 
notification requirements when privileges are withdrawn.
    (d) Establishes procedures for persons solicited on DoD 
installations to evaluate solicitors.
    (e) Prescribes procedures for providing financial education programs 
to military personnel.



Sec. 50.2  Applicability.

    This part:
    (a) Applies to the Office of the Secretary of Defense, the Military 
Departments, the Chairman of the Joint Chiefs of Staff, the Combatant 
Commands, the Office of the Inspector General of the Department of 
Defense, the Defense Agencies, the DoD Field Activities, and all other 
organizational entities in the Department of Defense (hereafter referred 
to collectively as the ``DoD Components'').
    (b) Does not apply to services furnished by residential service 
companies, such as deliveries of milk, laundry, newspapers, and related 
services to personal residences on the installation requested by the 
resident and authorized by the installation commander.
    (c) Applies to all other personal commercial solicitation on DoD 
installations. It includes meetings on DoD installations of private, 
non-profit, tax-exempt organizations that involve commercial 
solicitation. Attendance at these meetings shall be voluntary and the 
time and place of such meetings are subject to the discretion of the 
installation commander or his or her designee.



Sec. 50.3  Definitions.

    Agent. An individual who receives remuneration as a salesperson or 
whose remuneration is dependent on volume of sales of a product or 
products. (Also referred to as ``commercial agent'' or ``producer''). In 
this part, the term ``agent'' includes ``general agent'' unless the 
content clearly conveys a contrary intent.
    ``Authorized'' Bank and/or Credit Union. Bank and/or credit union 
selected by the installation commander through open competitive 
solicitation to provide exclusive on-base delivery of financial services 
to the installation under a written operating agreement.
    Banking institution. An entity chartered by a State or the Federal 
Government to provide financial services.
    Commercial sponsorship. The act of providing assistance, funding, 
goods, equipment (including fixed assets), or services to an MWR program 
or event by an individual, agency, association,

[[Page 290]]

company or corporation, or other entity (sponsor) for a specified 
(limited) period of time in return for public recognition or advertising 
promotions. Enclosure 9 of DoD Instruction 1015.10 \1\ provides general 
policy governing commercial sponsorship.
---------------------------------------------------------------------------

    \1\ Copies may be obtained at http://www.dtic.mil/whs/directives/.
---------------------------------------------------------------------------

    Credit union. A cooperative nonprofit association, incorporated 
under the Credit Union Act (12 U.S.C. 1751), or similar state statute, 
for the purpose of encouraging thrift among its members and creating a 
source of credit at a fair and reasonable rate of interest.
    DoD installation. For the purposes of this part, any Federally 
owned, leased, or operated base, reservation, post, camp, building, or 
other facility to which DoD personnel are assigned for duty, including 
barracks, transient housing, and family quarters.
    DoD personnel. For the purposes of this part, all active duty 
officers (commissioned and warrant) and enlisted members of the Military 
Departments and all civilian employees, including nonappropriated fund 
employees and special Government employees, of the Department of 
Defense.
    Financial services. Those services commonly associated with 
financial institutions in the United States, such as electronic banking 
(e.g., ATMs), in-store banking, checking, share and savings accounts, 
fund transfers, sale of official checks, money orders and travelers 
checks, loan services, safe deposit boxes, trust services, sale and 
redemption of U.S. Savings Bonds, and acceptance of utility payments and 
any other consumer-related banking services.
    General agent. A person who has a legal contract to represent a 
company. See the definition of ``Agent'' in this section.
    Insurance carrier. An insurance company issuing insurance through an 
association reinsuring or coinsuring such insurance.
    Insurance product. A policy, annuity, or certificate of insurance 
issued by an insurer or evidence of insurance coverage issued by a self-
insured association, including those with savings and investment 
features.
    Insurer. An entity licensed by the appropriate department to engage 
in the business of insurance.
    Military services. See Joint Publication 1-02, ``DoD Dictionary of 
Military and Associated Terms.'' \2\
---------------------------------------------------------------------------

    \2\ See http://www.dtic.mil/doctrine/jel/doddict/indexs.html.
---------------------------------------------------------------------------

    Normal home enterprises. Sales or services that are customarily 
conducted in a domestic setting and do not compete with an 
installation's officially sanctioned commerce.
    Personal commercial solicitation. Personal contact, to include 
meetings, meals, or telecommunications contact, for the purpose of 
seeking private business or trade.
    Securities. Mutual funds, stocks, bonds, or any product registered 
with the Securities and Exchange Commission except for any insurance or 
annuity product issued by a corporation subject to supervision by State 
insurance authorities.
    Suspension. Temporary termination of privileges pending completion 
of a commander's inquiry or investigation.
    Withdrawal. Termination of privileges for a set period of time 
following completion of a commander's inquiry or investigation.



Sec. 50.4  Policy.

    (a) It is DoD policy to safeguard and promote the welfare of DoD 
personnel as consumers by setting forth a uniform approach to the 
conduct of all personal commercial solicitation and sales to them by 
dealers and their agents. For those individuals and their companies that 
fail to follow this policy, the opportunity to solicit on military 
installations may be limited or denied as appropriate.
    (b) Command authority includes authority to approve or prohibit all 
commercial solicitation covered by this part. Nothing in this part 
limits an installation commander's inherent authority to deny access to 
vendors or to establish time and place restrictions on commercial 
activities at the installation.



Sec. 50.5  Responsibilities.

    (a) The Principal Deputy Under Secretary of Defense for Personnel 
and

[[Page 291]]

Readiness (PDUSD(P&R)), under the Under Secretary of Defense for 
Personnel and Readiness, shall:
    (1) Identify and publish policies and procedures governing personal 
commercial solicitation on DoD installations consistent with the policy 
set forth in this part.
    (2) Maintain and make available to installation commanders and 
appropriate Federal personnel the current master file of all individual 
agents, dealers, and companies who have their privileges withdrawn at 
any DoD installation.
    (3) Develop and maintain a list of all State Insurance 
Commissioners' points of contact for DoD matters and forward this list 
to the Military Services.
    (b) The Heads of the DoD Components shall:
    (1) Ensure implementation of this part and compliance with its 
provisions.
    (2) Require installations under their authority to report each 
instance of withdrawal of commercial solicitation privileges.
    (3) Submit lists of all individuals and companies who have had their 
commercial solicitation privileges withdrawn at installations under 
their authority to the PDUSD(P&R) in accordance with this part.



Sec. 50.6  Procedures.

    (a) General. (1) No person has authority to enter a DoD installation 
to transact personal commercial solicitation as a matter of right. 
Personal commercial solicitation may be permitted only if the following 
requirements are met:
    (i) The solicitor is duly licensed under applicable Federal, State, 
or municipal laws and has complied with installation regulations.
    (ii) A specific appointment has been made for each meeting with the 
individual concerned. Each meeting is conducted only in family quarters 
or in other areas designated by the installation commander.
    (iii) The solicitor agrees to provide each person solicited the 
personal commercial solicitation evaluation included in DD Form 2885 \3\ 
during the initial appointment. The person being solicited is not 
required to complete the evaluation. However, completed evaluations 
should be sent by the person who was solicited to the office designated 
by the installation commander on the back of the evaluation form.
---------------------------------------------------------------------------

    \3\ Copies may be obtained from http://www.dtic.mil/whs/directives/
infomgt/forms/forminfo/forminfopage2239.html.
---------------------------------------------------------------------------

    (iv) The solicitor agrees to provide DoD personnel with a written 
reminder, prior to their making a financial commitment, that free legal 
advice is available from the Office of the Staff Judge Advocate.
    (2) Solicitors on overseas installations shall be required to 
observe, in addition to the above, the applicable laws of the host 
country. Upon request, the solicitor must present documentary evidence 
to the installation commander that the company they represent, and its 
agents, meet the applicable licensing requirements of the host country.
    (b) Life insurance products and securities. (1) Life insurance 
products and securities offered and sold to DoD personnel shall meet the 
prerequisites described in Sec. 50.3.
    (2) Installation commanders may permit insurers and their agents to 
solicit on DoD installations if the requirements of paragraph (a) of 
this section are met and if they are licensed under the insurance laws 
of the State where the installation is located. Commanders will ensure 
the agent's license status and complaint history are checked with the 
appropriate State or Federal regulators before granting permission to 
solicit on the installation.
    (3) In addition, before approving insurance and financial product 
agents' requests for permission to solicit, commanders shall review the 
list of agents and companies currently barred, banned, or limited from 
soliciting on any or all DoD installations. This list may be viewed via 
the Personal Commercial Solicitation Report ``quick link'' at http://
www.commanderspage.com. In overseas areas, the DoD Components shall 
limit insurance solicitation to those insurers registered under the 
provisions of appendix B to this part.

[[Page 292]]

    (4) The conduct of all insurance business on DoD installations shall 
be by specific appointment. When establishing the appointment, insurance 
agents shall identify themselves to the prospective purchaser as an 
agent for a specific insurer.
    (5) Installation commanders shall designate areas where interviews 
by appointment may be conducted. The opportunity to conduct scheduled 
interviews shall be extended to all solicitors on an equitable basis. 
Where space and other considerations limit the number of agents using 
the interviewing area, the installation commander may develop and 
publish local policy consistent with this concept.
    (6) Installation commanders shall make disinterested third-party 
insurance counseling available to DoD personnel desiring counseling. 
Financial counselors shall encourage DoD personnel to seek legal 
assistance or other advice from a disinterested third-party before 
entering into a contract for insurance or securities.
    (7) In addition to the solicitation prohibitions contained in 
paragraph (d) of this section, DoD Components shall prohibit the 
following:
    (i) The use of DoD personnel representing any insurer, dealing 
directly or indirectly on behalf of any insurer or any recognized 
representative of any insurer on the installation, or as an agent or in 
any official or business capacity with or without compensation.
    (ii) The use of an agent as a participant in any Military Service-
sponsored education or orientation program.
    (iii) The designation of any agent or the use by any agent of titles 
(for example, ``Battalion Insurance Counselor,'' ``Unit Insurance 
Advisor,'' ``Servicemen's Group Life Insurance Conversion Consultant,'') 
that in any manner, states, or implies any type of endorsement from the 
U.S. Government, the Armed Forces, or any State or Federal agency or 
government entity.
    (iv) The use of desk space for interviews for other than a specific 
prearranged appointment. During such appointment, the agent shall not be 
permitted to display desk signs or other materials announcing his or her 
name or company affiliation.
    (v) The use of an installation ``daily bulletin,'' marquee, 
newsletter, Web page, or other official notice to announce the presence 
of an agent and/or his or her availability.
    (c) Supervision of on-base commercial activities. (1) All pertinent 
installation regulations shall be posted in a place easily accessible to 
those conducting and receiving personal commercial solicitation on the 
installation.
    (2) The installation commander shall make available a copy of 
installation regulations to anyone conducting on-base commercial 
solicitation activities warning that failure to follow the regulations 
may result in the loss of solicitation privileges.
    (3) The installation commander, or designated representative, shall 
inquire into any alleged violations of this part or of any questionable 
solicitation practices. The DD Form 2885 is provided as a means to 
supervise solicitation activities on the installation.
    (d) Prohibited practices. The following commercial solicitation 
practices shall be prohibited on all DoD installations:
    (1) Solicitation of recruits, trainees, and transient personnel in a 
group setting or ``mass'' audience and solicitation of any DoD personnel 
in a ``captive'' audience where attendance is not voluntary.
    (2) Making appointments with or soliciting military or DoD civilian 
personnel during their normally scheduled duty hours.
    (3) Soliciting in barracks, day rooms, unit areas, transient 
personnel housing, or other areas where the installation commander has 
prohibited solicitation.
    (4) Use of official military identification cards or DoD vehicle 
decals by active duty, retired or reserve members of the Military 
Services to gain access to DoD installations for the purpose of 
soliciting. When entering the installation for the purpose of 
solicitation, solicitors with military identification cards and/or DoD 
vehicle decals must present documentation issued by the installation 
authorizing solicitation.
    (5) Procuring, attempting to procure, supplying, or attempting to 
supply non-public listings of DoD personnel

[[Page 293]]

for purposes of commercial solicitation, except for releases made in 
accordance with DoD Directive 5400.7. \4\
---------------------------------------------------------------------------

    \4\ See footnote 1 to Sec. 50.3.
---------------------------------------------------------------------------

    (6) Offering unfair, improper, or deceptive inducements to purchase 
or trade.
    (7) Using promotional incentives to facilitate transactions or to 
eliminate competition.
    (8) Using manipulative, deceptive, or fraudulent devices, schemes, 
or artifices, including misleading advertising and sales literature. All 
financial products, which contain insurance features, must clearly 
explain the insurance features of those products.
    (9) Using oral or written representations to suggest or give the 
appearance that the Department of Defense sponsors or endorses any 
particular company, its agents, or the goods, services, and commodities 
it sells.
    (10) DoD personnel making personal commercial solicitations or sales 
to DoD personnel who are junior in rank or grade, or to the family 
members of such personnel, except as authorized in Section 2-205 and 5-
409 of the Joint Ethics Regulation, DoD 5500.7-R. \5\
---------------------------------------------------------------------------

    \5\ See footnote 1 to Sec. 50.3.
---------------------------------------------------------------------------

    (11) Entering into any unauthorized or restricted area.
    (12) Using any portion of installation facilities, including 
quarters, as a showroom or store for the sale of goods or services, 
except as specifically authorized by DoD Directive 1330.17 \6\ and DoD 
Instructions 1015.10, 1000.15 \7\ and 1330.21. \8\ This does not apply 
to normal home enterprises that comply with applicable State and local 
laws and installation rules.
---------------------------------------------------------------------------

    \6\ See footnote 1 to Sec. 50.3.
    \7\ See footnote 1 to Sec. 50.3.
    \8\ See footnote 1 to Sec. 50.3.
---------------------------------------------------------------------------

    (13) Soliciting door to door or without an appointment.
    (14) Unauthorized advertising of addresses or telephone numbers used 
in personal commercial solicitation activities conducted on the 
installation, or the use of official positions, titles, or organization 
names, for the purpose of personal commercial solicitation, except as 
authorized in DoD 5500.7-R. Military grade and Military Service as part 
of an individual's name (e.g., Captain Smith, U.S. Marine Corps) may be 
used in the same manner as conventional titles, such as ``Mr.'', 
``Mrs.'', or ``Honorable''.
    (15) Contacting DoD personnel by calling a government telephone, 
faxing to a government fax machine, or by sending e-mail to a government 
computer, unless a pre-existing relationship (i.e., the DoD member is a 
current client or requested to be contacted) exists between the parties 
and the DoD member has not asked for contact to be terminated.
    (e) Denial, suspension, and withdrawal of installation solicitation 
privileges. (1) The installation commander shall deny, suspend, or 
withdraw permission for a company and its agents to conduct commercial 
activities on the base if such action is in the best interests of the 
command. The grounds for taking these actions may include, but are not 
limited to, the following:
    (i) Failure to meet the licensing and other regulatory requirements 
prescribed in this part or violations of the State law where the 
installation is located. Commanders will request that appropriate state 
officials determine whether a company or agent violated State law.
    (ii) Commission of any of the practices prohibited in paragraphs 
(b)(6) and (d) of this section.
    (iii) Substantiated complaints and/or adverse reports regarding the 
quality of goods, services, and/or commodities, and the manner in which 
they are offered for sale.
    (iv) Knowing and willful violations of Public Law 90-321.
    (v) Personal misconduct by a company's agent or representative while 
on the installation.
    (vi) The possession of, and any attempt to obtain supplies of direct 
deposit forms, or any other form or device used by Military Departments 
to direct a Service member's pay to a third party, or possession or use 
of facsimiles thereof. This includes using or assisting in using a 
Service member's ``MyPay'' account or other similar Internet medium for 
the purpose of establishing a direct deposit for the purchase of 
insurance or other investment product.

[[Page 294]]

    (vii) Failure to incorporate and abide by the Standards of Fairness 
policies contained in DoD Instruction 1344.9. \9\
---------------------------------------------------------------------------

    \9\ See footnote 1 to Sec. 50.3.
---------------------------------------------------------------------------

    (2) The installation commander may determine that circumstances 
dictate the immediate suspension of solicitation privileges while an 
investigation is conducted. Upon suspending solicitation privileges, the 
commander shall promptly inform the agent and the company the agent 
represents, in writing.
    (3) In suspending or withdrawing solicitation privileges, the 
installation commander shall determine whether to limit such action to 
the agent alone or extend it to the company the agent represents. This 
decision shall be based on the circumstances of the particular case, 
including, but not limited to, the nature of the violations, frequency 
of violations, the extent to which other agents of the company have 
engaged in such practices and any other matters tending to show the 
culpability of an individual and the company.
    (4) If the investigation determines an agent or company does not 
possess a valid license or the agent, company, or product has failed to 
meet other State or Federal regulatory requirements, the installation 
commander shall immediately notify the appropriate regulatory 
authorities.
    (5) In a withdrawal action, the commander shall allow the individual 
or company an opportunity to show cause as to why the action should not 
be taken. To ``show cause'' means an opportunity must be given for the 
aggrieved party to present facts on an informal basis for the 
consideration of the installation commander or the commander's designee. 
The installation commander shall make a final decision regarding 
withdrawal based upon the entire record in each case. Installation 
commanders shall report concerns or complaints involving the quality or 
suitability of financial products or concerns or complaints involving 
marketing methods used to sell these products to the appropriate State 
and Federal regulatory authorities. Also, installation commanders shall 
report any suspension or withdrawal of insurance or securities products 
solicitation privileges to the appropriate State or Federal regulatory 
authorities.
    (6) The installation commander shall inform the Military Department 
concerned of any denial, suspension, withdrawal, or reinstatement of an 
agent or company's solicitation privileges and the Military Department 
shall inform the Office of the PDUSD(P&R), which will maintain a list of 
insurance and financial product companies and agents currently barred, 
banned, or otherwise limited from soliciting on any or all DoD 
installations. This list may be viewed at http://www.commanderspage.com. 
If warranted, the installation commander may recommend to the Military 
Department concerned that the action taken be extended to other DoD 
installations. The Military Department may extend the action to other 
military installations in the Military Department. The PDUSD(P&R), 
following consultation with the Military Department concerned, may order 
the action extended to other Military Departments.
    (7) All suspensions or withdrawals of privileges may be permanent or 
for a set period of time. If for a set period, when that period expires, 
the individual or company may reapply for permission to solicit through 
the installation commander or Military Department originally imposing 
the restriction. The installation commander or Military Department 
reinstating permission to solicit shall notify the Office of the 
PDUSD(P&R) and appropriate State and Federal regulatory agencies when 
such suspensions or withdrawals are lifted.
    (8) The Secretaries of the Military Departments may direct the Armed 
Forces Disciplinary Control Boards in all geographical areas in which 
the grounds for withdrawal action have occurred to consider all 
applicable information and take action that the Boards deem appropriate.
    (9) Nothing in this part limits the authority of the installation 
commander or other appropriate authority from requesting or instituting 
other administrative and/or criminal action against any person, 
including those who violate the conditions and restrictions upon which 
installation entry is authorized.

[[Page 295]]

    (f) Advertising and commercial sponsorship. (1) The Department of 
Defense expects voluntary observance of the highest business ethics by 
commercial enterprises soliciting DoD personnel through advertisements 
in unofficial military publications when describing goods, services, 
commodities, and the terms of the sale (including guarantees, 
warranties, and the like).
    (2) The advertising of credit terms shall conform to the provisions 
of 15 U.S.C. 1601 as implemented by Federal Reserve Board Regulation Z 
according to 12 CFR part 226.
    (3) Solicitors may provide commercial sponsorship to DoD Morale, 
Welfare and Recreation programs or events according to DoD Instruction 
1015.10. However, sponsorship may not be used as a means to obtain 
personal contact information for any participant at these events without 
written permission from the individual participant. In addition, 
commercial sponsors may not use sponsorship to advertise products and/or 
services not specifically agreed to in the sponsorship agreement.
    (4) The installation commander may permit organizations to display 
sales literature in designated locations subject to command policies. In 
accordance with DoD 7000.14-R, \10\ Volume 7(a), distribution of 
competitive literature or forms by off-base banks and/or credit unions 
is prohibited on installations where an authorized on-base bank and/or 
credit union exists.
---------------------------------------------------------------------------

    \10\ See footnote 1 to Sec. 50.3.
---------------------------------------------------------------------------

    (g) Educational programs. (1) The Military Departments shall develop 
and disseminate information and provide educational programs for members 
of the Military Services on their personal financial affairs, including 
such subjects as insurance, Government benefits, savings, budgeting, and 
other financial education and assistance requirements outlined in DoD 
Instruction 1342.27. \11\ The Military Departments shall ensure that all 
instructors are qualified as appropriate for the subject matter 
presented. The services of representatives of authorized on-base banks 
and credit unions may be used for this purpose. Under no circumstances 
shall commercial agents, including representatives of loan, finance, 
insurance, or investment companies, be used for this purpose. 
Presentations shall only be conducted at the express request of the 
installation commander.
---------------------------------------------------------------------------

    \11\ See footnote 1 to Sec. 50.3.
---------------------------------------------------------------------------

    (2) The Military Departments shall also make qualified personnel and 
facilities available for individual counseling on loans and consumer 
credit transactions in order to encourage thrift and financial 
responsibility and promote a better understanding of the wise use of 
credit, as prescribed in DoD 7000.14-R.
    (3) The Military Departments shall encourage military members to 
seek advice from a legal assistance officer, the installation financial 
counselor, their own lawyer, or a financial counselor, before making a 
substantial loan or credit commitment.
    (4) Each Military Department shall provide advice and guidance to 
DoD personnel who have a complaint under DoD 1344.9 or who allege a 
criminal violation of its provisions, including referral to the 
appropriate regulatory agency for processing of the complaint.
    (5) Banks and credit unions operating on DoD installations are 
required to provide financial counseling services as an integral part of 
their financial services offerings. Representatives of and materials 
provided by authorized banks and/or credit unions located on military 
installations may be used to provide the educational programs and 
information required by this part subject to the following conditions:
    (i) If the bank or credit union operating on a DoD installation 
sells insurance or securities or has any affiliation with a company that 
sells or markets insurance or other financial products, the installation 
commander shall consider that company's history of complying with this 
part before authorizing the on-base financial institution to provide 
financial education.
    (ii) All prospective educators must agree to use appropriate 
disclaimers in their presentations and on their other educational 
materials. The disclaimers must clearly indicate that they do not 
endorse or favor any commercial supplier, product, or service, or 
promote the services of a specific financial institution.

[[Page 296]]

    (6) Use of other non-government organizations to provide financial 
education programs is limited as follows:
    (i) Under no circumstances shall commercial agents, including 
employees or representatives of commercial loan, finance, insurance, or 
investment companies, be used.
    (ii) The limitation in paragraph (g)(6)(i) of this section does not 
apply to educational programs and information regarding the Survivor 
Benefits Program and other government benefits provided by tax-exempt 
organizations under section (c)(23) of 26 U.S.C. 501 or by any 
organization providing such a benefit under a contract with the 
Government.
    (iii) Educators from non-government, non-commercial organizations 
expert in personal financial affairs and their materials may, with 
appropriate disclaimers, provide the educational programs and 
information required by this part if approved by a Presidentially-
appointed, Senate-confirmed civilian official of the Military Department 
concerned. Presentations by approved organizations shall be conducted 
only at the express request of the installation commander. The following 
criteria shall be used when considering whether to permit a non-
government, non-commercial organization to present an educational 
program or provide materials on personal financial affairs:
    (A) The organization must qualify as a tax-exempt organization under 
5 U.S.C. 501(c)(3) or 5 U.S.C. 501(c)(23).
    (B) If the organization has any affiliation with a company that 
sells or markets insurance or other financial products, the approval 
authority shall consider that company's history of complying with this 
part.
    (C) All prospective educators must use appropriate disclaimers, in 
their presentations and on their other educational materials, which 
clearly indicate that they and the Department of Defense do not endorse 
or favor any commercial supplier, product, or service or promote the 
services of a specific financial institution.



Sec. 50.7  Information requirements.

    The reporting requirements concerning the suspension or withdrawal 
of solicitation privileges have been assigned Report Control Symbol 
(RCS) DD-P&R(Q)2182 in accordance with DoD 8910.1-M. \12\
---------------------------------------------------------------------------

    \12\ See footnote 1 to Sec. 50.3.
---------------------------------------------------------------------------



   Sec. Appendix A to Part 50--Life Insurance Products and Securities

             A. Life Insurance Product Content Prerequisites

    Companies must provide DoD personnel a written description for each 
product or service they intend to market to DoD personnel on DoD 
installations. These descriptions must be written in a manner that DoD 
personnel can easily understand, and fully disclose the fundamental 
nature of the policy. Companies must be able to demonstrate that each 
form to be used has been filed with and approved, where applicable, by 
the insurance department of the State where the installation is located. 
Insurance products marketed to DoD personnel on overseas installations 
must conform to the standards prescribed by the laws of the State where 
the company is incorporated.
    1. Insurance products, other than certificates or other evidence of 
insurance issued by a self-insured association, offered and sold 
worldwide to personnel on DoD installations, must:
    a. Comply with the insurance laws of the State or country in which 
the installation is located and the requirements of this part.
    b. Contain no restrictions by reason of Military Service or military 
occupational specialty of the insured, unless such restrictions are 
clearly indicated on the face of the contract.
    c. Plainly indicate any extra premium charges imposed by reason of 
Military Service or military occupational specialty.
    d. Contain no variation in the amount of death benefit or premium 
based upon the length of time the contract has been in force, unless all 
such variations are clearly described in the contract.
    e. In plain and readily understandable language, and in type font at 
least as large as the font used for the majority of the policy, inform 
Service members of:
    1. The availability and cost of government subsidized Servicemen's 
Group Life Insurance.
    2. The address and phone number where consumer complaints are 
received by the State insurance commissioner for the State in which the 
insurance product is being sold.
    3. That the U.S. Government has in no way sanctioned, recommended, 
or encouraged the sale of the product being offered. With respect to the 
sale or solicitation of insurance on Federal land or facilitates located 
outside the United States, insurance products must contain the address 
and phone number where

[[Page 297]]

consumer complaints are received by the State insurance commissioner for 
the State which has issued the agent a resident license or the company 
is domiciled, as applicable.
    2. To comply with paragraphs A.1.b., A.1.c. and A.1.d., an 
appropriate reference stamped on the first page of the contract shall 
draw the attention of the policyholder to any restrictions by reason of 
Military Service or military occupational specialty. The reference shall 
describe any extra premium charges and any variations in the amount of 
death benefit or premium based upon the length of time the contract has 
been in force.
    3. Variable life insurance products may be offered provided they 
meet the criteria of the appropriate insurance regulatory agency and the 
Securities and Exchange Commission.
    4. Insurance products shall not be marketed or sold disguised as 
investments. If there is a savings component to an insurance product, 
the agent shall provide the customer written documentation, which 
clearly explains how much of the premium goes to the savings component 
per year broken down over the life of the policy. This document must 
also show the total amount per year allocated to insurance premiums. The 
customer must be provided a copy of this document that is signed by the 
insurance agent.

                          B. Sale of Securities

    1. All securities must be registered with the Securities and 
Exchange Commission.
    2. All sales of securities must comply with the appropriate 
Securities and Exchange Commission regulations.
    3. All securities representatives must apply to the commander of the 
installation on which they desire to solicit the sale of securities for 
permission to solicit.
    4. Where the accredited insurer's policy permits, an overseas 
accredited life insurance agent--if duly qualified to engage in security 
activities either as a registered representative of the National 
Association of Securities Dealers or as an associate of a broker or 
dealer registered with the Securities and Exchange Commission--may offer 
life insurance and securities for sale simultaneously. In cases of 
commingled sales, the allotment of pay for the purchase of securities 
cannot be made to the insurer.

                  C. Use of the Allotment of Pay System

    1. Allotments of military pay for life insurance products shall be 
made in accordance with DoD 7000.14-R.
    2. For personnel in pay grades E-4 and below, in order to obtain 
financial counseling, at least seven calendar days shall elapse between 
the signing of a life insurance application and the certification of a 
military pay allotment for any supplemental commercial life insurance. 
Installation Finance Officers are responsible for ensuring this seven-
day cooling-off period is monitored and enforced. The purchaser's 
commanding officer may grant a waiver of the seven-day cooling-off 
period requirement for good cause, such as the purchaser's imminent 
deployment or permanent change of station.

                        D. Associations--General

    The recent growth and general acceptability of quasi-military 
associations offering various insurance plans to military personnel are 
acknowledged. Some associations are not organized within the supervision 
of insurance laws of either a State or the Federal Government. While 
some are organized for profit, others function as nonprofit associations 
under Internal Revenue Service regulations. Regardless of the manner in 
which insurance is offered to members, the management of the association 
is responsible for complying fully with the policies contained in this 
part.



Sec. Appendix B to Part 50--Overseas Life Insurance Registration Program

                        A. Registration Criteria

                         1. Initial Registration

    a. Insurers must demonstrate continuous successful operation in the 
life insurance business for a period of not less than 5 years on 
December 31 of the year preceding the date of filing the application.
    b. Insurers must be listed in Best's Life-Health Insurance Reports 
and be assigned a rating of B+ (Very Good) or better for the business 
year preceding the Government's fiscal year for which registration is 
sought.

                           2. Re-Registration

    a. Insurers must demonstrate continuous successful operation in the 
life insurance business, as described in paragraph A.1.a. of this 
appendix.
    b. Insurers must retain a Best's rating of B+ or better, as 
described in paragraph A.1.b. of this appendix.
    c. Insurers must demonstrate a record of compliance with the 
policies found in this part.

                          3. Waiver Provisions

    Waivers of the initial registration or re-registration provisions 
shall be considered for those insurers demonstrating substantial 
compliance with the aforementioned criteria.

                       B. Application Instructions

    1. Applications Filed Annually. Insurers must apply by June 30 of 
each year for solicitation privileges on overseas U.S. military

[[Page 298]]

installations for the next fiscal year beginning October 1. Applications 
e-mailed, faxed, or postmarked after June 30 shall not be considered.
    2. Application prerequisites. A letter of application, signed by the 
President, Vice President, or designated official of the insurance 
company shall be forwarded to the Principal Deputy Under Secretary of 
Defense (Personnel and Readiness), Attention: Morale, Welfare and 
Recreation (MWR) Policy Directorate, 4000 Defense, Pentagon, Washington, 
DC 20301-4000. The registration criteria in paragraph A1.a. or A1.b. of 
this appendix must be met to satisfy application prerequisites. The 
letter shall contain the information set forth below, submitted in the 
order listed. Where criteria are not applicable, the letter shall so 
state.
    a. The overseas Combatant Commands (e.g., U.S. European Command, 
U.S. Pacific Command, U.S. Central Command, U.S. Southern Command) where 
the company presently solicits, or plans to solicit, on U.S. military 
installations.
    b. A statement that the company has complied with, or shall comply 
with, the applicable laws of the country or countries wherein it 
proposes to solicit. ``Laws of the country'' means all national, 
provincial, city, or county laws or ordinances of any country, as 
applicable.
    c. A statement that the products to be offered for sale conform to 
the standards prescribed in appendix A to this part and contain only the 
standard provisions such as those prescribed by the laws of the State 
where the company's headquarters are located.
    d. A statement that the company shall assume full responsibility for 
the acts of its agents with respect to solicitation. If warranted, the 
number of agents may be limited by the overseas command concerned.
    e. A statement that the company shall only use agents who have been 
licensed by the appropriate State and registered by the overseas command 
concerned to sell to DoD personnel on DoD installations.
    f. Any explanatory or supplemental comments that shall assist in 
evaluating the application.
    g. If the Department of Defense requires facts or statistics beyond 
those normally involved in registration, the company shall make separate 
arrangements to provide them.
    h. A statement that the company's general agent and other registered 
agents are appointed in accordance with the prerequisites established in 
section C of this appendix.
    3. If a company is a life insurance company subsidiary, it must be 
registered separately on its own merits.

                          C. Agent Requirements

    The overseas Combatant Commanders shall apply the following 
principles in registering agents:
    1. An agent must possess a current State license. This requirement 
may be waived for a registered agent continuously residing and 
successfully selling life insurance in foreign areas, who, through no 
fault of his or her own, due to State law (or regulation) governing 
domicile requirements, or requiring that the agent's company be licensed 
to do business in that State, forfeits eligibility for a State license. 
The request for a waiver shall contain the name of the State or 
jurisdiction that would not renew the agent's license.
    2. General agents and agents may represent only one registered 
commercial insurance company. This principle may be waived by the 
overseas Combatant Commander if multiple representations are in the best 
interest of DoD personnel.
    3. An agent must have at least 1 year of successful life insurance 
underwriting experience in the United States or its territories, 
generally within the 5 years preceding the date of application, in order 
to be approved for overseas solicitation.
    4. The overseas Combatant Commanders may exercise further agent 
control procedures as necessary.
    5. An agent, once registered in an overseas area, may not change 
affiliation from the staff of one general agent to another and retain 
registration, unless the previous employer certifies in writing that the 
release is without justifiable prejudice. Overseas Combatant Commanders 
will have final authority to determine justifiable prejudice. 
Indebtedness of an agent to a previous employer is an example of 
justifiable prejudice.

                     D. Announcement of Registration

    1. Registration by the Department of Defense upon annual 
applications of insurers shall be announced as soon as practicable by 
notice to each applicant and by a list released annually in September to 
the appropriate overseas Combatant Commanders. Approval does not 
constitute DoD endorsement of the insurer or its products. Any 
advertising by insurers or verbal representation by its agents, which 
suggests such endorsement, is prohibited.
    2. In the event registration is denied, specific reasons for the 
denial shall be provided to the applicant.
    a. The insurer shall have 30 days from the receipt of notification 
of denial of registration (sent certified mail, return receipt 
requested) in which to request reconsideration of the original decision. 
This request must be in writing and accompanied by substantiating data 
or information in rebuttal of the

[[Page 299]]

specific reasons upon which the denial was based.
    b. Action by the Office of the PDUSD(P&R) on a request for 
reconsideration is final.
    c. An applicant that is presently registered as an insurer shall 
have 90 calendar days from final action denying registration in which to 
close operations.
    3. Upon receiving an annual letter approving registration, each 
company shall send to the applicable overseas Combatant Commander a 
verified list of agents currently registered for overseas solicitation. 
Where applicable, the company shall also include the names and prior 
military affiliation of new agents for whom original registration and 
permission to solicit on base is requested. Insurers initially 
registered shall be furnished instructions by the Department of Defense 
for agent registration procedures in overseas areas.
    4. Material changes affecting the corporate status and financial 
condition of the company that occur during the fiscal year of 
registration must be reported to the MWR Policy Directorate at the 
address in paragraph B.2. of this appendix as they occur.
    a. The Office of the PDUSD(P&R) reserves the right to terminate 
registration if such material changes appear to substantially affect the 
financial and operational standards described in section A of this 
appendix on which registration was based.
    b. Failure to report such material changes may result in termination 
of registration regardless of how it affects the standards.
    5. If an analysis of information furnished by the company indicates 
that unfavorable trends are developing that could adversely affect its 
future operations, the Office of the PDUSD(P&R) may, at its option, 
bring such matters to the attention of the company and request a 
statement as to what action, if any, is considered to deal with such 
unfavorable trends.



PART 53_WEARING OF THE UNIFORM--Table of Contents



Sec.
53.1 Purpose.
53.2 Policy.

    Authority: 5 U.S.C. 301, 10 U.S.C. 772.



Sec. 53.1  Purpose.

    This part prescribes limitations on wearing of the uniform by 
members of the Armed Forces, and establishes policy with respect to 
wearing of the uniform by former members of the Armed Forces.

[35 FR 1236, Jan. 30, 1970]



Sec. 53.2  Policy.

    (a) Members of the Armed Forces (including retired members and 
members of reserve components). The wearing of the uniform is prohibited 
under any of the following circumstances:
    (1) At any meeting or demonstration which is a function of, or 
sponsored by an organization, association, movement, group, or 
combination of persons which the Attorney General of the United States 
has designated, pursuant to E.O. 10450 as amended, as totalitarian, 
fascist, communist, or subversive, or as having adopted a policy of 
advocating or approving the commission of acts of force or violence to 
deny others their rights under The Constitution of the United States, or 
as seeking to alter the form of Government of the United States by 
unconstitutional means.
    (2) During or in connection with the furtherance of political 
activities, private employment or commercial interests, when an 
inference of official sponsorship for the activity or interest could be 
drawn.
    (3) Except when authorized by competent Service authority, when 
participating in activities such as public speeches, interviews, picket 
lines, marches, rallies or any public demonstrations (including those 
pertaining to civil rights), which may imply Service Sanction of the 
cause for which the demonstration or activity is conducted.
    (4) When wearing of the uniform would tend to bring discredit upon 
the Armed Forces.
    (5) When specifically prohibited by regulations of the department 
concerned.
    (b) Former members of the Armed Forces. (1) Unless qualified under 
another provision of this part or under the provisions of 10 U.S.C. 772, 
former members who served honorably during a declared or undeclared war 
and whose most recent service was terminated under honorable conditions 
may wear the uniform in the highest grade held during such war service 
only upon the following occasions and in the course of travel incidents 
thereto:
    (i) Military funerals, memorial services, weddings, and inaugurals.

[[Page 300]]

    (ii) Parades on national or State holidays; or other parades or 
ceremonies of a patriotic character in which any active or reserve U.S. 
military unit is taking part.
    (2) Wearing of the uniform or any part thereof at any other time or 
for any other purpose is prohibited.
    (c) Medal of Honor holders. Persons who have been awarded the Medal 
of Honor may wear the uniform at their pleasure except under the 
circumstances set forth in paragraph (a) of this section.

[35 FR 1236, Jan. 30, 1970]



PART 54_ALLOTMENTS FOR CHILD AND SPOUSAL SUPPORT--Table of Contents



Sec.
54.1 Purpose.
54.2 Applicability and scope.
54.3 Definitions.
54.4 Policy.
54.5 Responsibilities.
54.6 Procedures.

    Authority: 15 U.S.C. 1673, 37 U.S.C. 101, 42 U.S.C. 665.

    Source: 51 FR 23755, July 1, 1986, unless otherwise noted.



Sec. 54.1  Purpose.

    Under section 65 of title 42, United States Code, this part provides 
policy on statutorily required child or child and spousal support 
allotments, assigns responsibilities, and prescribes procedures. The 
policy and procedures for this part are also located in the DoD 
Financial Management Regulation (``DoDFMR''), Volume 7B, Chapter 43, 
section 4304, ``Allotments for Child Support and Spousal Support'' (DoD 
7000.14-R).

[51 FR 23755, July 1, 1986, as amended at 71 FR 40656, July 18, 2006]



Sec. 54.2  Applicability and scope.

    (a) This part applies to the Office of the Secretary of Defense 
(OSD) and the Military Departments. The term ``Military Services,'' as 
used herein, refers to the Army, Navy, Air Force, and Marine Corps.
    (b) Its provisions cover members of the Military Services on 
extended active duty. This does not include a member under a call or 
order to active duty for a period of less than 30 days.



Sec. 54.3  Definitions.

    (a) Authorized person. Any agent or attorney of any State having in 
effect a plan approved under part D of title IV of the Social Security 
Act (42 U.S.C. 651-664), who has the duty or authority to seek recovery 
of any amounts owed as child or child and spousal support (including, 
when authorized under the State plan, any official of a political 
subdivision); and the court that has authority to issue an order against 
a member for the support and maintenance of a child or any agent of such 
court.
    (b) Child support. Periodic payments for the support and maintenance 
of a child or children, subject to and in accordance with State or local 
law. This includes, but is not limited to, payments to provide for 
health care, education, recreation, and clothing or to meet other 
specific needs of such a child or children.
    (c) Designated official. The representative of the Military Service 
concerned who is authorized to receive and to process notices under this 
part. See Sec. 54.6(f) for a listing of designed officials.
    (d) Notice. A court order, letter, or similar documentation issued 
by an authorized person providing notification that a member has failed 
to make periodic support payments under a support order.
    (e) Spousal support. Periodic payments for the support and 
maintenance of a spouse or former spouse, in accordance with State and 
local law. It includes, but is not limited to, separate maintenance, 
alimony while litigation continues, and maintenance. Spousal support 
does not include any payment for tranfer of property or its value by an 
individual to his or her spouse or former spouse in compliance with any 
community property settlement, equitable distribution of property, or 
other division of property between spouses or former spouses.
    (f) Support order. Any order providing for child or child and 
spousal support issued by a Court of competent jurisdiction within any 
State, territory, or

[[Page 301]]

possession of the United States, including Indian tribal courts, or in 
accordance with administrative procedures established under State law 
that affords substantial due process and is subject to judicial review.



Sec. 54.4  Policy.

    The Department of Defense is obligated by 42 U.S.C. 665 to require 
child, or child and spousal, support allotments from the pay and 
allowances of a member who has failed to make periodic payments under a 
support order in a total amount equal to the support payable for 2 
months or longer. The member's allotment shall be established by the 
Secretary of the Military Department concerned, or the Secretary's 
designee, provided all requirements of this part have been met.



Sec. 54.5  Responsibilities.

    (a) The Assistant Secretary of Defense (Comptroller) (ASD(C)) shall 
provide guidance, monitor compliance with this part, and have the 
authority to change or modify the procedures in Sec. 54.6.
    (b) The Secretaries of the Military Departments shall comply with 
this part.



Sec. 54.6  Procedures.

    (a) Notice to designated official. (1) An authorized person shall 
send to the designated official of the member's Military Service a 
signed notice that includes:
    (i) A statement that delinquent support payments equal or exceed the 
amount of support payable for 2 months under a support order, and a 
request that an allotment be initiated pursuant to 42 U.S.C. 665.
    (ii) A certified copy of the support order.
    (iii) The amount of the monthly support payment. Such amount may 
include arrearages, if a support order specifies the payment of such 
arrearages. The notice shall indicate how much of the amount payable 
shall be applied toward liquidation of the arrearages.
    (iv) A statement that delinquent support payments are more than 12 
weeks in arrears, if appropriate.
    (v) Sufficient information identifying the member to enable 
processing by the designated official. The following information is 
requested:
    (A) Full name;
    (B) Social Security Number;
    (C) Military Service (Army, Navy, Air Force, or Marine Corps).
    (vi) The full name and address of the allottee. The allottee shall 
be an authorized person, the authorized person's designee, or the 
recipient named in the support order.
    (vii) Any limitations on the duration of the support allotment.
    (viii) A certificate that the official sending the notice is an 
authorized person.
    (2) The notice shall be sent by mail or delivered in person to the 
appropriate designated official of the Military Service. The designated 
official shall note the date and time of receipt on the notice.
    (3) The notice is effective when it is received in the office of the 
designated official.
    (4) When the notice does not sufficiently identify the member, it 
shall be returned directly to the authorized person with an explanation 
of the deficiency. However, before the notice is returned, if there is 
sufficient time, an attempt shall be made to inform the authorized 
person who sent the notice that it will not be honored unless adequate 
information is supplied.
    (5) Upon receipt of effective notice of delinquent support payments, 
together with all required supplementary documents and information, the 
designated official shall identify the member from whom moneys are due 
and payable. Under Sec. 54.6(d), the allotment shall be established in 
the amount necessary to comply with the support order and to liquidate 
arrearages if provided by a support order when the maximum amount to be 
allotted under this provision, together with any other moneys withheld 
for support from the member, does not exceed:
    (i) Fifty percent of the member's disposable earnings for any month 
in which the member asserts by affidavit or other acceptable evidence 
that he or she is supporting a spouse, dependent child, or both, other 
than a party in the support order. When the member

[[Page 302]]

submits evidence, copies shall be sent to the authorized person, 
together with notification that the member's support claim shall be 
honored. If the support claim is contested by the authorized person, 
that authorized person may refer this matter to the appropriate court or 
other authority for resolution.
    (ii) Sixty percent of the member's disposable earnings for any month 
in which the member fails to assert by affidavit or other acceptable 
evidence that he or she is supporting a spouse, dependent child, or 
both.
    (iii) Regardless of the limitations above, an additional 5 percent 
of the member's disposable earnings shall be withheld when the notice 
states that the total amount of the member's support payments is 12 or 
more weeks in arrears.
    (b) Disposable Earnings. (1) In determining disposable earnings for 
a member assigned within the contiguous United States, include the 
following payments. For definitions of these items, see DoD 5000.12-M.
    (i) Basic pay (including Military Service academy cadet and 
midshipman pay).
    (ii) Basic allowance for quarters for members with dependents, and 
for members without dependents in grade E-7 or higher.
    (iii) Basic allowance for subsistence for commissioned and warrant 
officers.
    (iv) Special pay for physicians, dentists, optometrists, and 
veterinarians.
    (v) Submarine pay.
    (vi) Flying pay (all crew members).
    (vii) Diving pay.
    (viii) Proficiency pay or special duty assignment pay.
    (ix) Career sea pay.
    (2) To determine disposable earnings for a member assigned outside 
of the contiguous United States, the following shall supplement the 
payments listed in paragraph (b)(1) of this section:
    (i) Foreign duty pay.
    (ii) Special pay for duty subject to hostile fire (applies only to 
members permanently assigned in a designated area).
    (iii) Family separation allowances (only under certain type-II 
conditions).
    (iv) Special pay for overseas extensions
    (c) Calculations of disposable earnings shall exclude:
    (1) Amounts owed by the member to the United States.
    (2) Amounts mandatorily withheld for the U.S. Soldiers' and Airmen's 
Home.
    (3) Fines and forfeitures ordered by a court-martial or by a 
commanding officer.
    (4) Federal and State employment and income taxes withheld to the 
extent that the amount deducted is consistent with the member's tax 
liability.
    (5) Deductions for the Servicemen's Group Life Insurance coverage.
    (6) Advances of pay received by the member before receipt of notice 
(see paragraph (c)(1) of this section) that may be due and payable by 
the member at some future date. Requests for advances received after 
notice for a statutorily required support allotment shall be reduced by 
the amount of the statutorily required support allotment.
    (7) Other amounts required by law to be deducted.
    (d) Notice to member and member's Commanding Officer.
    (1) As soon as possible, but not later than 15 calendar days after 
the date of receipt of notice, the designated official shall send to the 
member, at his or her duty station, written notice:
    (i) That notice has been received from an authorized person, 
including a copy of the documents submitted.
    (ii) Of the maximum limitations provided in 15 U.S.C. 1673, with a 
request that the member submit supporting affidavits or other 
documentation necessary for determining the applicable percentage 
limitation.
    (iii) That the member may submit supporting affidavits or other 
documentation as evidence that the information contained in the notice 
is in error.
    (iv) That by submitting supporting affidavits or other necessary 
documentation, the member consents to the disclosure of such information 
to the party requesting the support allotment.
    (v) Of the amount or percentage that will be deducted if the member 
fails to submit the documentation necessary to

[[Page 303]]

enable the designated official to respond to the notice within the 
prescribed time limits.
    (vi) That a consultation with a judge advocate or legal officer will 
be provided by the Military Service, if possible, and that the member 
should immediately contact the nearest legal services office.
    (vii) Of the date that the allotment is scheduled to begin.
    (2) The designated official shall notify the member's commanding 
officer, or designee, of the need for consultation between the member 
and a judge advocate or legal officer. The designated official shall 
provide the member's commanding officer, or designee, with a copy of the 
notice and other legal documentation served on the designated official.
    (3) The Military Services shall provide the member with the 
following:
    (i) When possible, an in-person consultation with a judge advocate 
or legal officer of the Military Service concerned, to discuss the legal 
and other factors, involved in the member's support obligation and 
failure to make payment.
    (ii) Copies any other documents submitted with the notice.
    (4) The member's commanding officer, or designee, shall confirm in 
writing to the designated official within 30 days of notice that the 
member received a consultation concerning the member's support 
obligation and the consequences of failure to make payments, or when 
appropriate, of the inability to arrange such consultation and the 
status of continuing efforts to fulfill the consultation requirement.
    (5) If, within 30 days of the date of the notice, the member has 
furnished the designated official affidavits or other documentation 
showing the information in the notice to be in error, the designated 
official shall consider the member's response. The designated official 
may return to the authorized person, without action, the notice for a 
statutorily required support allotment together with the member's 
affidavit and other documentation, if the member submits substantial 
proof of error, such as:
    (i) The support payments are not delinquent.
    (ii) The underlying support order in the notice has been amended, 
superseded, or set aside.
    (e) Payments. (1) Except as provided in paragraph (e)(3) the 
Secretary of the Military Department concerned, or designee, shall make 
the support allotment by the first end-of-month payday after the 
designated official is notified that the member has had a consultation 
with a judge advocate or legal officer, or that a consultation was not 
possible, but not later than the first end-of-month payday after 30 days 
have elapsed from the date of the notice to the member. The Military 
Services will not be required to vary their normal military allotment 
payment cycle to comply with the notice.
    (2) If several notices are sent with respect to the same member, 
payments shall be satisfied on a first-come, first-served basis within 
the amount limitations in paragraph (a)(5) of this section.
    (3) When the member identified in the notice is found not to be 
entitled to money due from or payable by the Military Service, the 
designated official shall return the notice to the authorized person and 
shall advise him or her that no money is due from or payable by the 
Military Service to the named individual. When it appears that amounts 
are exhausted temporarily or otherwise unavailable, the authorized 
person shall be told why, and for how long, any money is unavailable, if 
known. If the member separates from active duty, the authorized person 
shall be informed that the allotment is discontinued.
    (4) Payment of statutorily required allotments shall be enforced 
over other voluntary deductions and allotments when the gross amount of 
pay and allowances is not sufficient to permit all authorized deductions 
and collections.
    (5) The authorized person or allottee shall notify the designated 
official promptly if the operative court order upon which the allotment 
is based is vacated, modified, or set aside. The designated official 
shall also be notified of any events affecting the allottee's 
eligibility to receive the allotment, such as the former spouse's 
remarriage, if a part of the payment is for spousal support, and notice 
of a change in eligibility for child support

[[Page 304]]

payments under circumstances of death, emancipation, adoption, or 
attainment of majority of a child whose support is provided through the 
allotment.
    (6) An allotment established under this Directive shall be adjusted 
or discontinued upon notice from the authorized person.
    (7) Neither the Department of Defense, nor any officer or employee 
thereof, shall be liable for any payment made from moneys due from, or 
payable by, the Department of Defense to any individual pursuant to 
notice regular on its face, if such payment is made in accordance with 
this part. If a designated official receives notices based on a support 
order which, on its face, appears to conform to the laws of the 
jurisdiction from which it was issued, the designated official shall not 
be required to ascertain whether the authority that issued the order had 
obtained personal jurisdiction over the member.
    (f) List of designated officials.

Army--Commander, U.S. Army Finance and Accounting Center, ATTN: FINCL-G, 
Indianapolis, IN 46249-0160, (317) 542-2155.
Navy--Director, Navy Family Allowance Activity, Anthony J. Celebrezze 
Federal Building, Cleveland, OH 44199, (216) 522-5301.
Air Force--Commander, Air Force Accounting and Finance Center, ATTN: JA, 
Denver, CO 80279, (303) 370-7524.
Marine Corps--Commanding Officer, Marine Corps Finance Center (Code AA), 
Kansas City, MO 64197, (816) 926-7103.



PART 56_NONDISCRIMINATION ON THE BASIS OF HANDICAP IN PROGRAMS AND ACTIVITIES 

ASSISTED OR CONDUCTED BY THE DEPARTMENT OF DEFENSE--Table of Contents



Sec.
56.1 Purpose.
56.2 Applicability and scope.
56.3 Definitions.
56.4 Policy.
56.5 Responsibilities.
56.6 Information requirements.
56.7 Programs and activities subject to this part.
56.8 Guidelines for determining discriminatory practices.
56.9 Ensuring compliance with this part in Federal financial assistance 
          programs and activities.
56.10 Ensuring compliance with this part in programs and activities 
          conducted by the Department of Defense.

    Authority: Pub. L. 93-112, sec. 504 29 U.S.C. 794, as amended by 
Pub. L. 95-602, 92 Stat. 2982; Pub. L. 93-112, sec. 7, 29 U.S.C. 706, as 
amended by Pub. L. 93-516, 88 Stat. 1619; Executive Order 12250; 
Executive Order 12291; Executive Order 12067.

    Source: 47 FR 15124, Apr. 8, 1982, unless otherwise noted.



Sec. 56.1  Purpose.

    This part implements section 504 of Public Law 93-112, 
``Rehabilitation Act of 1973,'' September 26, 1973 (29 U.S.C. 794) 
(1976); section 111 of Pub. L. 93-516, ``Rehabilitation Act Amendments 
of 1974,'' December 7, 1974 (29 U.S.C. 706, 780, 790) (1976); section 
119 of Pub. L. 95-602, ``Rehabilitation, Comprehensive Services, and 
Developmental Disabilities Amendments of 1978,'' November 6, 1978 (29 
U.S.C. 794) (supp. III 1979); and Department of Justice Regulation, 
``Implementation of Executive Order 12250, Nondiscrimination on the 
Basis of Handicap in Federally Assisted Programs,'' August 11, 1981 (28 
CFR part 41) to prohibit discrimination based on handicap in programs 
and activities receiving Federal financial assistance disbursed by the 
Department of Defense and in programs and activities conducted by the 
Department of Defense.



Sec. 56.2  Applicability and scope.

    (a) This part applies to the Office of the Secretary of Defense, the 
Military Departments, the Organization of the Joint Chiefs of Staff, the 
National Guard Bureau, and the Defense Agencies (hereafter referred to 
as ``DoD Components'') insofar as they:
    (1) Extend Federal financial assistance to programs and activities 
that affect handicapped persons in the United States and that are 
covered by this part (see Sec. 56.7(b)).
    (2) Conduct programs and activities that affect handicapped persons 
in the United States and that are covered by this part (see Sec. 
56.7(c)).
    (b) This part also applies to each recipient of Federal financial 
assistance disbursed by the Department of Defense and to each program 
and activity

[[Page 305]]

that receives or benefits from such assistance, insofar as such 
recipient, program, or activity affects a handicapped person in the 
United States.



Sec. 56.3  Definitions.

    (a) Facility. All or any portion of buildings, structures, 
equipment, roads, walks, parking lots, or other real or personal 
property or any interest in such property.
    (b) Federal financial assistance. Any grant, loan, contract (other 
than a procurement contract or a contract of insurance or guaranty), or 
any other arrangement by which the Federal Government provides or 
otherwise makes available assistance in the form of:
    (1) Funds.
    (2) Services performed by Federal personnel, including technical 
assistance, counseling, training, and provision of statistical or expert 
information.
    (3) Real and personal property or any interest in or use of such 
property, including:
    (i) Transfers or leases of such property for less than fair market 
value or for reduced consideration.
    (ii) Proceeds from a subsequent transfer or lease of such property 
if the Federal share of its fair market value is not returned to the 
Federal government.
    (c) Handicapped person. Any person who has a physical or mental 
impairment that substantially limits one or more major life activities, 
has a record of such an impairment, or is regarded as having such an 
impairment. For purposes of this Directive as it relates to employment 
programs of recipients, such term does not include any individual who is 
an alcoholic or drug abuser and whose current use of alcohol or drugs 
prevents such individual from performing the duties of the job in 
question, or whose employment, by reason of such current alcohol or drug 
abuse, would constitute a direct threat to property or to the safety of 
others. As used in this paragraph:
    (1) Physical or mental impairment. Any physiological disorder or 
condition, cosmetic disfigurement, or anatomical loss affecting one or 
more of the following body systems: Neurological; musculoskeletal and 
special sense organs; respiratory, including speech organs; 
cardiovascular; reproductive; digestive; genito-urinary; hemic and 
lymphatic; skin; and endocrine; or any mental or psychological disorder, 
such as mental retardation, organic brain syndrome, emotional or mental 
illness, and specific learning disabilities. The term includes such 
diseases and conditions as orthopedic, visual, speech, and hearing 
impairments; cerebral palsy, epilepsy, and muscular dystrophy; multiple 
sclerosis; cancer; heart disease; diabetes; drug abuse; and alcoholism.
    (2) Major life activities. Functions such as caring for one's self, 
performing manual tasks, walking, seeing, hearing, speaking, breathing, 
learning, and working.
    (3) Has a record of such an impairment. Has a history of, or has 
been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.
    (4) Is regarded as having an impairment. Has: (i) A physical or 
mental impairment that does not substantially limit major life 
activities but is treated by a recipient or DoD Component as 
constituting such a limitation;
    (ii) A physical or a mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) None of the impairments defined above, but is treated by a 
recipient or DoD Component as having such an impairment.
    (d) Historic properties. Those properties listed or eligible for 
listing in the National Register of Historic Places.
    (e) Include; such as. Not all the possible items are covered, 
whether like or unlike the ones named.
    (f) Qualified handicapped person. A handicapped person who:
    (1) With respect to employment, can perform the essential functions 
of the job in question with reasonable accommodation.
    (2) With respect to services, meets the essential eligibility 
requirements for receiving the services in question.
    (g) Recipient. Any State or political subdivision or instrumentality 
thereof,

[[Page 306]]

any public or private agency, institution, organization, or other 
entity, or any person that receives Federal financial assistance 
directly or through another recipient, including any successor, 
assignee, or transferee of a recipient, but not the ultimate beneficiary 
of the assistance. The term includes persons and entities applying to be 
recipients.
    (h) Substantial impairment. A significant loss of the integrity of 
finished materials, design quality, or special character resulting from 
a permanent alteration.



Sec. 56.4  Policy.

    It is DoD policy that no qualified handicapped person shall be 
subjected to discrimination on the basis of handicap under any program 
or activity that receives or benefits from Federal financial assistance 
disbursed by a DoD Component or under any Federal program or activity 
that is conducted by a DoD Component. Guidelines for determining actions 
that discriminate against handicapped persons are prescribed in Sec. 
56.8.



Sec. 56.5  Responsibilities.

    (a) The Assistant Secretary of Defense (Manpower, Reserve Affairs, 
and Logistics) (ASD(MRA&L)), or designee, shall monitor compliance with 
this part. In discharging this responsibility, the ASD(MRA&L), or 
designee, shall:
    (1) Coordinate efforts of DoD Components to enforce this part.
    (2) Assist in the development of standards and procedures 
promulgated pursuant to Sec. 56.9.
    (3) Perform the responsibilities assigned to the ASD(MRA&L) in Sec. 
56.8, 9, and 10.
    (4) Otherwise assist DoD Components in implementing this part.
    (b) The Heads of DoD Components shall comply with this part. In 
discharging this responsibility, they shall:
    (1) Designate a policy-level official to ensure compliance with this 
part receive and investigate complaints filed under this part and 
otherwise manage DoD Component responsibilities under this part.
    (2) Notify the ASD(MRA&L), or designee, of the name, position, 
location, and telephone number of persons selected by them to be policy-
level officials within 15 calendar days of such a selection.
    (3) Issue guidelines pursuant to Sec. 56.9.
    (4) Cooperate fully with the ASD(MRA&L), or designee, in that 
official's performance of the responsibilities assigned herein, 
including furnishing to the ASD(MRA&L), or designee, in a timely fashion 
any requested reports and information.
    (5) Assign sufficient personnel to implement and to ensure effective 
enforcement of this part.



Sec. 56.6  Information requirements.

    (a) Each DoD Component shall maintain a log of all complaints that 
are filed with it or its recipients under this part. The log shall 
contain the complainant's name (last name, first, and middle initial) 
and address (street address, city, State, and zip code), the recipient's 
name (if this refers to a person, last name, first, and middle initial) 
and address (street address, city, State, and zip code), the nature of 
the complaint, and the current status of the complaint investigation or 
resolution. Each DoD Component shall submit a narrative summary report 
on complaints by memorandum to the ASD(MRA&L), or designee, before July 
15 and January 15 of each year. This reporting requirement has been 
assigned Report Control Symbol DD-M(SA)1596.
    (b) Each DoD Component shall submit a narrative report by memorandum 
to the ASD(MRA&L), or designee, whenever, pursuant to enclosure 4 of 
this directive, the DoD Component notifies an applicant or recipient 
that noncompliance with this part is indicated. The report shall include 
the recipient's name (if this refers to a person, last name, first, and 
middle initial) and address (street address, city, State, and zip code), 
the date (YYMMDD) and nature of the finding, and the name of the 
applicable federally assisted program or activity. This reporting 
requirement has been assigned Report Control Symbol DD-M(AR)1597.
    (c) The recordkeeping requirements contained in Sec. 56.9(c)(2), 
have been approved by the Office of Management and Budget (OMB) under 44 
U.S.C.

[[Page 307]]

chapter 35 and have been assigned OMB No. 0704-0102.



Sec. 56.7  Programs and activities subject to this part.

    (a) This part applies to all DoD Components and recipients of 
Federal financial assistance disbursed by a DoD Component insofar as the 
programs and activities of the DoD Components and recipients affect 
handicapped persons in the United States. Existing programs and 
activities that are assisted or conducted by a DoD Component and that 
are subject to this part but do not appear in paragraph (b) or (c) of 
this section, are covered even though not listed. DoD Components must 
report new programs and activities that are subject to this part to the 
ASD (MRA&L), or designee, within 15 calendar days of their creation or 
funding.
    (b) Federal financial assistance programs subject to this part 
include: (1) title 32, United States Code, sections 101-716 (1976 and 
supp. III 1979): the Army and Air National Guard.
    (2) Title 40, U.S. Code, sections 483, 484, and 512 (1976); title 
49, U.S. Code, sections 1101 and 1107 (1976); and title 10, U.S. Code, 
sections 2541, 2544, 2571, 2576, 2662, 7308, 7541, 7542, 7545, 7546, and 
7547 (1976 and supp. IV 1980): Various programs involving the loan or 
other disposition of surplus, obsolete, or unclaimed property.
    (3) Title 10 U.S. Code, sections 4307-4311 (1976), and the annual 
Department of Defense Appropriations Act: National Program for the 
Promotion of Rifle Practice.
    (4) Secretary of the Navy Instruction 5720.19E, ``Navy Science 
Cruiser Program,'' February 24, 1977.
    (5) Title 10 U.S. Code, section 9441 (1976 and supp. IV 1980): Civil 
Air Patrol.
    (6) Title 41 U.S. Code, sections 501-509 (supp. III 1979): Federal 
grants and cooperative agreements.
    (7) Title 33 U.S. Code, section 426 (1976 and supp. III 1979): Army 
Corps of Engineers participation in cooperative investigations and 
studies concerning the erosion of shores of coastal and lake waters.
    (8) Title 33 U.S. Code, sections 426e-426h (1976): Army Corps of 
Engineers assistance in the construction of works for the restoration 
and protection of shores.
    (9) Title 16 U.S. Code, section 460d (1976): Construction and 
operation of public park and recreational facilities in water resource 
development projects under the administrative jurisdiction of the 
Department of the Army.
    (10) Title 33 U.S. Code, section 701c-3 (1976): Payment to States of 
lease receipts from lands acquired by the United States for flood 
control, navigation, and allied purposes.
    (11) Title 33 U.S. Code, sections 558c and 702d-1 (1976); title 10, 
U.S. Code, sections 2668 and 2669 (1976); title 43, U.S. Code, section 
961 (1976); and title 40, U.S. Code, section 319 (1976): Grants of 
easements without consideration, or at a nominal or reduced 
consideration, on land under the control of the Department of the Army 
at water resource development projects.
    (12) Title 33 U.S. Code, sections 540 and 577 (1976): Army Corps of 
Engineers assistance in the construction of small boat harbor projects.
    (13) Title 33 U.S. Code, section 701s (1976): Emergency bank 
protection works constructed by the Army Corps of Engineers for 
protection of highways, bridge approaches, and public works.
    (14) Title 33 U.S. Code, section 633 (1976): Army Corps of Engineers 
contracts for the protection, alteration, reconstruction, relocation, or 
replacement of structures and facilities.
    (15) Title 50 U.S. Code, section 453 (1976): Defense Logistics 
Agency loans of industrial equipment to educational institutions (Tools 
for Schools).
    (16) Title 33 U.S. Code, section 610 (1976): Provision of 
specialized services or technical information by the Army Corps of 
Engineers to State and local governments for the control of aquatic 
plant growths in rivers, harbors, and allied waters.
    (17) Title 42 U.S. Code, section 1962d-16 (1976): Provision of 
specialized services by the Army Corps of Engineers to any State for the 
preparation of comprehensive plans for drainage basins located within 
the boundaries of said State.
    (18) Title 33 U.S. Code, section 603a (1976): Provision of 
specialized services

[[Page 308]]

by the Army Corps of Engineers to improve channels for navigation.
    (19) Title 33 U.S. Code, section 701g (1976): Provision of 
specialized services by the Army Corps of Engineers to reduce flood 
damage.
    (20) Title 24 U.S. Code, sections 44c and 47 (1976): United States 
Soldiers' and Airmen's Home.
    (21) Title 10 U.S. Code, chapter 55, as implemented by DoD 6010.8-R, 
``Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS),'' January 10, 1977.
    (c) All programs and activities conducted by the Department of 
Defense that affect handicapped persons in the United States are subject 
to this part. They include:
    (1) Promulgation of rules and regulations for public comment in a 
manner that grants handicapped persons a reasonable opportunity for such 
comment (such as by making cassette recordings of proposed rules).
    (2) Public meetings, conferences, or seminars sponsored or conducted 
by a DoD Component but held in nongovernmental buildings.
    (3) Public meetings, conferences, or seminars sponsored or conducted 
by a DoD Component or by a non-DoD organization but held in a DoD 
building.
    (4) Open houses, memorial services, tours, or other ceremonies held 
on or in DoD property.
    (5) Military museums.
    (6) Historic vessels.
    (7) Historic buildings and properties maintained by a DoD Component 
and properties designated as historic under a statute of the appropriate 
State or local governmental body.
    (8) Schools operated by the Department of Defense within the United 
States pursuant to section 6 of Public Law 81-874, title 20, U.S. Code, 
section 241 (1976).



Sec. 56.8  Guidelines for determining discriminatory practices.

    (a) General prohibitions against discrimination. (1) No qualified 
handicapped person shall, on the basis of handicap, be excluded from 
participation in, be denied the benefit of, or otherwise be subjected to 
discrimination under any program or activity that is conducted by the 
Department of Defense or that receives or benefits from Federal 
financial assistance disbursed by the Department of Defense.
    (2) A recipient or DoD Component may not, directly or through 
contractual, licensing, or other arrangements, on the basis of handicap:
    (i) Provide different or separate aid, benefits, or services to 
handicapped persons than is provided to others unless such action is 
necessary to provide qualified handicapped persons with aid, benefits, 
or services that are equal to those provided to others;
    (ii) Deny a qualified handicapped person the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (iii) Afford a qualified handicapped person an opportunity to 
participate in or benefit from the aid, benefit, or service that is not 
equal to that afforded others;
    (iv) Provide a qualified handicapped person with an aid, benefit, or 
service that is not as effective as that afforded to others; or
    (v) Otherwise limit a qualified handicapped person in the enjoyment 
of any right, privilege, advantage, or opportunity granted to others 
receiving the aid, benefit, or service.
    (3) A recipient or DoD Component may not deny a qualified 
handicapped person the opportunity to participate in programs or 
activities that are not separate or different from regular programs or 
activities, even if such separate or different programs and activities 
are permissible under paragraph (a)(2)(i) of this section.
    (4) A recipient or DoD Component may not provide assistance to an 
agency, organization, or person that discriminates on the basis of 
handicap in providing any aid, benefit, or service to beneficiaries of 
the recipient's program or activity.
    (5) A recipient of DoD Component may not deny, on the basis of 
handicap, a qualified handicapped person the opportunity to participate 
as a member of planning or advisory boards.
    (6) A recipient or DoD Component may not use, directly or through 
contractual or other arrangements, criteria or methods of administration 
that:

[[Page 309]]

    (i) Subject qualified handicapped persons to discrimination on the 
basis of handicap;
    (ii) Defeat or substantially impair accomplishment of the objectives 
of the recipient's or DoD Component's program or activity with respect 
to handicapped persons; or
    (iii) Perpetuate discrimination by another recipient if both 
recipients are subject to common administrative control or are agencies 
of the same State.
    (7) In determining the site or location of a facility, a recipient 
or DoD Component may not make selections that:
    (i) Exclude handicapped persons from, deny them the benefits of, or 
otherwise subject them to discrimination under any program or activity 
that receives or benefits from Federal financial assistance; or
    (ii) Defeat or substantially impair, with respect to handicapped 
persons, the accomplishment of the objectives of the program or 
activity.
    (8) Recipients and DoD Components shall administer programs and 
activities in the most integrated setting appropriate to the needs of 
qualified handicapped persons.
    (9) Recipients and DoD Components shall take appropriate steps to 
make communications with their applicants, employees, and beneficiaries 
available to persons with impaired vision and hearing.
    (10) This section may not be interpreted to prohibit the exclusion 
of:
    (i) Persons who are not handicapped from benefits, programs, and 
activities limited by Federal statute or Executive order to handicapped 
persons; or
    (ii) One class of handicapped persons from a program or activity 
limited by Federal statute or Executive order to a different class of 
handicapped persons.
    (11) Recipients and DoD Components shall take appropriate steps to 
ensure that no handicapped individual is denied the benefits of, 
excluded from participation in, or otherwise subjected to discrimination 
under any program or activity receiving or benefiting from Federal 
financial assistance disbursed by the Department of Defense or under any 
program or activity conducted by the Department of Defense because of 
the absence of auxiliary aids, such as certified sign-language 
interpreters, telecommunication devises (TDDs), or other telephonic 
devices for individuals with impaired sensory, manual, or speaking 
skills.
    (b) Prohibitions against employment discrimination by recipients. 
(1) No qualified handicapped person shall, on the basis of handicap, be 
subjected to discrimination in employment under any program or activity 
that receives or benefits from Federal financial assistance disbursed by 
the Department of Defense.
    (2) The prohibition against discrimination in employment applies to 
the following:
    (i) Recruitment, advertising, and processing of applications for 
employment.
    (ii) Hiring, upgrading, promotion, award of tenure, demotion, 
transfer, layoff, termination, right of return from layoff, and 
rehiring.
    (iii) Rates of pay or any other form of compensation and changes in 
compensation.
    (iv) Job assignments, job classifications, organizational 
structures, position descriptions, lines of progression, and seniority 
lists.
    (v) Leaves of absence, sick leave, or any other leave.
    (vi) Fringe benefits available by virtue of employment, whether or 
not administered by the recipient.
    (vii) Selection and financial support for training, including 
apprenticeship, professional meetings, conferences and other related 
activities, and selection for leaves of absence for training.
    (viii) Programs and activities sponsored by the employer, including 
social and recreational programs.
    (ix) Any other term, condition, or privilege of employment.
    (3) A recipient may not participate in a contractual or other 
relationship that subjects qualified handicapped applicants or employees 
to discrimination prohibited by this section, including relationships 
with employment and referral agencies, labor unions, organizations 
providing or administering fringe benefits to employees of the 
recipient, and organizations providing training and apprenticeship 
programs.
    (4) A recipient shall make reasonable accommodation to the known 
physical

[[Page 310]]

or mental limitations of an otherwise qualified handicapped applicant or 
employee unless the recipient can demonstrate that the accommodation 
would impose an undue hardship on the operation of its program. 
Reasonable accommodation includes providing ramps, accessible restrooms, 
drinking fountains, interpreters for deaf employees, readers for blind 
employees, amplified telephones, TDDs such as Teletypewriters or 
Telephone Writers (TTYs), and tactile signs on elevators.
    (5) A recipient may not use employment tests or criteria that 
discriminate against handicapped persons, and shall ensure that 
employment tests are adapted for use by persons who have handicaps that 
impair sensory, manual, or speaking skills.
    (6) A recipient may not conduct a preemployment medical examination 
or make a preemployment inquiry about whether an applicant is a 
handicapped person or about the nature or severity of a handicap. A 
recipient may make, however, a preemployment inquiry into an applicant's 
ability to perform job-related functions.
    (7) When a recipient is taking remedial action to correct the 
effects of past discrimination or is taking voluntary action to overcome 
the effects of conditions that have resulted in limited participation by 
handicapped persons in its federally assisted program or activity, the 
recipient may invite applicants for employment to indicate whether and 
to what extent they are handicapped if:
    (i) The recipient makes clear to the applicants that the information 
is intended for use solely in connection with its remedial action 
obligations or its voluntary affirmative action efforts.
    (ii) The recipient makes clear to the applicants that the 
information is being requested on a voluntary basis, that it will be 
kept confidential as provided in paragraph (b)(9) in this section, that 
refusal to provide it will not subject the applicants to any adverse 
treatment, and that it will be used only in accordance with this part.
    (8) Nothing in this section shall prohibit a recipient from 
conditioning an offer of employment on the results of a medical 
examination conducted prior to the employee's entrance on duty if:
    (i) All entering employees are subjected to such an examination, 
regardless of handicap.
    (ii) The results of such an examination are used only in accordance 
with this part which prohibits discrimination against a qualified 
handicapped person on the basis of handicap.
    (9) Information obtained under this section concerning the medical 
condition or history of applicants shall be collected and maintained on 
separate forms that shall be accorded confidentiality as medical 
records, except that:
    (i) Supervisors and managers may be informed about restrictions on 
the work or duties of handicapped persons and about necessary 
accommodations.
    (ii) First aid and safety personnel may be informed, when 
appropriate, if a handicapping condition might require emergency 
treatment.
    (iii) Government officials investigating compliance with section 
504, Pub. L. 93-112, and this part shall be provided relevant 
information upon request.
    (c) Program accessibility--(1) General requirements. No qualified 
handicapped person shall, because a recipient's or DoD Component's 
facilities are inaccessible to or not usable by handicapped persons, be 
denied the benefits of, be excluded from participation in, or otherwise 
be subjected to discrimination under any program or activity that 
receives or benefits from Federal financial assistance disbursed by the 
Department of Defense or under any program or activity conducted by the 
Department of Defense.
    (2) Existing facilities. (i) A recipient or DoD Component shall 
operate each program or activity so that the program or activity, when 
viewed in its entirety, is readily accessible to and usable by 
handicapped persons. This does not necessarily require a recipient or 
DoD Component to make each of its existing facilities or every part of 
an existing facility accessible to and usable by handicapped persons. 
For guidance in determining the accessibility of facilities, see chapter 
18 of DoD 4270.1-M, ``Department of Defense Construction Criteria 
Manual,'' June 1, 1978, and Department of the Army, Office of the

[[Page 311]]

Chief of Engineers, Manual EM 1110-1-103, ``Design for the Physically 
Handicapped,'' October 15, 1976. Inquiries on specific accessibility 
design problems may be addressed to the ASD (MRA&L), or designee.
    (ii) When structural changes are necessary to make programs or 
activities in existing facilities accessible to the exent required by 
paragraph (c)(1) of this section.
    (A) Such changes shall be made as soon as practicable, but not later 
than 3 years after the effective date of this part however, if the 
program or activity is a particular mode of transportation (such as a 
subway station) that can be made accessible only through extraordinarily 
expensive structural changes to, or replacement of, existing facilities 
and if other accessible modes of transportation are available, the DoD 
Component concerned may extend this period of time. This extension shall 
be for a reasonable and definite period, which shall be determined after 
consultation with the ASD(MRA&L), or designee.
    (B) The recipient or DoD Component shall develop, with the 
assistance of interested persons or organizations and within a period to 
be established in each DoD Component's guidelines, a transition plan 
setting forth the steps necessary to complete such changes.
    (C) The recipient or DoD Component shall make a copy of the 
transition plan available for public inspection. At a minimum, the plan 
shall:
    (1) Identify physical obstacles in the recipient's or DoD 
Component's facilities that limit the accessibility of its program or 
activity to handicapped persons.
    (2) Describe in detail the methods that will be used to make the 
facilities accessible.
    (3) Specify the schedule for taking the steps necessary to achieve 
full program accessibility and, if the time period of the transition 
plan is longer than 1 year, identify steps that will be taken during 
each year of the transition period.
    (4) Indicate the person (last name, first, and middle initial) 
responsible for implementation of the transition plan.
    (iii) A recipient or DoD Component may comply with paragraphs 
(c)(2)(i) and (c)(2)(ii) of this section, through such means as the 
acquisition or redesign of equipment, such as telecommunication or other 
telephonic devices; relocation of classes or other services to 
accessible buildings; assignment of aides to beneficiaries, such as 
readers or certified sign-language interpreters; home visits; delivery 
of health, welfare, or other services at accessible alternate sites; 
alteration of existing facilities and construction of new facilities in 
conformance with paragraph (c)(3) in this section; or any other method 
that results in making the program or activity of the recipient or DoD 
Component accessible to handicapped persons.
    (iv) A recipient or DoD Component is not required to make structural 
changes in existing facilities when other methods are effective in 
achieving compliance with this section.
    (v) In choosing among available methods for meeting the requirements 
of this section, a recipient or DoD Component shall give priority to 
those methods that offer programs and activities to handicapped persons 
in the most integrated setting appropriate with nonhandicapped persons.
    (3) New Construction. New facilities shall be designed and 
constructed to be readily accessible to and usable by handicapped 
persons. Alterations to existing facilities shall be designed and 
constructed, to the maximum extent feasible, to be readily accessible to 
and usable by handicapped persons. For guidance in determining the 
accessibility of facilities, see chapter 18 of DoD 4270.1-M and 
Department of the Army, Office of the Chief of Engineers, Manual EM 
1110-1-103. Inquiries about specific accessibility design problems may 
be addressed to the ASD(MRA&L), or designee.
    (4) Historic properties. (i) In the case of historic properties, 
program accessibility shall mean that, when viewed in their entirety, 
programs are readily accessible to and usable by handicapped persons. 
Because the primary benefit of historic properties is the experience of 
the property itself, DoD Components and recipients shall give priority 
to those methods of achieving program accessibility that make the 
historic

[[Page 312]]

property, or portions thereof, physically accessible to handicapped 
persons.
    (ii) Methods of achieving program accessibility include:
    (A) Making physical alterations that give handicapped persons access 
to otherwise inaccessible areas or features of historic properties.
    (B) Using audiovisual materials and devices to depict otherwise 
inaccessible areas or features of historic properties.
    (C) Assigning individuals to guide handicapped persons into or 
through otherwise inaccessible portions of historic properties.
    (D) Adopting other innovative methods.
    (iii) When program accessibility cannot be achieved without causing 
a substantial impairment of significant historic features, the DoD 
Component or recipient may seek a modification or waiver of access 
standards from the ASD (MRA&L), or designee.
    (A) A decision to grant a modification or waiver shall be based on 
consideration of the following:
    (1) Scale of the property, reflecting its ability to absorb 
alterations.
    (2) Use of the property, whether primarily for public or private 
purposes.
    (3) Importance of the historic features of the property to the 
conduct of the program.
    (4) Costs of alterations in comparison to the increase in 
accessibility.
    (B) The ASD(MRA&L), or designee, shall review periodically any 
waiver granted under this paragraph and may withdraw it if technological 
advances or other changes warrant.
    (iv) The decision by the ASD(MRA&L), or designee, to grant a 
modification or waiver of access standards is subject to section 106 of 
the National Historic Preservation Act, as amended, and shall be made in 
accordance with the Advisory Council on Historic Preservation regulation 
on ``Protection of Historic and Cultural Properties'' (36 CFR part 800). 
When the property is federally owned or when Federal funds may be used 
for alterations, the ASD(MRA&L), or designee, shall obtain the comments 
of the Advisory Council on Historic Preservation when required by 
section 106 of the National Historic Preservation Act and the Advisory 
Council on Historic Preservation regulation on ``Protection of Historic 
and Cultural Properties'' (36 CFR part 800) prior to effectuation of 
structural alterations.
    (v) DoD Component guidelines prepared in accordance with Sec. 56.10 
shall include a listing of all historic properties, including historic 
ships, subject to this part and a plan for compliance with paragraph 
(c)(4) of this section.
    (5) Military museums. (i) In the case of military museums, program 
accessibility shall mean that exhibits, displays, tours, lectures, 
circulating or traveling exhibits, and other programs of military 
museums are accessible to and usable by handicapped persons. Methods of 
meeting this requirement include the following:
    (A) Museum programs may be made accessible to deaf and hearing-
impaired persons by means such as training museum staff, such as 
docents, in sign language; providing qualified sign-language 
interpreters to accompany deaf or hearing-impaired visitors; ensuring 
that clear, concise language is used on all museum signs and display 
labels; providing amplification devices; or providing printed scripts 
for films, videotapes, lectures, or tours. DoD Components are encouraged 
to use ``Museums and Handicapped Students: Guidelines for Educators,'' 
published by the National Air and Space Museum, Smithsonian Institution, 
Washington, DC 20560.
    (B) Museum programs may be made accessible to blind and visually-
impaired persons by means such as providing museum catalogues in a 
large-print edition printed over braille; providing cassette tapes, 
records, or discs for museum tours or exhibits; providing readers to 
accompany blind or visually impaired visitors; using large-print and 
braille display cards at exhibits; providing raised-line maps of the 
museum building; using raised-line drawings, reproductions, or models of 
large exhibits to facilitate tactile experiences when touching exhibits 
is prohibited; placing large-print and braille signs to identify 
galleries, elevators, restrooms, and other service areas; and permitting 
guide dogs in all museum facilities.

[[Page 313]]

    (C) Museum programs may be made accessible to other physically 
impaired persons by means such as lowering display cases; spacing 
exhibits to facilitate movement; using ramps in galleries; increasing 
lighting in exhibit areas to facilitate viewing from a distance; 
providing places to sit in exhibit areas; making restrooms accessible; 
using large-print exhibit display cards to facilitate reading from a 
distance; and sensitizing museum staff to consider the needs of 
handicapped visitors when organizing exhibits.
    (ii) DoD Component guidelines developed in accordance with paragraph 
(c)(5) of this section shall identify military museums subject to 
paragraph (c) of this section and shall contain a plan for making museum 
programs accessible to handicapped persons. Technical assistance in the 
preparation and content of these plans may be obtained from the National 
Access Center, 1419 27th Street, NW., Washington, DC 20007 ((202) 333-
1712 or TTY (202) 333-1339). In addition, community organizations that 
serve handicapped persons and handicapped persons themselves shall be 
consulted in the preparation of these plans.
    (d) Reasonable accommodation. (1) A recipient or DoD Component shall 
make reasonable accommodation to the known physical or mental 
limitations of an otherwise qualified handicapped applicant or employee 
unless the recipient or DoD Component demonstrates to the ASD(MRA&L), or 
designee, that the accommodation would impose an undue hardship on the 
operation of its program.
    (2) Reasonable accommodation includes the following:
    (i) Making facilities used by employees readily accessible to and 
usable by handicapped persons.
    (ii) Job restructuring; part-time or modified work schedules; 
acquisition or modification of equipment or devices, such as 
telecommunication or other telephonic instruments; the provision of 
readers or certified sign-language interpreters; and similar actions.
    (3) In determining whether an accommodation would impose an undue 
hardship on the operation of a recipient's or DoD Component's program, 
the ASD(MRA&L), or designee, shall consider the following factors, at a 
minimum:
    (i) The overall size of the recipient's or DoD Component's program 
or activity, such as the number of employees, number and type of 
facilities, and size of budget.
    (ii) The size of the recipient's or DoD Component's operations, 
including the composition and structure of the recipient's or DoD 
Component's workforce.
    (iii) The nature and cost of the accommodation needed.
    (4) A recipient or DoD Component may not deny any employment 
opportunity to a qualified handicapped employee or applicant for 
employment if the basis for the denial is the need to make reasonable 
accommodation to the physical or mental limitations of the employee or 
applicant.



Sec. 56.9  Ensuring compliance with this part in Federal financial assistance 

programs and activities.

    (a) Supplementary guidelines issued by DoD Components. (1) Whenever 
necessary, DoD Components shall publish supplementary guidelines for 
each type of program or activity to which they disburse Federal 
financial assistance within 120 days of the effective date of this part 
or of the effective date of any subsequent statute authorizing Federal 
financial assistance to a new type of program or activity. DoD 
Components shall obtain approval of these supplementary guidelines from 
the ASD(MRA&L), or designee, before issuing them. Prior to their 
issuance, the ASD(MRA&L), or designee, shall submit supplementary 
guidelines prepared pursuant to paragraph (a)(1) of this section to the 
Coordination and Review Section, Civil Rights Division, Department of 
Justice, for review and approval. To the extent that supplementary 
guidelines issued by DoD Components deal with the employment of 
civilians in programs and activities subject to this part the 
ASD(MRA&L), or designee, shall also obtain the approval of the Equal 
Employment Opportunity Commission (EEOC) in accordance with Executive 
Order 12067.
    (2) The ASD(MRA&L), or designee, and DoD Components shall ensure 
that

[[Page 314]]

their supplementary guidelines conform to the requirements of this part 
and that they provide:
    (i) A description of the types of programs and activities covered.
    (ii) Examples of prohibited practices likely to arise with respect 
to those types of programs and activities.
    (iii) A list of the data collection and reporting requirements of 
the recipients.
    (iv) Procedures for processing and investigating complaints.
    (v) Procedures for hearings to determine compliance by recipients 
with this part.
    (vi) Requirements or suggestions for affirmative action on behalf of 
qualified handicapped persons.
    (vii) Requirements for the dissemination of program and complaint 
information to the public.
    (viii) A description of the form of the assurances that must be 
executed pursuant to paragraph (b) of this section, and sample 
assurances.
    (ix) Requirements concerning the frequency and nature of 
postapproval reviews conducted pursuant to paragraph (h) of this 
section.
    (x) A period of time, provided for by Sec. 56.8(c)(2)(ii)(B), for 
the development of a transition plan that sets out the steps necessary 
to complete structural changes that might be required by Sec. 56.8(c).
    (xi) The maximum period of time that may be allowed for extensions 
that might be granted pursuant to Sec. 56.8(c)(2)(ii).
    (xii) An appendix that contains a list of identified programs and 
activities of the type covered by the supplementary guidelines, 
including the names of the programs and activities and the authorizing 
statute, regulation, or directive for each program and activity.
    (xiii) Requirements for the recipient to designate a responsible 
official to coordinate the implementation of supplementary guidelines.
    (xiv) Requirements for any other actions or procedures necessary to 
implement this part.
    (3) When the head of a DoD Component determines that it would not be 
appropriate to include on or more of the provisions described in 
paragraph (a)(2) of this section, in the supplementary guidelines of 
that DoD Component or that it is not necessary to issue such guidelines 
at all, the reasons for such determination shall be stated in writing 
and submitted to the ASD(MRA&L), or designee, for review and approval. 
Once that determination is approved, the DoD Component shall make it 
available to the public upon request.
    (4) The heads of DoD Components, or designees, shall be responsible 
for keeping the supplementary guidelines current and accurate. When a 
DoD Component determines that a program or activity should be added to 
or deleted from the guidelines, the DoD Component shall notify the 
ASD(MRA&L), or designee, in writing.
    (b) Required assurances. (1) DoD Components shall require all 
recipients to file written assurances that their programs or activities 
will be conducted in accordance with this part and supplementary 
guidelines promulgated by DoD Components. If a recipient fails to 
provide an assurance that conforms to the requirements of this section, 
the DoD Component shall attempt to effect compliance pursuant to 
paragraphs (f) through (h) of this section, provided that if assistance 
is due and payable to the recipient based on an application approved 
prior to the effective date of this part the DoD Component shall 
continue the assistance while any proceedings required by paragraphs (n) 
through (v) of this section, are pending.
    (2) DoD Components shall advise each recipient of the required 
elements of the assurance and, with respect to each program or activity, 
of the extent to which those receiving assistance from recipients shall 
be required to execute similar assurances.
    (3) DoD Component shall ensure that each assurance:
    (i) Obligates the recipient to advise the DoD Component of any 
complaints received that allege discrimination against handicapped 
persons.
    (ii) Obligates the recipient to collect and provide the items of 
information that the DoD Component lists in its supplementary guidelines 
pursuant to paragraph (a)(2)(iii) of this section.
    (iii) Is made applicable to any Federal financial assistance that 
might be

[[Page 315]]

disbursed by a DoD Component without the submission of a new 
application.
    (iv) Obligates the recipient, when the financial assistance is in 
the form of proprerty, for the period during which the property is used 
under a financial assistance agreement or is possessed by the recipient.
    (v) Includes a provision recognizing that the U.S. Government has 
the right to seek judicial enforcement of section 504 and this part.
    (c) Self-evaluation and consultation with interested persons and 
organizations. (1) DoD Components shall require recipients to conduct, 
within 6 months of the effective date of this part or of first receiving 
Federal financial assistance disbursed by the Department of Defense, a 
self-evaluation with the assistance of interested persons, including 
handicapped persons or organizations that represent them. When 
appropriate, DoD Components also shall require recipients to consult at 
least annually with such persons. The ``Department of Health, Education, 
and Welfare Section 504 Technical Assistance Reserve Directory,'' April 
1980, shall be consulted to identify likely sources for consultation. In 
conducting its self-evaluation, each recipient shall:
    (i) Evaluate the effects of its policies and practices with respect 
to its compliance with this part and the applicable DoD Component's 
supplementary guidelines.
    (ii) Modify any policies that do not meet such requirements.
    (iii) Take appropriate remedial steps to eliminate the 
discriminatory effects of any such policies or practices.
    (2) For at least 3 years following the completion of a self-
evaluation required under paragraph (c)(1) of this section, a recipient 
shall maintain on file, make available for public inspection, and 
provide to the ASD(MRA&L), or designee, upon request:
    (i) A list of the interested persons (last names, first names, and 
middle initials) consulted.
    (ii) A description of areas examined and problems identified, if 
any, with respect to those areas.
    (iii) A description of any modification made and remedial steps 
taken.
    (d) Dissemination of information. (1) Within 90 days of the 
effective date of this part or of first receiving assistance from the 
Department of Defense and on a continuing basis thereafter, each 
recipient shall notify beneficiaries and employees of their rights under 
this part and shall take appropriate steps to notify participants, 
beneficiaries, applicants for employment and employees, including those 
with impaired vision or hearing, and unions or professional 
organizations involved in collective bargaining or professional 
agreements with the recipient that the recipient does not discriminate 
on the basis of handicap in violation of this part. The notification 
shall state, when appropriate, that the recipient does not discriminate 
in admitting or providing access to or treating or employing persons in 
its programs and activities. Such notification may be accomplished by 
posting notices, publishing announcements in newspapers and magazines, 
placing notices in its publications, or distributing memoranda or other 
written communications.
    (2) If a recipient publishes or uses and makes available to 
participants, beneficiaries, applicants for employment, or employees 
recruitment materials or publications containing general information 
about the recipient's programs and activities, it shall include in those 
materials or publications a statement of the policy described in 
paragraph (d)(1) of this section. This may be accomplished by including 
appropriate inserts in existing materials and publications or by 
revising and reprinting the materials and publications.
    (3) Understandable materials developed in accordance with this 
section shall be provided to ensure that all beneficiaries and employees 
of the recipient understand the information. In addition, recipients 
shall disseminate appropriate and comprehensive information about formal 
and informal complaint and appeal procedures, including directions on 
how and where to file complaints and to appeal DoD Component decisions.
    (e) Intimidation and interference. Recipients and DoD Components 
shall take reasonable steps to ensure that no person intimidates, 
threatens, coerces, or discriminates against any individual

[[Page 316]]

for the purpose of retaliating against, interfering with, or 
discouraging the filing of a complaint, furnishing of information, or 
assisting or participating in an investigation, compliance review, 
hearing, or other activity related to the administration of this part.
    (f) Staff responsibilities. All DoD Component determinations of 
recipient compliance with this part shall be subject to reviews by the 
ASD(MRA&L), or designee. When responsibility for approving applications 
for Federal financial assistance disbursed by a DoD Component is 
assigned to regional or area offices of the DoD Component, personnel in 
such offices shall be designated to perform the functions described in 
paragraphs (h) and (o) through (w) of this section.
    (g) Access to records and facilities. Each recipient shall permit 
access to its premises by DoD officials during normal business hours 
when such access is necessary for conducting onsite compliance reviews 
or complaint investigations, and shall allow such officials to 
photograph facilities and to inspect and copy any books, records, 
accounts, and other material relevant to determining the recipient's 
compliance with this part. Information so obtained shall be used only in 
connection with the administration of this part. If the recipient does 
not have the information requested, it shall submit to the DoD Component 
a written report that contains a certification that the information is 
not available and describes the good-faith efforts made to obtain the 
information.
    (h) Compliance review. DoD Components shall determine the compliance 
of each recipient with this part as follows: (1) General. Whenever 
possible, DoD Components shall perform compliance reviews in conjunction 
with their review and audit efforts implementing title VI of the Civil 
Rights Act of 1964.
    (2) Desk audit application review. Before approving an application 
for Federal financial assistance, the DoD Component concerned shall make 
a written determination as to whether the recipient is in compliance 
with this part, based on a review of the assurance of compliance 
executed by a recipient pursuant to paragraph (b) of this section, and 
other data submitted by the recipient. When a determination cannot be 
made from the assurance and other data submitted by the recipient, the 
DoD Component concerned shall require the recipient to submit additional 
information and shall take other steps as necessary to determine the 
recipient's compliance with this part. If this additional information 
demonstrates that the recipient is in compliance with this part, the DoD 
Component shall notify the recipient promptly that it is in compliance.
    (3) Preapproval onsite review. (i) When a desk audit application 
review conducted pursuant to paragraph (h)(2) of this section indicates 
that the recipient might not be in compliance with this part, the DoD 
Component concerned may conduct a preapproval onsite review at the 
recipient's facilities before approving the disbursement of Federal 
financial assistance to the recipient. The DoD Component shall conduct 
such a review:
    (A) When appropriate, if a desk audit application review reveals 
that the recipient's compliance posture is questionable because of a 
history of discrimination complaints, current discrimination complaints, 
a noncompliance determination by another government agency or DoD 
Component, or other indications of possible noncompliance; or
    (B) If Federal financial assistance is requested for construction, 
except under extraordinary circumstances, to determine whether the 
location and design of the project would provide service on a 
nondiscriminatory basis, in conformity with Sec. 56.8(c).
    (ii) Preapproval onsite reviews shall be conducted under DoD 
Component supplementary guidelines and in accordance with the provisions 
of paragraph (h)(4) of this section, concerning postapproval reviews.
    (4) Postapproval reviews. DoD Components shall: (i) Establish and 
maintain effective programs of postapproval reviews.
    (ii) Conduct such reviews of each recipient, the frequency and the 
nature of which shall be prescribed in the DoD Component supplemetary 
guidelines implementing this part.
    (iii) Require recipients periodically to submit compliance reports 
to them.

[[Page 317]]

    (iv) Record the results of the reviews, including findings of fact 
and recommendations.
    (5) A DoD Component shall complete a review within 180 calendar days 
of initiating it unless an extension of time is granted by the 
ASD(MRA&L), or designee, for good cause shown, and shall either:
    (i) Find the recipient to be in compliance and notify the recipient 
of that finding; or
    (ii) Notify the recipient and the ASD(MRA&L), or designee, of a 
finding of probable noncompliance, pursuant to paragraph (o) of this 
section.
    (i) Filing of complaints against recipients. (1) DoD Components 
shall establish and publish in their supplementary guidelines procedures 
for the prompt processing and disposition of complaints against 
recipients, consistent with this section.
    (2) A DoD Component shall consider all complaints that: (i) Are 
filed with it within 180 days of the alleged discrimination or within a 
longer period of time if an extension is granted for good cause by the 
DoD Component with the approval of the ASD(MRA&L), or designee.
    (ii) Include the name, address, and telephone number, if any, of the 
complainant; the name and address of the recipient committing the 
alleged discrimination; a description of the acts or omissions 
considered to be discriminatory; and other pertinent information.
    (iii) Are signed by the complainant or the complainant's authorized 
representative (legal counsel or a person with power of attorney granted 
by the complainant).
    (3) DoD Components shall transmit a copy of each complaint filed 
with them to the ASD(MRA&L), or designee, within 10 calendar days after 
its receipt.
    (4) If the information in a complaint is incomplete, the DoD 
Component shall request the complainant to provide the additional 
information required. If the DoD Component does not receive this 
requested information within 30 calendar days of the date of the 
request, the case may be closed and the complainant so notified in 
writing.
    (5) If a complaint concerning a program or activity is filed with a 
DoD Component that does not have jurisdiction over it, the DoD Component 
shall refer the complaint to the ASD(MRA&L), or designee, and advise the 
complainant in writing of such referral. The ASD(MRA&L), or designee, 
then shall refer the complaint to the appropriate DoD Component and so 
notify the complainant in writing.
    (j) Investigation by DoD components. (1) DoD Components shall 
investigate complaints that involve recipients and that meet the 
standards described in paragraph (i) of this section, unless good cause 
for not investigating is stated in a written notification of the 
disposition of the complaint provided to the complainant.
    (2) If an investigation of a complaint is conducted, the DoD 
Component concerned shall maintain a case record that contains:
    (i) The name (last name, first, and middle initial), address (street 
address, city, State, and zip code), and telephone number of each person 
interviewed.
    (ii) Copies, transcripts, or summaries of pertinent documents.
    (iii) A reference to at least one program or activity conducted by 
the recipient and receiving Federal financial assistance disbursed by a 
DoD Component, and a description of the amount and nature of the 
assistance.
    (iv) A narrative report of the results of the investigation that 
contains references to relevant exhibits and other evidence that relates 
to the alleged violations.
    (k) Investigations by recipients. (1) A DoD Component may require or 
permit recipients to investigate complaints alleging violation of this 
part. In such cases, the DoD Component shall:
    (i) Ensure that the recipient investigates the complaints in 
accordance with the standards, procedures, and requirements prescribed 
in paragraph (j) of this section.
    (ii) Require the recipient to submit a written report of each 
complaint and investigation to the DoD Component.
    (iii) Retain a review responsibility over the investigation and 
disposition of each complaint.

[[Page 318]]

    (iv) Ensure that each complaint investigation is completed within 
180 calendar days of the receipt of the complaint by the proper DoD 
Component, unless an extension of time is granted for good cause by the 
ASD(MRA&L), or designee.
    (v) Require the recipient to maintain a log of all complaints filed 
against it, as described in Sec. 56.6(a)(1).
    (2) DoD Components that require or permit complaint investigations 
to be conducted by recipients shall review recipient complaint 
investigations pursuant to paragraphs (k) and (l) of this section.
    (l) Results of investigations. (1) Within 180 days of the receipt of 
a complaint, the DoD Component, recipient, or the ASD(MRA&L), or 
designee, shall give written notification:
    (i) Of the disposition of the complaint to the complainant and, as 
the case may be, to the recipient or DoD Component.
    (ii) To the complainant that within 30 calendar days of receipt of 
the written notification, the complainant may request that the 
ASD(MRA&L), or designee, review the findings in the notification 
pursuant to paragraph (m) of this section.
    (2) If the complaint investigation results in a determination by the 
DoD Component that a recipient is not complying with this part the DoD 
Component shall proceed as prescribed in paragraph (n) through (v) of 
this section. If the DoD Component determines that the recipient is in 
compliance, the DoD Component shall submit the complete case file to the 
ASD(MRA&L), or designee, within 15 calendar days after the notification 
of the disposition of the investigation to the complainant.
    (m) Reviewing completed investigations. (1) The ASD(MRA&L), or 
designee, may review all completed investigations.
    (2) The ASD(MRA&L), or designee, shall review the results of any 
investigation of a complaint if the complainant requests such a review 
pursuant to paragraph (l)(1)(ii) of this section.
    (3) After reviewing the results of an investigation, the ASD(MRA&L), 
or designee, may:
    (i) Find that no further investigation is necessary and approve the 
results of the investigation;
    (ii) Request further investigation by the DoD Component; or
    (iii) Require the DoD Component to take appropriate corrective 
action.
    (n) Effecting compliance. (1) When a compliance review or complaint 
investigation indicates that a recipient has violated this part, the 
applicable DoD Component's supplementary guidelines, or the assurances 
executed pursuant to paragraph (b) of this section, the responsible DoD 
Component or the ASD(MRA&L), or designee, shall attempt to effect 
compliance in accordance with paragraphs (o) and (p) of this section. 
The inability of a DoD Component to comply with any time frame 
prescribed by this part does not relieve a recipient of the 
responsibility for compliance with this part.
    (2) The DoD Component may require, when necessary to overcome the 
effects of discrimination in violation of this part, a recipient to take 
remedial action:
    (i) With respect to handicapped persons who are no longer 
participants in the recipient's program or activity but who were 
participants in the program or activity when such discrimination 
occurred.
    (ii) With respect to handicapped persons who would have been 
participants in the recipient's program or activity had the 
discrimination not occurred.
    (iii) With respect to handicapped persons presently in the 
recipient's program or activity, but not receiving full benefits or 
equal and integrated treatment within the program or activity.
    (o) Written notice.  After evaluating the investigative report, the 
DoD Component shall issue to the recipient and, pursuant to paragraph 
(n)(2) of this section to the ASD(MRA&L), or designee, a written notice 
that:
    (1) Describes the apparent violation and the corrective actions 
necessary to achieve compliance.
    (2) Extends an offer to meet informally with the recipient.
    (3) Informs the recipient that failure to respond to the notice 
within 15 calendar days of its receipt shall result in

[[Page 319]]

the initiation of enforcement procedures described in paragraphs (r) 
through (v), of this section.
    (p) Attempting to achieve voluntary compliance by recipients. (1) If 
a DoD Component issues a notice pursuant to paragraph (o) of this 
section, the DoD Component shall attempt to meet with the recipient and 
shall attempt to persuade it to take the steps necessary to achieve 
compliance with this part.
    (2) If a recipient agrees to take remedial steps to achieve 
compliance, the DoD Component shall require that the agreement be in 
writing and:
    (i) Be signed by the head of the DoD Component concerned, or 
designee, and by the principal official of the recipient.
    (ii) Specify the action necessary to achieve compliance.
    (iii) Be made available to the public upon request.
    (iv) Be subject to the approval of the ASD(MRA&L), or designee.
    (3) If satisfactory adjustment or a written agreement has not been 
achieved within 60 calendar days of the recipient's receipt of the 
notice issued pursuant to paragraph (o) of this section, the DoD 
Component shall notify the ASD(MRA&L), or designee, and state the 
reasons therefor.
    (4) The DoD Component shall initiate the enforcement actions 
prescribed in paragraphs (r) through (v) of this section if:
    (i) The recipient does not respond to a notice pursuant to paragraph 
(o) of this section, within 15 calendar days of its receipt and 
satisfactory adjustments are not made within 45 calendar days of the 
date of the recipient's response; or
    (ii) The DoD Component or the ASD (MRA&L) determines at any time 
within 90 days after the recipient receives a notice pursuant to 
paragraph (o) of this section, that, despite reasonable efforts, it is 
not likely that the recipient will comply promptly and voluntarily.
    (5) If, pursuant to paragraph (p)(4) of this section, the DoD 
Component initiates enforcement action, it also shall continue its 
attempts to persuade the recipient to comply voluntarily.
    (q) Imposing sanctions--(1) Sanctions available. If a DoD Component 
has taken action pursuant to paragraphs (o) and (p) of this section, the 
DoD Component may, by order, subject to paragraph (q)(2) and (q)(3) of 
this section:
    (i) Terminate, suspend, or refuse to grant or continue assistance to 
such recipient.
    (ii) Refer the case to the Department of Justice for the initation 
of enforcement proceedings at a Federal, State, or local level.
    (iii) Pursue any remedies under State or local law.
    (iv) Impose other sanctions upon consultation with the ASD (MRASL), 
or designee.
    (2) Terminating, suspending, or refusing to grant or continue 
assistance. A DoD Component may not terminate or refuse to grant or 
continue Federal financial assistance unless:
    (i) Such action has been approved by the Secretary of Defense.
    (ii) The DoD Component has given the recipient an opportunity for a 
hearing pursuant to the procedures set out in paragraph (r) of this 
section, and a finding of noncompliance has resulted.
    (iii) Thirty calendar days have elapsed since the Secretary of 
Defense has filed a written report describing the violation and action 
to be taken with the committees of the House of Representatives and 
Senate that have jurisdiction over the program or activity in which the 
violation of this part exists.
    (iv) Such action is limited to affect only the particular activity 
or program, or portion thereof, of the recipient where the violation 
exists.
    (3) Other sanctions. A DoD Component may not impose the sanctions 
set out in paragraphs (q)(1) (iii) and (iv) of this section, unless:
    (i) The DoD Component has given the recipient an opportunity for a 
hearing pursuant to paragraph (r) of this section, and a finding of 
noncompliance has resulted.
    (ii) The action has been approved by the Secretary of Defense.
    (iii) Ten calendar days have elapsed since the mailing of a notice 
informing the recipient of its continuing failure to comply with this 
part the action necessary to achieve compliance, and the sanction to be 
imposed.

[[Page 320]]

    (iv) During those 10 calendar days the DoD Component has made 
additional efforts to persuade the recipient to comply.
    (r) Hearings for recipients--(1) General. When, pursuant to 
paragraph (q)(2)(ii) of this section, an opportunity for a hearing is 
given to a recipient, the DoD Component involved shall follow the 
procedures prescribed in paragraphs (r)(2) through (r)(6) of this 
section.
    (2) Notice. The DoD Component concerned shall notify the recipient 
of the opportunity for a hearing by registered or certified mail, return 
receipt requested, when the recipient denies a tentative finding of 
noncompliance with this part.
    (i) The DoD Component shall ensure that the notice:
    (A) Describes the proposed sanctions to be imposed.
    (B) Cites the section of this part under which the proposed action 
is to be taken.
    (C) States the name and office of the DoD Component official who is 
responsible for conducting the hearing (hereafter referred to as the 
``responsible DoD official'').
    (D) Outlines the issues to be decided at the hearing.
    (E) Advises the recipient either of a date, not less than 20 
calendar days after the date that the notice is received, by which the 
recipient may request that the matter be scheduled for a hearing, or of 
a reasonable time and place of a hearing that is subject to change for 
good cause shown.
    (ii) When a time and place for a hearing are set, the DoD Component 
shall give the recipient and the complainant, if any, reasonable notice 
of such time and place.
    (3) Waiver of a hearing. A recipient may waive a hearing and submit 
to the responsible DoD official, in writing, information or arguments on 
or before the date stated pursuant to paragraph (r)(2)(i)(E) of this 
section.
    (i) A recipient waives its right to a hearing if it fails to request 
a hearing on or before a date stated pursuant to paragraph (r)(2)(i)(E) 
of this section, or fails to appear at a hearing that has been scheduled 
pursuant to that paragraph.
    (ii) If a recipient waives its right to a hearing under this 
section, the responsible DoD official shall decide the issues and render 
a final decision that is based on the information available and that 
conforms to the requirements of paragraph (s)(4) of this section.
    (4) Hearing examiner. Hearings shall be conducted by the responsible 
DoD official or by a hearing examiner designated by the official, 
provided that the hearing examiner shall be a field grade officer or 
civilian employee above the grade of GS-12 (or the equivalent) who is 
admitted to practice law before a Federal court or the highest court of 
a State, territory, commonwealth, or the District of Columbia.
    (5) Right to counsel. In all proceedings under this section, the 
recipient and the DoD Component may be represented by counsel. The 
representation of the recipient will not be at U.S. Government expense.
    (6) Procedures. Hearings authorized under this section shall be 
subject to the following: (i) Hearings shall be open to the public.
    (ii) Formal rules of evidence will not apply. The DoD Component 
concerned and the recipient shall be entitled to introduce all relevant 
evidence on the issues stated in the notice of hearing issued pursuant 
to paragraph (r)(2) of this section, and those designated by the 
responsible DoD official or the hearing examiner at the outset of or 
during the hearing. The responsible DoD official or hearing examiner, 
however, may exclude irrelevant, immaterial, or repetitious evidence.
    (iii) All witnesses may be examined or cross-examined, as the case 
may be, by each party.
    (iv) All parties shall have the opportunity to examine all evidence 
offered or admitted for the record.
    (v) A transcript of the proceedings shall be maintained in either 
electronic or typewritten form and made available to all parties.
    (s) Decisions--(1) Initial or proposed decisions by a hearing 
examiner. If a hearing is conducted by a hearing examiner who is 
designated by the responsible DoD official pursuant to paragraph (r)(4) 
of this section, the hearing examiner shall either:

[[Page 321]]

    (i) Make an initial decision, if so authorized, that conforms to the 
requirements of paragraph (s)(4) of this section; or
    (ii) Certify the entire record and submit to the responsible DoD 
official recommended findings and a proposed decision.
    (2) Review of initial decisions. Initial decisions made by a hearing 
examiner pursuant to paragraph (s)(1)(i) of this section, shall be 
reviewed as follows:
    (i) A recipient may file exceptions to an initial decision within 30 
calendar days of receiving notice of such initial decision. Reasons 
shall be stated for each exception.
    (ii) If the recipient does not file exceptions pursuant to paragraph 
(s)(2)(i) of this section, the responsible DoD official may notify the 
recipient within 45 calendar days of the initial decision that the 
responsible DoD official will review the decisions.
    (iii) If exceptions are filed pursuant to paragraph (s)(2)(i) of 
this section, or a notice of review is issued pursuant to paragraph 
(s)(2)(ii) of this section, the responsible DoD official shall review 
the initial decision and, after giving the recipient reasonable 
opportunity to file a brief or other written statement of its 
contentions, issue a final decision that addresses each finding and 
conclusion in the initial decision and each exception, if any.
    (iv) If the exceptions described in paragraph (s)(2)(i) of this 
section are not filed and the responsible DoD official does not issue 
the notice of review described in paragraph (s)(2)(ii) of this section, 
the initial decision of the hearing examiner shall constitute the final 
decision of the responsible DoD official.
    (3) Decisions by the responsible DoD official who conducts a hearing 
or receives a certified record. If a hearing examiner who is designated 
by the responsible DoD official certifies the entire record and submits 
recommended findings and a proposed decision to the responsible DoD 
official pursuant to paragraph (s)(1)(ii) of this section, or if the 
responsible DoD official conducts the hearing, after giving the 
recipient a reasonable opportunity to file a brief or other written 
statement of its contentions, the responsible DoD official shall render 
a final decision that conforms to paragraph (s)(4) of this section.
    (4) Contents of decisions. Each decision of a hearing examiner or 
responsible DoD official shall state all findings and conclusions and 
identify each violation of this part. The final decision may contain an 
order pursuant to paragraph (q) of this section, providing for the 
suspension or termination of or refusal to grant or continue all or some 
of the Federal financial assistance under the program or activity 
involved and contain terms, conditions, and other provisions that are 
consistent with and intended to achieve compliance with this Directive.
    (5) Notice of decisions and certifications. The responsible DoD 
official shall provide a copy of any certified record of a hearing and 
any initial or final decision to the recipient and the complainant, if 
any.
    (6) Review by the Secretary of Defense. The responsible DoD official 
shall transmit promptly any final decision that orders a suspension, 
termination, or denial of Federal financial assistance through the 
ASD(MRA&L) to the Secretary of Defense. The Secretary may;
    (i) Approve the decision;
    (ii) Vacate the decision; or
    (iii) Remit or mitigate any sanction imposed.
    (t) Restoring eligibility for financial assistance. (1) A recipient 
that is affected adversely by a final decision issued under paragraph 
(s) of this section, may at any time request the responsible DoD 
official to restore fully its eligibility to receive Federal financial 
assistance.
    (2) If the responsible DoD official determines that the information 
supplied by the recipient demonstrates that it has satisfied the terms 
and conditions of the order entered pursuant to paragraph (s) of this 
section, and that is complying with and has provided reasonable 
assurance that it will continue to comply with this part the responsible 
DoD official shall restore such eligibility immediately.
    (3) If the responsible DoD official denies a request for restoration 
of eligibility, the recipient may submit a written request for a hearing 
that states

[[Page 322]]

why it believes the responsible DoD official erred in denying the 
request. Following such a written request, the recipient shall be given 
an expeditious hearing under rules of procedure issued by the 
responsible DoD official to determine whether the requirements described 
in paragraph (t)(2) of this section, have been met. While any such 
proceedings are pending, the sanctions imposed by the order issued under 
paragraph (s) of this section, shall remain in effect.
    (u) Interagency cooperation and delegation. (1) When several 
recipients are receiving assistance for the same or similar purposes 
from a DoD Component and another Federal agency, the DoD Component shall 
notify the ASD (MRA&L), or designee. Such notification shall be in 
writing and shall contain:
    (i) A description of the programs and activities involved.
    (ii) A statement of the amount of money expended on the programs and 
activities in the previous and current fiscal year by the DoD Component 
and the agency.
    (iii) A list of the known primary recipients.
    (2) The ASD(MRA&L), or designee, shall attempt to negotiate with the 
Federal agency a written delegation agreement that designates the agency 
or the DoD Component as the primary agency for purposes of ensuring 
compliance with section 504 of Public Law 93-112, as amended, and this 
part depending upon which of them administers a larger financial 
assistance program with the common recipients and other relevant 
factors. If necessary, the agreement shall establish procedures to 
ensure the enforcement of section 504 of Public Law 93-112, as amended, 
and this part. The ASD(MRA&L), or designee, shall provide written 
notification to recipients of an agreement reached under this 
subsection.
    (3) When several recipients are receiving assistance for the same or 
similar purposes from two or more DoD Components, the DoD Components may 
negotiate a proposed written delegation agreement that:
    (i) Assigns responsibility for ensuring that the recipient complies 
with this part to one of the DoD Components.
    (ii) Provides for the notification to recipients and the responsible 
program officials of the DoD Components involved of the assignment of 
enforcement responsibility.
    (4) No delegation agreement reached in accordance with paragraph 
(u)(3) to this section shall be effective until it is approved by the 
ASD(MRA&L), or designee.
    (5) When possible, existing delegation agreements relating to title 
VI of the Civil Rights Act of 1964 shall be amended to provide for the 
enforcement of this part.
    (6) Any DoD Component conducting a compliance review or 
investigating a complaint of an alleged violation by a recipient shall 
notify any other affected agency or DoD Component through the 
ASD(MRA&L), or designee, upon discovery that the agency or DoD Component 
has jurisdiction over the program or activity in question and shall 
subsequently inform it of the finding made. Such reviews or 
investigations may be conducted on a joint basis.
    (7) When a compliance review or complaint investigation under this 
part reveals a possible violation of Executive Order 11246, titles VI or 
VII of the Civil Rights Act of 1964, or any other Federal law, the DoD 
Component shall notify the appropriate agency, through the ASD(MRA&L), 
or designee.
    (v) Coordination with sections 502 and 503. (1) DoD Components shall 
use DoD 4270.1-M and Department of the Army, Office of the Chief of 
Engineers, Manual EM 1110-1-103, in developing requirements for the 
accessibility of facilities. If DoD Components encounter issues with 
respect to section 502 of the Rehabilitation Act of 1973, as amended, 
that are not covered by these publications, the ASD(MRA&L), or designee, 
may be consulted. If necessary, the ASD(MRA&L), or designee, shall 
consult with the Architectural and Transportation Barriers Compliance 
Board in resolving such problems.
    (2) DoD Components may advise recipients to consult directly with 
the Architectural and Transportation Barriers Compliance Board in 
developing accessibility criteria.

[[Page 323]]

    (3) DoD Components shall coordinate enforcement actions relating to 
the accessibility of facilities with the Architectural and 
Transportation Barriers Compliance Board and shall notify the 
ASD(MRA&L), or designee, of such coordination.
    (4) If a recipient is also a Federal contractor subject to section 
503 of the Rehabilitation Act of 1973, as amended, and the regulations 
thereunder (41 CFR part 60-741) and if a DoD Component has reason to 
believe that the recipient is in violation thereof, the DoD Component 
shall coordinate enforcement actions with the Department of Labor, 
Office of Federal Contract Compliance Programs. The DoD Component shall 
notify the ASD(MRA&L), or designee, of such coordination.



Sec. 56.10  Ensuring compliance with this part in programs and activities 

conducted by the Department of Defense.

    (a) Supplementary guidelines. (1) Whenever necessary, the 
ASD(MRA&L), or designee, shall publish supplementary guidelines for 
programs and activities that are conducted by DoD Components and that 
are subject to this Directive. Prior to their issuance, the ASD(MRA&L), 
or designee, shall submit supplementary guidelines prepared pursuant to 
this subsection to the Coordination and Review Section, Civil Rights 
Division, Department of Justice, for review.
    (2) The heads of DoD Components, or designees, shall be responsible 
for keeping the supplementary guidelines described in this section 
current and accurate. When a DoD Component head determines that a 
program or activity should be added to or deleted from the guidelines, 
that official shall notify the ASD(MRA&L), or designee, in writing.
    (b) Staff responsibilities. The ASD(MRA&L), or designee, shall 
determine DoD Component compliance with this part as it pertains to 
programs and activities that are conducted by DoD Components and are 
subject to this part.
    (c) Filing of complaints. (1) Complaints of discrimination in a 
program or activity conducted by a DoD Component may be filed directly 
with the ASD(MRA&L), or designee.
    (2) DoD Components shall develop procedures, such as posters or 
other devices, to notify participants in the programs and activities 
listed in Sec. 56.7(c) of their right to be free of discrimination 
because of handicap in those programs and activities and of their right 
to file complaints of discrimination with the ASD(MRA&L), or designee.
    (d) Investigations of complaints. (1) The ASD(MRA&L), or designee, 
shall investigate complaints of discrimination in programs and 
activities that are conducted by DoD Components and are subject to this 
part.
    (2) A case record of each investigation shall be compiled in 
accordance with Sec. 56.9(j)(2).
    (e) Results of investigations. If the complaint investigation 
results in a determination by the ASD(MRA&L), or designee, that a DoD 
Component's program or activity is not complying with Sec. 56.9, the 
ASD(MRA&L), or designee, shall proceed as prescribed in Sec. 56.9 (n) 
through (v). Hearings prescribed under Sec. 56.9(r) however, need not 
be conducted. If the ASD(MRA&L), or designee, determines that the DoD 
Component is in compliance, the ASD(MRA&L), or designee, shall notify 
the complainant within 15 calendar days of such determination.
    (f) Written notice. If an investigative report concludes that there 
has been a violation of this part in a program or activity conducted by 
a DoD Component and the ASD(MRA&L), or designee, accepts that 
conclusion, that official shall issue to the head of the DoD Component a 
written notice describing the apparent violation, the corrective actions 
necessary to achieve compliance, and a suspense date for completion of 
the corrective actions.
    (g) Effecting compliance. When necessary to overcome the effects of 
discrimination in violation of this part the ASD(MRA&L), or designee, 
may require a DoD Component to take remedial action similar to that in 
Sec. 56.9(n)(2).
    (h) Employment. DoD Components that conduct Federal programs or 
activities covered by this part that involve employment of civilian 
persons to conduct such a program or activity must comply with section 
501 of the Rehabilitation Act of 1973, as amended,

[[Page 324]]

and the implementing rules and regulations of the EEOC.



PART 57_PROVISION OF EARLY INTERVENTION AND SPECIAL EDUCATION SERVICES TO 

ELIGIBLE DOD DEPENDENTS--Table of Contents



Sec.
57.1 Purpose.
57.2 Applicability and scope.
57.3 Definitions.
57.4 Policy.
57.5 Responsibilities.
57.6 Procedures.

Appendix A to Part 57--Procedures for the Provision of Early 
          Intervention Services for Infants and Toddlers With 
          Disabilities and Their Families
Appendix B to Part 57--Procedures for the Provision of Educational 
          Programs and Services for Children With Disabilities, Ages 3 
          Through 21 Years, Inclusive
Appendix C to Part 57--Procedures for the Provision of Related Services 
          by the Military Medical Departments to DoDDS Students on IEPs
Appendix D to Part 57--The DoD-AP
Appendix E to Part 57--DoD-CC on Early Intervention, Special Education, 
          and Related Services
Appendix F to Part 57--Parent and Student Rights
Appendix G to Part 57--Mediation and Hearing Procedures
Appendix H to Part 57--Monitoring

    Authority: 20 U.S.C. 921 and 1400.

    Source: 69 FR 32662, June 10, 2004, unless otherwise noted.



Sec. 57.1  Purpose.

    This part:
    (a) Implements policy, assigns responsibilities, and prescribes 
procedures under 20 U.S.C. chapter 33 and 20 U.S.C. 921-932, 10 U.S.C. 
2164, DoD Directive 1342.6 \1\, DoD Directive 1342.21, DoD Instruction 
1342.26, DoD Directive 1342.13, and DoD Directive 5105.4 for the 
following:
---------------------------------------------------------------------------

    \1\ All unclassified DoD Directives, DoD Instructions, and DoD 
Publications mentioned in this part may be obtained via Internet at 
http://www.dticmil/whs/directives.
---------------------------------------------------------------------------

    (1) Provision of early intervention services (EIS) to infants and 
toddlers with disabilities (birth through 2 years, inclusive) and their 
families, and special education and related services (hereafter referred 
to as ``special services'') to children with disabilities (ages 3 
through 21 years, inclusive) entitled to receive special services from 
the Department of Defense in accordance with 10 U.S.C. 2164, DoD 
Directive 1342.6, DoD Directive 1342.21, DoD Instruction 1342.26, DoD 
Directive 1342.13, and DoD Directive 5105.4.
    (2) Implementation of a comprehensive, multidisciplinary program of 
EIS for infants and toddlers (birth through 2 years, inclusive) with 
disabilities, and their families.
    (3) Provision of a free, appropriate public education (FAPE) 
including special education and related services for children with 
disabilities enrolled in the DoD school systems, as specified in their 
Individualized Educational Programs (IEP).
    (4) Monitoring of DoD programs providing EIS, special education, and 
related services for compliance with this part.
    (5) Establishment of a DoD Advisory Panel (DoD-AP) on Early 
Intervention, Special Education, and Related Services and a DoD 
Coordinating Committee (DoD-CC) on Early Intervention, Special 
Education, and Related Services in accordance with DoD Directive 5105.4.
    (b) Authorizes implementing instructions, a DoD Manual entitled 
``Standard Operating Procedures for the Provision of Early Intervention, 
Special Education and Related Services,'' consistent with DoD 5025.1-M 
and DoD forms consistent with DoD 8910.1-M, DoD Instruction 7750.7, and 
Hospital Accreditation Standards.



Sec. 57.2  Applicability and scope.

    This part:
    (a) Applies to the Office of the Secretary of Defense, the Military 
Departments, the Chairman of the Joint Chiefs of Staff, the Combatant 
Commands, the Office of the Inspector General of the Department of 
Defense, the Defense Agencies, the DoD Field Activities, and all other 
organizational entities in the Department of Defense (hereafter referred 
to collectively as ``the DoD Components'').

[[Page 325]]

    (b) Applies to infants, toddlers, and children receiving or entitled 
to receive special services from the Department of Defense, and their 
parents.
    (c) Applies to DoD Domestic Dependents Elementary and Secondary 
Schools (DDESS) operated by the Department of Defense within the 
continental United States, Alaska, Hawaii, and territories, 
commonwealths and possessions of the United States (hereafter referred 
to as ``domestic'').
    (d) Applies to DoD Dependents Schools (DoDDS) operated by the 
Department of Defense outside the continental United States and its 
territories, commonwealths and possessions (hereafter referred to as 
``overseas'').
    (e) Does not create any rights or remedies and may not be relied 
upon by any person, organization, or other entity to allege a denial of 
such rights or remedies.



Sec. 57.3  Definitions.

    (a) Age of Majority. The age when a person acquires the rights and 
responsibilities of being an adult. For purposes of this part, a child 
attains majority at age 18.
    (b) Alternate Assessment. A process that measures the performance of 
students with disabilities unable to participate, even with 
accommodations provided, in system-wide assessment.
    (c) Alternative Educational Setting (AES). A temporary setting other 
than the school (e.g., home, installation library) normally attended by 
the student. The interim AES shall:
    (1) Be selected so as to enable the child to continue to progress in 
the general curriculum, although in another setting, and to continue to 
receive those services and modifications, including those described in 
the child's current IEP, that shall enable the child to meet the goals 
set out in that IEP; and
    (2) Include services and modifications to address the behavior that 
resulted in the child being considered or placed in an AES.
    (d) Assessment. The ongoing procedures used by appropriately 
qualified personnel throughout the period of a child's eligibility 
determination to identify the child's unique needs; the family's 
strengths and needs related to development of the child; and the nature 
and extent of early intervention services that are needed by the child 
and the child's family to meet their unique needs.
    (e) Assistive Technology Device. Any item, piece of equipment, or 
product system, whether acquired commercially or off the shelf, 
modified, or customized, that is used to increase, maintain, or improve 
functional capabilities of children with disabilities.
    (f) Assistive Technology Service. Any service that directly assists 
an individual with a disability in the selection, acquisition, or use of 
an assistive technology device. The term includes the following:
    (1) The evaluation of the needs of an individual with a disability, 
including a functional evaluation in the individual's customary 
environment.
    (2) Purchasing, leasing, or otherwise providing for the acquisition 
of assistive technology devices by individuals with disabilities.
    (3) Selecting, designing, fitting, customizing, adapting, applying, 
maintaining, repairing, or replacing assistive technology devices.
    (4) Coordinating and using other therapies, interventions, or 
services with assistive technology devices, such as those associated 
with existing educational and rehabilitative plans and programs.
    (5) Training or technical assistance for an individual with 
disabilities or the family of an individual with disabilities.
    (6) Training or technical assistance for professionals (including 
individuals providing educational rehabilitative services), employers, 
or other individuals who provide services to, employ, or are otherwise 
substantially involved in the major life functions of an individual with 
a disability.
    (g) Attention Deficit Disorder (ADD). As used in this part, 
encompasses attention-deficit hyperactivity disorder (ADHD) and ADD 
without hyperactivity. The essential features of the disorder are 
developmentally inappropriate degrees of inattention, impulsiveness, and 
in some instances, hyperactivity.
    (1) Either diagnosis must be made by appropriate medical personnel.

[[Page 326]]

    (2) ADD and ADHD are not specific disabling conditions under this 
part, although a child with either may be eligible for EIS and/or 
special education and related services as ``other health impaired'' by 
reason of the disability if the child's alertness or vitality is 
sufficiently compromised. The majority of children with ADD/ADHD 
generally do not meet the eligibility criteria as outlined in this part.
    (h) Audiology. A service that includes the following:
    (1) Identification of children with hearing loss.
    (2) Determination of the range, nature, and degree of hearing loss, 
and communication functions including referral for medical or other 
professional attention for the habilitation of hearing.
    (3) Provision of habilitative activities, such as language 
habilitation, auditory training, speech-reading (lip-reading), hearing 
evaluation, and speech conservation.
    (4) Creation and administration of programs for the prevention of 
hearing loss.
    (5) Counseling and guidance of children concerning the prevention of 
hearing loss.
    (6) Determination of a child's need for group and individual 
amplification, selecting and fitting an aid, and evaluating the 
effectiveness of amplification.
    (i) Autism. A developmental disability significantly affecting 
verbal and nonverbal communication and social interaction, generally 
evident before age 3 years that adversely affects educational 
performance. Other characteristics often associated with autism are 
engagement in repetitive activities and stereotyped movements, 
resistance to environmental change or change in daily routines, and 
unusual responses to sensory experiences. The term does not apply if a 
child's educational performance is adversely affected primarily because 
the child has an emotional disturbance as defined in paragraph (z) of 
this section.
    (j) Case Study Committee (CSC). A school-level team comprised of, 
among others, an administrator or designee who is qualified to supervise 
or provide special education, one or more of the child's regular 
education teachers, one or more special education teachers, parents, and 
related service providers (if appropriate) who do the following:
    (1) Oversee screening and referral of children who may require 
special education.
    (2) Oversee the multidisciplinary evaluation of such children.
    (3) Determine the eligibility of children for special education and 
related services.
    (4) Formulate individualized instruction as reflected in an IEP, in 
accordance with this part.
    (5) Monitor the development, review, and revision of IEPs.
    (k) Child-Find. An outreach program used by the DoD school systems, 
the Military Departments, and the other DoD Components to seek and 
identify children from birth to age 21, inclusive, who may require EIS 
or special education and related services. Child-find includes all 
children who are eligible to attend a DoD school. Child-find activities 
include the dissemination of information to military members and DoD 
employees, the identification and screening of children, and the use of 
referral procedures.
    (l) Children with Disabilities (Ages 3 through 21, Inclusive). 
Children, before graduation from high school or completion of the 
General Education Degree, who have one or more impairments, as 
determined by a CSC and who need and qualify for special education and 
related services.
    (m) Consent. The permission obtained from the parent or legal 
guardian. This includes the following:
    (1) The parent is fully informed of all information about the 
activity for which consent is sought in the native language or in 
another mode of communication, if necessary.
    (2) The parent understands and agrees in writing to the 
implementation of the activity for which permission is sought. That 
consent describes the activity, lists the child's records (if any) to be 
released outside the Department of Defense, and specifies to whom the 
records shall be sent.
    (i) The parent understands that the granting of consent is voluntary 
on the part of the parent and may be revoked at anytime.

[[Page 327]]

    (ii) If a parent revokes consent, that revocation is not retroactive 
(i.e., it does not negate an action that has occurred after the consent 
was given and before the cognizant authorities received the notice of 
revocation of the consent).
    (n) Continuum of Alternative Placements. Instruction in regular 
classes, special classes, special schools, home instruction, and 
instruction in hospitals and institutions; includes provision for 
supplementary services (such as resource room or itinerant instruction) 
to be provided in conjunction with regular class placement.
    (o) Counseling Service. A service provided by a qualified social 
worker, psychologist, guidance counselor, or other qualified personnel.
    (p) Deaf-Blindness. Concomitant hearing and visual impairments, the 
combination of which causes such severe communication, developmental, 
and educational problems that it cannot be accommodated in special 
education programs solely for children with deafness or blindness.
    (q) Deafness. A hearing loss or deficit so severe that it impairs a 
child's ability to process linguistic information through hearing, with 
or without amplification, and affects the child's educational 
performance adversely.
    (r) Developmental Delay. A significant discrepancy in the actual 
functioning of an infant, toddler, or child, birth through age 5, when 
compared with the functioning of a non-disabled infant, toddler, or 
child of the same chronological age in any of the following areas: 
physical, cognitive, communication, social or emotional, and adaptive 
development as measured using standardized evaluation instruments and 
confirmed by clinical observation and judgment. A child classified with 
a developmental delay before the age of 5 may maintain that eligibility 
classification through the age 8.
    (1) A Significant Discrepancy. The child is experiencing a 
developmental delay as measured by diagnostic instruments and procedures 
of 2 standard deviations below the mean in at least one area, or by a 25 
percent delay in at least one area on assessment instruments that yield 
scores in months, or a developmental delay of 1.5 standard deviations 
below the mean in two or more areas, or by a 20 percent delay on 
assessment instruments that yield scores in months in two or more of the 
following areas of development: cognitive, physical, communication, 
social or emotional, or adaptive.
    (2) High Probability for Developmental Delay. An infant or toddler, 
birth through age 2, with a diagnosed physical or mental condition, such 
as chromosomal disorders and genetic syndromes, that places the infant 
or toddler at substantial risk of evidencing a developmental delay 
without the benefit of EIS.
    (s) DoD Dependents Schools (DoDDS). The overseas schools 
(kindergarten through grade 12) established by 20 U.S.C. 921. The DoDDS 
are operated under DoD Directive 1342.6.
    (t) DoD Domestic Dependent Elementary and Secondary Schools (DDESS). 
The schools (pre-kindergarten through grade 12) established by 20 U.S.C. 
921-932. The DoD DDESS are operated under DoD Directive 1342.21.
    (u) DoD School Systems. The DDESS and DoDDS school systems.
    (v) Early Identification and Assessment. The implementation of a 
formal plan for identifying a disability as early as possible in a 
child's life.
    (w) Early Intervention Services. Developmental services that meet 
the following criteria:
    (1) Are provided under the supervision of a Military Medical 
Department.
    (2) Are provided using Military Health Services System resources at 
no cost to the parents.
    (3) Evaluation, Individualized Family Service Plan (IFSP) 
development and revision, and Service coordination services are provided 
at no cost to the infant's or toddler's parents. Parents may be charged 
incidental fees (identified in Service guidance) that are normally 
charged to infants, toddlers, and children without disabilities or to 
their parents.
    (4) Are designed to meet the developmental needs of an infant or 
toddler with a disability in any one or more of the following areas:
    (i) Physical.
    (ii) Cognitive.
    (iii) Communication.

[[Page 328]]

    (iv) Social or emotional.
    (v) Adaptive development.
    (5) Meet the standards developed or adopted by the Department of 
Defense.
    (6) Are provided by qualified personnel including early childhood 
special educators, speech and language pathologists and audiologists, 
occupational therapists, physical therapists, psychologists, social 
workers, nurses, nutritionists, family therapists, orientation and 
mobility specialists, pediatricians and other physicians, and certified 
and supervised paraprofessional assistants, such as certified 
occupational therapy assistants.
    (7) Maximally, are provided in natural environments including the 
home and community settings where infants and toddlers without 
disabilities participate.
    (8) Are provided in conformity with an IFSP.
    (9) Developmental services include, but are not limited to, the 
following services: Family training, counseling, and home visits; 
special instruction; speech pathology and audiology; occupational 
therapy; physical therapy; psychological services; Service coordination 
services; medical services only for diagnostic or evaluation purposes; 
early identification, screening and assessment services; vision 
services; and social work services. Also included are assistive 
technology devices and assistive technology services; health services 
necessary to enable the infant or toddler to benefit from the above EIS; 
and transportation and related costs necessary to enable an infant or 
toddler and the family to receive EIS.
    (x) Educational and Developmental Intervention Services (EDIS). 
Programs operated by the Military Medical Departments to provide EIS and 
related services in accordance with this part.
    (y) Eligible. Children who meet the age, command sponsorship, and 
dependency requirements established by 10 U.S.C. 2164, DoD Directive 
1342.6, DoD Directive 1342.13, and DoD Directive 5105.4.
    (1) In DoDDS, children without disabilities who meet these 
requirements, and are ages 5 to 21 years, inclusive, are entitled to 
receive educational instruction.
    (2) In DDESS, children without disabilities who meet these 
requirements, and are ages 4 to 21 years, inclusive, are entitled to 
receive educational instruction.
    (3) In both DoDDS and DDESS, children with disabilities, ages 3 
through 21 years, inclusive, are authorized to receive educational 
instruction. Additionally, an eligible infant or toddler with 
disabilities is a child from birth through age 2 years who meets either 
the DoDDS or DDESS eligibility requirements except for the age 
requirement.
    (z) Emotional Disturbance. A condition confirmed by clinical 
evaluation and diagnosis and that, over a long period of time and to a 
marked degree, adversely affects educational performance, and exhibits 
one or more of the following characteristics:
    (1) Inability to learn that cannot be explained by intellectual, 
sensory, or health factors.
    (2) Inability to build or maintain satisfactory interpersonal 
relationships with peers and teachers.
    (3) Inappropriate types of behavior or feelings under normal 
circumstances.
    (4) A tendency to develop physical symptoms or fears associated with 
personal or school problems.
    (5) A general pervasive mood of unhappiness or depression. Includes 
children who are schizophrenic, but does not include children who are 
socially maladjusted unless it is determined they are seriously 
emotionally disturbed.
    (aa) Evaluation. The synthesis of assessment information by a 
multidisciplinary team used to determine whether a particular child has 
a disability, the type and extent of the disability, and the child's 
eligibility to receive early intervention or special education and/or 
related services.
    (bb) Family Training, Counseling, and Home Visits. Services 
provided, as appropriate, by social workers, psychologists, and other 
qualified personnel to assist the family of a child eligible under this 
part in understanding the special needs of the child and enhancing the 
child's development.
    (cc) Free Appropriate Public Education (FAPE). Special education and 
related services that:

[[Page 329]]

    (1) Are provided at no cost to parents of a child with a disability, 
and are under the general supervision and direction of the DoDDS or 
DDESS, including children with disabilities who have been suspended or 
expelled from school.
    (2) Are provided in the least restrictive environment at a 
preschool, elementary, or secondary school.
    (3) Are provided in conformity with an IEP.
    (4) Meet the requirements of this part.
    (dd) Functional Behavioral Assessment. A process for identifying the 
events that predict and maintain patterns of problem behavior.
    (ee) Functional Vocational Evaluation. A student-centered appraisal 
process for vocational development and career decision-making. It allows 
students, educators, and others to gather information about such 
development and decision-making. Functional vocational evaluation 
includes activities for transitional, vocational, and career planning; 
instructional goals; objectives; and implementation.
    (ff) General Curriculum. The curriculum adopted by the DoD school 
systems for all children from preschool through secondary school. To the 
extent applicable to an individual child with a disability, the general 
curriculum can be used in any educational environment along a continuum 
of alternative placements, described in paragraph (l) of this section.
    (gg) Health Services. Services necessary to enable an infant or 
toddler to benefit from the other EIS being received under this part. 
That term includes the following:
    (1) Services such as clean intermittent catheterization, tracheotomy 
care, tube feeding, changing of dressings or colostomy collection bags, 
and other health services.
    (2) Consultation by physicians with other service providers about 
the special healthcare needs of infants and toddlers with disabilities 
that need to be addressed in the course of providing other EIS.
    (3) That term does not include the following:
    (i) Services that are surgical or solely medical.
    (ii) Devices necessary to control or treat a medical condition.
    (iii) Medical services routinely recommended for all infants or 
toddlers.
    (hh) Hearing Impairment. An impairment in hearing, whether permanent 
or fluctuating, that adversely affects a child's educational 
performance, but is not included under the definition of deafness.
    (ii) Illegal Drug. Means a controlled substance as identified in the 
Controlled Substances Act (21 U.S.C. 812(c)) but does not include a 
substance that is legally possessed or used under the supervision of a 
licensed healthcare professional or that is legally possessed or used 
under any other authority under that Act or under any other provision of 
Federal law.
    (jj) Independent Evaluation. An evaluation conducted by a qualified 
examiner who is not employed by either the DoD school or EDIS that 
conducted the initial evaluation.
    (kk) Individualized Education Program (IEP). A written document 
defining specially designed instruction for a student with a disability, 
ages 3 through 21 years, inclusive. That document is developed and 
implemented in accordance with appendix B of this part.
    (ll) Individualized Family Service Plan (IFSP). A written document 
for an infant or toddler, age birth through 2 years, with a disability 
and the family of such infant or toddler that is developed, reviewed, 
and revised in accordance with appendix A of this part.
    (mm) Infants and Toddlers with Disabilities. Children, ages birth 
through 2 years, who need EIS because they:
    (1) Are experiencing a developmental delay, defined at paragraph (r) 
of this section.
    (2) Have a high probability for developmental delay as defined at 
paragraph (r)(2) of this section.
    (nn) Inter-Component. Cooperation among DoD organizations and 
programs, ensuring coordination and integration of services to infants, 
toddlers, children with disabilities, and their families.
    (oo) Medical Services. Those evaluative, diagnostic, therapeutic, 
and supervisory services provided by a licensed and/or credentialed 
physician to

[[Page 330]]

assist CSCs and to implement IEPs. Medical services include diagnosis, 
evaluation, and medical supervision of related services that, by 
statute, regulation, or professional tradition, are the responsibility 
of a licensed and credentialed physician.
    (pp) Meetings to Determine Eligibility or Placement of a Child. All 
parties to such a meeting shall appear personally at the meeting site on 
issuance of written notice and establishment of a date convenient to the 
concerned parties. When a necessary participant is unable to attend, 
electronic communication suitable to the occasion may be used to involve 
the unavailable party. Parents generally shall be responsible for the 
cost of travel to personally attend meetings about the eligibility or 
placement of their child.
    (qq) Mental Retardation. Significantly sub-average general 
intellectual functioning, existing concurrently with deficits in 
adaptive behavior. This disability is manifested during the 
developmental period and adversely affects a child's educational 
performance.
    (rr) Multidisciplinary. The involvement of two or more disciplines 
or professions in the integration and coordination of services, 
including evaluation and assessment activities, and development of an 
IFSP or an IEP.
    (ss) Native Language. When used with reference to an individual of 
limited English proficiency, the home language normally used by such 
individuals, or in the case of a child, the language normally used by 
the parents of the child.
    (tt) Natural Environments. Settings that are natural or normal 
(e.g., home or day care setting) for the infant, toddler, or child's 
same-age peers who have no disability.
    (uu) Non-DoD Placement. An assignment by the DoD school system of a 
child with a disability to a non-DoD school or facility. The term does 
not include a home schooling arrangement, except pursuant to an IEP.
    (vv) Non-DoD School or Facility. A public or private school or other 
institution not operated by the Department of Defense. That term 
includes DDESS special contractual arrangements.
    (ww) Nutrition Services. Those services to infants and toddlers that 
include, but are not limited to, the following:
    (1) Conducting individual assessments in nutritional history and 
dietary intake; anthropometric, biochemical, and clinical variables; 
feeding skills and feeding problems; and food habits and food 
preferences.
    (2) Developing and monitoring plans to address the nutritional needs 
of infants and toddlers eligible for EIS.
    (3) Making referrals to community resources to carry out nutrition 
goals.
    (xx) Occupational Therapy. Services provided by a qualified 
occupational therapist or a certified occupational therapist assistant 
(under the supervision of a qualified occupational therapist). That term 
includes services to address the functional needs of children (birth 
through age 21, inclusive) related to adaptive development; adaptive 
behavior and play; and sensory, motor, and postural development. Those 
services are designed to improve the child's functional ability to 
perform tasks in home, school, and community settings, and include the 
following:
    (1) Identification, assessment, and intervention.
    (2) Adaptation of the environment and selection, design, and 
fabrication of assistive and orthotic devices to help development and 
promote the acquisition of functional skills.
    (3) Prevention or minimization of the impact of initial or future 
impairment, delay in development, or loss of functional ability.
    (yy) Orthopedic Impairment. A severe orthopedic impairment that 
adversely affects a child's educational performance. That term includes 
congenital impairments such as club foot or absence of some member; 
impairments caused by disease, such as poliomyelitis and bone 
tuberculosis; and impairments from other causes such as cerebral palsy, 
amputations, and fractures or burns causing contractures.
    (zz) Orientation and Mobility. Services provided to blind or 
visually impaired students by qualified personnel to enable those 
students to attain systematic orientation to and safe movement within 
their environments in school, home and community; and includes teaching 
students the following, as appropriate:

[[Page 331]]

    (1) To understand spatial and environmental concepts and use of 
information received by the senses (such as sound, temperature and 
vibrations) orientation and mobility to establish, maintain, or regain 
orientation and line of travel (e.g., using sound at a traffic light to 
cross the street);
    (2) To use the long cane to supplement visual travel skills or as a 
tool for safely negotiating the environment for students with no 
available travel vision;
    (3) To understand and use remaining vision and distance low vision 
aids; and other concepts, techniques, and tools.
    (aaa) Other Health Impairment. Limited strength, vitality, or 
alertness due to chronic or acute health problems that adversely affect 
a child's educational performance. Such impairments may include ADD, 
heart condition, tuberculosis, rheumatic fever, nephritis, asthma, 
sickle cell anemia, hemophilia, seizure disorder, lead poisoning, 
leukemia, or diabetes.
    (bbb) Parent. The biological father or mother of a child; a person 
who, by order of a court of competent jurisdiction, has been declared 
the father or mother of a child by adoption; the legal guardian of a 
child; or a person in whose household a child resides, if such person 
stands in loco parentis to that child and contributes at least one-half 
of the child's support.
    (ccc) Parent Counseling and Training. A service that assists parents 
in understanding the special needs of their child's development and that 
provides them with information on child development and special 
education.
    (ddd) Personally Identifiable Information. Information that would 
make it possible to identify the infant, toddler, or child with 
reasonable certainty. Information includes:
    (1) The name of the child, the child's parent, or other family 
member; the address of the child;
    (2) A personal identifier, such as the child's social security 
number or student number; or
    (3) A list of personal characteristics or other information that 
would make it possible to identify the child with reasonable certainty.
    (eee) Physical Therapy. Services provided by a qualified physical 
therapist or a certified physical therapist (under the supervision of a 
qualified physical therapist). That term includes services to children 
(birth through age 21, inclusive) to address the promotion of 
sensorimotor function through enhancement of musculoskeletal status, 
neurobehavioral organization, perceptual and motor development, 
cardiopulmonary status, and effective environmental adaptation. Those 
services include the following:
    (1) Screening, evaluation, and assessment to identify movement 
dysfunction.
    (2) Obtaining, interpreting, and integrating information to 
appropriate program planning to prevent, alleviate, or compensate for 
movement dysfunction and related functional problems.
    (3) Providing individual and group services or treatment to prevent, 
alleviate, or compensate for movement dysfunction and related functional 
problems.
    (fff) Primary Referral Source. Parents and the DoD Components, 
including child development centers, pediatric clinics, and newborn 
nurseries, that suspect an infant or toddler has a disability and bring 
the child to the attention of the EDIS.
    (ggg) Psychological Services. Services that include the following:
    (1) Administering psychological and educational tests and other 
assessment procedures.
    (2) Interpreting test and assessment results.
    (3) Obtaining, integrating, and interpreting information about a 
child's behavior and conditions relating to learning.
    (4) Consulting with other staff members, including service 
providers, to plan programs to meet the special needs of children, as 
indicated by psychological tests, interviews, and behavioral 
evaluations.
    (5) Planning and managing a program of psychological services, 
including psychological counseling for children and parents, family 
counseling, consultation on child development, parent training, and 
education programs.
    (hhh) Public Awareness Program. Activities or print materials 
focusing on early identification of infants and toddlers with 
disabilities. Materials may

[[Page 332]]

include information prepared and disseminated by a military medical 
department to all primary referral sources and information for parents 
on the availability of EIS. Procedures to determine the availability of 
information on EIS to parents are also included in that program.
    (iii) Qualified. A person who meets the DoD-approved or recognized 
certification, licensing, or registration requirements or other 
comparable requirements in the area in which the person provides special 
education or related services or EIS to an infant, toddler, or child 
with a disability.
    (jjj) Recreation. A related service that includes the following:
    (1) Assessment of leisure function.
    (2) Therapeutic recreational activities.
    (3) Recreational programs in schools and community agencies.
    (4) Leisure education.
    (kkk) Rehabilitation Counseling. Services provided by qualified 
personnel in individual or group sessions that focus specifically on 
career development, employment preparation, achieving independence, and 
integration in the workplace and community of the student with a 
disability. The term also includes vocational rehabilitation services 
provided to a student with disabilities by vocational rehabilitation 
programs funded under the Rehabilitation Act of 1973, as amended.
    (lll) Related Services. Transportation and such developmental, 
corrective, and other supportive services, as required, to assist a 
child, age 3 through 21 years, inclusive, with a disability to benefit 
from special education under the child's IEP. The term includes speech-
language pathology and audiology, psychological services, physical and 
occupational therapy, recreation including therapeutic recreation, early 
identification and assessment of disabilities in children, counseling 
services including rehabilitation counseling, orientation and mobility 
services, and medical services for diagnostic or evaluative purposes. 
That term also includes school health services, social work services in 
schools, and parent counseling and training. The sources for those 
services are school, community, and medical treatment facilities.
    (mmm) Related Services Assigned to the Military Medical Departments 
Overseas. Services provided by EDIS to DoDDS students, under the 
development or implementation of an IEP, necessary for the student to 
benefit from special education. Those services may include medical 
services for diagnostic or evaluative purpose, social work, community 
health nursing, dietary, occupational therapy, physical therapy, 
audiology, ophthalmology, and psychological testing and therapy.
    (nnn) School Health Services. Services provided by a qualified 
school nurse or other qualified person.
    (ooo) Separate Facility. A school or a portion of a school, 
regardless of whether it is operated by the Department of Defense, 
attended exclusively by children with disabilities.
    (ppp) Service Coordination. Activities of a service coordinator to 
assist and enable an infant or toddler and the family to receive the 
rights, procedural safeguards, and services that are authorized to be 
provided under appendix B of this part. Those activities include the 
following:
    (1) Coordinating the performance of evaluations and assessments.
    (2) Assisting families to identify their resources, concerns, and 
priorities.
    (3) Facilitating and participating in the development, review, and 
evaluation of IFSPs.
    (4) Assisting in identifying available service providers.
    (5) Coordinating and monitoring the delivery of available services.
    (6) Informing the family of support or advocacy services.
    (7) Coordinating with medical and health providers.
    (8) Facilitating the development of a transition plan to preschool 
services.
    (qqq) Service Provider. Any individual who provides services listed 
in an IEP or an IFSP.
    (rrr) Social Work Services in Schools. A service that includes the 
following:
    (1) Preparing a social or developmental history on a child with a 
disability.
    (2) Counseling a child and the family on a group or individual 
basis.

[[Page 333]]

    (3) Working with those problems in a child's home, school, or 
community that adversely affect adjustment in school.
    (4) Using school and community resources to enable a child to 
benefit from the educational program.
    (sss) Special Education. Specially designed instruction, including 
physical education, which is provided at no cost to the parent or 
guardians to meet the unique needs of a child with a disability, 
including instruction conducted in the classroom, in the home, in 
hospitals and institutions, and in other settings.
    (1) That term includes speech-language pathology or any other 
related service if the service consists of specially designed 
instruction, at no cost to the parents, to meet the unique needs of a 
child with a disability.
    (2) That term also includes vocational education if it consists of 
specially designed instruction, at no cost to the parents, to meet the 
unique needs of a child with a disability.
    (3) At No Cost. For a child eligible to attend a DoD school without 
paying tuition, specially designed instruction and related services are 
provided without charge. Incidental fees normally charged to non-
disabled students or their parents as a part of the regular educational 
program may be imposed.
    (4) Physical Education. The development of the following:
    (i) Physical and motor fitness.
    (ii) Fundamental motor skills and patterns.
    (iii) Skills in aquatics, dance, and individual and group games and 
sports, including intramural and lifetime sports.
    (iv) A program that includes special physical education, adapted 
physical education, movement education, and motor development.
    (ttt) Specially Designed Instruction. That term means adapting 
content, methodology or delivery of instruction to:
    (1) Address the unique needs of an eligible child under this part; 
and
    (2) Ensure access of the child to the general curriculum, so that 
she or he can meet the educational standards within the DoD school 
systems.
    (uuu) Specific Learning Impairment. A disorder in one or more of the 
basic psychological processes involved in understanding or in using 
spoken or written language that may manifest itself as an imperfect 
ability to listen, think, speak, read, write, spell, remember, or do 
mathematical calculations. That term includes such conditions as 
perceptual disabilities, brain injury, minimal brain dysfunction, 
dyslexia, and developmental aphasia. The term, commonly called, 
``specific learning disability,'' does not include learning problems 
that are primarily the result of visual, hearing, or motor disabilities; 
mental retardation; emotional disturbance; or environmental, cultural, 
or economic differences.
    (vvv) Speech and Language Impairments. A communication disorder, 
such as stuttering, impaired articulation, voice impairment, or a 
disorder in the receptive or expressive areas of language that adversely 
affects a child's educational performance.
    (www) Speech-Language Pathology Services. Services provided by a 
qualified speech/language therapist or a certified speech/language 
assistant (under the supervision of a qualified speech/language 
therapist), that include the following:
    (1) Identification of children with speech or language impairments.
    (2) Diagnosis and appraisal of specific speech or language 
impairments.
    (3) Referral for medical or other professional attention for the 
habilitation or prevention of speech and language impairments.
    (4) Provision of speech and language services for the habilitation 
or prevention of communicative impairments.
    (5) Counseling and guidance of children, parents, and teachers for 
speech and language impairments.
    (xxx) Supplementary Aids and Services. Include aids, services, and 
other supports that are provided in regular education classes or other 
educational-related settings to enable children with disabilities to be 
educated with non-disabled children to the maximum extent appropriate.
    (yyy) Transition Services. (1) A coordinated set of activities for a 
student

[[Page 334]]

that may be required to promote movement from early intervention, 
preschool, and other educational programs into different educational 
settings or programs.
    (2) For students 14 years of age and older, transition services are 
designed in an outcome-oriented process that promotes movement from 
school to post-school activities; including, related services, post-
secondary education, vocational training, integrated employment; and 
also including supported employment, continuing and adult education, 
adult services, independent living, or community participation. The 
coordinated set of activities are based on the individual student's 
needs, considering the student's preferences and interests, and include 
instruction, community experiences, the development of employment and 
other post-school adult living objectives, and acquisition of daily 
living skills and functional vocational evaluation.
    (zzz) Transportation. A service that includes the following:
    (1) Transportation and related costs for EIS includes the cost of 
travel (e.g., mileage or travel by taxi, common carrier, or other means) 
and other costs (e.g., tolls and parking expenses) that are necessary to 
enable an eligible child and the family to receive EIS.
    (2) Services rendered under the IEP of a child with a disability:
    (i) Travel to and from school and between schools, including travel 
necessary to permit participation in educational and recreational 
activities and related services.
    (ii) Travel in and around school buildings.
    (3) Specialized equipment, including special or adapted buses, 
lifts, and ramps, if required to provide transportation for a child with 
a disability.
    (aaaa) Traumatic Brain Injury. An acquired injury to the brain 
caused by an external physical force resulting in total or partial 
functional disability or psychosocial impairment that adversely affects 
educational performance. That term includes open or closed head injuries 
resulting in mild, moderate, or severe impairments in one or more areas 
including cognition, language, memory, attention, reasoning, abstract 
thinking, judgment, problem solving, sensory, perceptual and motor 
abilities, psychosocial behavior, physical function, information 
processing, and speech. That term does not include brain injuries that 
are congenital or degenerative, or brain injuries that are induced by 
birth trauma.
    (bbbb) Vision Services. Services necessary to habilitate or 
rehabilitate the effects of sensory impairment resulting from a loss of 
vision.
    (cccc) Visual Impairment. An impairment of vision that, even with 
correction, adversely affects a child's educational performance. That 
term includes both partial sight and blindness.
    (dddd) Vocational Education. Organized educational programs for the 
preparation of individuals for paid or unpaid employment or for 
additional preparation for a career requiring other than a baccalaureate 
or advanced degree.
    (eeee) Weapon. Items carried, presented, or used in the presence of 
other persons in a manner likely to make reasonable persons fear for 
their safety. They include, but are not limited to, guns, look-alike 
(replica) guns, knives, razors, box or carpet cutters, slingshots, 
nunchucks, any flailing instrument such as a fighting chain or heavy 
studded or chain belt, objects designed to project a missile, 
explosives, mace, pepper spray, or any other similar propellant, or any 
other object concealed, displayed, or brandished in a manner that 
reasonably provokes fear.



Sec. 57.4  Policy.

    It is DoD policy that:
    (a) Eligible infants and toddlers with disabilities and their 
families shall be provided EIS consistent with appendix A of this part.
    (b) Eligible children with disabilities, ages 3 through 21 years, 
inclusive, shall be provided a FAPE in the least restrictive 
environment, consistent with appendix B of this part.
    (c) The Military Medical Departments and DoDDS shall cooperate in 
the delivery of related services to eligible children with disabilities, 
ages 3

[[Page 335]]

through 21 years, inclusive, that require such services to benefit from 
special education. Related services assigned to the Military Medical 
Departments are defined in Sec. 57.3 and are provided in accordance 
with appendix C of this part. DDESS is responsible for the delivery of 
all related services to eligible children with disabilities, ages 3 
through 21 years, inclusive, served by DDESS.
    (d) The Military Medical Departments shall provide EIS in both 
domestic and overseas areas, and related services assigned to them in 
overseas areas, at the same priority as medical care is provided to 
active duty military members.



Sec. 57.5  Responsibilities.

    (a) The Under Secretary of Defense (Personnel and Readiness) (USD 
(P&R)) shall:
    (1) Establish a DoD-AP consistent with appendix D of this part.
    (2) Establish and chair, or designate a ``Chair,'' of the DoD-CC 
consistent with appendix E of this part.
    (3) Ensure that inter-Component agreements or other mechanisms for 
inter-Component coordination are in effect between the DoD Components 
providing services to infants, toddlers and children.
    (4) Ensure the implementation of procedural safeguards consistent 
with appendix F of this part.
    (5) In consultation with the General Counsel of the Department of 
Defense (GC, DoD) and the Secretaries of the Military Departments:
    (i) Ensure that eligible infants and toddlers with disabilities and 
their families are provided comprehensive, coordinated and 
multidisciplinary EIS under 20 U.S.C. 921-932 and 10 U.S.C. 2164 as 
provided in appendix A of this part.
    (ii) Ensure that eligible children with disabilities (ages 3 through 
21 years, inclusive) are provided a FAPE under U.S.C. 921-932 and 10 
U.S.C. 2164 as provided in appendix A of this part.
    (iii) Ensure that eligible DoDDS students are provided related 
services, as provided in appendix C of this part.
    (iv) Ensure that all eligible DDESS students are provided related 
services by DDESS.
    (v) Ensure the development of a DoD-wide comprehensive child-find 
system to identify eligible infants, toddlers, and children ages birth 
through 21 years, inclusive, under DoD Directive 1342.6 who may require 
early intervention or special education services.
    (vi) Ensure that personnel are identified to provide the mediation 
services specified in appendix 7 of this part.
    (vii) Ensure that transition services are available to promote 
movement from early intervention, preschool, and other educational 
programs into different educational settings and post-secondary 
environments.
    (viii) Ensure compliance with this Part in the provision of special 
services, in accordance with appendix H of this part and other 
appropriate guidance.
    (ix) Ensure that personnel are identified and trained to provide the 
monitoring specified in appendix H of this part
    (x) Ensure that the Military Departments deliver the following:
    (A) In overseas and domestic areas, a comprehensive, coordinated, 
and multidisciplinary program of EIS for eligible infants and toddlers 
(birth through 2 years, inclusive) with disabilities.
    (B) In overseas areas, the related services as defined in Sec. 57.3 
for eligible children with disabilities, ages 3 through 21 years, 
inclusive.
    (xi) Ensure the development and implementation of a comprehensive 
system of personnel development in the area of special services for the 
Department of Defense Education Activity (DoDEA) and the Military 
Departments. That system shall include professionals, paraprofessionals, 
and primary referral source personnel in the areas of special services, 
and may also include:
    (A) Implementation of innovative strategies and activities for the 
recruitment and retention of personnel providing special services, 
ensuring that personnel requirements are established consistent with 
recognized certification, licensing, registration, or other comparable 
requirements for personnel providing special services, and allow the use 
of paraprofessionals and assistants who are appropriately

[[Page 336]]

trained and supervised to assist in the provision of special services.
    (B) Training personnel to coordinate transition services for infants 
and toddlers from an early intervention program to preschool or other 
appropriate services
    (C) Ensuring that training is provided in and across disciplines.
    (xii) Develop procedures to compile data on the numbers of eligible 
infants and toddlers with disabilities and their families in need of 
EIS, and children in need of special education and related services, in 
accordance with DoD Directives 5400.7 and 5400.11. Those data elements 
shall include, at a minimum, the following:
    (A) The number of infants and toddlers and their families served.
    (B) The number of children served.
    (C) The types of services provided.
    (D) Other information required to evaluate and monitor the provision 
of services.
    (xiii) Resolve disputes among the DoD Components involving appendix 
A of this part.
    (xiv) Ensure the assigned responsibilities for the delivery of 
special services are reviewed at least every 5 years to determine the 
most appropriate distribution of responsibilities.
    (b) The Assistant Secretary of Defense (Health Affairs) (ASD(HA)), 
under the Principal Deputy Under Secretary of Defense for Personnel and 
Readiness (PDUSD(P&R)), shall:
    (1) Ensure the provision of advice and consultation about the 
provision of EIS and related services to the USD(P&R) and the GC, DoD.
    (2) Ensure the development of healthcare provider workload standards 
and performance levels to determine staffing requirements of designated 
centers. These standards shall take into account the provider training 
needs, the requirements of this part, and the additional time required 
to provide EIS (in domestic and overseas areas) and related services (in 
overseas areas) as defined in Sec. 57.3 for assessment and treatment 
and for coordination with other DoD Components, such as the DoD school 
systems.
    (3) Assign the Military Medical Departments geographical areas of 
responsibility for providing related services and EIS under paragraph 
(c)(1) of this section. Periodically review the alignment of geographic 
areas to ensure that base closures and other resourcing issues are 
considered in the cost effective delivery of services.
    (4) Establish a system for compiling data required by this part.
    (c) The Secretaries of the Military Departments shall:
    (1) In consultation with DoDEA, establish Educational and 
Developmental Intervention Services (EDIS) within the following areas:
    (i) Designated overseas areas of geographical responsibility, 
capable of providing necessary related services and EIS to support the 
needs of eligible beneficiaries.
    (ii) Domestic areas, capable of providing necessary EIS to support 
the needs of eligible beneficiaries.
    (2) Staff EDIS with appropriate professional staff, as necessary 
based on services required, which should include occupational 
therapist(s) with pediatric experience; physical therapist(s) with 
pediatric experience; audiologist(s) with pediatric experience; child 
psychiatrist(s); clinical psychologist(s) with pediatric experience; 
social worker(s) with pediatric experience; speech language 
pathologists; community health nurse(s) or the equivalent; 
pediatrician(s) with experience and/or training in developmental 
pediatrics; certified assistants (for example, certified occupational 
therapy assistants or physical therapy assistants); and early childhood 
special educators.
    (3) Provide a comprehensive, coordinated, inter-Component, 
community-based system of EIS for eligible infants and toddlers with 
disabilities (birth through 2 inclusive) and their families using the 
procedures established by this part and guidelines from the ASD(HA) on 
staffing and personnel standards.
    (4) Provide related services, as defined in Sec. 57.3 to DoDDS 
students who are on IEPs using the procedures established by this part 
and guidelines from the ASD(HA) on staffing and personnel standards.
    (5) To DoDDS students, provide transportation to and from the site 
where related services are provided by

[[Page 337]]

the Military Medical Department, if not provided at the school.
    (6) Provide transportation to and from the site where EIS is 
provided, if it is not provided in the home or some other natural 
environment.
    (d) The Surgeons General of the Military Departments shall:
    (1) Ensure the development of policies and procedures for providing, 
documenting, and evaluating EIS and related services assigned to the 
Military Medical Departments, as defined in Sec. 57.3 (mmm).
    (2) Ensure that EDIS participates in the existing military treatment 
facility (MTF) quality assurance program, which monitors and evaluates 
the medical services for children receiving such services as described 
by this part. Standards used by the Joint Commission on Accreditation of 
Health Organizations or equivalent standards shall be used, where 
applicable, to ensure accessibility, acceptability, and adequacy of the 
medical portion of the program provided by EDIS.
    (3) Ensure that each program providing EIS is monitored for 
compliance with this part at least once every 3 years in accordance with 
appendix H of this part.
    (4) Ensure that resources are allocated in accordance with the 
healthcare provider workload standards and performance levels developed 
under the direction of the ASD(HA).
    (5) Ensure the cooperation and coordination between their respective 
offices, the offices of other Surgeons General, and DoDEA with respect 
to the implementation of this Part.
    (6) Ensure that training is available for each healthcare 
professional providing EIS or related services. This training shall 
include information about the roles and responsibilities of the 
providers and the development of an Individualized Family Service Plan 
(IFSP) or an IEP.
    (7) Ensure the provision of in-service training on EIS and related 
services to educational, legal, and other suitable personnel, if 
requested and feasible.
    (8) Provide professional supervision of the EDIS provision of EIS 
and related services in the overseas areas, as designated in (b)(3) of 
this section and of EIS in domestic areas of responsibility.
    (9) Submit to the DoD-CC a report not later than July 31 of each 
year certifying that all EDIS are in compliance with this part and other 
DoD guidance in accordance with appendix H of this part.
    (e) The Director, Department of Defense Education Activity under the 
Deputy Under Secretary of Defense (Military Community and Family 
Policy), and the PDUSD(P&R), shall ensure that the Directors of the DoD 
school systems shall:
    (1) Ensure that eligible children with disabilities, ages 3 through 
21 years, inclusive, are provided a FAPE.
    (2) Ensure that the educational needs of children with and without 
disabilities are met comparably, consistent with appendix B of this 
part.
    (3) Ensure that educational facilities and services operated by the 
DoD school systems for children with and without disabilities are 
comparable.
    (4) Maintain records on special education and related services 
provided to eligible children with disabilities, ages 3 through 21 
years, inclusive, consistent with 21 U.S.C. 812(c).
    (5) Provide any or all special education and related services 
required by a child with a disability, ages 3 through 21 years, 
inclusive, other than those furnished by the Secretaries of the Military 
Departments through inter-Agency, intra-Agency, and inter-Service 
arrangements, or through contracts with private parties when funds are 
authorized and appropriated.
    (6) Provide transportation, which is a related service under this 
Part, to students with disabilities when transportation is prescribed in 
the student's IEP. The DoD school systems shall furnish transportation 
between the student's home (or another location specified in the IEP) 
and the DoD school.
    (7) Provide transportation to and from the site where DDESS provides 
related services, if not provided at the school.
    (8) Participate in the development and implementation of a 
comprehensive system of personnel development.
    (9) Ensure that all programs providing special education and related 
services, including those provided by

[[Page 338]]

the Military Medical Departments, are monitored for compliance with this 
part in accordance with appendix H of this part.
    (10) Provide physical space for the provision of occupational 
therapy, physical therapy, and psychological services in those DoDDS 
facilities where EDIS shall provide related services.
    (11) Provide physical space for the provision of occupational 
therapy, physical therapy, psychological services, and therapists' 
offices in construction of DoDDS facilities at those locations where 
EDIS shall provide related services. The DoDDS shall determine the 
specifics of space design in consultation with the responsible Military 
Department's medical authorities concerned and the Defense Medical 
Facilities Office, Office of the ASD(HA).
    (12) The DoDDS shall provide repair and maintenance support, 
custodial support, and utilities to the areas described in paragraphs 
(e)(10) and (e)(11) of this section.
    (13) The DoDDS shall maintain operational control of therapy and 
office space.
    (14) Ensure that all newly constructed or renovated DoD school 
facilities are fully accessible to persons with mobility impairments 
including those in wheelchairs.
    (15) Report not later than July 31 of each year to the DoD-CC on the 
following:
    (i) Number of children with disabilities participating in regular 
and alternate system-wide assessment.
    (ii) Performance of children with disabilities on the regular 
system-wide assessment and on the alternate system-wide assessment.
    (iii) By district, rate of suspension and expulsion of students with 
disabilities compared to regular education students.
    (f) The Director, Defense Office of Hearings and Appeals (DOHA), 
under the General Counsel of the Department of Defense, shall ensure 
impartial due process hearings are provided consistent with appendix G 
of this part.



Sec. 57.6  Procedures.

    (a) The procedures for EIS for infants and toddlers with 
disabilities and their families are prescribed in appendix A of this 
part.
    (b) The procedures for educational programs and services for 
children with disabilities, ages 3 through 21 years, inclusive, on IEPs 
are prescribed in appendix B of this part.
    (c) The procedures for the provision of related services for DoDDS 
students with disabilities, ages 3 through 21, inclusive, are prescribed 
in appendix C of this part
    (d) Procedural safeguards and parent and student rights are 
prescribed in appendix F of this part.
    (e) The procedures for conducting mediation and due process hearings 
are prescribed in appendix G of this part.
    (f) The procedures for conducting compliance monitoring are 
prescribed in appendix H of this part.



   Sec. Appendix A to Part 57--Procedures for the Provision of Early 

  Intervention Services for Infants and Toddlers With Disabilities and 

                             Their Families

                     A. Identification and Screening

    (1) Each Military Department shall develop and implement in its 
assigned geographic area a comprehensive child-find public awareness 
program that focuses on the early identification of children who are 
eligible to receive EIS under this part. The public awareness program 
must inform the public about:
    (i) The EDIS early intervention program;
    (ii) The child-find system, including:
    (A) The purpose and scope of the system;
    (B) How to make referrals to service providers that includes 
timelines and provides for participation by primary referral sources; 
and
    (C) How to gain access to a comprehensive, multidisciplinary 
evaluation and other EIS; and
    (D) A central directory that includes a description of the EIS and 
other relevant resources available in each military community overseas.
    (2) EDIS must prepare and disseminate materials for parents on the 
availability of EIS to all primary referral sources, especially 
hospitals, physicians, and child development centers.
    (3) Upon receipt of a referral, EDIS shall appoint a service 
coordinator.
    (4) Procedures for Identification and Screening. All children 
referred to the EDIS for EIS shall be screened to determine the 
appropriateness of the referral and to guide the assessment process.

[[Page 339]]

    (i) Screening does not constitute a full evaluation. At a minimum, 
screening shall include a review of the medical and developmental 
history of the referred child through a parent interview and/or a review 
of medical records.
    (ii) If screening was conducted prior to the referral, or if there 
is a substantial or obvious biological risk, screening may not be 
necessary.

                      B. Assessment and Evaluation

    (1) The assessment and evaluation of each child must:
    (i) Be conducted by a multidisciplinary team.
    (ii) Be based on informed clinical opinion; and
    (iii) Include the following:
    (A) A review of pertinent records related to the child's current 
health status and medical history.
    (B) An evaluation of the child's level of functioning in each of the 
following developmental areas:
    (i) Cognitive development.
    (ii) Physical development, including vision and hearing.
    (iii) Communication development.
    (iv) Social or emotional development.
    (v) Adaptive development.
    (iv) An assessment of the unique needs of the child in terms of each 
of the developmental areas in paragraph B.(1)(iii)(B) of this appendix, 
including the identification of services appropriate to meet those 
needs.
    (2) Family Assessment. (i) Family assessments must be family-
directed and designed to determine the resources, priorities, and 
concerns of the family and the identification of the supports and 
services necessary to enhance the family's capacity to meet the 
developmental needs of the child.
    (ii) Any assessment that is conducted must be voluntary on the part 
of the family.
    (iii) If an assessment of the family is carried out, the assessment 
must:
    (A) Be conducted by personnel trained to utilize appropriate methods 
and procedures.
    (B) Be based on information provided by the family through a 
personal interview; and
    (C) Incorporate the family's description of its resources, 
priorities, and concerns related to enhancing the child's development.
    (3) Standards for Assessment Selection and Procedures. EDIS shall 
ensure, at a minimum, that:
    (i) Tests and other evaluation materials and procedures are 
administered in the native language of the parents or other mode of 
communication, unless it is clearly not feasible to do so.
    (ii) Any assessment and evaluation procedures and materials that are 
used are selected and administered so as not to be racially or 
culturally discriminatory.
    (iii) No single procedure is used as the sole criterion for 
determining a child's eligibility under this part; and
    (iv) Evaluations and assessments are conducted by qualified 
personnel.
    (4) With the parent's consent, EIS may begin before the completion 
of the assessment and evaluation when it has been determined by a 
multidisciplinary team that the child and/or the child's family needs 
the service immediately. Although all assessments have not been 
completed, an IFSP must be developed before the start of services. The 
remaining assessments must then be completed in a timely manner.

                             C. Eligibility

    (1) Eligibility shall be determined at an EIS team meeting that 
includes parents.
    (i) The EIS team shall document the basis for eligibility on an 
eligibility report.
    (ii) A copy of the eligibility report shall be provided to the 
parent at the eligibility meeting.
    (2) Children with disabilities from birth through age 2 are eligible 
for EIS if they meet one of the following criteria:
    (i) The child is experiencing a developmental delay as defined in 
Sec. 57.3(r).
    (ii) The child has a diagnosed physical or mental condition that has 
a high probability of resulting in developmental delay, as defined in 
Sec. 57.3(s).

                              D. Timelines

    (1) The initial evaluation and assessment of each child (including 
the family assessment) must be completed within a timely manner.
    (2) The Military Department responsible for providing EIS shall 
develop procedures to ensure that in the event of exceptional 
circumstances that make it impossible to complete the evaluation and 
assessment within a timely manner (e.g., if a child is ill), EDIS shall:
    (i) Document those circumstances; and
    (ii) Develop and implement an interim IFSP, to the extent 
appropriate and consistent with this part.

                                 E. IFSP

    (1) Each Military Department shall ensure that the EDIS develop and 
implement an IFSP for each child, birth through 2 years of age, who 
meets the eligibility criteria for EIS in section B of this appendix.
    (2) The IFSP Meeting. The EDIS shall establish and convene a meeting 
to develop the IFSP of a child with a disability. That meeting shall be 
scheduled as soon as possible following a determination by the EDIS that 
the child is eligible for EIS, but not later than 45 days from the date 
of the referral for services.

[[Page 340]]

    (3) Meetings to develop and review the IFSP must include the 
following participants:
    (i) The parent or parents of the child.
    (ii) Other family members, as requested by the parent, if feasible.
    (iii) An advocate or person outside of the family, if the parent 
requests that person's participation.
    (iv) The services coordinator who has worked with the family since 
the initial referral of the child or who has been designated as 
responsible for the implementation of the IFSP.
    (v) The person(s) directly involved in conducting the evaluations 
and assessments.
    (vi) As appropriate, persons who shall provide services to the child 
or family.
    (4) If a person listed in paragraph E.(3) of this appendix is unable 
to attend a meeting, arrangements must be made for the person's 
involvement through other means, including the following:
    (i) Participating in a telephone conference call.
    (ii) Having a knowledgeable, authorized representative attend the 
meeting.
    (iii) Making pertinent records available at the meeting.
    (5) The IFSP shall be written in a reasonable time after assessment 
and shall contain the following:
    (i) A statement of the child's current developmental levels 
including physical, cognitive, communication, social or emotional, and 
adaptive behaviors based on professionally acceptable objective 
criteria.
    (ii) With the concurrence of the family, a statement of the family's 
resources, priorities, and concerns about enhancing the child's 
development.
    (iii) A statement of the major outcomes expected to be achieved for 
the child and the family. Additionally, the statement shall contain the 
criteria, procedures, and timelines used to determine the degree to 
which progress toward achieving the outcomes is being made and whether 
modification or revision of the outcomes and services are necessary.
    (iv) A statement of the specific EIS necessary to meet the unique 
needs of the child and the family including the frequency, intensity, 
and method of delivering services.
    (v) The projected number of sessions necessary to achieve the 
outcomes listed in the IFSP.
    (vi) A statement of the natural environments in which EIS shall be 
provided, and a justification of the extent, if any, to which the 
services shall not be provided in a natural environment.
    (vii) The projected dates for initiation of services and the 
anticipated duration of those services.
    (viii) The name of the service coordinator who shall be responsible 
for the implementation of the IFSP and coordination with other agencies 
and persons. In meeting these requirements, EDIS may:
    (A) Assign the same service coordinator who was appointed at the 
time that the child was initially referred for evaluation to be 
responsible for implementing a child's and family's IFSP; or
    (B) Appoint a new service coordinator.
    (C) Appoint a service coordinator requested by the parents.
    (ix) The steps to be taken supporting the transition of the toddler 
with a disability to preschool or other services. These steps must 
include:
    (A) Discussions with, and training of, parents regarding future 
placements and other matters related to the child's transition;
    (B) Procedures to prepare the child for changes in service delivery, 
including steps to help the child adjust to, and function in, a new 
setting; and
    (C) The transmission of information about the child to the DoD 
school system, to ensure continuity of services, including evaluation 
and assessment information, and copies of IFSPs that have been developed 
and implemented in accordance with this Part.
    (6) The contents of the IFSP shall be explained to the parents and 
an informed, written consent from the parents shall be obtained before 
providing EIS described in that plan.
    (7) If a parent does not provide consent for participation in all 
EIS, the services shall still be provided for those interventions to 
which a parent does give consent.
    (8) The IFSP shall be evaluated at least once a year and the family 
shall be provided an opportunity to review the plan at 6-month intervals 
(or more frequently, based on the child and family needs). The purpose 
of the periodic review is to determine the following:
    (i) The degree to which progress toward achieving the outcomes is 
being made; and
    (ii) Whether modification or revision of the outcomes or services is 
necessary.
    (9) The review may be carried out by a meeting or by another means 
that is acceptable to the parents and other participants.

                        F. Maintenance of Records

    (1) The EDIS officials shall maintain all EIS records, in accordance 
with DoD Directive 5400.11.
    (2) The IFSP and the documentation of services delivered in 
accordance with the IFSP are educational records and shall be maintained 
accordingly.

[[Page 341]]



Sec. Appendix B to Part 57--Procedures for the Provision of Educational 

Programs and Services for Children With Disabilities, Ages 3 Through 21 

                            Years, Inclusive

                            A. Identification

    (1) It is the responsibility of the DoD school system officials to 
engage in child-find activities to locate, identify, and with informed 
parental consent, evaluate all children who are eligible to enroll in 
the DDESS under DoD Directive 1342.26 or in the DoDDS under DoD 
Directive 1342.13 who may require special education and related 
services.
    (2) Referral of a Child for Special Education or Related Services. 
The DoD school system officials, related service providers, parents, or 
others who suspect that a child has a possible disabling condition shall 
refer that child to the CSC.
    (3) Procedures for Identification and Screening. The DoD school 
system officials shall conduct the following activities to determine if 
a child needs special education and related services:
    (i) Screen educational records.
    (ii) Screen students using system-wide or other basic skill tests in 
the areas of reading, math, and language arts.
    (iii) Screen school health data such as reports of hearing, vision, 
speech, or language tests and reports from healthcare personnel about 
the health status of a child.
    (iv) Analyze school records to obtain pertinent information about 
the basis for suspensions, exclusions, withdrawals, and disciplinary 
actions.
    (v) Coordinate the transition of children from early intervention to 
preschool.
    (4) In cooperation with the Military Departments, conduct on-going 
child-find activities and publish, periodically, any information, 
guidelines, and direction on child-find activities for eligible children 
with disabilities, ages 3 through 21 years, inclusive.

                      B. Assessment and Evaluation

    (1) Every child eligible to attend a DoD school who is referred to a 
CSC shall receive a full and comprehensive diagnostic evaluation of 
educational needs. An evaluation shall be conducted before an IEP is 
developed or placement is made in a special education program.
    (2) Procedures for Assessment and Evaluation. A CSC shall ensure 
that the following elements are included in a comprehensive assessment 
and evaluation of a child:
    (i) Assessment of visual and auditory acuity.
    (ii) A plan to assess the type and extent of the disability. A child 
shall be assessed in all areas related to the suspected disability. When 
necessary, the assessment plan shall include the following:
    (A) Assessment of the level of functioning academically, 
intellectually, emotionally, socially, and in the family.
    (B) Observation in an educational environment.
    (C) Assessment of physical status including perceptual and motor 
abilities.
    (D) Assessment of the need for transition services for students 14 
years and older, the acquisition of daily living skills, and functional 
vocational assessment.
    (iii) The involvement of parents.
    (3) The CSC shall use all locally available community, medical, and 
school resources to accomplish the assessment. At least one specialist 
with knowledge in the area of the suspected disability shall be a member 
of the multidisciplinary assessment team.
    (4) Each assessor shall prepare an individual assessment report that 
includes:
    (i) Demographic information about the student and the assessor.
    (ii) The problem areas constituting the bases for a referral.
    (iii) A behavioral observation of the child during testing.
    (iv) The instruments and techniques used for the assessment.
    (v) A description of the child's strengths and limitations.
    (vi) The results of the assessment; and
    (vii) The instructional implications of the findings for educational 
functioning.
    (5) Standards for Assessment Selection and Procedures. All DoD 
elements, including the CSC and related services providers, shall ensure 
that assessment materials and evaluation procedures are in compliance 
with the following criteria:
    (i) Selected and administered so as not to be racially or culturally 
discriminatory.
    (ii) Administered in the native language or mode of communication of 
the child, unless it clearly is not possible to do so.
    (iii) Materials and procedures used to assess a child with limited 
English proficiency are selected and administered to ensure that they 
measure the extent to which the child has a disability and needs special 
education, rather than measuring the child's English language skills.
    (iv) Validated for the specific purpose for which they are used or 
intended to be used.
    (v) Administered by trained personnel in compliance with the 
instructions of the testing instrument.
    (vi) Administered such that no single procedure is the sole 
criterion for determining eligibility or an appropriate educational 
program for a child with a disability.
    (vii) Selected to assess specific areas of educational needs and 
strengths and not merely to provide a single general intelligence 
quotient.
    (viii) Administered to a child with impaired sensory, motor, or 
communication skills so that the results reflect accurately a

[[Page 342]]

child's aptitude or achievement level or whatever other factors the test 
purports to measure, rather than reflecting the child's impaired 
sensory, manual, or speaking skills (unless those skills are the factors 
that the test purports to measure).
    (6) Review of Existing Evaluation Data. As part of an initial 
evaluation (if appropriate) and as part of any reevaluation, the CSC 
shall review existing evaluation data on the child, including:
    (i) Evaluations and information provided by the parents of the 
child;
    (ii) Current classroom-based assessments and observations;
    (iii) Observations by teachers and related services providers; and
    (iv) On the basis of that review, and input from the child's 
parents, identify what additional data, if any, are needed to determine:
    (A) Whether the child has a particular category of disability, or in 
the case of a reevaluation of a child, whether the child continues to 
have such a disability.
    (B) The present levels of performance and educational needs of the 
child.
    (C) Whether the child needs special education and related services, 
or in the case of a reevaluation of a child, whether the child continues 
to need special education and related services; and
    (D) Whether any additions or modifications to the special education 
and related services are needed to enable the child to meet the 
measurable annual goals set out in the IEP of the child and to 
participate, as appropriate, in the general curriculum.
    (v) The CSC may conduct its review without a meeting.
    (vi) The CSC shall administer tests and other evaluation materials 
as may be needed to produce the data identified under paragraph B.(2) of 
this appendix.

                             C. Eligibility

    (1) The CSC shall:
    (i) Ensure that the full comprehensive evaluation of a child is 
accomplished by a multidisciplinary team. The team shall be comprised of 
teachers or other specialists with knowledge in the area of the 
suspected disability.
    (ii) Convene a meeting to determine the eligibility of a child for 
special education and related services.
    (iii) Meet as soon as possible after a child has been assessed to 
determine the eligibility of the child for services.
    (iv) Afford the child's parents the opportunity to participate in 
the CSC eligibility meeting.
    (v) Issue a written eligibility report that contains the following:
    (A) Identification of the child's disabling condition.
    (B) A synthesis of the formal and informal findings of the 
multidisciplinary assessment team.
    (C) A summary of information from the parents, the child, or other 
persons having significant contact with the child.
    (D) A determination of eligibility statement.
    (E) A list of the educational areas affected by the child's 
disability, a description of the child's educational needs, and a 
statement of the child's present level of performance.
    (2) Reevaluation for Eligibility. School officials shall reevaluate 
the eligibility of a child with a disability every 3 years, or more 
frequently, if conditions warrant.
    (i) The scope and type of the reevaluation shall be determined 
individually based on a child's performance, behavior, and needs during 
the reevaluation and the review of existing data in accordance with 
paragraph B.(6) of this appendix.
    (ii) The CSC is not required to conduct assessments unless requested 
to do so by the child's parents.
    (iii) If the CSC determines that no additional data are needed to 
determine whether the child continues to be a child with a disability, 
the CSC shall notify the parents of:
    (A) The determination that no additional assessment data are needed 
and the reasons for their determination; and
    (B) The right of the parents to request an assessment to determine 
whether the child continues to be a child with a disability.

                                 D. IEP

    (1) The DoD school system officials shall ensure that the CSC 
develop and implement an IEP for each child with a disability who:
    (i) Is enrolled in the DoD school system;
    (ii) In DoDDS, is home-schooled, eligible to enroll in DoDDS on a 
space-required, tuition-free basis and whose sponsors have completed a 
registration form and complied with other registry procedures and 
requirements of the school;
    (iii) In DDESS, is home-schooled and eligible to enroll on a 
tuition-free basis and whose sponsors have completed a registration form 
and complied with other registry procedures and requirements of the 
school; or
    (iv) Is placed in another institution by the DoD school system.
    (2) The CSC shall convene a meeting to develop, review, or revise 
the IEP of a child with a disability. That meeting shall:
    (i) Be scheduled as soon as possible following a determination by 
the CSC that the child is eligible for special education and related 
services.
    (ii) Include minimally as participants the following:
    (A) An administrator or school representative other than the child's 
teacher who is

[[Page 343]]

qualified to provide or supervise the provision of special education and 
is knowledgeable about the general curriculum and available resources.
    (B) The child's teacher (if the child is, or may be, participating 
in the regular education environment);
    (C) A special education teacher or provider.
    (D) One or both of the child's parents.
    (E) The child, if appropriate.
    (F) For a child with a disability who has been evaluated for the 
first time, a representative of the evaluation team who is knowledgeable 
about the evaluation procedures used and is familiar with the results of 
the evaluation.
    (G) Other individuals invited at the discretion of the parent or 
school who have knowledge or special expertise regarding the child, 
including related services personnel, as appropriate.
    (3) Development of the IEP. The CSC shall prepare the IEP with the 
following:
    (i) A statement of the child's present levels of educational 
performance including a description of:
    (A) How the child's disability affects involvement and progress in 
the general curriculum or for preschoolers, how the disability affects 
participation in appropriate activities.
    (B) A description of the child's participation in the regular 
classroom (if the child participates in the regular education 
environment), extracurricular and other non-academic activities; and
    (C) If necessary, an explanation of the extent to which the child 
shall not participate with children who are not disabled in these 
activities.
    (ii) A statement of measurable annual goals including benchmarks or 
short-term instructional objectives related to meeting:
    (A) The child's needs that result from the disability to enable the 
child to be involved in and progress in the general curriculum;
    (B) Each of the child's other needs resulting from his or her 
disability.
    (iii) A statement of the special education and related services and 
supplementary aids and services to be provided to the child, or on 
behalf of the child and a statement of the program modifications or 
supports for school personnel that shall be provided for the child to:
    (A) Advance appropriately toward attaining the annual goals.
    (B) Be involved in and progress in the general curriculum in 
accordance with this part and to participate in extracurricular and 
other non-academic activities; and
    (C) Be educated and participate with other children with or without 
disabilities.
    (iv) A statement of any individual modifications in the 
administration of system-wide or district-wide assessment of student 
achievement that are needed for the child to participate in the 
assessment.
    (v) If the CSC determines that the child shall not participate in a 
particular system-wide or district-wide assessment of student 
achievement (or part of an assessment), a statement of:
    (A) Why that assessment is not appropriate for the child; and
    (B) How the child shall be assessed using alternate assessments to 
measure student progress.
    (vi) A statement explaining how the child's progress towards annual 
goals shall be measured.
    (vii) A statement explaining how parents shall be informed, at least 
as often as parents are informed of progress of children who are not 
disabled, of:
    (A) Their child's progress toward annual goals; and
    (B) The extent to which that progress is sufficient to enable the 
child to achieve the goals by the end of the year.
    (viii) A statement of special education, related services, and 
modifications necessary for the child to advance appropriately toward 
the annual goals.
    (ix) A statement of the amount of time that each service shall be 
provided to the child, to include the projected date for beginning of 
services and location and duration of those services (including adjusted 
school day or an extended school year) and modifications.
    (x) A statement of the physical education program provided in one of 
the following settings:
    (A) In the regular education program.
    (B) In the regular education program with adaptations, 
modifications, or the use of assistive technology.
    (C) Through specially designed instruction based on the goals and 
objectives included in the IEP.
    (xi) Beginning at age 14, and updated annually:
    (A) A statement of transition service needs under applicable 
components of the child's IEP that focuses on his or her course of study 
and augments the standard transition requirements.
    (B) A statement of needed transition services, including inter-
Agency responsibilities.
    (xii) Beginning at least one year before the child reaches the age 
of majority, a statement that the child has been informed of those 
rights that transfer to him or her under this Part.
    (xiii) A statement of special transportation requirement, if any.
    (xiv) A statement of the vocational education program for secondary 
students. If a specially designed instructional program is required, the 
necessary goals and objectives in the IEP shall be included.

[[Page 344]]

    (4) Consideration of Special Factors. The CSC shall consider:
    (i) Assistive technology needs for all children.
    (ii) Language needs for the limited English proficient child.
    (iii) Providing Braille instruction, unless the CSC determines that 
the use of Braille is not appropriate, for a child who is blind or 
visually impaired.
    (iv) Interventions, strategies, and supports including behavior 
management plans to address behavior for a child whose behavior impedes 
learning.
    (v) Language and communication needs, opportunities for 
communication in the child's language and communication mode, including 
direct instruction in that mode, for the child who is deaf or hard of 
hearing.
    (5) The CSC shall ensure that at least one parent understands the 
special education procedures including the due process procedures 
described in appendix G of this part and the importance of the parent's 
participation in those processes. School officials shall use devices or 
hire interpreters or other intermediaries who might be necessary to 
foster effective communications between the school and the parent about 
the child.
    (6) The CSC shall ensure that all provisions developed for any child 
entitled to an education by the DoD school system are fully implemented 
in DoD schools or in non-DoD schools or facilities including those 
requiring special facilities, other adaptations, or assistive devices.
    (7) The CSC shall afford the child's parents the opportunity to 
participate in every CSC meeting to determine their child's initial or 
continuing eligibility for special education and related services, or to 
prepare or change the child's IEP or to determine or change the child's 
placement.
    (8) In developing each child's IEP, the CSC shall consider the 
strengths of the child and the concerns of the parents for enhancing the 
education of their child.

                      E. Implementation of the IEP

    The CSC shall:
    (1) Obtain parental agreement and signature before implementation of 
the IEP.
    (2) Provide a copy of the child's IEP to the parents.
    (3) Ensure that the IEP is in effect before a child receives special 
education and related services.
    (4) Ensure that the IEP is implemented as soon as possible following 
the meetings described under paragraph D.(2) of this appendix.
    (5) Provide special education and related services, in accordance 
with the IEP. The Department of Defense, the DoD school systems, and DoD 
personnel are not accountable if a child does not achieve the growth 
projected in the annual goals of the IEP, as long as services have been 
provided in accordance with the IEP.
    (6) Ensure that the child's IEP is accessible to each regular 
education teacher, special education teacher, related service provider, 
and other service provider who is responsible for its implementation, 
and that each teacher and provider is informed of:
    (i) His or her specific responsibilities related to implementing the 
child's IEP; and
    (ii) The specific accommodations, modifications, and supports that 
must be provided for the child in accordance with the IEP.
    (7) Review the IEP for each child at least annually in a CSC meeting 
to determine whether the annual goals for the child are being achieved.
    (8) Revise the IEP, as appropriate, to address:
    (i) Any lack of progress toward the annual goals and in the general 
curriculum, where appropriate.
    (ii) The results of any reevaluation.
    (iii) Information about the child provided by the parents.
    (iv) The child's anticipated needs.

                        F. Transferring Students

    (1) When a student transfers to a DoD school with a current IEP from 
a non-DoD school, the CSC shall convene promptly an IEP meeting to 
address eligibility and special education services as described in 
sections C and D of this appendix. The CSC may:
    (i) Accept the child's current IEP by notifying and obtaining 
consent of the parents to use the current IEP and all elements contained 
in it.
    (ii) Initiate a CSC meeting to revise the current IEP, if necessary.
    (iii) Initiate an evaluation of the child, if necessary.
    (2) When a student with a current IEP transfers from one DoD school 
to another, the CSC shall accept the child's eligibility and current IEP 
by notifying and obtaining consent of the parents to use the current IEP 
and all elements contained in it.

                    G. Least Restrictive Environment

    (1) To the maximum extent, a child with a disability should be 
placed with children who are not disabled. Special classes, separate 
schooling, or other removal of a child with a disability from the 
regular education environment shall occur only when the type or severity 
of the disability is such that education in regular classes with the use 
of supplementary aids and services cannot be achieved satisfactorily.
    (2) A child shall not be placed by the DoD school system in any 
special education program unless the CSC has developed an IEP. If

[[Page 345]]

a child with a disability is applying for initial admission to a school, 
the child shall enter on the same basis as a child without a disability. 
A child with an IEP, and with the consent of a parent and school 
officials, may receive an initial placement in a special education 
program under procedures listed in section F of this appendix.
    (3) A placement decision requires the following:
    (i) Parent participation in the decision and parent consent to the 
placement before actual placement of the child, except as otherwise 
provided in paragraph H.(2) of this appendix.
    (ii) Delivery of educational instruction and related services in the 
least restrictive environment.
    (iii) The CSC to base placements on the IEP and to review the IEP at 
least annually.
    (iv) The child to participate, to the maximum extent appropriate to 
the needs and abilities of the child, in school activities including 
meals, assemblies, recess periods, and field trips with children who are 
not disabled.
    (v) Consideration of factors affecting the child's well-being, 
including the effects of separation from parents.
    (vi) A child to attend a DoD school that is located as close as 
possible to the residence of the parent who is sponsoring the child's 
attendance. Unless otherwise required by the IEP, the school should be 
the same school that the child would have attended had he or she not 
been disabled.

                              H. Discipline

    (1) All regular disciplinary rules and procedures applicable to 
children attending a DoD school shall apply to children with 
disabilities who violate school rules and regulations or disrupt regular 
classroom activities, subject to the following provisions. School 
personnel may remove a child with a disability from the child's current 
placement (to the extent removal would be applied to children who are 
not disabled):
    (i) On an emergency basis for the duration of the emergency when it 
reasonably appears that the child's behavior may endanger the health, 
welfare, or safety of self or any other child, teacher, or school 
personnel.
    (ii) For not more than 10-cumulative school days in a school year 
for any violation of school rules.
    (2) Change of Placement. If a child is removed from his or her 
current placement for more than 10-cumulative school days in a school 
year, it is considered a change of placement.
    (i) Not later than the date on which the decision to make a change 
in placement is made, the school must notify parents of the decision and 
of all procedural safeguards, as described in section B of appendix F of 
this part.
    (ii) Not later than 10 days following the change of placement, the 
CSC must:
    (A) Convene a meeting of the IEP team and other qualified personnel 
to conduct a manifestation determination as described in paragraph H.(5) 
of this appendix and
    (B) Convene an IEP meeting to review the IEP to develop appropriate 
behavioral interventions to address the child's behavior and implement 
those interventions. This review may be conducted at the same meeting 
that is convened under paragraph H.(2)(ii)(A) of this appendix.
    (i) If the child has a behavioral intervention plan, the CSC must 
review the plan and its implementation, and modify the plan and its 
implementation as necessary, to address the behavior.
    (ii) If the child does not have a behavioral intervention plan, the 
CSC must develop an assessment plan to include a functional behavioral 
assessment.
    (iii) As soon as practicable after developing the assessment plan 
and completing the assessments required by the plan, the CSC must 
convene an IEP meeting to develop a behavioral intervention plan to 
address that behavior, and shall implement the plan.
    (3) After a child with a disability has been removed from his or her 
current placement for more than 10-cumulative school days in a school 
year, during any subsequent days of removal the DoD school system must 
provide services to the extent necessary to enable the child to 
appropriately progress in the general curriculum and appropriately 
advance toward achieving the goals set out in the child's IEP.
    (4) Alternative Education Setting (AES). School personnel may order 
a change in placement of a child with a disability in accordance with 
the requirements of paragraph H.(2) of this appendix to an appropriate 
interim AES for the same amount of time that a non-disabled child would 
be subject to discipline, but for not more than 45 days, if:
    (i) The child carries a weapon to school or to a school function 
under the jurisdiction of the DoD school system; or
    (ii) The child knowingly possesses or uses illegal drugs or sells or 
solicits the sale of a controlled substance while at school or at a 
school function under the jurisdiction of a DoD school system.
    (5) Manifestation Determination. The CSC shall determine whether the 
child's behavior is the result of the child's disability by considering 
all relevant information including evaluation results, observation of 
the child, information provided by the parents of the child, and the 
child's IEP and placement.
    (i) Unless all of the following are evident, the CSC must consider 
the child's behavior to be a manifestation of the disability:
    (A) IEP and placement were appropriate and the special education 
services, supplementary aides and services, and behavior

[[Page 346]]

intervention strategies were provided consistent with the child's IEP 
and placement;
    (B) The child's disability did not impair his or her ability to 
understand the impact and consequences of the behavior subject to the 
disciplinary action; and
    (C) The child's disability did not impair his or her ability to 
control the behavior subject to disciplinary action.
    (ii) If the CSC determines that the child's behavior was a 
manifestation of the disability, the child is not subject to removal 
from current educational placement as a disciplinary action, except as 
provided for in paragraph H.(1)(i) of this appendix.
    (A) The child's parents shall be notified of the right to have an 
IEP meeting before any changes in the child's placement.
    (B) The CSC shall address the behavior that was the subject of the 
disciplinary action, by:
    (i) Reviewing the child's educational placement to ensure that it is 
appropriate in consideration of the child's behavior.
    (ii) Revising the IEP to include goals, services, and modifications 
that address the behavior subject to disciplinary action, as necessary.
    (iii) If the CSC determines that the child's behavior was not the 
result in whole or part of the disability, relevant disciplinary 
procedures may be applied to the child in the same manner in which it 
would be applied to a child without a disability, except as provided in 
FAPE.

                            I. Parent Appeal

    (1) If the parent disagrees with the manifestation determination or 
with any decision regarding placement, the parent may request a hearing.
    (2) The school system shall arrange for an expedited hearing in 
accordance with appendix G of this part.
    (3) Placement During Appeal. When a parent requests a hearing 
challenging placement in an interim AES, the child shall remain in the 
interim AES pending the decision of the hearing officer or until the 
expiration of the time period provided for in paragraph H.(3) of this 
appendix whichever comes first, unless the parent and the school system 
agree otherwise.
    (i) After expiration of the interim AES, during the pendency of any 
proceedings to challenge the proposed change in placement, the child 
shall return and remain in the child's placement prior to the interim 
AES.
    (ii) If the school personnel maintain that it is dangerous for the 
child to return to his or her placement prior to the interim AES, the 
DoD school system may request an expedited hearing.

                      J. Order by a Hearing Officer

    A hearing officer may order a change in the placement of a child 
with a disability to an interim AES for not more than 45 days, if the 
hearing officer:
    (1) Determines that the DoD school system has demonstrated by 
substantial evidence that maintaining the current placement of such 
child is substantially likely to result in injury to the child or to 
others.
    (2) Considers the appropriateness of the child's current placement.
    (3) Considers whether the school system has made reasonable efforts 
to minimize the risk of harm in the child's current placement, including 
the use of supplementary aids and services; and
    (4) Determines that the interim AES meets the requirements of 
section A of this appendix.

      K. Children Not Yet Determined Eligible for Special Education

    Children who have not yet been determined eligible for special 
education and who have violated the disciplinary rules and procedures 
may assert the protections of the IDEA if the DoD school system had 
knowledge that the child had a disability before the behavior occurred.
    (1) The DoD school system is considered to have had knowledge if:
    (i) The parents expressed concern in writing to the school system 
personnel that the child needed special education or related services.
    (ii) The child's behavior or performance indicated a need for 
services.
    (iii) The child's parents requested an evaluation; or
    (iv) The child's teacher or other DoD school system personnel 
expressed concern about the behavior or performance to the CSC, the 
school principal, assistant principal, or district special education 
coordinator.
    (2) If the DoD school system does not have knowledge of a disability 
prior to disciplinary action, the child shall be subject to the regular 
disciplinary rules and procedures.
    (3) If an evaluation were requested during the time the child is 
subjected to disciplinary action, the evaluation shall be expedited. The 
child shall remain in his or her current placement until determined 
eligible for special education or related services.
    (4) The DoD school system is not constrained from reporting crime to 
the appropriate law enforcement authorities and shall ensure that 
special education and disciplinary records are transmitted to the 
appropriate law enforcement and judicial authorities.

[[Page 347]]

  L. Children With Disabilities Who Are Placed in a NON-DoD School or 
                                Facility

    (1) Children with disabilities who are eligible to receive a DoD 
school system education, but are placed in a non-DoD school or facility 
by a DoD school system, shall have all the rights of children with 
disabilities who are enrolled in a DoD school.
    (2) A child with a disability may be placed in a non-DoD school or 
facility only if required by the IEP.
    (3) Placement by DoDDS in a host-nation non-DoD school or facility 
shall be made under the host-nation requirements.
    (4) Placement by DoDDS in a host-nation non-DoD school or facility 
is subject to all treaties, executive agreements, and status of forces 
agreements between the United States and the host nations, and all DoD 
and DoD school system regulations.
    (5) If a DoD school system places a child with a disability in a 
non-DoD school or facility as a means of providing special education and 
related services, the program of that institution, including non-medical 
care and room and board, as prescribed in the child's IEP, must be 
provided at no cost to the child or the child's parents. The DoD school 
system or the responsible DoD Component shall pay the costs in 
accordance with this part.
    (6) DoD school officials shall initiate and conduct a meeting to 
develop an IEP for the child before placement. A representative of the 
non-DoD school or facility should attend the meeting. If the 
representative cannot attend, the DoD school system officials shall 
communicate in other ways to ensure participation including individual 
or conference telephone calls. The IEP must meet the following 
standards:
    (i) Be signed by an authorized DoD school system official before it 
becomes valid.
    (ii) Include a determination that the DoD school system does not 
currently have or cannot reasonably create an educational program 
appropriate to meet the needs of the child with a disability.
    (iii) Include a determination that the non-DoD school or facility 
and its educational program and related services conform to the 
requirements of this part.
    (7) Cost of Tuition for Non-DoD School or Facility. The Department 
of Defense is not authorized to reimburse the costs of special education 
if a parent unilaterally places the student in a non-DoD school without 
approval of the cognizant CSC and the Superintendent, in coordination 
with the Director of the DoD school system. A valid IEP must document 
the necessity of the placement in a non-DoD school or facility.
    (i) Reimbursement may be required if a hearing officer determines 
that the DoD school system had not made FAPE available in a timely 
manner prior to enrollment in the non-DoD school and that the private 
placement is appropriate.
    (ii) Reimbursement may be reduced or denied if the parents did not 
inform the CSC that the placement determined by the CSC was rejected, 
including a statement of their concerns, and that they intended to place 
a child in a non-DoD school; or if 10 business days (Monday through 
Friday, except for Federal holidays) prior to the parents' removal of 
the child from the school, the parents failed to provide written notice 
to the DoD school system of their rejection of the placement decision 
concerning the child, the reasons for their rejection, and their intent 
to remove the child; or if the CSC informed parents of its intent to 
evaluate the child, but parents did not make the child available.
    (iii) Reimbursement may not be reduced or denied for failure to 
provide the required notice if the parents cannot read and write in 
English; compliance would result in physical or emotional harm to the 
child; the DoD school prevented the parent from providing notice; or the 
parents had not received notice of a requirement to provide required 
notice.

                    M. Confidentiality of the Records

    The DoD school system and EDIS officials shall maintain all student 
records in accordance with DoD Directive 5400.11.

                          N. Dispute Resolution

    A parent, teacher, or other person covered by this part may file a 
written complaint about any aspect of this part that is not a proper 
subject for adjudication by a due process hearing officer, in accordance 
with DSR 2500.11.



  Sec. Appendix C to Part 57--Procedures for the Provision of Related 

 Services by the Military Medical Departments to DoDDS Students on IEPs

                        A. Evaluation Procedures

    (1) Upon request by a DoDDS CSC, the responsible EDIS shall ensure 
that a qualified medical authority conducts or verifies a medical 
evaluation for use by the CSC in determining the medically related 
disability that results in a child's need for special education and 
related services, and oversees an EDIS evaluation used in determining a 
child's need for related services.
    (i) This medical or related services evaluation, including necessary 
consultation with other medical personnel, shall be supervised by a 
physician or other qualified healthcare provider.
    (ii) This medical evaluation shall include a review of general 
health history, current health assessment, systems evaluation to include 
growth and developmental assessment,

[[Page 348]]

and, if pertinent, detailed evaluation of gross motor and fine motor 
adaptive skills, psychological status, and visual and audiological 
capabilities, including details of present level of performance in each 
of these areas affecting the student's performance in school.
    (iii) The EDIS-related services evaluation shall be specific to the 
areas addressed in the referral by the CSC.
    (2) EDIS shall provide a summary evaluation report to the CSC that 
responds to the questions posed in the original referral. The written 
report shall include:
    (i) Demographic information about the child.
    (ii) Behavioral observation of the child during testing.
    (iii) Instruments and techniques used.
    (iv) Evaluation results.
    (v) Descriptions of the child's strengths and limitations.
    (vi) Instructional implications of the findings; and
    (vii) The impact of the child's medical condition(s), if applicable, 
on his or her educational performance.
    (3) If EDIS determines that in order to respond to the CSC referral 
the scope of its assessment and evaluation must be expanded beyond the 
areas specified in the initial parental permission, EDIS must:
    (i) Obtain parental permission for the additional activities.
    (ii) Complete their initial evaluation by the original due date; and
    (iii) Notify the CSC of the additional evaluation activities.
    (4) When additional evaluation information is submitted by EDIS, the 
CSC shall review all data and determine the need for program changes 
and/or the reconsideration of eligibility.
    (5) An EDIS provider shall serve on the CSC when eligibility, 
placement, or requirements for related services that EDIS provides are 
to be determined.
    (6) Related services provided by EDIS, pursuant to an IEP, are 
educational and not medical services.

                                 B. IEP

    (1) EDIS shall be provided the opportunity to participate in the IEP 
meeting.
    (2) EDIS shall provide related services assigned to EDIS that are 
listed on the IEP.

                          C. Liaison With DoDDS

    Each EDIS shall designate an EDIS Liaison Officer to:
    (1) Provide liaison between the EDIS and DoDDS schools.
    (2) Offer, on a consultative basis, training for DoDDS personnel on 
medical aspects of specific disabilities.
    (3) Offer consultation and advice as needed regarding the health 
services provided at school (for example, tracheostomy care, tube 
feeding, occupational therapy).
    (4) Participate with DoDDS and legal personnel in developing and 
delivering in-service training programs that include familiarization 
with various conditions that impair a child's educational endeavors, the 
relationship of medical findings to educational functioning, related 
services, and this part.



                 Sec. Appendix D to Part 57--The DoD-AP

                              A. Membership

    (1) The DoD Advisory Panel on Early Intervention and Special 
Education shall meet as needed in publicly announced, accessible 
meetings open to the general public and shall comply with DoD Directive 
5105.4. The DoD-AP members, appointed by the Secretary of Defense, or 
designee, shall include at least one representative from each of the 
following groups:
    (i) Persons with disabilities.
    (ii) Representatives of the Surgeons General of the Military 
Departments.
    (iii) Representatives of the family support programs of the Military 
Departments.
    (iv) Special education teachers from the DoD school system.
    (v) Regular education teachers from the DoD school system.
    (vi) Parents of children, ages 3 through 21 years, inclusive, who 
are receiving special education from the DoD school system.
    (vii) Parents of children, ages birth through 2 years, inclusive, 
who are receiving EIS from EDIS.
    (viii) Institutions of higher education that prepare early 
intervention, special education, and related services personnel.
    (ix) Special education program managers from the DoD school systems.
    (x) Representatives of the Military Departments and overseas 
commands, including providers of early intervention and related 
services.
    (xi) Representatives of vocational community, or business 
organizations concerned with transition services.
    (xii) Other appropriate persons.
    (2) A majority of panel members shall be individuals with 
disabilities or parents of children, ages birth through 2 years, 
inclusive, who are receiving EIS from EDIS and children, ages 3 through 
21 years, inclusive who are receiving special education from the DoD 
school system.
    (3) The DoD-AP members shall serve under appointments that shall be 
for a term not to exceed 3 years.

[[Page 349]]

                           B. Responsibilities

    (1) Advise the USD(P&R) of unmet needs within the Department of 
Defense in the provision of special services to infants, toddlers, and 
children with disabilities.
    (2) Advise and assist the Military Departments in the performance of 
their responsibilities, particularly the identification of appropriate 
resources and agencies for providing EIS and promoting inter-Component 
agreements.
    (3) Advise and assist the DoD schools systems on the provision of 
special education and related services, and on transition of toddlers 
with disabilities to preschool services.

                              C. Activities

    The DoD-AP shall perform the following activities:
    (1) Review information about improvements in service provided to 
children with disabilities, ages birth through 21, inclusive, in the 
Department of Defense.
    (2) Receive and consider comments from parents, students, 
professional groups, and individuals with disabilities.
    (3) Review policy memoranda on effective inter-Department and inter-
Component collaboration.
    (4) Review the findings of fact and decisions of each impartial due 
process hearing conducted under appendix G of this part.
    (5) Review reports of technical assistance and monitoring 
activities.
    (6) Make recommendations based on program and operational 
information for changes in policy and procedures and in the budget, 
organization, and general management of the programs providing special 
services.
    (i) Identify strategies to address areas of conflict, overlap, 
duplication, or omission of services.
    (ii) When necessary, establish committees for short-term purposes 
comprised of representatives from parent, student, professional groups, 
and individuals with disabilities.
    (iii) Assist in developing and reporting such information and 
evaluations as may assist the Department of Defense.
    (iv) Comment publicly on rules or standards about EIS for infants 
and toddlers, ages birth through 2 years, and special education of 
children with disabilities, ages 3 through 21 years, inclusive.
    (v) Perform such other tasks as may be requested by the USD(P&R).

                        D. Reporting Requirements

    (1) Submit an annual report of the DoD-AP's activities and 
suggestions to the DoD Coordinating Committee, by July 31 of each year.
    (2) That report is exempt from formal review and licensing under 
section 5 of DoD Instruction 7750.7



   Sec. Appendix E to Part 57--DoD-CC on Early Intervention, Special 

                     Education, and Related Services

                         A. Committee Membership

    The DoD-CC shall meet at least yearly to facilitate collaboration in 
early intervention, special education, and related services in the 
Department of Defense. The DoD-CC shall consist of the following 
members, appointed by the Secretary of Defense or designee:
    (1) A representative of the USD(P&R) or designee, who shall serve as 
the Chair.
    (2) Representatives of the Secretaries of the Military Departments.
    (3) A representative of the TRICARE Management Activity.
    (4) Representatives from the DoD school systems.
    (5) A representative from the GC, DoD.

                           B. Responsibilities

    (1) Advise and assist the USD(P&R) in the performance of his or her 
responsibilities.
    (2) At the direction of the USD(P&R), advise and assist the Military 
Departments, and the DoD school systems in the coordination of services 
among providers of early intervention, special education, and related 
services.
    (3) Ensure compliance in the provision of EIS for infants and 
toddlers and special education and related services for children ages 3 
through 21 years, inclusive.
    (4) Review the recommendations of the DoD-AP to identify common 
concerns, ensure coordination of effort, and forward issues requiring 
resolution to the USD(P&R).
    (5) Assist in the coordination of assignments of sponsors who have 
children with disabilities who are or who may be eligible for special 
education and related services in the DoDDS or EIS through the Military 
Departments.
    (6) Perform other duties as assigned by the USD(P&R), including 
monitoring the delivery of services under this part.



          Sec. Appendix F to Part 57--Parent and Student Rights

                           A. Parental Consent

    (1) The consent of a parent of a child with a disability or 
suspected of having a disability shall be obtained before any of the 
following:
    (i) Initiation of formal evaluation procedures or re-evaluation.
    (ii) Provision of EIS or initial educational placement.

[[Page 350]]

    (iii) Change in EIS or educational placement.
    (2) If a parent of an infant or toddler (birth through 2 years of 
age) does not provide consent for participation in all EIS, the services 
shall still be provided for those interventions to which a parent does 
give consent.
    (3) If the parent of a child 3 through 21 years, inclusive, refuses 
consent to initial evaluation, reevaluation, or initial placement in a 
special education program, the DoD school system or the parent may do 
the following:
    (i) Request a conference between the school and parents.
    (ii) Request mediation.
    (iii) Initiate an impartial due process hearing under appendix G of 
this part to show cause as to why an evaluation or placement in a 
special education program should or should not occur without such 
consent. If the hearing officer sustains the DoD school system's 
position in the impartial due process hearing, the DoD school system may 
evaluate or provide special education and related services to the child 
without the consent of a parent, subject to the further exercise of due 
process rights.
    (4) The Department of Defense shall protect the child's rights, by 
assigning an individual to act as a surrogate for the parents, when 
after reasonable effort the Department of Defense cannot locate the 
parents.

                        B. Procedural Safeguards

    Parents of children with disabilities are afforded the following 
procedural safeguards, consistent with appendix G of this part to ensure 
that their children receive appropriate special services:
    (1) The timely administrative resolution of parental complaints, 
including hearing procedures with respect to any matter relating to the 
identification, evaluation, or educational placement of the child, or 
the provision of EIS for an infant or toddler, age birth through 2 
years, or a free appropriate public education for the child, age 3 
through 21 years, inclusive.
    (2) The right to confidentiality of personally identifiable 
information under DoD Directive 5400.11.
    (3) The right to provision of written notice and to have furnished 
consent prior to the release of relevant information outside the 
Department of Defense.
    (4) The right to determine whether they, their child, or other 
family members shall accept or decline any portion of EIS, without 
jeopardizing the provision of other EIS.
    (5) The opportunity to examine records on assessment, screening, 
eligibility determinations, and the development and implementation of 
the IFSP and IEP.
    (6) Written Notice. The right to prior written notice when the EDIS 
or school proposes, or refuses, to initiate or change the 
identification, evaluation, placement or provision of special services 
to the child with a disability.
    (i) The notice must be in sufficient detail to inform the parents 
about:
    (A) The action that is being proposed or refused;
    (B) The reasons for taking the action;
    (C) All procedural safeguards that are available under this part as 
described in paragraph B.(7) of this appendix; and
    (D) Conflict resolution procedures, including a description of 
mediation and due process hearings procedures and applicable timelines, 
as defined in appendix G of this part.
    (ii) The notice must be provided in the native language of the 
parent or other mode of communication used by the parent, unless it is 
clearly not feasible to do so.
    (7) Procedural Safeguards Notice. Parents must be given a Procedural 
Safeguards Notice, at a minimum, upon initial referral for evaluation, 
upon each notification of an IFSP or IEP meeting, upon reevaluation of 
the child, and upon receipt of a request for due process.
    (i) The procedural safeguards notice must include a full explanation 
of all of the procedural safeguards available with regard to the matters 
in paragraph B.(7) of this appendix including the right to:
    (A) Independent educational evaluation for school-aged children.
    (B) Prior written notice.
    (C) Parental consent.
    (D) Access to educational or early intervention records.
    (E) Opportunity to present complaints.
    (F) The child's placement during pendency of due process 
proceedings.
    (G) Procedures for children (3 through 21 years, inclusive) who are 
subject to placement in an interim alternative educational setting.
    (H) Requirements for unilateral placement by parents of children in 
private schools at public expense.
    (I) Mediation.
    (J) Due process hearings, including requirements for disclosure of 
evaluation results and recommendations.
    (K) Civil actions.
    (L) The DoD complaint system, including a description of how to file 
a complaint and the timelines under those procedures.
    (ii) The procedural safeguards notice must be:
    (A) Written in language understandable to the general public.
    (B) Provided in the native language of the parent or other mode of 
communication used by the parent, unless it is clearly not feasible to 
do so. If the native language or other mode of communication of the 
parent is not a written language, the school system shall take steps to 
ensure that:

[[Page 351]]

    (i) The notice is translated orally or by other means to the parent 
in his or her native language or other mode of communication.
    (ii) The parent understands the content of the notice; and
    (iii) There is written evidence that the requirements in paragraph 
B.(7)(ii)(A) and paragraph B.(7)(ii)(B) of this appendix have been met.
    (8) Independent Educational Evaluation. A parent of a child (3 
through 21 years, inclusive) may be entitled to an independent 
educational evaluation of the child at the expense of the DoD school 
system if the parent disagrees with the DoD school system's evaluation 
of the child.
    (i) If a parent requests an independent educational evaluation at 
the school system's expense, the DoD school system must, without 
unnecessary delay, either:
    (A) Initiate an impartial due process hearing to show that its 
evaluation is appropriate; or
    (B) Ensure an independent evaluation is provided at the DoD school 
system's expense. Unless the DoD school system demonstrates in an 
impartial due process hearing that an independent evaluation obtained by 
the parent did not meet DoD school system criteria. In such cases, the 
parents must bear the cost of the evaluation.
    (ii) If the DoD school system initiates a hearing and the decision 
is that the DoD school system's evaluation is appropriate, the parents 
still have the right to an independent evaluation, but not at the school 
system's expense.
    (iii) An independent educational evaluation provided at the DoD 
school system's expense must do the following:
    (A) Conform to the requirements of this part.
    (B) Be conducted, when possible, in the area where the child 
resides.
    (C) Meet DoD standards governing persons qualified to conduct an 
educational evaluation, including an evaluation for related services.
    (9) The DoD school system, the CSC, and a hearing officer appointed 
under this part shall consider any evaluation report presented by a 
parent.
    (10) Access to Records. The parents of a child with a disability 
shall be afforded an opportunity to inspect and review educational 
records about the identification, evaluation, and educational placement 
of the child, and the provision of a free public education for the 
child.
    (11) Due Process Rights. (i) The parent of a child with a 
disability, the Military Department, or the DoD school system has the 
opportunity to file a written petition for an impartial due process 
hearing under appendix G of this part. The petition may concern issues 
affecting a particular child's identification, evaluation, or placement, 
or the provision of EIS or a free and appropriate public education.
    (ii) While an impartial due process hearing or judicial proceeding 
is pending, unless the EDIS or the DoD school system and the parent of 
the child agree otherwise, the child shall remain in his or her present 
educational setting, subject to the disciplinary procedures prescribed 
in section H of appendix B of this part.
    (12) Transfer of Parental Rights at Age of Majority. (i) In the DoD 
school systems, a child reaches the age of majority at age 18.
    (ii) When a child with a disability reaches the age of majority 
(except for a child with a disability who has been determined to be 
incompetent under State law) the rights accorded to parents under this 
Part transfer to the child.
    (iii) When a child reaches the age of majority, the DoD school 
system shall notify the individual and the parents of the transfer of 
rights.
    (iv) When a child with a disability who has reached the age of 
majority, who has not been determined to be incompetent, but who does 
not have the ability to provide informed consent with respect to his or 
her educational program, the Department of Defense shall establish 
procedures for appointing the parent of the child to represent the 
educational interests of the child throughout the period of eligibility 
for special education services.



      Sec. Appendix G to Part 57--Mediation and Hearing Procedures

                               A. Purpose

    This appendix establishes requirements for the resolution of 
conflicts through mediation and impartial due process hearings. Parents 
of infants, toddlers, and children who are covered by this Part and, as 
the case may be, the cognizant Military Medical Department or the DoD 
school system are afforded impartial mediation and/or impartial due 
process hearings and administrative appeals about the provision of EIS, 
or the identification, evaluation, educational placement of, and the 
FAPE provided to, such children by the Department of Defense, in 
accordance with sections 927 and 1400 of 20 U.S.C. and section 2164 of 
10 U.S.C.

                              B. Mediation

    (1) Mediation may be initiated by either a parent or the Military 
Medical Department concerned or the DoD school system to resolve 
informally a disagreement on any matter relating to the identification, 
evaluation, or educational placement of the child, or the provision of a 
FAPE to such child.

[[Page 352]]

    (i) The DoD school system shall participate in mediation involving 
special education and related services.
    (ii) The cognizant Military Medical Department shall participate in 
mediation involving EIS.
    (2) The party initiating mediation must notify the other party to 
the mediation of its request to mediate. The initiating party's request 
must be written, include a written description of the dispute and bear 
the signature of the requesting party. Formal acknowledgement of the 
request for mediation shall occur in a timely manner. The parties may 
jointly request mediation.
    (3) Upon agreement of the parties to mediate a dispute, the Military 
Medical Department or DoD school shall forward a request for a mediator 
to higher headquarters, or request a mediator through the Director, 
Defense Office of Hearings and Appeals (DOHA).
    (i) The cognizant DoDDS Area Special Education Coordinator or the 
DDESS District Superintendent shall promptly appoint a mediator. The 
Director, DOHA, through the DoHA Office of Alternate Dispute Resolution 
(ADR), shall maintain a roster of mediators trained in ADR methods, 
knowledgeable in laws and regulations related to special education, and 
available to mediate disputes upon request. When requested, the 
Director, DOHA, through the Office of ADR, shall appoint a mediator 
within 15 business days of receiving the request for a due process 
hearing, unless a party provides written notice to the Director, DOHA 
that the party refuses to participate in mediation.
    (ii) The mediator assigned to a dispute shall not be employed by the 
Military Medical Department or the DoD school system involved, unless 
the parties agree otherwise.
    (4) Unless both parties agree otherwise, mediation shall commence in 
a timely manner after both parties agree to mediation.
    (5) The parents of the infant, toddler or child and 2 
representatives of the EDIS or DoD school may participate in mediation. 
With the consent of both parties, other persons may participate in 
mediation. Either party may recess a mediation session to consult 
advisors, whether or not present, or to consult privately with the 
mediator.
    (6) If the parties resolve the dispute or a portion of the dispute, 
or agree to use another procedure to resolve the dispute, the mediator 
shall ensure that the resolution or agreement is reduced to writing and 
that it is signed and dated by the parties and that a copy is given to 
each party. The resolution or agreement is legally binding upon the 
parties.
    (7) Discussions that occur during the mediation process shall be 
confidential and may not be used as evidence in any subsequent due 
process hearing or civil proceeding. Unless the parties and the mediator 
agree, no person may record a mediation session, nor should any written 
notes be taken from the room by either party. The mediator may require 
the parties to sign a confidentiality pledge before the commencement of 
mediation.
    (8) Parents must be provided an opportunity to meet with appropriate 
EDIS or DoD school system staff in at least one mediation session, if 
they request a due process hearing in accordance with sections A through 
H of this appendix. The parents and the Military Medical Department or 
DoD school system must participate in mediation, unless a party objects 
to mediation.
    (9) Mediation shall not delay hearings or appeals related to the 
dispute. All mediation sessions shall be held in a location that is 
convenient to the parties. The Military Medical Department in mediations 
concerning EIS or the DoD school system in mediations concerning special 
education and related services shall bear the cost of the mediation 
process.
    (10) Any hearing officer or adjudicative body may draw no negative 
inference from the fact that a mediator or a party withdrew from 
mediation or that mediation did not result in settlement of a dispute.

                        C. Hearing Administration

    (1) The Defense Office of Hearings and Appeals (DOHA) shall have 
administrative responsibility for the proceedings authorized by sections 
D through H of this appendix.
    (2) This appendix shall be administered to ensure that the findings, 
judgments, and determinations made are prompt, fair, and impartial.
    (3) Impartial hearing officers, who shall be DOHA Administrative 
Judges, shall be appointed by the Director, DOHA, and shall be attorneys 
in good standing of the bar of any State, the District of Columbia, or a 
commonwealth, territory or possession of the United States, who are also 
independent of the DoD school system or the Military Medical Department 
concerned in proceedings conducted under this appendix. A parent shall 
have the right to be represented in such proceedings by counsel or by 
persons with special knowledge or training with respect to the 
challenges of individuals with disabilities. The DOHA Department Counsel 
normally shall appear and represent the DoD school system in proceedings 
conducted under this appendix, when such proceedings involve a child age 
3 to 21, inclusive. When an infant or toddler is involved, the Military 
Medical Department responsible under this part for delivering EIS shall 
either provide its own counsel or request counsel from the DOHA.

                    D. Hearing Practice and Procedure

    (1) Hearing. (i) Should mediation be refused or otherwise fail to 
resolve the issues on the

[[Page 353]]

provision of EIS to an infant or toddler or the identification or 
evaluation of such an individual, the parent may request and shall 
receive a hearing before a hearing officer to resolve the matter. The 
parents of an infant or toddler and the Military Medical Department 
concerned shall be the only parties to a hearing conducted under this 
appendix.
    (ii) Should mediation be refused or otherwise fail to resolve the 
issues on the provision of a FAPE to a child with a disability, age 3 to 
21, inclusive, or the identification, evaluation, or educational 
placement of such an individual, the parent or the school principal, for 
the DoD school system, may request and shall receive a hearing before a 
hearing officer to resolve the matter. The parents of a child age 3 to 
21, inclusive, and the DoD school system shall be the only parties to a 
hearing conducted under this appendix.
    (2) The parents and the Military Medical Department or DoD school 
system must have an opportunity to obtain an impartial due process 
hearing, if the parents object to:
    (i) A proposed formal educational assessment or proposed denial of a 
formal educational assessment of their child.
    (ii) The proposed placement of their child in, or transfer of their 
child to a special education program.
    (iii) The proposed denial of placement of their child in a special 
education program or the transfer of their child from a special 
education program.
    (iv) The proposed provision or addition of special education 
services for their child; or
    (v) The proposed denial or removal of special education services for 
their child.
    (3) The parent or the attorney representing the child shall include 
in the petition, the name of the child, the address of the residence of 
the child, the name of the school the child is attending, a description 
of the nature of the problem of the child relating to the proposed or 
refused initiation or change, including the facts relating to the 
problem, and a proposed resolution of the problem to the extent known 
and available to the parents at the time.
    (4) The DoD school system may file a written petition for a hearing 
to override a parent's refusal to grant consent for an initial 
evaluation, a reevaluation or an initial educational placement of the 
child. The DoD school system may also file a written petition for a 
hearing to override a parent's refusal to accept an IEP.
    (5) The party seeking the hearing shall submit the petition to the 
Director, DOHA, at P.O. Box 3656, Arlington, Virginia 22203. The 
petitioner shall deliver a copy of the petition to the opposing party 
(i.e., the parent or the school principal, for the DoD school system, or 
the military MTF commander, for the Military Medical Department), either 
in person or by first-class mail, postage prepaid. Delivery is complete 
on mailing. When the DoD school system or the Military Medical 
Department petitions for a hearing, it shall inform the other parties of 
the deadline for filing an answer under paragraph D.(6) of this appendix 
and shall provide the other parties with a copy of this part.
    (6) An opposing party shall submit an answer to the petition to the 
Director, DOHA, with a copy to the petitioner, at the latest by the 15th 
business day after receipt of the petition. The answer shall be as full 
and complete as possible, addressing the issues, facts, and proposed 
relief. The submission of the answer is complete upon mailing.
    (7) By 10 business days after receipt of the petition, the Director, 
DOHA, shall assign a hearing officer, who then shall have jurisdiction 
over the resulting proceedings. The Director, DOHA, shall forward all 
pleadings to the hearing officer.
    (8) The party requesting the hearing shall plead with specificity as 
to what issues are in dispute and all issues not specifically pleaded 
with specificity is deemed waived. Parties must limit evidence to the 
issues specifically pleaded. A party may amend a pleading if the 
amendment is filed with the hearing officer and is received by the other 
parties at least 10 business days before the hearing.
    (9) The Director, DOHA, shall arrange for the time and place of the 
hearing, and shall provide administrative support. The hearing shall be 
held in the DoD school district attended by the child or at the military 
base location of the EDIS clinic, unless the parties agree otherwise or 
upon a showing of good cause.
    (10) The purpose of a hearing is to establish the relevant facts 
necessary for the hearing officer to reach a fair and impartial 
determination of the case. Oral and documentary evidence that is 
relevant and material may be received. The technical rules of evidence 
shall be relaxed to permit the development of a full evidentiary record 
with the Federal Rules of Evidence, title 28, United States Code serving 
as guide.
    (11) The hearing officer shall be the presiding officer, with 
judicial powers to manage the proceeding and conduct the hearing. Those 
powers shall include the authority to order an independent evaluation of 
the child at the expense of the DoD school system or the Military 
Medical Department concerned and to call and question witnesses.
    (12) Those normally authorized to attend a hearing shall be the 
parents of the individual with disabilities, the counsel or personal 
representative of the parents, the counsel and professional employees of 
the DoDDS or the Military Medical Department concerned, the hearing 
officer, and a person qualified to transcribe or record the proceedings. 
The hearing officer may permit other persons to

[[Page 354]]

attend the hearing, consistent with the privacy interests of the parents 
and the individual with disabilities. The parents have the right to an 
open hearing on waiving in writing their privacy rights and those of the 
individual with disabilities who is the subject of the hearing.
    (13) A verbatim transcription of the hearing shall be made in 
written or electronic form and shall become a permanent part of the 
record. A copy of the written transcript or electronic record of the 
hearing shall be made available to a parent on request and without cost. 
The hearing officer may allow corrections to the written transcript or 
electronic recording for conforming it to actual testimony after 
adequate notice of such changes is given to all parties.
    (14) The hearing officer's decision of the case shall be based on 
the record, which shall include the petition, the answer, the written 
transcript or the electronic recording of the hearing, exhibits admitted 
into evidence, pleadings or correspondence properly filed and served on 
all parties, and such other matters as the hearing officer may include 
in the record, if such matter is made available to all parties before 
the record is closed under paragraph D.(16) of this appendix.
    (15) The hearing officer shall make a full and complete record of a 
case presented for adjudication.
    (16) The hearing officer shall decide when the record in a case is 
closed.
    (17) The hearing officer shall issue findings of fact and 
conclusions of law in a case not later than 50 business days after being 
assigned to the case, unless a request for discovery is made by either 
party, as provided for in paragraph D.(5) of this appendix in which case 
the time required for such discovery does not count toward the 50 
business days. The hearing officer may grant a specific extension of 
time for good cause either on his or her own motion or at the request of 
either party. Good cause includes the time required for mediation under 
section B of this appendix. If the hearing officer grants an extension 
of time, he or she shall identify the length of the extension and the 
reason for the extension in the record of the proceeding.

                              E. Discovery

    (1) Full discovery shall be available to parties to the proceeding, 
with the Federal Rules of Civil Procedure, Rules 26-37, codified at 28 
U.S.C. serving as a guide.
    (2) If voluntary discovery cannot be accomplished, a party seeking 
discovery may file a motion with the hearing officer to accomplish 
discovery. The hearing officer shall grant an order to accomplish 
discovery upon a showing that the requested evidence is relevant and 
necessary. Relevant evidence is necessary when it is not cumulative and 
when it would contribute to a party's presentation of the case in some 
positive way on a matter in issue. A matter is not in issue when it is 
admitted or stipulated as a fact. An order granting discovery shall be 
enforceable as is an order compelling testimony or the production of 
evidence.
    (3) Records compiled or created in the regular course of business, 
which have been provided to a party prior to hearing in accordance with 
paragraph E.(2) of this appendix may be received and considered by the 
officer without authenticating witnesses.

                  F. Witnesses; Production of Evidence

    (1) All witnesses testifying at the hearing shall be advised that it 
is a criminal offense knowingly and willfully to make a false statement 
or representation to a Department or Agency of the U.S. Government as to 
any matter in the jurisdiction of that Department or Agency. All 
witnesses shall be subject to cross-examination by the parties.
    (2) A party calling a witness shall bear the witness' travel and 
incidental expenses associated with testifying at the hearing. The DoD 
school system or the Military Medical Department concerned shall pay 
such expenses when a witness is called by the hearing officer.
    (3) The hearing officer may issue an order compelling the attendance 
of witnesses or the production of evidence on the hearing officer's own 
motion or, if good cause can be shown, on motion of either party.
    (4) When the hearing officer determines that a person has failed to 
obey an order to testify or to produce evidence, and such failure is in 
knowing and willful disregard of the order, the hearing officer shall so 
certify.
    (5) The party or the hearing officer seeking to compel testimony or 
the production of evidence may, based on the certification provided for 
in paragraph F.(4) of this appendix file an appropriate action in a 
court of competent jurisdiction to compel compliance with the hearing 
officer's order.
    (6) At least 5 business days prior to a hearing, the parties shall 
exchange lists of all documents and materials that each party intends to 
use at the hearing, including all evaluations and reports. Each party 
also shall disclose the names of all witnesses it intends to call at 
hearing along with a proffer of the anticipated testimony of each 
witness.
    (7) At least 10 business days in advance of hearing, each party must 
provide the name, title, curriculum vitae, and summary of proposed 
testimony of any expert witness it intends to call at hearing.
    (8) Failure to disclose documents, materials, or witnesses pursuant 
to paragraphs F.(6) and F.(7) of this appendix may result in the hearing 
officer barring their introduction at the hearing.

[[Page 355]]

           G. Hearing Officer's Findings of Fact and Decision

    (1) The hearing officer shall make written findings of fact and 
shall issue a decision setting forth the questions presented, the 
resolution of those questions, and the rationale for the resolution. The 
hearing officer shall file the findings of fact and decision with the 
Director, DOHA, with a copy to the parties.
    (2) The Director, DOHA, shall forward to the Director, of the DoD 
school system, or to the Military Medical Department concerned, copies 
with all personally identifiable information deleted, of the hearing 
officer's findings of fact and decision or, in cases that are 
administratively appealed, of the final decision of the DOHA Appeal 
Board.
    (3) The findings of fact and decision of the hearing officer shall 
become final unless a notice of appeal is filed under section I of this 
appendix. The DoD school system or the Military Medical Department 
concerned shall implement the decision as soon as practicable after it 
becomes final.

                    H. Determination Without Hearing

    (1) At the request of a parent of an infant, toddler, or child age 3 
to 21, inclusive, when early intervention or special educational 
(including related) services are at issue, the requirement for a hearing 
may be waived, and the case may be submitted to the hearing officer on 
written documents filed by the parties. The hearing officer shall make 
findings of fact and conclusions of law in the period fixed by paragraph 
D.(17) of this appendix.
    (2) The DoD school system or the Military Medical Department 
concerned may oppose a request to waive a hearing. In that event, the 
hearing officer shall rule on that request.
    (3) Documents submitted to the hearing officer in a case determined 
without a hearing shall comply with paragraph F.(6) of this appendix. A 
party submitting such documents shall provide copies to all other 
parties.

                                I. Appeal

    (1) A party may appeal the hearing officer's findings of fact and 
decision by filing a written notice of appeal with the Director, DOHA, 
at P.O. Box 3656, Arlington, Virginia 22203, within 15 business days of 
receipt of the findings of fact and conclusions of law. The notice of 
appeal must contain the appellant's certification that a copy of the 
notice of appeal has been provided to all other parties. Filing is 
complete on mailing.
    (2) Within 30 business days of receipt of the notice of appeal, the 
appellant shall submit a written statement of issues and arguments to 
the Director, DOHA, with a copy to the other parties. The other parties 
shall submit a reply or replies to the Director, DOHA, within 20 
business days of receiving the statement, and shall deliver a copy of 
each reply to the appellant. Submission is complete on mailing.
    (3) The Director, DOHA, shall refer the matter on appeal to the DOHA 
Appeal Board. It shall determine the matter, including the making of 
interlocutory rulings, within 45 business days of receiving timely 
submitted replies under paragraph I.(2) of this appendix.
    (4) The determination of the DOHA Appeal Board shall be a final 
administrative decision and shall be in written form. It shall address 
the issues presented and set forth a rationale for the decision reached. 
A determination denying the appeal of a parent in whole or in part shall 
state that the parent has the right under sections 921-932 and chapter 
33 of title 20, United States Code to bring a civil action on the 
matters in dispute in a district court of the United States of competent 
jurisdiction without regard to the amount in controversy.
    (5) No provision of this part or other DoD guidance may be construed 
as conferring a further right of administrative review. A party must 
exhaust all administrative remedies afforded by this appendix before 
seeking judicial review of a determination made under this appendix.

             J. Publication and Indexing of Final Decisions

    The Director, DOHA, shall ensure that final decisions in cases 
arising under this appendix are published and indexed to protect the 
privacy rights of the parents who are parties in those cases and the 
children of such parents, in accordance with DoD Directive 5400.11.



                 Sec. Appendix H to Part 57--Monitoring

                              A. Monitoring

    (1) The DoDEA and the Military Medical Departments shall establish 
procedures for monitoring special services requiring:
    (i) Periodic on-site monitoring at each administrative level.
    (ii) The DoD school systems to report annually that the provision of 
special education and related services is in compliance with this part.
    (iii) The Military Medical Departments to report annually that the 
provision of EIS is in compliance with this part.
    (2) The Director, DoDEA, and the Surgeons General of the Military 
Medical Departments shall submit reports to the DoD-CC not later than 
July 31 each year that summarize the status of compliance. The reports 
shall:
    (i) Identify procedures conducted at Headquarters and at each 
subordinate level, including on-site visits, to evaluate compliance with 
this part.
    (ii) Summarize the findings.

[[Page 356]]

    (iii) Describe corrective actions required of the programs that were 
not in compliance and the technical assistance that shall be provided to 
ensure they reach compliance.

                          B. USD(P&R) Oversight

    (1) On behalf of the USD(P&R), the DoD-CC or designees, shall make 
periodic unannounced visits to selected programs to ensure the 
monitoring process is in place and to validate the compliance data and 
reporting. The DoD-CC may use other means in addition to the procedures 
in this section to ensure compliance with the requirements established 
in this part.
    (2) For DoD-CC monitoring visits, the Secretaries of the Military 
Departments, or designees, shall:
    (i) Provide necessary travel funding and support for their 
respective team members.
    (ii) Provide necessary technical assistance and logistical support 
to monitoring teams during monitoring visits to facilities for which 
they are responsible.
    (iii) Cooperate with monitoring teams, including making all 
pertinent records available to the teams.
    (iv) Address monitoring teams' recommendations concerning early 
intervention and related services for which the Secretary concerned has 
responsibility, including those to be furnished through an inter-Service 
agreement, are promptly implemented.
    (3) For DoD-CC monitoring visits, the Director, DoDEA shall:
    (i) Provide necessary travel funding and support for team members 
from the Office of the Under Secretary (P&R); the Office of GC, DoD; and 
DoD school systems.
    (ii) Provide necessary technical assistance and logistical support 
to monitoring teams during monitoring visits to facilities for which he/
she is responsible.
    (iii) Cooperate with monitoring teams, including making all 
pertinent records available to the teams.
    (iv) Address the monitoring teams' recommendations concerning 
special education and related services for which the DoD school system 
concerned has responsibility.
    (4) The ASD(HA), or designee, shall provide technical assistance to 
the DoD monitoring teams when requested.
    (5) The GC, DoD, or designee, shall:
    (i) Provide legal counsel regarding monitoring activities conducted 
pursuant to this part to the USD(P&R), the ASD(HA), and, where 
appropriate, to DoDEA, monitored Agencies, and monitoring teams.
    (ii) Provide advice about the legal requirements of this part and 
Federal law to the DoD school systems, military medical commanders, and 
military installation commanders, and to other DoD personnel as 
appropriate, in connection with monitoring activities conducted pursuant 
to this part.



PART 64_MANAGEMENT AND MOBILIZATION OF REGULAR AND RESERVE RETIRED MILITARY 

MEMBERS--Table of Contents



Sec.
64.1 Purpose.
64.2 Applicability and scope.
64.3 Definitions.
64.4 Policy.
64.5 Responsibilities.

    Authority: 10 U.S.C. 688, 973, and 12301(a).

    Source: 71 FR 19828, Apr. 18, 2006, unless otherwise noted.



Sec. 64.1  Purpose.

    This part implements 10 U.S.C. 688, 973, 12301(a), and 12307 by 
prescribing uniform policy and guidance governing the peacetime 
management of retired Regular and Reserve military personnel preparing 
for their use during a mobilization.



Sec. 64.2  Applicability and scope.

    This part:
    (a) Applies to the Office of the Secretary of Defense, the Military 
Departments (including the Coast Guard when it is not operating as part 
of the Navy by agreement with the Department of Homeland Security), the 
Chairman of the Joint Chiefs of Staff, the Combatant Commands, the 
Office of the Inspector General of the Department of Defense, the 
Defense Agencies, the DoD Field Activities, and all other organizational 
entities in the Department of Defense (hereafter referred to as the 
``DoD Components''). The term ``Military Services,'' as used herein, 
refers to the Army, the Navy, the Air Force, the Marine Corps, and the 
Coast Guard. The term ``Secretary concerned,'' refers to the respective 
Secretaries of the Military Departments and the Secretary of Homeland 
Security for the Coast Guard when it is not operating as part of the 
Navy. (b) This part also applies to non-DoD organizations that have DoD-
related missions, such as the Department of Homeland Security and the 
Selective Service System, and non-DoD organizations that have North 
Atlantic Treaty Organization-related missions, under agreements with 
those non-DoD organizations.

[[Page 357]]



Sec. 64.3  Definitions.

    (a) Key employee. Any Reservist or any military retiree (Regular or 
Reserve) identified by his or her employer, private or public, as 
filling a key position.
    (b) Key position. A civilian position, public or private (designated 
by an employer and approved by the Secretary concerned), that cannot be 
vacated during war, a national emergency, or mobilization without 
seriously impairing the capability of the parent agency or office to 
function effectively, while meeting the criteria for designating key 
positions as outlined in Department of Defense Directive 1200.7. \1\
---------------------------------------------------------------------------

    \1\ Copies may be obtained from http://www.dtic.mil/whs/directives.
---------------------------------------------------------------------------

    (c) Military retiree categories--(1) Category I. Non-disability 
military retirees under age 60 who have been retired fewer than 5 years.
    (2) Category II. Non-disability military retirees under age 60 who 
have been retired 5 years or more.
    (3) Category III. Military retirees, including those retired for 
disability, other than categories I or II retirees (includes warrant 
officers and healthcare professionals who retire from active duty after 
age 60).
    (d) Military retirees or retired military members. (1) Regular and 
Reserve officers and enlisted members who retire from the Military 
Services under 10 U.S.C. Chapters 61, 63, 65, 1223, 367, 571, or 573, 
and 14 U.S.C. Chapters 11 and 21.
    (2) Reserve officers and enlisted members eligible for retirement 
under one of the provisions of law in Sec. 64.3(d) who have not reached 
age 60 and who have not elected discharge or are not members of the 
Ready Reserve or Standby Reserve (including members of the Inactive 
Standby Reserve).
    (3) Members of the Fleet Reserve and Fleet Marine Corps Reserve 
under 10 U.S.C. 6330.



Sec. 64.4  Policy.

    (a) It is DoD policy that military retirees be ordered to active 
duty as needed to perform such duties as the Secretary concerned 
considers necessary in the interests of national defense as described in 
10 U.S.C. 12301 and 688.
    (b) The DoD Components and the Commandant of the U.S. Coast Guard 
shall plan to use as many retirees as necessary to meet national 
security needs.
    (c) The military retirees ordered to active duty may be used 
according to guidance prescribed by the Secretary concerned as follows:
    (1) To fill shortages or to augment deployed or deploying units and 
activities or units in the Continental United States, Alaska, and Hawaii 
supporting deployed units.
    (2) To release other military members for deployment overseas.
    (3) Subject to the limitations of 10 U.S.C. 973, Federal civilian 
workforce shortages in the Department of Defense, the U.S. Coast Guard, 
or other Government entities.
    (4) To meet national security needs in organizations outside the 
Department of Defense with Defense-related missions, if the detail 
outside the Department of Defense is approved according to DoD Directive 
1000.17. \2\
---------------------------------------------------------------------------

    \2\ See Sec. 64.3(b).
---------------------------------------------------------------------------

    (5) To perform other duties that the Secretary concerned considers 
necessary in the interests of national defense.
    (d) Military retirees shall be ordered to active duty with full pay 
and allowances. They may not be used to fill mobilization billets in a 
non-pay status.
    (e) Military retirees serving on active duty may be reassigned to 
meet the needs of the Military Service.



Sec. 64.5  Responsibilities.

    (a) The Assistant Secretary of Defense for Reserve Affairs and the 
Deputy Under Secretary of Defense (Military Personnel Policy) 
(DUSD(MMP)), under the Under Secretary of Defense for Personnel and 
Readiness, shall provide policy guidance for the management and 
mobilization of DoD military retirees.
    (b) The Secretaries of the Military Departments and the Commandant 
of the U.S. Coast Guard shall ensure plans for the management and 
mobilization of military retirees are consistent with this rule.
    (c) The Directors of the Defense Agencies, the Secretary of Homeland

[[Page 358]]

Security, the Director of the Selective Service System, and Heads of 
Federal Agencies, shall, by agreement, assist in identifying military 
and Federal civilian wartime positions that are suitable to be filled by 
military retirees. They shall also process those requirements according 
to Departmental policy, including any appropriate coordination under 
Department of Defense Directive 1000.17, \3\ before the positions are 
filled by the Military Services. The Secretary of the Military 
Department shall retain the right to disapprove the request if no 
military retiree is available.
---------------------------------------------------------------------------

    \3\ See Sec. 64.3(b).
---------------------------------------------------------------------------

    (d) The Secretaries of the Military Departments, or designees, 
shall:
    (1) Prepare plans and establish procedures for mobilization of 
military retirees according to this rule.
    (2) Determine the extent of military retiree mobilization 
requirements based on existing inventories and inventory projections for 
mobilization of qualified Reservists in an active status in the Ready 
Reserve, including Individual Ready Reserve and the Inactive National 
Guard (when placed in an active status), or the Standby Reserve.
    (3) Develop procedures for identifying retiree Categories I and II 
and conduct screening of retirees according to Department of Defense 
Directive 1200.7. \4\
---------------------------------------------------------------------------

    \4\ See Sec. 64.3(b).
---------------------------------------------------------------------------

    (4) Maintain necessary records on military retirees and their 
military qualifications. Maintain records for military retiree 
Categories I and II, including retirees who are key employees, and their 
availability for mobilization, civilian employment, and physical 
condition. Data shall be
    (5) Advise military retirees of their duty to provide the Military 
Services with accurate mailing addresses and any changes in civilian 
employment, military qualifications, availability for service, and 
physical condition.
    (6) Pre-assign retired members, when determined appropriate and as 
necessary.
    (7) Determine refresher training requirements.



PART 65_POST	9/11 GI BILL--Table of Contents



Sec.
65.1 Purpose.
65.2 Applicability.
65.3 Definitions.
65.4 Policy.
65.5 Responsibilities.
65.6 Procedures.
65.7 Eligibility.
65.8 Reporting requirements.

Appendix to 32 CFR Part 65--Additional Reporting Requirements

    Authority: 38 U.S.C., chapter 33

    Source: 74 FR 30213, June 25, 2009, unless otherwise noted.



Sec. 65.1  Purpose.

    This part:
    (a) Establishes policy, assigns responsibilities, and prescribes 
procedures under chapter 33 of title 38, United States Code (U.S.C.) for 
carrying out the Post-9/11 GI Bill.
    (b) Establishes policy for the use of supplemental educational 
assistance (hereafter referred to as ``kickers'') for members with 
critical skills or specialties, or for members serving additional 
service under section 3316 of title 38, U.S.C.
    (c) Establishes policy for authorizing the transferability of 
education benefits (TEB) in accordance with section 3319 of title 38, 
U.S.C.
    (d) Assigns responsibility to the Department of Defense Board of 
Actuaries to review valuations of the Department of Defense Education 
Benefits Fund in accordance with sections 183 and 2006 of title 10, 
U.S.C.



Sec. 65.2  Applicability.

    (a) This part applies to the Office of the Secretary of Defense, the 
Military Departments (including the Coast Guard at all times, including 
when it is a Service in the Department of Homeland Security (DHS) by 
agreement with the Department).
    (b) The term ``Military Services,'' as used herein, refers to the 
Army, the Navy, the Air Force, the Marine Corps, and the Coast Guard.



Sec. 65.3  Definitions.

    Active Duty. Defined in section 101(21)(A) of title 38, U.S.C. for 
Members of the regular components of the

[[Page 359]]

Armed Forces. Defined in section 688, 12301(a), 12301(d), 12301(g), 
12302, or 12304 of title 10, U.S.C. for Members of the Reserve 
Components of the Armed Forces.
    EATP. The Educational Assistance for Persons Enlisting for Active 
Duty program, chapter 106A (formerly 107) of title 10, U.S.C.
    Entry Level and Skill Training. (1) In the case of members of the 
Army, Basic Combat Training and Advanced Individual Training, which 
includes members attending One Station Unit Training (OSUT).
    (2) In the case of members of the Navy, Recruit Training (or Boot 
Camp) and Skill Training (or so-called `A' School).
    (3) In the case of members of the Air Force, Basic Military Training 
and Technical Training.
    (4) In the case of members of the Marine Corps, Recruit Training and 
Marine Corps Training (or School of Infantry Training).
    (5) In the case of members of the Coast Guard, Basic Training.
    Family Member. For the purpose of this part, a spouse or child 
enrolled in the Defense Enrollment Eligibility Reporting System (DEERS).
    Kickers. Supplemental educational assistance paid to an eligible 
Service member besides the basic educational assistance, because of the 
individual's qualifying service, as in section 3316 of title 38, U.S.C.
    Institution of Higher Learning (IHL). A training institution as 
defined in section 3452(f) of title 38, U.S.C., and approved for 
purposes of chapter 30 of title 38, U.S.C., (including approval by the 
State approving agency concerned).
    Member of the Armed Forces. For the purposes of this part, those 
individuals on active duty or in the Selected Reserve. Does not include 
other members of the Ready Reserve (such as the Individual Ready 
Reserve, standby Reserve, or retired members of the Armed Forces.)
    MGIB. The All-Volunteer Force Education Assistance Program, Chapter 
30 of title 38, U.S.C.
    MGIB-SR. The Educational Assistance for Members of the Selected 
Reserve program, Chapter 1606 of title 10, U.S.C.
    Post-9/11 GI Bill. The Post-9/11 Educational Assistance Program, 
Chapter 33 of title 38, U.S.C.
    REAP. The Reserve Educational Assistance Program, Chapter 1607 of 
title 10, U.S.C.
    Secretary of the Military Department concerned. For a member of the 
Army, the Navy, the Air Force, the Marine Corps, and the Coast Guard 
when it is operating as a Service of the Department of the Navy, the 
term means the Secretary of the Military Department with jurisdiction 
over that Service member. For a member of the Coast Guard, when the 
Coast Guard is operating as a Service of the DHS, the term means, ``the 
Secretary of Homeland Security has jurisdiction over that Service 
member.''



Sec. 65.4  Policy.

    It is DoD policy:
    (a) That ``kickers'' may be authorized to assist in the recruitment 
and retention of individuals into skills or specialties in which there 
are critical shortages or for which it is difficult to recruit, or in 
the case of units, retain personnel.
    (b) That transferability of unused educational benefits be used by 
the Military Services to promote recruitment and retention.
    (c) That the Secretary of Defense may limit the months of the 
entitlement that may be transferred to no less than 18 months, as 
specified in section 3319 of title 38, U.S.C., if needed to manage force 
structure and force shaping.



Sec. 65.5  Responsibilities.

    (a) The Deputy Under Secretary of Defense for Military Personnel 
Policy (DUSD(MPP)), under the authority, direction, and control of the 
Under Secretary of Defense for Personnel and Readiness, shall:
    (1) Develop procedures to implement policy for the Post-9/11 GI Bill 
authorized by chapter 33 of title 38, U.S.C.
    (2) Coordinate administrative procedures with the Department of 
Veterans Affairs (DVA), as applicable.
    (3) Review and approve each Military Department plan to use 
supplemental assistance under the provisions of section 3316 of title 
38, U.S.C.

[[Page 360]]

    (4) Establish the standard data elements needed to administer the 
Post-9/11 GI Bill Program.(see Appendix A to this part).
    (b) The Under Secretary of Defense (Comptroller)/Chief Financial 
Officer (USD(C/CFO)) shall:
    (1) Provide guidance on budgeting, accounting, and funding for the 
educational benefits program in support of policies established in Sec. 
65.6(b) of this part, and for investing the available DoD Education 
Benefits Fund balance.
    (2) In coordination with the DUSD (MPP), review and approve the 
Military Department budget estimates for the supplemental payments under 
the provisions of section 3316 of title 38, U.S.C.
    (c) The Secretaries of the Military Departments shall:
    (1) Provide regulations, policy implementation guidance, and 
instructions governing the administration of the GI Bill program 
established under chapter 33 of title 38, U.S.C. consistent with this 
DTM and other guidance issued by the DUSD(MPP) and USD(C)/CFO consistent 
with the needs of the Military Services. Regulations must include 
Service implementation of kickers and the transfer of unused educational 
benefits as established in section 3319 of title 38, U.S.C., as outlined 
in Sec. 65.6 of this part.
    (2) Ensure that all eligible active duty members and members of the 
Reserve Components are aware that they are eligible for educational 
assistance under the Post-9/11 GI Bill program upon serving the required 
active duty time as established in Chapter 33 of title 38, U.S.C.
    (3) Advise all officers without earlier established eligibility, 
following commissioning through Service Academies, with the exception 
the U.S. Coast Guard Academy, or Reserve Officer Training Corps (ROTC) 
Scholarship Programs, that their eligibility for benefits does not begin 
until they have completed their statutory obligated active duty service. 
Any active duty service after that obligated period of service may 
qualify and entitle the Service member to accrue active duty service for 
the Post-9/11 GI Bill eligibility.
    (4) Ensure that Service members participating in the student loan 
repayment program under chapter 109 of title 10, U.S.C., receive 
counseling on qualification for the Post-9/11 GI Bill program and 
understand that their service commitment due to such participation does 
not count as qualifying active duty service. Any service after that 
obligated period of service may qualify and entitle the Service member 
to accrue active duty service for Post-9/11 GI Bill eligibility.
    (5) Determine the need for Supplemental Educational Assistance 
(Kickers) for recruitment and retention of individuals with special 
skills under section 3316 of title 38, U.S.C., and submit plans to the 
DUSD(MPP) for approval. That submission shall include justification for 
providing benefits to those skills, identification of skills for which 
benefits shall be offered, other special incentives offered in those 
skills, estimated number of participants, costs, and eligibility 
requirements.
    (6) Budget for and transfer funds to support the Supplemental 
Educational Assistance (Kickers), in accordance with Sec. 65.6 of this 
part and guidance issued by the USD(C)/CFO.
    (7) Provide active duty participants and members of the Reserve 
Components with qualifying active duty service individual pre-separation 
or release from active duty counseling on the benefits under the Post-9/
11 GI Bill and document accordingly.
    (8) Maintain records for individuals who participate in supplemental 
educational assistance programs under section 3316 of title 38, U.S.C. 
Ensure that records on that participation are provided to the Defense 
Manpower Data Center (DMDC) and the DVA.
    (9) Use DoD standard data elements and codes established by DoD 
Instruction 1336.5 (available at http://www.dtic.mil/whs/directives/
corres/pdf/133605p.pdf) and DoD Instruction 7730.54 (available at http:/
/www.dtic.mil/whs/directives/corres/pdf/773054p.pdf) and listed in table 
1 of appendix A to this part, when specified. A Military Service failing 
to comply either with the coding instructions or with codes registered 
in the DoD Data Element Program shall be responsible for the conversion 
costs in accomplishing data interchange.

[[Page 361]]



Sec. 65.6  Procedures.

    (a) General--(1) Eligibility. The Department of Veterans Affairs is 
responsible for determining eligibility for education benefits under the 
GI Bill. Generally, to be eligible for the GI Bill, individuals must 
serve on active duty on or after September 11, 2001, for at least 30 
continuous days with a discharge due to a service-connected disability; 
or an aggregate period ranging from 90 days to 36 months or more. See 
Sec. 65.7 of this part for specific requirements.
    (2) Educational assistance benefits. (i) Benefits under the GI Bill 
are based on a percentage, as determined by a Service Member's aggregate 
length of active duty service.
    (A) Amount of tuition and fees charged, not to exceed the most 
expensive in-State undergraduate tuition and fees at a public 
institution of higher learning (tuition and fees paid directly to the 
school);
    (B) Monthly stipend equal to the basic allowance for housing (BAH) 
amount payable to a military E-5 with dependents, in the same ZIP code 
as the school that the student is attending (paid to the individual);
    (C) Yearly books and supplies stipend of up to $1000 per year (paid 
to the individual on a quarter, semester, or term basis, as 
appropriate); and
    (D) A one-time payment of $500 may be payable to certain individuals 
relocating from highly rural areas (paid to the individual).
    (ii) ``Kickers'', for those who are eligible, will be paid to the 
individual in conjunction with, and only when receiving, the monthly 
stipend.
    (iii) The monthly stipend and the books and supplies stipend are not 
payable to individuals on active duty.
    (iv) The monthly stipend allowance is not payable for those pursuing 
education and/or training at half time or less or to some individuals 
taking distance learning. Individuals enrolled at half time or less are 
eligible for an appropriately reduced stipend for books and supplies. 
The DVA will determine under what, if any, circumstances an individual 
will be eligible for the monthly stipend while undertaking distance 
learning.
    (v) Post-9/11 GI Bill benefits are subject to change based on 
legislative changes. The benefits are different for educational programs 
pursued on a full-time basis or at an applicable reduced rate determined 
by the Secretary of Veterans Affairs for less than full-time enrollment.
    (vi) Post-9/11 GI Bill benefits may be used for an approved program 
of education offered by an Institution of Higher Learning (IHL) This 
includes graduate and undergraduate training, and some vocational/
technical training programs. DVA is the final authority on program 
eligibility.
    (vii) Individuals may receive tutorial assistance (up to $100 per 
month, not to exceed a total of $1,200) and reimbursement of one 
licensing and certification test (not to exceed a total of $2,000).
    (viii) Additionally, individuals who were eligible for MGIB, MGIB-
SR, or REAP, and elect to use benefits under the GI Bill will be 
eligible to receive benefits for programs approved under those 
provisions but not offered by IHLs, such as on-the-job training, 
apprenticeship training, correspondence courses, flight training, 
preparatory courses, and national exams at the benefit rate for MGIB, 
MGIB-SR, or REAP, as appropriate.
    (3) Benefits for individuals pursuing education on active duty. 
Educational assistance is payable under the Post-9/11 GI Bill Program 
for pursuit of an approved program of education while on active duty.
    (i) The amount of educational assistance payable shall be the lesser 
of the amount of assistance authorized in the manner specified under 
section 3014(b)(1) of title 38, U.S.C., or the established institutional 
charges for tuition and fees required in similar circumstances of non-
veterans enrolled in the same program.
    (ii) Concurrent Use of Post-9/11 GI Bill and Tuition Assistance 
(commonly called ``Top Up''). In accordance with section 3313(e) of 
title 38, U.S.C., a Service member entitled to basic educational 
assistance who is pursuing education or training described in subsection 
(a) or (c) of section 2007 of title 10, U.S.C., may use, at their 
discretion, Post-9/11 GI Bill benefits to meet all or

[[Page 362]]

a portion of the charges of the educational institution for the 
education or training that are not paid by the Secretary of the Military 
Department concerned under such subsection. DVA shall administer fully 
that portion of the Post-9/11 GI Bill Program.
    (4) Time limitation. As a general rule, eligible individual 
entitlements expire at the end of a 15-year period beginning on the 
Service member's last date of discharge or release from active duty of 
at least 90 consecutive days (30 days if released or discharged for 
service-connected disability). The Secretary of the Military Department 
concerned shall determine the last date of discharge or release, if such 
date cannot be determined clearly from the Service member's records.
    (5) Issues for Members with Entitlement to Existing Education 
Programs--(i) Members Eligible for Existing Programs. An individual may 
elect to receive educational assistance under chapter 33 of title 38, 
U.S.C., if such individual, as of August 1, 2009,
    (A) Is entitled to basic educational assistance under MGIB, and has 
used, but retains unused, entitlement under chapter 30 of title 38, 
U.S.C.;
    (B) Is entitled to educational assistance under EATP, MGIB-SR, or 
REAP, and has used, but retains unused, entitlement under the applicable 
program;
    (C) Is entitled to basic educational assistance under MGIB, but has 
not used any entitlement under chapter 30 of title 38, U.S.C.;
    (D) Is entitled to educational assistance under EATP, MGIB-SR, or 
REAP, but has not used any entitlement under such program;
    (E) Is a member of the Armed Forces who is eligible for receipt of 
basic educational assistance under MGIB, and is making contributions 
toward such assistance under sections 3011(b) or 3012(c) of title 38, 
U.S.C.; or
    (F) Is a member of the Armed Forces who is not entitled to basic 
educational assistance under MGIB, by reason of an election under 
sections 3011(c)(1) or 3012(d)(1) of title 38, U.S.C.; and
    (G) As of the date of the individual's election under paragraph 
(a)(5)(i)), meets the requirements for entitlement to educational 
assistance under chapter 33 of title 38, U.S.C.
    (ii) Election Process. The method and process of making such 
election will be determined by DVA.
    (iii) Irrevocability of Election. An election made under paragraph 
(a)(5(i)) of this section is irrevocable.
    (iv) An individual entitled to educational assistance under the 
Post-9/11 GI Bill who is also eligible for educational assistance under 
the MGIB (chapters 30, 31, 32, or 35 of title 38, U.S.C.), EATP (chapter 
106A of title 10, U.S.C.), MGIB-SR (chapter 1606 of title 10, U.S.C.), 
REAP (chapter 1607 of title 10, U.S.C.), or the provisions of the 
Hostage Relief Act of 1980 (section 5561 note of title 5, U.S.C.) may 
not receive assistance under two or more such programs concurrently, but 
shall elect (in such form and manner as the Secretary of Veterans 
Affairs may prescribe) under which chapter or provisions to receive 
educational assistance.
    (v) Cessation of pay reduction under Montgomery GI Bill. Effective 
as of the first month beginning on or after the date of an election 
under paragraph (a)(5(i)) of this section, an individual having their 
pay reduced under the provisions of sections 3011(b) or 3012(c) of title 
38, U.S.C., as applicable, shall have that pay reduction ceased, and the 
requirements of such section shall be deemed no longer applicable to the 
individual.
    (vi) Refund of pay reduction under Montgomery GI Bill. An individual 
who is described in paragraph (a)(5(i)) of this section, whose pay was 
reduced under the provisions of sections 3011(b) or 3012(c) of title 38, 
U.S.C., will receive a refund of that pay reduction subject to the 
following:
    (A) A full refund for an individual who used no months of benefit 
under the MGIB.
    (B) A refund reduced by a proportion calculated by the number of 
months of MGIB benefits remaining at the time of election divided by 36.
    (C) The refund will be added to the monthly stipend allowance paid 
in the last month of eligibility under the Post-9/11 GI Bill. 
Individuals who do not exhaust entitlement under the Post-9/11 GI Bill 
will not receive a refund of the pay reduction.
    (vii) Treatment of certain contributions under MGIB and REAP 
(commonly called

[[Page 363]]

``Buy-Up''). (A) There is no provision to allow for increasing the 
amount allowed for Post-9/11 GI Bill benefits based on any contributions 
made by an individual under the provisions of section 3015(g) of title 
38, U.S.C.
    (B) There is no provision to allow for increasing the amount allowed 
for Post-9/11 GI Bill benefits based on any contributions made by an 
individual under the provisions of section 16162(f) of title 10, U.S.C.
    (viii) Limitation on entitlement for certain individuals. In the 
case of an individual eligible for MGIB who has used but retains unused 
entitlement, making an election to receive benefits under the Post-9/11 
GI Bill, the number of months of entitlement of the individual to 
educational assistance under the Post-9/11 GI Bill shall be the number 
of months equal to the number of months of unused entitlement of the 
individual under MGIB as of the date of the election.
    (ix) Additional educational and training availability. In addition 
to the educational benefits as described in paragraph (a)(2)(vi) of this 
section, individuals who were eligible for benefits under MGIB, MGIB-SR, 
or REAP, and elect to use benefits under the GI Bill, will be eligible 
to receive benefits for on-the-job training, apprenticeship training, 
correspondence courses, flight training, preparatory courses, and 
national exams at the benefit rate for MGIB, MGIB-S, or REAP, as 
approriate.
    (x) Treatment of existing supplemental educational benefits 
(Kickers). Individuals eligible for kickers under either MGIB or MGIB-SR 
will remain eligible for such increased educational assistance. The 
payments shall be based upon the applicable monthly rate for the 
kickers. Payments shall be lump sum and made on a quarter, semester, or 
term basis as determined by the Secretary of Veterans Affairs.
    (b) Supplemental educational assistance (``kickers'')--(1) 
Enlistment kickers. (i) The Secretaries of the Military Departments may 
offer an increase to the monthly amount of educational assistance 
otherwise payable to the individual under paragraph (1)(B) of section 
3313(c) of title 38, U.S.C., or under paragraphs (2) through (7) of such 
section 3313(c) of title 38, U.S.C. (as applicable), for members who 
initially enlist in a regular component in a skill or specialty in which 
there is a critical shortage of personnel or for which it is difficult 
to recruit. These increases in the monthly amount are known as 
enlistment kickers.
    (ii) The use of enlistment kickers should be based on the 
criticality of the skill and/or the length of enlistment commitment and 
may be offered in amounts from $150 per month to $950 per month in 
increments of $100. Reporting codes for enlistment kickers are listed in 
Appendix A to this part.
    (2) Affiliation kickers. (i) The Secretaries of the Military 
Departments may offer an increase to the monthly amount of educational 
assistance otherwise payable to the individual under paragraph (1)(B) of 
section 3313(c) of title 38, U.S.C., or under paragraphs (2) through (7) 
of such section 3313(c) of title 38, U.S.C. (as applicable), to a member 
who is separating honorably from a regular component and who agrees to 
serve in the Selected Reserve in a skill, specialty, or unit in which 
there is a critical shortage of personnel or for which it is difficult 
to recruit and/or retain.
    (ii) The use of affiliation kickers should be based on the 
criticality of the skill and/or unit and the length of Selected Reserve 
commitment, and may be offered in amounts from $150 per month to $950 
per month in increments of $100. If an individual is already eligible 
for an enlistment kicker, the amount of the Affiliation Kicker is 
limited to the amount that would take the total to $950. For those 
individuals who are offered an Affiliation Kicker on top of an 
Enlistment Kicker, the increases will be in $100 increments. Reporting 
codes for Affiliation Kickers are the same as the codes for Enlistment 
Kickers listed in Appendix A to this part.
    (3) Reenlistment kickers. (i) The Secretaries of the Military 
Departments may offer an increase to the monthly amount of educational 
assistance otherwise payable to the individual under paragraph (1)(B) of 
section 3313(c) of title 38, U.S.C., or under paragraphs (2) through (7) 
of such section 3313.(c) of title 38, U.S.C. (as applicable), to a

[[Page 364]]

member who, after completing the initial term of service, elects to 
remain on active duty for a period of at least 2 years.
    (ii) The use of reenlistment kickers should be based on the 
criticality of the skill and may be offered in amounts from $100 per 
month to $300 per month in increments of $100, based on length of 
additional service. Reporting codes for reenlistment kickers are listed 
in appendix A to this part.
    (4) Limitations. Since kickers are paid in conjunction with the 
monthly stipend paid under section (1)(B)(i) of section 3313(c) of title 
38, U.S.C., members eligible for kickers should be aware of the 
limitations on payment.
    (i) No payment will be provided for education pursued on half-time 
basis or less.
    (ii) No payment will be provided for education/training pursued 
solely through distance learning.
    (iii) No payment will be provided for use while serving on active 
duty.
    (c) Transferability of unused education benefits to family members. 
Subject to the provisions of this section, the Secretaries of the 
Military Departments, to promote recruitment and retention of members of 
the Armed Forces, may permit an individual described in paragraph (c)(1) 
of this section, who is entitled to educational assistance under this 
Post-9/11 GI Bill to elect to transfer to one or more of the family 
members specified, all or a portion of such individual's entitlement to 
such assistance.
    (1) Eligible individuals. Any member of the Armed Forces on or after 
August 1, 2009 who, at the time of the approval of the individual's 
request to transfer entitlement to educational assistance under this 
section, is eligible for the Post-9/11 GI Bill, and
    (i) Has at least 6 years of service in the Armed Forces (active duty 
and/or Selected Reserve) on the date of election and agrees to serve 4 
additional years in the Armed Forces from the date of election, or
    (ii) Has at least 10 years of service in the Armed Forces (active 
duty and/or Selected Reserve) on the date of election and either 
standard policy (Service or DoD) or statute preclude the Service member 
from committing to 4 additional years and agrees to serve for the 
maximum amount of time allowed by such policy or statute, or
    (iii) Is or becomes retirement eligible during the period from 
August 1, 2009, through August 1, 2013, and agrees to serve the 
additional period, if any, specified in paragraphs (c)(1)(iii)(A) 
through (c)(1)(iii)(E) of this section. A Service Member is considered 
to be retirement eligible if he or she has completed 20 years of active 
Federal service or 20 qualifying years as computed under section 12732 
of title 10, U.S.C.
    (A) For those individuals eligible for retirement on August 1, 2009, 
no additional service is required.
    (B) For those individuals who have an approved retirement date after 
August 1, 2009, and before July 1, 2010, no additional service is 
required.
    (C) For those individuals eligible for retirement after August 1, 
2009, and before August 1, 2010, 1 year of additional service is 
required.
    (D) For those individuals eligible for retirement on or after August 
1, 2010 and before August 1, 2011, 2 years of additional service is 
required.
    (E) For those individuals eligible for retirement on or after August 
1, 2011, and before August 1, 2012, 3 years of additional service is 
required.
    (2) Eligible family members. (i) An individual approved to transfer 
an entitlement to educational assistance under this section may transfer 
the individual's entitlement to:
    (A) The individual's spouse.
    (B) One or more of the individual's children.
    (C) A combination of the individuals referred to in paragraphs 
(c)(2)(i)(A) and (c)(2)(i)(B) of this section.
    (ii) A family member must be enrolled in the Defense Eligibility 
Enrollment Reporting System (DEERS) and be eligible for benefits, at the 
time of transfer to receive transferred educational benefits.
    (iii) A child's subsequent marriage will not affect his or her 
eligibility to receive the educational benefit; however, after an 
individual has designated a child as a transferee under this section, 
the individual retains the right to revoke or modify the transfer at any 
time.

[[Page 365]]

    (iv) A subsequent divorce will not affect the transferee's 
eligibility to receive educational benefits; however, after an 
individual has designated a spouse as a transferee under this section, 
the eligible individual retains the right to revoke or modify the 
transfer at any time.
    (3) Months of transfer. Months transferred must be in whole months. 
The Secretary of Defense may limit the months of entitlement that may be 
transferred to no less than 18 months. The number of months of benefits 
transferred by an individual under this section may not exceed the 
lesser of:
    (i) The months of unused benefits available under the Post-9/11 GI 
Bill,
    (ii) 36 months, or
    (iii) the number of months specified by the Secretary of Defense.
    (4) Transferee usage. Dependent use of transferred educational 
benefits is subject to the following:
    (i) A spouse:
    (A) May start to use the benefit only after the individual making 
the transfer has completed at least 6 years of service in the Armed 
Forces.
    (B) May use the benefit while the member remains in the Armed Forces 
or after separation from active duty after completing the additional 
service required to transfer the educational assistance under the Post-
9/11 GI Bill referred to in paragraph (c)(1) of this section.
    (C) Is subject to the same 15-year limitation as the member as 
stipulated in paragraph (a)(4) of this section.
    (ii) A child:
    (A) May start to use the benefit only after the individual making 
the transfer has completed at least 10 years of service in the Armed 
Forces.
    (B) May use the benefit while the member remains in the Armed Forces 
or after separation from active duty after completing the additional 
service required to transfer the educational assistance under the Post-
9/11 GI Bill referred to in paragraph (c)(1) of this section.
    (C) May not use the benefit until they have met the requirements of 
a secondary school diploma (or equivalency certificate), or reached 18 
years of age.
    (D) Is not subject to the time limitation in paragraph (a)(4) of 
this section, but may not use the benefit after reaching 26 years of 
age.
    (5) Nature of transferred entitlement. The entitlement transferred 
will be available as follows:
    (i) An eligible spouse:
    (A) Is entitled to educational assistance under chapter 33 of title 
38, U.S.C. in the same manner as the individual from whom the 
entitlement was transferred.
    (B) Is not eligible for the monthly stipend or books and supplies 
stipend while the sponsor is serving on active duty.
    (ii) An eligible child:
    (A) Is entitled to educational assistance under chapter 33 of title 
38, U.S.C, in the same manner as the individual from whom the 
entitlement was transferred as if the individual were not on active 
duty.
    (B) Is entitled to the monthly stipend and books and supplies 
stipend even if the eligible individual is on active duty.
    (6) Designation of transferee. An individual transferring an 
entitlement to educational assistance under this section shall, through 
notification to the Secretary of the Military Department concerned as 
specified in paragraph (c)(9) of this section:
    (i) Designate the dependent or dependents to whom such entitlement 
is being transferred;
    (ii) Designate the number of months of such entitlement to be 
transferred to each dependent; and
    (iii) Specify the period for which the transfer shall be effective 
for each dependent.
    (7) Time for transfer, revocation, and modification--(i) Time for 
transfer. An individual approved to transfer entitlement to educational 
assistance under this section may transfer such entitlement to the 
individual's dependent only while serving as a member of the Armed 
Forces.
    (ii) Modification or revocation. (A) An individual transferring 
entitlement under this section may modify or revoke at any time the 
transfer of any unused portion of the entitlement so transferred.

[[Page 366]]

    (1) An individual may add new dependents, modify the number of 
months of the transferred entitlement for existing dependents, or revoke 
transfer of the entitlement while serving in the Armed Forces.
    (2) An individual may not add dependents after retirement or 
separation from the Armed Forces, but may modify the number of months of 
the transferred entitlement for existing dependents or revoke 
transferred benefits after retirement or separation for those family 
members who had received transferred benefits prior to separation or 
retirement.
    (B) The modification or revocation of the transfer of entitlement 
under this section shall be made by submitting notice of the action to 
both the Secretary of the Military Department concerned and the 
Secretary of Veterans Affairs. Additions, modifications or revocations 
made while in the Armed Forces will be made through the Transferability 
of Educational Benefits (TEB) Web site as described in paragraph (c)(9) 
of this section. Modifications or revocations after separation from the 
Armed Forces will be accomplished with the Department of Veterans 
Affairs.
    (8) Additional administrative matters--(i) Use. The use of any 
entitlement to educational assistance transferred under this section 
shall be charged against the entitlement of the individual making the 
transfer at the rate of 1 month for each month of transferred 
entitlement that is used.
    (ii) Death of transferor. The death of an individual transferring an 
entitlement under this section shall not affect the use of the 
entitlement by the dependent to whom the entitlement is transferred.
    (iii) Scope of use by transferees. The purposes for which a 
dependent to whom entitlement is transferred under this section may use 
such entitlement shall include the pursuit and completion of the 
requirements of a secondary school diploma (or equivalency certificate).
    (iv) Joint and several liability. In the event of an overpayment of 
educational assistance with respect to a dependent to whom entitlement 
is transferred under this section, the dependent and the individual 
making the transfer shall be jointly and severally liable to the United 
States for the amount of the overpayment for purposes of section 3685 of 
title 38, U.S.C.
    (v) Failure to complete service agreement. (A) Except as provided in 
paragraph (c)(8)(v)(B) of this section, if an individual transferring 
entitlement under this section fails to complete the service agreed to 
by the individual under paragraph (c)(1) of this section in accordance 
with the terms of the agreement of the individual under that section, 
the amount of any transferred entitlement under this section that is 
used by a dependent of the individual as of the date of such failure 
shall be treated as an overpayment of educational assistance (see 
paragraph (c)(8)(iv) of this section) and will be subject to collection 
by DVA.
    (B) Paragraph (c)(8)(v)(A) of this section shall not apply in the 
case of an individual who fails to complete service agreed to by the 
individual due to:
    (1) The death of the individual,
    (2) Discharge or release from active duty for a medical condition 
which pre-existed the service of the individual and was not service 
connected,
    (3) Discharge or release from active duty for hardship as determined 
by the Secretary of the Military Department concerned,
    (4) Discharge or release from active duty for a physical or mental 
condition not a disability and that did not result from the individual's 
own willful misconduct, but did interfere with the performance of duty.
    (9) Procedures. All requests and transactions for individuals who 
remain in the Armed Forces will be completed through the Transferability 
of Educational Benefits (TEB) Web application at https://
www.dmdc.osd.mil/TEB/. The TEB Users Manual will provide instruction for 
enrollment; verification; and additions, changes, and revocations. 
Modifications or revocations after separation from the Armed Forces will 
be accomplished with the Department of Veterans Affairs.
    (10) Regulations. The Secretaries of the Military Departments 
concerned

[[Page 367]]

shall prescribe regulations for the purposes of administering the 
transferability of unused education entitlements to family members in 
accordance with this part. Such regulations shall specify:
    (i) The manner of verifying and documenting the additional service 
commitment, if any, under paragraph (c)(1) of this section, to be 
authorized to transfer education benefits.
    (ii) The manner of determining eligibility to be authorized to 
transfer entitlements as allowed in paragraph (c)(1)(i), (c)(1)(ii) or 
(c)(1)(iii) of this section.



Sec. 65.7  Eligibility.

    The DVA is responsible for determining eligibility for education 
benefits under the GI Bill. Generally, to be eligible for the GI Bill, 
individuals must serve on active duty after September 10, 2001, for at 
least 30 continuous days with a discharge due to a service-connected 
disability; or an aggregate period ranging from 90 days to 36 months or 
more. Benefits under the GI Bill are based on a percentage, as 
determined by a Service Member's length of active duty service, as shown 
in the following table:

             Table to Sec.  65.7--Maximum Benefits Payable
------------------------------------------------------------------------
                                                         Percentage of
                    Member serves                       maximum benefit
                                                            payable
------------------------------------------------------------------------
At least 36 months...................................                100
At least 30 continuous days on active duty and                       100
 discharged due to service-connected disability......
At least 30 months, but less than 36 months..........                 90
At least 24 months, but less than 30 months..........                 80
At least 18 months, but less than 24 months*.........                 70
At least 12 months, but less than 18 months*.........                 60
At least 6 months, but less than 12 months*..........                 50
At least 90 days, but less than 6 months*............                 40
------------------------------------------------------------------------
 If aggregate service is less than 24 months, initial entry training
  does not count as qualifying active duty.



Sec. 65.8  Reporting requirements.

    The reporting requirements in this part have been assigned Report 
Control Symbols DD-P&R(AR)1221, DD-P&R(Q)2077, DD-RA(M)1147, DD-
RA(D)1148, DD-RA(D)2170, DD-RA(M)2171, DD-RA(D)2302, and DD-RA(M)2303 in 
accordance with the requirements of DoD 8910.1-M (Available at http://
www.dtic.mil/whs/directives/corres/pdf/891001m.pdf).



  Sec. Appendix A to 32 CFR Part 65--Additional Reporting Requirements

      Table 1--Data Elements From DoD Instruction 1336.5 and DoD Instruction 7730.54 Relevant to This Part
----------------------------------------------------------------------------------------------------------------
               Field                  Data element name                Description                 References
----------------------------------------------------------------------------------------------------------------
947-954...........................  d. Initial Entry       The date a member completed initial
                                     Training End           entry training, including skill
                                     Calendar Date.         training. Format: YYYYMMDD. If not
                                                            applicable or unknown, report all
                                                            zeros.
293...............................  b. Commissioned        The code that represents the         See DoD
                                     Officer Accession      accession program by which a         Instruction
                                     Program Source Code.   member first obtained commissioned   1336.5 for
                                                            officer, other than commissioned     additional data
                                                            warrant officer, status (also        elements.
                                                            known as Source of Initial
                                                            Commission.) Applicable only to
                                                            commissioned officers, other than
                                                            commissioned warrant officers. If
                                                            not applicable or unknown, report
                                                            Z.
                                                           G ROTC scholarship program under
                                                            section 2107(b) of title 10, U.S.C.
                                                           R ROTC scholarship program under
                                                            section 2107a of title 10, U.S.C.
955-971...........................  Active Duty Loan
                                     Repayment Incentive
                                     Program.
955-962...........................  a. Active Duty Loan    The beginning date of a Service
                                     Repayment Incentive    member's commitment based on
                                     Program Eligibility    eligibility for an educational
                                     Effective Date.        incentive under the Active Duty
                                                            Loan Repayment Incentive Program.
                                                           Format: YYYYMMDD. If not applicable
                                                            or unknown, report all zeroes.
963...............................  b. Active Duty Loan    The type of active duty educational  Chapter 109 of
                                     Repayment Incentive    incentive for a Service member,      title 10,
                                     Program Educational    who is appointed, enlists,           U.S.C.
                                     Type Code.             reenlists, affiliates, or extends
                                                            in an Active Duty Loan Repayment
                                                            Incentive Program. If not
                                                            applicable or unknown, report Z.
                                                           A = Educational loan repayment
                                                            assistance..
964-971...........................  c. Active Duty Loan    The completion date of a Service
                                     Repayment Incentive    member's commitment based on
                                     Program Eligibility    eligibility for an educational
                                     Completion Date.       incentive under the Active Duty
                                                            Loan Repayment Incentive Program.
                                                            Format: YYYYMMDD. If not
                                                            applicable or unknown, report all
                                                            zeroes.

[[Page 368]]

 
972-975...........................  GI Bill Incentive
                                     Program..
972-973...........................  a. GI Bill Incentive   The code that represents the         See Table 4 for
                                     Kicker Rate Code.      monetary level of a GI Bill kicker   a list of
                                                            incentive for which a member is      values.
                                                            entitled upon enlistment or
                                                            affiliation. If not applicable or
                                                            unknown, report ZZ.
974-975...........................  b. GI Bill             The code that represents the         See Table 5 for
                                     Reenlistment           monetary level of a GI Bill          a list of
                                     Incentive Kicker       reenlistment kicker incentive for    values.
                                     Rate Code.             which a member is entitled. If not
                                                            applicable or unknown, report ZZ.
----------------------------------------------------------------------------------------------------------------


            Table 2--Enlistment and Affiliation Kicker Codes*
------------------------------------------------------------------------
              Code                    Rate          Other Information
------------------------------------------------------------------------
D2.............................            $150  Effective 1 August
                                                  2009. Requires a 2-
                                                  year active duty
                                                  service agreement.
D3.............................             150  Effective 1 August
                                                  2009. Requires a 3-
                                                  year active duty
                                                  service agreement.
D4.............................             150  Effective 1 August
                                                  2009. Requires a 4-
                                                  year active duty
                                                  service agreement.
D5.............................             150  Effective 1 August
                                                  2009. Requires a 5-
                                                  year active duty
                                                  service agreement.
D6.............................             150  Effective 1 August
                                                  2009. Requires a 6-
                                                  year active duty
                                                  service agreement.
D9.............................             150  Effective 1 August
                                                  2009. Requires a 4-
                                                  year service
                                                  agreement: 2 years on
                                                  active duty plus 2
                                                  years in the Selected
                                                  Reserve.
E2.............................             250  Effective 1 August
                                                  2009. Requires a 2-
                                                  year active duty
                                                  service agreement.
E3.............................             250  Effective 1 August
                                                  2009. Requires a 3-
                                                  year active duty
                                                  service agreement.
E4.............................             250  Effective 1 August
                                                  2009. Requires a 4-
                                                  year active duty
                                                  service agreement.
E5.............................             250  Effective 1 August
                                                  2009. Requires a 5-
                                                  year active duty
                                                  service agreement.
E6.............................             250  Effective 1 August
                                                  2009. Requires a 6-
                                                  year active duty
                                                  service agreement.
E9.............................             250  Effective 1 August
                                                  2009. Requires a 4-
                                                  year service
                                                  agreement: 2 years on
                                                  active duty plus 2
                                                  years in the Selected
                                                  Reserve.
F2.............................             350  Effective 1 August
                                                  2009. Requires a 2-
                                                  year active duty
                                                  service agreement.
F3.............................             350  Effective 1 August
                                                  2009. Requires a 3-
                                                  year active duty
                                                  service agreement.
F4.............................             350  Effective 1 August
                                                  2009. Requires a 4-
                                                  year active duty
                                                  service agreement.
F5.............................             350  Effective 1 August
                                                  2009. Requires a 5-
                                                  year active duty
                                                  service agreement.
F6.............................             350  Effective 1 August
                                                  2009. Requires a 6-
                                                  year active duty
                                                  service agreement.
F9.............................             350  Effective 1 August
                                                  2009. Requires a 4-
                                                  year service
                                                  agreement: 2 years on
                                                  active duty plus 2
                                                  years in the Selected
                                                  Reserve.
G2.............................             450  Effective 1 August
                                                  2009. Requires a 2-
                                                  year active duty
                                                  service agreement.
G3.............................             450  Effective 1 August
                                                  2009. Requires a 3-
                                                  year active duty
                                                  service agreement.
G4.............................             450  Effective 1 August
                                                  2009. Requires a 4-
                                                  year active duty
                                                  service agreement.
G5.............................             450  Effective 1 August
                                                  2009. Requires a 5-
                                                  year active duty
                                                  service agreement.
G6.............................             450  Effective 1 August
                                                  2009. Requires a 6-
                                                  year active duty
                                                  service agreement.
G9.............................             450  Effective 1 August
                                                  2009. Requires a 4-
                                                  year service
                                                  agreement: 2 years on
                                                  active duty plus 2
                                                  years in the Selected
                                                  Reserve.
H2.............................             550  Effective 1 August
                                                  2009. Requires a 2-
                                                  year active duty
                                                  service agreement.
H3.............................             550  Effective 1 August
                                                  2009. Requires a 3-
                                                  year active duty
                                                  service agreement.
H4.............................             550  Effective 1 August
                                                  2009. Requires a 4-
                                                  year active duty
                                                  service agreement.
H5.............................             550  Effective 1 August
                                                  2009. Requires a 5-
                                                  year active duty
                                                  service agreement.
H6.............................             550  Effective 1 August
                                                  2009. Requires a 6-
                                                  year active duty
                                                  service agreement.
H9.............................             550  Effective 1 August
                                                  2009. Requires a 4-
                                                  year service
                                                  agreement: 2 years on
                                                  active duty plus 2
                                                  years in the Selected
                                                  Reserve.
J2.............................             650  Effective 1 August
                                                  2009. Requires a 2-
                                                  year active duty
                                                  service agreement.
J3.............................             650  Effective 1 August
                                                  2009. Requires a 3-
                                                  year active duty
                                                  service agreement.
J4.............................             650  Effective 1 August
                                                  2009. Requires a 4-
                                                  year active duty
                                                  service agreement.
J5.............................             650  Effective 1 August
                                                  2009. Requires a 5-
                                                  year active duty
                                                  service agreement.
J6.............................             650  Effective 1 August
                                                  2009. Requires a 6-
                                                  year active duty
                                                  service agreement.
J9.............................             650  Effective 1 August
                                                  2009. Requires a 4-
                                                  year service
                                                  agreement: 2 years on
                                                  active duty plus 2
                                                  years in the Selected
                                                  Reserve.
K2.............................             750  Effective 1 August
                                                  2009. Requires a 2-
                                                  year active duty
                                                  service agreement.
K3.............................             750  Effective 1 August
                                                  2009. Requires a 3-
                                                  year active duty
                                                  service agreement.
K4.............................             750  Effective 1 August
                                                  2009. Requires a 4-
                                                  year active duty
                                                  service agreement.
K5.............................             750  Effective 1 August
                                                  2009. Requires a 5-
                                                  year active duty
                                                  service agreement.
K6.............................             750  Effective 1 August
                                                  2009. Requires a 6-
                                                  year active duty
                                                  service agreement.
K9.............................             750  Effective 1 August
                                                  2009. Requires a 4-
                                                  year service
                                                  agreement: 2 years on
                                                  active duty plus 2
                                                  years in the Selected
                                                  Reserve.
L2.............................             850  Effective 1 August
                                                  2009. Requires a 2-
                                                  year active duty
                                                  service agreement.
L3.............................             850  Effective 1 August
                                                  2009. Requires a 3-
                                                  year active duty
                                                  service agreement.
L4.............................             850  Effective 1 August
                                                  2009. Requires a 4-
                                                  year active duty
                                                  service agreement.
L5.............................             850  Effective 1 August
                                                  2009. Requires a 5-
                                                  year active duty
                                                  service agreement.
L6.............................             850  Effective 1 August
                                                  2009. Requires a 6-
                                                  year active duty
                                                  service agreement.
L9.............................             850  Effective 1 August
                                                  2009. Requires a 4-
                                                  year service
                                                  agreement: 2 years on
                                                  active duty plus 2
                                                  years in the Selected
                                                  Reserve.
M2.............................             950  Effective 1 August
                                                  2009. Requires a 2-
                                                  year active duty
                                                  service agreement.

[[Page 369]]

 
M3.............................             950  Effective 1 August
                                                  2009. Requires a 3-
                                                  year active duty
                                                  service agreement.
M4.............................             950  Effective 1 August
                                                  2009. Requires a 4-
                                                  year active duty
                                                  service agreement.
M5.............................             950  Effective 1 August
                                                  2009. Requires a 5-
                                                  year active duty
                                                  service agreement.
M6.............................             950  Effective 1 August
                                                  2009. Requires a 6-
                                                  year active duty
                                                  service agreement.
M9.............................             950  Effective 1 August
                                                  2009. Requires a 4-
                                                  year service
                                                  agreement: 2 years on
                                                  active duty plus 2
                                                  years in the Selected
                                                  Reserve.
------------------------------------------------------------------------
* This will be the same coding structure for DoD Instruction 7730.54,
  ``Reserve Components Common Personnel Data System (RCCPDS).''


                   Table 3--Reenlistment Kicker Codes*
------------------------------------------------------------------------
              Code                    Rate          Other Information
------------------------------------------------------------------------
N2.............................            $100  Effective 1 August
                                                  2009. Requires a 2-
                                                  year active duty
                                                  service agreement.
N3.............................             200  Effective 1 August
                                                  2009. Requires a 3-
                                                  year active duty
                                                  service agreement.
N4.............................             300  Effective 1 August
                                                  2009. Requires a 4-
                                                  year active duty
                                                  service agreement.
------------------------------------------------------------------------
* This will be the same coding structure for DoD Instruction 7730.54,
  ``Reserve Components Common Personnel Data System (RCCPDS).''



PART 67_EDUCATIONAL REQUIREMENTS FOR APPOINTMENT OF RESERVE COMPONENT OFFICERS 

TO A GRADE ABOVE FIRST LIEUTENANT OR LIEUTENANT (JUNIOR GRADE)--Table of 

Contents



Sec.
67.1 Purpose.
67.2 Applicability.
67.3 Definitions.
67.4 Policy.
67.5 Responsibilities.
67.6 Procedures.

    Authority: 10 U.S.C. 12205.

    Source: 62 FR 55517, Oct. 27, 1997, unless otherwise noted.



Sec. 67.1  Purpose.

    This part provides guidance for implementing policy, assigns 
responsibilities, and prescribes under 10 U.S.C. 12205 for identifying 
criteria for determining educational institutions that award 
baccalaureate degrees which satisfy the educational requirement for 
appointment of officers to a grade above First Lieutenant in the Army 
Reserve, Air Force Reserve, and Marine Corps Reserve, or Lieutenant 
(Junior Grade) in the Naval Reserve, or for officers to be federally 
recognized in a grade level above First Lieutenant as a member of the 
Army National Guard or Air National Guard.



Sec. 67.2  Applicability.

    This part applies to the Office of the Secretary of Defense, and the 
Military Departments; the Chairman of the Joint Chiefs or Staff; and the 
Defense Agencies referred to collectively in this part as the ``DoD 
Components''). The term ``Military Departments,'' as used in this part, 
refers to the Departments of the Army, the Navy, and the Air Force. The 
term ``Secretary concerned'' refers to the Secretaries of the Military 
Departments. The term ``Military Services'' refers to the Army, the 
Navy, the Air Force, the Marine Corps. The term ``Reserve components'' 
refers to the Army Reserve, Army National Guard of the United States, 
Air Force Reserve, Air National Guard of the United States, Naval 
Reserve, Marine Corps Reserve.



Sec. 67.3  Definitions.

    Accredited educational institution. An educational institution 
accredited by an agency recognized by the Secretary of Education.
    Qualifying educational institution. An educational institution that 
is accredited, or an unaccredited educational institution that the 
Secretary of Defense designates pursuant to Sec. 67.6(a) and Sec. 
67.6(b).
    Unaccredited educational institution. An educational institution not 
accredited by an agency recognized by the Secretary of Education.

[[Page 370]]



Sec. 67.4  Policy

    (a) It is DoD policy under 10 U.S.C. 12205 to require Reserve 
component officers to have at least a baccalaureate degree from a 
qualifying educational institution before appointment to a grade above 
First Lieutenant in the Army Reserve, Air Force Reserve or Marine Corps 
Reserve, or Lieutenant (Junior Grade) in the Naval Reserve, or for 
officers to be federally recognized in a grade above First Lieutenant as 
a member of the Army National Guard or Air National Guard.
    (b) Exempt from this policy is any officer who was:
    (1) Appointed to or recognized in a higher grade for service in a 
health profession for which a baccalaureate degree is not a condition of 
original appointment or assignment.
    (2) Appointed in the Naval Reserve or Marine Corps Reserve as a 
limited duty officer.
    (3) Appointed in the Naval Reserve for service under the Naval 
Aviation Cadet (NAVCAD) program or the Seaman to Admiral program.
    (4) Appointed to or recognized in a higher grade if appointed to, or 
federally recognized in, the grade of captain or, in the case of the 
Navy, lieutenant before October 1, 1995.
    (5) Recognized in the grade of captain or major in the Alaska Army 
National Guard, who resides permanently at a location in Alaska that is 
more than 50 miles from each of the cities of Anchorage, Fairbanks, and 
Juneau, Alaska, by paved road, and who is serving in a Scout unit or a 
Scout support unit.
    (c) The Department of Defense will designate an unaccredited 
educational institution as a qualifying educational institution for the 
purpose of meeting this educational requirement if that institution 
meets the criteria established in this part.



Sec. 67.5  Responsibilities.

    (a) The Assistant Secretary of Defense for Reserve Affairs, under 
the Under Secretary of Defense for Personnel and Readiness, shall:
    (1) Establish procedures by which an unaccredited educational 
institution can apply for DoD designation as a qualifying educational 
institution.
    (2) Publish in the Federal Register DoD requirements and procedures 
for an unaccredited educational institution to apply for designation as 
a qualifying education institution.
    (3) Annually, provide to the Secretaries of the Military Departments 
a list of those unaccredited educational institutions that have been 
approved by the Department of Defense as a qualifying educational 
institution. This list shall include the year or years for which 
unaccredited educational institutions are designed as qualifying 
educational institutions.
    (b) The Secretaries of the Military Departments shall establish 
procedures to ensure that after September 30, 1995, those Reserve 
component officers selected for appointment to a grade above First 
Lieutenant in the Army Reserve, Air Force Reserve, or Marine Corps 
Reserve, or Lieutenant (Junior Grade) in the Naval Reserve, or for 
officers to be federally recognized in a grade above First Lieutenant as 
a member of the Army National Guard or Air National Guard, who are 
required to hold a baccalaureate degree, were awarded a baccalaureate 
degree from a qualifying educational institution before appointment to 
the next higher grade. For a degree from an unaccredited educational 
institution that has been recognized as qualifying educational 
institution by the Department of Defense to satisfy the educational 
requirements of 10 U.S.C. 12205, the degree must not have been awarded 
more than 8 years before the date the officer is to be appointed, or 
federally recognized, in the grade of Captain in the Army Reserve, Army 
National Guard, Air Force Reserve, Air National Guard, or Marine Corps 
Reserve, or in the grade of Lieutenant in the Naval Reserve.



Sec. 67.6  Procedures.

    (a) An unaccredited educational institution may obtain designation 
as a qualifying educational institution for a specific Reserve component 
officer who graduated from that educational institution by providing 
certification from registrars at three accredited educational 
institutions that maintain ROTC programs that their educational 
institutions would accept at least 90

[[Page 371]]

percent of the credit hours earned by that officer at the unaccredited 
educational institution, as of the year of graduation.
    (b) For an unaccredited educational institution to be designated as 
a qualifying educational institution for a specific year, that 
educational institution must provide the Office of the Assistant 
Secretary of Defense for Reserve Affairs certification from the 
registrars at three different accredited educational institutions that 
maintain ROTC programs listing the major field(s) of study in which that 
educational institution would accept at least 90 percent of the credit 
hours earned by a student who was awarded a baccalaureate degree in that 
major field of study at the unaccredited educational institution.
    (c) For an unaccredited educational institution to be considered for 
designation as a qualifying educational institution, the unaccredited 
educational institution must submit the required documentation no later 
than January 1 of the year for which the unaccredited educational 
institution seeks to be designated a qualifying educational institution.
    (d) The required documentation must be sent to the following 
address: Office of the Assistant Secretary of Defense for Reserve 
Affairs, Attn: DASD (M&P), 1500 Defense Pentagon, Washington, DC 20301-
1500.
    (e) Applications containing the required documentation may also be 
submitted at any time from unaccredited educational institutions 
requesting designation as a qualifying educational institution for prior 
school years.



PART 69_SCHOOL BOARDS FOR DEPARTMENT OF DEFENSE DOMESTIC DEPENDENT ELEMENTARY 

AND SECONDARY SCHOOLS--Table of Contents



Sec.
69.1 Purpose.
69.2 Applicability and scope.
69.3 Definitions.
69.4 Policy.
69.5 Responsibilities.
69.6 Procedures.

    Authority: 10 U.S.C. 2164.

    Source: 61 FR 60563, Nov. 29, 1996, unless otherwise noted.



Sec. 69.1  Purpose.

    This part prescribes policies and procedures for the establishment 
and operation of elected School Boards for schools operated by the 
Department of Defense (DoD) under 10 U.S.C. 2164, 32 CFR part 345, and 
Public Law 92-463.



Sec. 69.2  Applicability and scope.

    This part applies to:
    (a) The Office of the Secretary of Defense (OSD), the Military 
Departments, the Coast Guard when operating as a service of the 
Department of the Navy or by agreement between DoD and the Department of 
Transportation, the Chairman of the Joint Chiefs of Staff, the Unified 
and Specified Combatant Commands, the Inspector General of the 
Department of Defense, the Uniformed Services University of the Health 
Sciences, the Defense Agencies, and the DoD Field Activities.
    (b) The schools (prekindergarten through grade 12) operated by the 
DoD under 10 U.S.C. 2164 and 32 CFR part 345 within the continental 
United States, Alaska, Hawaii, Puerto Rico, Wake Island, Guam, American 
Samoa, the Northern Mariana Islands, and the Virgin Islands, known as 
DoD DDESS Arrangements.
    (c) This part does not apply to elected school boards established 
under state or local law for DoD DDESS special arrangements.



Sec. 69.3  Definitions.

    (a) Arrangements. Actions taken by the Secretary of Defense to 
provide a free public education to dependent children under 10 U.S.C. 
2164 through DoD DDESS arrangements or DoD DDESS special arrangements:
    (1) DDESS arrangement. A school operated by the Department of 
Defense under 10 U.S.C. 2164 and 32 CFR 345 to provide a free public 
education for eligible children.
    (2) DDESS special arrangement. An agreement, under 10 U.S.C. 2164, 
between the Secretary of Defense, or designee, and a local public 
education agency whereby a school or a school system operated by the 
local public education agency provides educational services to eligible 
dependent children

[[Page 372]]

of U.S. military personnel and federally employed civilian personnel. 
Arrangements result in partial or total Federal funding to the local 
public education agency for the educational services provided.
    (b) Parent. The biological father or mother of a child when parental 
rights have not been legally terminated; a person who, by order of a 
court of competent jurisdiction, has been declared the father or mother 
of a child by adoption; the legal guardian of a child; or a person in 
whose household a child resides, provided that such person stands in 
loco parentis to that child and contributes at least one-half of the 
child's support.



Sec. 69.4  Policy.

    (a) Each DoD DDESS arrangement shall have an elected school board, 
established and operated in accordance with this part and other 
pertinent guidance.
    (b) Because members of DoD DDESS elected school boards are not 
officers or employees of the United States appointed under the 
Appointments Clause of the United States Constitution (Art. II, Sec. 2, 
Cl. 2), they may not exercise discretionary governmental authority, such 
as the taking of personnel actions or the establishment of governmental 
policies. This part clarifies the role of school boards in the 
development and oversight of fiscal, personnel, and educational 
policies, procedures, and programs for DoD DDESS arrangements, subject 
to these constitutional limitations.
    (c) The DoD DDESS chain of command for matters relating to school 
arrangements operated under 10 U.S.C. 2164 and 32 CFR part 345 shall be 
from the Director, DoD DDESS, to the Superintendent of each school 
arrangement. The Superintendent will inform the school board of all 
matters affecting the operation of the local school arrangement. Direct 
liaison among the school board, the Director, and the Superintendent is 
authorized for all matters pertaining to the local school arrangement.



Sec. 69.5  Responsibilities.

    The Assistant Secretary of Defense for Force Management Policy (ASD 
(FMP)), under the Under Secretary of Defense for Personnel and 
Readiness, shall:
    (a) Make the final decision on all formal appeals to directives and 
other guidance submitted by the school board or Superintendent.
    (b) Ensure the Director, DoD DDESS shall:
    (1) Ensure the establishment of elected school boards in DoD DDESS 
arrangements.
    (2) Monitor compliance by the Superintendent and school boards with 
applicable statutory and regulatory requirements, and this part. In the 
event of suspected noncompliance, the Director, DoD DDESS, shall take 
appropriate action, which will include notification of the 
Superintendent and the school board president of the affected DoD DDESS 
arrangement.
    (3) Determine when the actions of a school board conflict with an 
applicable statute, regulation, or other guidance or when there is a 
conflict in the views of the school board and the Superintendent. When 
such conflicts occur, the Director, DoD DDESS, shall assist the 
Superintendent and the school board in resolving them or direct that 
such actions be discontinued. Such disapprovals must be in writing to 
the school board and the Superintendent concerned and shall state the 
specific supporting reason or reasons.
    (c) Ensure the school board for DoD DDESS arrangements shall:
    (1) Participate in the development and oversight of fiscal, 
personnel, and educational policies, procedures, and programs for the 
DoD DDESS arrangement concerned, consistent with this part.
    (2) Approve agendas and prepare minutes for school board meetings. A 
copy of the approved minutes of school board meetings shall be forwarded 
to the Director, DoD DDESS, within 10 working days after the date the 
minutes are approved.
    (3) Provide to the Director, DoD DDESS, names of applicants for a 
vacancy in the Superintendent's position after a recruitment has been 
accomplished. The school board shall submit to the Director, DoD DDESS, 
a list of all applicants based on its review of the applications and 
interviews (either in

[[Page 373]]

person or telephonically) of the applicants. The list of applicants will 
be accompanied by the recommended choice of the school board. The 
Director will select the Superintendent and will submit written notice 
with justification to the school board if the recommendation of the 
school board is not followed.
    (4) Prepare an annual written on-site review of the Superintendent's 
performance for consideration by the Director, DoD DDESS. The written 
review shall be based on critical elements recommended by the school 
board and Superintendent and approved by the Director, DoD DDESS. The 
school board's review will be an official attachment to the 
Superintendent's appraisal.
    (5) Participate in the development of the school system's budget for 
submission to the Director, DoD DDESS, for his or her approval as 
endorsed by the school board; and participate in the oversight of the 
approved budget, in conjunction with the Superintendent, as appropriate 
for operation of the school arrangement.
    (6) Invite the Superintendent or designee to attend all school board 
meetings.
    (7) Provide counsel to the Superintendent on the operation of the 
school and the implementation of the approved budget.
    (8) Channel communications with school employees to the DoD DDESS 
Superintendent. Refer all applications, complaints, and other 
communications, oral or written, to the DoD DDESS Arrangement 
Superintendents.
    (9) Participate in the development of school policies, rules, and 
regulations, in conjunction with the Superintendent, and recommend which 
policies shall be reflected in the School Policy Manual. At a minimum, 
the Policy Manual, which shall be issued by the Superintendent, shall 
include following:
    (i) A statement of the school philosophy.
    (ii) The role and responsibilities of school administrative and 
educational personnel.
    (iii) Provisions for promulgation of an annual school calendar.
    (iv) Provisions on instructional services, including policies for 
development and adoption of curriculum and textbooks.
    (v) Regulations affecting students, including attendance, grading, 
promotion, retention, and graduation criteria, and the student code of 
rights, responsibilities, and conduct.
    (vi) School policy on community relations and noninstructional 
services, including maintenance and custodial services, food services, 
and student transportation.
    (vii) School policy and legal limits on financial operations, 
including accounting, disbursing, contracting, and procurement; 
personnel operations, including conditions of employment, and labor 
management regulations; and the processing of, and response to, 
complaints.
    (viii) Procedures providing for new school board member orientation.
    (ix) Any other matters determined by the school board and the 
superintendent to be necessary.
    (10) Under 10 U.S.C. 2164(b)(4)(B), prepare and submit formal 
appeals to directives and other guidance that in the view of the school 
board adversely impact the operation of the school system either through 
the operation and management of DoD DDESS or a specific DoD DDESS 
arrangement. Written formal appeals with justification and supporting 
documentation shall be submitted by the school board or Superintendent 
to ASD(FMP). The ASD(FMP) shall make the final decision on all formal 
appeals. The Director, Dod DDESS, will provide the appealing body 
written review of the findings relating to the merits of the appeal. 
Formal appeals will be handled expeditiously by all parties to minimize 
any adverse impact on the operation of the DoD DDESS system.
    (d) Ensure school board operating procedures are as follows:
    (1) The school board shall operate from a written agenda at all 
meetings. Matters not placed on the agenda before the start of the 
meeting, but approved by a majority of the school board present, may be 
considered at the ongoing meeting and added to the agenda at that time.
    (2) A majority of the total number of school board members 
authorized shall constitute a quorum.

[[Page 374]]

    (3) School board meetings shall be conducted a minimum of 9 times a 
year. The school board President or designee will provide school board 
members timely notice of all meetings. All regularly scheduled school 
board meetings will be open to the public. Executive session meetings 
may be closed under 10 U.S.C. 2164(d)(6).
    (4) The school board shall not be bound in any way by any action or 
statement of an individual member or group of members of the board 
except when such action or statement is approved by a majority of the 
school board members during a school board meeting.
    (5) School board members are eligible for reimbursement for official 
travel in accordance with the DoD Joint Travel Regulations and guidance 
issued by the Director, DoD DDESS.
    (6) School board members may be removed by the ASD (FMP) for 
dereliction of duty, malfeasance, or other grounds for cause shown. The 
school board concerned may recommend such removal with a two-thirds 
majority vote. Before a member may be removed, the member shall be 
afforded due process, to include written notification of the basis for 
the action, review of the evidence or documentation considered by the 
school board, and an opportunity to respond to the allegations.



Sec. 69.6  Procedures.

    (a) Composition of school board. (1) The school board shall 
recommend to the Director, DoD DDESS, the number of elected school board 
voting members, which shall be not fewer than 3 and no more than 9, 
depending upon local needs. The members of the school board shall select 
by majority vote of the total number of school board members authorized 
at the beginning of each official school board term, one member to act 
as President and another to act as Vice President. The President and 
Vice President shall each serve for 1 year. The President shall preside 
over school board meetings and provide leadership for related activities 
and functions. The Vice President shall serve in the absence of the 
President. If the position of President is vacated for any reason, the 
Vice President shall be the President until the next regularly scheduled 
school board election. The resulting vacancy in the position of the Vice 
President shall be filled by the majority vote of all members of the 
incumbent board.
    (2) The DoD DDESS Arrangement Superintendent, or designee, shall 
serve as a non-voting observer to all school board meetings. The 
Installation Commander, or designee, shall convey command concerns to 
the school board and the Superintendent and keep the school board and 
the Superintendent informed of changes and other matters within the host 
installation that affect school expenditures or operations.
    (3) School board members may not receive compensation for their 
service on the school board.
    (4) Members of the school board may not have any financial interest 
in any company or organization doing business with the school system. 
Waivers to this restriction may be granted on a case-by-case basis by 
the Director, DoD DDESS, in coordination with the Office of General 
Counsel of the Department of Defense.
    (b) Electorate of the school board. The electorate for each school 
board seat shall be composed of parents of the students attending the 
school. Each member of the electorate shall have one vote.
    (c) Election of school board members. (1) To be elected as a member 
of the school board, an individual must be a resident of the military 
installation in which the DoD DDESS arrangement is located, or in the 
case of candidates for the Antilles Consolidated School System School 
Board, be the parent of an eligible child currently enrolled in the 
school system. Personnel employed by a DoD DDESS arrangement may not 
serve as school board members.
    (2) The board shall determine the term of office for elected 
members, not to exceed 3 years, and the limit on the number of terms, if 
any. If the board fails to set these terms by the first day of the first 
full month of the school year, the terms will be set at 3 years, with a 
maximum of 2 consecutive terms.
    (3) When there is a sufficient number of school board vacancies that 
result in not having a quorum, which is defined

[[Page 375]]

as a majority of seats authorized, a special election shall be called by 
the DoD DDESS Arrangement Superintendent or designee. A special election 
is an election that is held between the regularly scheduled annual 
school board election. The nomination and election procedures for a 
special election shall be the same as those of regularly scheduled 
school board elections. Individuals elected by special election shall 
serve until the next regularly scheduled school board election. 
Vacancies may occur due to the resignation, death, removal for cause, 
transfer, or disenrollment of a school board member's child(ren) from 
the DoD DDESS arrangement.
    (4) The board shall determine a schedule for regular elections. 
Parents shall have adequate notice of the time and place of the 
election. The election shall be by secret ballot. All votes must be cast 
in person at the time and place of the election. The candidate(s) 
receiving the greatest number of votes shall be elected as school board 
member(s).
    (5) Each candidate for school board membership must be nominated in 
writing by at least one member of the electorate to be represented by 
the candidate. Votes may be cast at the time of election for write-in 
candidates who have not filed a nomination petition if the write-in 
candidates otherwise are qualified to serve in the positions sought.
    (6) The election process shall provide staggered terms for board 
members; e.g., on the last day of the last month of each year, the term 
for some board members will expire.
    (7) The DoD DDESS Superintendent, in consultation with the school 
board, shall be responsible for developing the plans for nominating 
school board members and conducting the school board election and the 
special election process. The DoD DDESS Superintendent shall announce 
election results within 7 working days of the election.



PART 70_DISCHARGE REVIEW BOARD (DRB) PROCEDURES AND STANDARDS--Table of 

Contents



Sec.
70.1 Reissuance and purpose.
70.2 Applicability.
70.3 Definitions.
70.4 Responsibilities.
70.5 Procedures.
70.6 Information requirements.
70.7 Effective date and implementation.
70.8 Discharge review procedures.
70.9 Discharge review standards.
70.10 Complaints concerning decisional documents and index entries.
70.11 DoD semiannual report.

    Authority: 10 U.S.C. 1553 and 38 U.S.C. 101 and 3103, as amended.

    Source: 47 FR 37785, Aug. 26, 1982, unless otherwise noted.



Sec. 70.1  Reissuance and purpose.

    This part is reissued and:
    (a) Establishes uniform policies, procedures, and standards for the 
review of discharges or dismissals under 10 U.S.C. 1553.
    (b) Provides guidelines for discharge review by application or on 
motion of a DRB, and the conduct of discharge reviews and standards to 
be applied in such reviews which are designed to ensure historically 
consistent uniformity in execution of this function, as required under 
Pub. L. 95-126.
    (c) Assigns responsibility for administering the program.
    (d) Makes provisions for public inspection, copying, and 
distribution of DRB documents through the Armed Forces Discharge Review/
Correction Board Reading Room.
    (e) Establishes procedures for the preparation of decisional 
documents and index entries.
    (f) Provides guidance for processing complaints concerning 
decisional documents and index entries.



Sec. 70.2  Applicability.

    The provisions of this part 70 apply to the Office of the Secretary 
of Defense (OSD) and the Military Departments. The terms, ``Military 
Services,'' and ``Armed Forces,'' as used herein, refer to the Army, 
Navy, Air Force and Marine Corps.

[[Page 376]]



Sec. 70.3  Definitions.

    (a) Applicant. A former member of the Armed Forces who has been 
discharged or dismissed administratively in accordance with Military 
Department regulations or by sentence of a court-martial (other than a 
general court-martial) and under statutory regulatory provisions whose 
application is accepted by the DRB concerned or whose case is heard on 
the DRB's own motion. If the former member is deceased or incompetent, 
the term ``applicant'' includes the surviving spouse, next-of-kin, or 
legal representative who is acting on behalf of the former member. When 
the term ``applicant'' is used in Sec. Sec. 70.8 through 70.10, it 
includes the applicant's counsel or representative, except that the 
counsel or representative may not submit an application for review, 
waive the applicant's right to be present at a hearing, or terminate a 
review without providing the DRB an appropriate power of attorney or 
other written consent of the applicant.
    (b) Complainant. A former member of the Armed Forces (or the former 
member's counsel) who submits a complaint under Sec. 70.10 with respect 
to the decisional document issued in the former member's own case; or a 
former member of the Armed Forces (or the former member's counsel) who 
submits a complaint under Sec. 70.10 stating that correction of the 
decisional document will assist the former member in preparing for an 
administrative or judicial proceeding in which the former member's own 
discharge will be at issue.
    (c) Counsel or Representative. An individual or agency designated by 
the applicant who agrees to represent the applicant in a case before the 
DRB. It includes, but is not limited to: a lawyer who is a member of the 
bar of a Federal court or of the highest court of a State; an accredited 
representative designated by an organization recognized by the 
Administrator of Veterans Affairs; a representative from a State agency 
concerned with veterans affairs; and representatives from private 
organizations or local government agencies.
    (d) Discharge. A general term used in this Directive that includes 
dismissal and separation or release from active or inactive military 
status, and actions that accomplish a complete severance of all military 
status. This term also includes the assignment of a reason for such 
discharge and characterization of service (32 CFR part 41).
    (e) Discharge Review. The process by which the reason for 
separation, the procedures followed in accomplishing separation, and the 
characterization of service are evaluated. This includes determinations 
made under the provisions of 38 U.S.C. 3103(e)(2).
    (f) Discharge Review Board (DRB). An administrative board 
constituted by the Secretary of the Military Department concerned and 
vested with discretionary authority to review discharges and dismissals 
under the provisions of 10 U.S.C. 1553. It may be configured as one main 
element or two or more elements as designated by the Secretary 
concerned.
    (g) DRB Panel. An element of a DRB, consisting of five members, 
authorized by the Secretary concerned to review discharges and 
dismissals.
    (h) DRB Traveling or Regional Panel. A DRB panel that conducts 
discharge reviews in a location outside the National Capital Region 
(NCR).
    (i) Hearing. A review involving an appearance before the DRB by the 
applicant or on the applicant's behalf by a counsel or representative.
    (j) Hearing Examination. The process by which a designated officer 
of a DRB prepares a presentation for consideration by a DRB in 
accordance with regulations prescribed by the Secretary concerned.
    (k) National Capital Region (NCR). The District of Columbia; Prince 
Georges and Montgomery Counties in Maryland; Arlington, Fairfax, 
Loudoun, and Prince William Counties in Virginia; and all cities and 
towns included within the outer boundaries of the foregoing counties.
    (l) President, DRB. A person designated by the Secretary concerned 
and responsible for the supervision of the discharge review function and 
other duties as assigned.



Sec. 70.4  Responsibilities.

    (a) The Secretaries of the Military Departments have the authority 
for final decision and the responsibility for the

[[Page 377]]

operation for their respective discharge review programs under 10 U.S.C. 
1553.
    (b) The Assistant Secretary of Defense (Manpower, Reserve Affairs, 
and Logistics) (ASD(MRA&L)) shall:
    (1) Resolve all issues concerning DRBs that cannot be resolved among 
the Military Departments.
    (2) Ensure uniformity among the Military Departments in the rights 
afforded applicants in discharge reviews.
    (3) Modify or supplement the enclosures to this part.
    (4) Maintain the index of decisions and provide for timely 
modification of index categories to reflect changes in discharge review 
policies, procedures, and standards issued by the OSD and the Military 
Departments.
    (c) The Secretary of the Army, as the designated administrative 
focal point for DRB matters, shall:
    (1) Effect necessary coordination with other governmental agencies 
regarding continuing applicability of this part and resolve 
administrative procedures relating thereto.
    (2) Review suggested modifications to this part, including 
implementing documents; monitor the implementing documents of the 
Military Departments; resolve differences, when practicable; recommend 
specific changes; provide supporting rationale to the ASD(MRA&L) for 
decision; and include appropriate documentation through the Office of 
the ASD(MRA&L) and the OSD Federal Register liaison officer to effect 
publication in the Federal Register.
    (3) Maintain the DD Form 293, ``Application for Review of Discharge 
or Separation from the Armed Forces of the United States,'' and 
republish as necessary with appropriate coordination of the other 
Military Departments and the Office of Management and Budget.
    (4) Respond to all inquiries from private individuals, 
organizations, or public officials with regard to DRB matters. When the 
specific Military Service can be identified, refer such correspondence 
to the appropriate DRB for response or designate an appropriate activity 
to perform this task.
    (5) Provide overall guidance and supervision to the Armed Forces 
Discharge Review/Correction Board Reading Room with staff augmentation, 
as required, by the Departments of the Navy and Air Force.
    (6) Ensure that notice of the location, hours of operation, and 
similar types of information regarding the Reading Room is published in 
the Federal Register.



Sec. 70.5  Procedures.

    (a) Discharge review procedures are prescribed in Sec. 70.8.
    (b) Discharge Review Standards are prescribed in Sec. 70.9 and 
constitute the basic guidelines for the determination whether to grant 
or deny relief in a discharge review.
    (c) Complaint Procedures about decisional documents are prescribed 
in Sec. 70.10.



Sec. 70.6  Information requirements.

    (a) Reporting requirements. (1) The reporting requirement prescribed 
in Sec. 70.8(n) is assigned Report Control Symbol DD-M(SA)1489.
    (2) All reports must be consistent with DoD Directive 5000.11, 
``Data Elements and Data Codes Standardization Program,'' December 7, 
1964.
    (b) Use of standard data elements. The data requirements prescribed 
by this part shall be consistent with DoD 5000.12-M, ``DoD Manual for 
Standard Data Elements,'' December 1981. Any reference to a date should 
appear as (YYMMDD), while any name entry should appear as (Last name, 
first name, middle initial).



Sec. 70.7  Effective date and implementation.

    This part is effective immediately for the purpose of preparing 
implementing documents. DoD Directive 1332.28, March 29, 1978, is 
officially canceled, effective November 27, 1982. This part applies to 
all discharge review proceedings conducted on or after November 27, 
1982. Sec. 70.10 applies to all complaint proceedings conducted on or 
after September 28, 1982. Final action on complaints shall not be taken 
until September 28, 1982, unless earlier corrective action is requested 
expressly by the applicant (or the applicant's counsel) whose case is 
the subject of the

[[Page 378]]

decisional document. If earlier corrective action is requested, it shall 
be taken in accordance with Sec. 70.10.



Sec. 70.8  Discharge review procedures.

    (a) Application for review--(1) General. Applications shall be 
submitted to the appropriate DRB on DD Form 293, ``Application for 
Review of Discharge or Separation from the Armed Forces of the United 
States,'' with such other statements, affidavits, or documentation as 
desired. It is to the applicant's advantage to submit such documents 
with the application or within 60 days thereafter in order to permit a 
thorough screening of the case. The DD Form 293 is available at most DoD 
installations and regional offices of the Veterans Administration, or by 
writing to: DA Military Review Boards Agency, Attention: SFBA (Reading 
Room), Room 1E520, The Pentagon, Washington, DC 20310.
    (2) Timing. A motion or request for review must be made within 15 
years after the date of discharge or dismissal.
    (3) Applicant's responsibilities. An applicant may request a change 
in the character of or reason for discharge (or both).
    (i) Character of discharge. Block 7 of DD Form 293 provides an 
applicant an opportunity to request a specific change in character of 
discharge (for example, General Discharge to Honorable Discharge; Other 
than Honorable Discharge to General or Honorable Discharge). Only a 
person separated on or after 1 October 1982 while in an entry level 
status may request a change from Other than Honorable Discharge to Entry 
Level Separation. A request for review from an applicant who does not 
have an Honorable Discharge shall be treated as a request for a change 
to an Honorable Discharge unless the applicant requests a specific 
change to another character of discharge.
    (ii) Reason for discharge. Block 7 of DD Form 293 provides an 
applicant an opportunity to request a specific change in the reason for 
discharge. If an applicant does not request a specific change in the 
reason for discharge, the DRB shall presume that the request for review 
does not involve a request for change in the reason for discharge. Under 
its responsibility to examine the propriety and equity of an applicant's 
discharge, the DRB shall change the reason for discharge if such a 
change is warranted.
    (iii) The applicant must ensure that issues submitted to the DRB are 
consistent with the request for change in discharge set forth in block 7 
of the DD Form 293. If an ambiguity is created by a difference between 
an applicant's issue and the request in block 7, the DRB shall respond 
to the issue in the context of the action requested in block 7. In the 
case of a hearing, the DRB shall attempt to resolve the ambiguity under 
paragraph (a)(5) of this section.
    (4) Request for consideration of specific issues. An applicant may 
request the DRB to consider specific issues which, in the opinion of the 
applicant, form a basis for changing the character of or reason for 
discharge, or both. In addition to the guidance set forth in this 
section, applicants should consult the other sections in this part 
(particularly paragraphs (c), (d), and (e) of this section and 
Sec. Sec. 70.9 and 70.10 before submitting issues for consideration by 
the DRB.
    (i) Submission of issues on DD Form 293. Issues must be provided to 
the DRB on DD Form 293 before the DRB closes the review process for 
deliberation.
    (A) Issues must be clear and specific. An issue must be stated 
clearly and specifically in order to enable the DRB to understand the 
nature of the issue and its relationship to the applicant's discharge.
    (B) Separate listing of issues. Each issue submitted by an applicant 
should be listed separately. Submission of a separate statement for each 
issue provides the best means of ensuring that the full import of the 
issue is conveyed to the DRB.
    (C) Use of DD Form 293. DD Form 293 provides applicants with a 
standard format for submitting issues to the DRB, and its use:
    (1) Provides a means for an applicant to set forth clearly and 
specifically those matters that, in the opinion of the applicant, 
provide a basis for changing the discharge;
    (2) Assists the DRB in focusing on those matters considered to be 
important by an applicant;

[[Page 379]]

    (3) Assists the DRB in distinguishing between a matter submitted by 
an applicant in the expectation that it will be treated as a decisional 
issue under paragraph (e) of this section, and those matters submitted 
simply as background or supporting materials;
    (4) Provides the applicant with greater rights in the event that the 
applicant later submits a complaint under Sec. 70.10(d)(1)(iii) 
concerning the decisional document;
    (5) Reduces the potential for disagreement as to the content of an 
applicant's issue.
    (D) Incorporation by reference. If the applicant makes an additional 
written submission, such as a brief, in support of the application, the 
applicant may incorporate by reference specific issues set forth in the 
written submission in accordance with the guidance on DD Form 293. The 
reference shall be specific enough for the DRB to identify clearly the 
matter being submitted as an issue. At a minimum, it shall identify the 
page, paragraph, and sentence incorporated. Because it is to the 
applicant's benefit to bring such issues to the DRB's attention as early 
as possible in the review, applicants who submit a brief are strongly 
urged to set forth all such issues as a separate item at the beginning 
of the brief. If it reasonably appears that the applicant inadvertently 
has failed expressly to incorporate an issue which the applicant clearly 
identifies as an issue to be addressed by the DRB, the DRB shall respond 
to such an issue under paragraphs (d) and (e) of this section.
    (E) Effective date of the new Form DD 293. With respect to 
applications received before November 27, 1982, the DRB shall consider 
issues clearly and specifically stated in accordance with the rules in 
effect at the time of submission. With respect to applications received 
on or after November 27, 1982, if the applicant submits an obsolete DD 
Form 293, the DRB shall accept the application, but shall provide the 
applicant with a copy of the new form and advise the applicant that it 
will only respond to issues submitted on the new form in accordance with 
this part.
    (ii) Relationship of issues to character of or reason for discharge. 
If the application applies to both character of and reason for 
discharge, the applicant is encouraged, but not required, to identify 
the issue as applying to the character of or reason for discharge (or 
both). Unless the issue is directed at the reason for discharge 
expressly or by necessary implication, the DRB will presume that it 
applies solely to the character of discharge.
    (iii) Relationship of issues to the standards for discharge review. 
The DRB reviews discharges on the basis of issues of propriety and 
equity. The standards used by the DRB are set forth in Sec. 70.9. The 
applicant is encouraged to review those standards before submitting any 
issue upon which the applicant believes a change in discharge should be 
based.
    (A) Issues concerning the equity of the discharge. An issue of 
equity is a matter that involves a determination whether a discharge 
should by changed under the equity standards of Sec. 70.9. This 
includes any issue, submitted by the applicant in accordance with 
paragraph (a)(4)(i) of this section, that is addressed to the 
discretionary authority of the DRB.
    (B) Issues concerning the propriety of a discharge. An issue of 
propriety is a matter that involves a determination whether a discharge 
should be changed under the propriety standards of Sec. 70.9. This 
includes an applicant's issue, submitted in accordance with paragraph 
(a)(4)(i) of this section, in which the applicant's position is that the 
discharge must be changed because of an error in the discharge 
pertaining to a regulation, statute, constitutional provision, or other 
source of law (including a matter that requires a determination whether, 
under the circumstances of the case, action by military authorities was 
arbitrary, capricious, or an abuse of discretion). Although a numerical 
reference to the regulation or other sources of law alleged to have been 
violated is not necessarily required, the context of the regulation or a 
description of the procedures alleged to have been violated normally 
must be set forth in order to inform the DRB adequately of the basis for 
the applicant's position.
    (C) The applicant's identification of an issue. The applicant is 
encouraged, but not required, to identify an issue as

[[Page 380]]

pertaining to the propriety or the equity to the discharge. This will 
assist the DRB in assessing the relationship of the issue to propriety 
or equity under paragraph (e)(1)(iii) of this section.
    (iv) Citation of matter from decisions. The primary function of the 
DRB involves the exercise of dicretion on a case-by-case basis. See 
Sec. 70.9(b)(3). Applicants are not required to cite prior decisions as 
the basis for a change in discharge. If the applicant wishes to bring 
the DRB's attention to a prior decision as background or illustrative 
material, the citation should be placed in a brief or other supporting 
documents. If, however, it is the applicant's intention to submit an 
issue that sets forth specific principles and facts from a specific 
cited decision, the following requirements apply with respect to 
applications received on or after November 27, 1982.
    (A) The issue must be set forth or expressly incorporated in the 
``Applicant's Issue'' portion of DD Form 293.
    (B) If an applicant's issue cites a prior decision (of the DRB, 
another Board, an agency, or a court), the applicant shall describe the 
specific principles and facts that are contained in the prior decision 
and explain the relevance of cited matter to the applicant's case.
    (C) To ensure timely consideration of principles cited from 
unpublished opinions (including decisions maintained by the Armed Forces 
Discharge Review Board/Corrective Board Reading Room), applicants must 
provide the DRB with copies of such decisions or of the relevant portion 
of the treatise, manual, or similar source in which the principles were 
discussed. At the applicant's request, such materials will be returned.
    (D) If the applicant fails to comply with the requirements in 
paragraphs (a)(4)(iv) (A), (B), and (C), the decisional document shall 
note the defect, and shall respond to the issue without regard to the 
citation.
    (5) Identification by the DRB of issues submitted by an applicant. 
The applicant's issues shall be identified in accordance with this 
section after a review of the materials noted under paragraph (c)(4), is 
made.
    (i) Issues on DD Form 293. The DRB shall consider all items 
submitted as issues by an applicant on DD Form 293 (or incorporated 
therein) in accordance with paragraph (a)(4)(i). With respect to 
applications submitted before November 27, 1982, the DRB shall consider 
all issues clearly and specifically stated in accordance with the rules 
in effect at the time of the submission.
    (ii) Amendment of issues. The DRB shall not request or instruct an 
applicant to amend or withdraw any matter submitted by the applicant. 
Any amendment or withdrawal of an issue by an applicant shall be 
confirmed in writing by the applicant. Nothing in this provision:
    (A) Limits the DRB's authority to question an applicant as to the 
meaning of such matter;
    (B) Precludes the DRB from developing decisional issues based upon 
such questions;
    (C) Prevents the applicant from amending or withdrawing such matter 
any time before the DRB closes the review process for deliberation; or
    (D) Prevents the DRB from presenting an applicant with a list of 
proposed decisional issues and written information concerning the right 
of the applicant to add to, amend, or withdraw the applicant's 
submission. The written information will state that the applicant's 
decision to take such action (or decline to do so) will not be used 
against the applicant in the consideration of the case.
    (iii) Additional issues identified during a hearing. The following 
additional procedure shall be used during a hearing in order to promote 
the DRB's understanding of an applicant's presentation. If, before 
closing the case for deliberation, the DRB believes that an applicant 
has presented an issue not listed on DD Form 293, the DRB may so inform 
the applicant, and the applicant may submit the issue in writing or add 
additional written issues at that time. This does not preclude the DRB 
from developing its own decisional issues.
    (6) Notification of possible bar to benefits. Written notification 
shall be made to each applicant whose record indicates a reason for 
discharge that bars receipt of benefits under 38 U.S.C. 3103(a). This 
notification will advise

[[Page 381]]

the applicant that separate action by the Board for Correction of 
Military or Naval Records or the Veterans Administration may confer 
eligibility for VA benefits. Regarding the bar to benefits based upon 
the 180 days consecutive unauthorized absence, the following applies:
    (i) Such absence must have been included as part of the basis for 
the applicant's discharge under other than honorable conditions.
    (ii) Such absence is computed without regard to the applicant's 
normal or adjusted expiration of term of service.
    (b) Conduct of reviews--(1) Members. As designated by the Secretary 
concerned, the DRB and its panels, if any, shall consist of five 
members. One member of the DRB shall be designated as the president and 
may serve as a presiding officer. Other officers may be designated to 
serve as presiding officers for DRB panels under regulations prescribed 
by the Secretary concerned.
    (2) Locations. Reviews by a DRB will be conducted in the NCR and 
such other locations as designated by the Secretary concerned.
    (3) Types of review. An applicant, upon request, is entitled to:
    (i) Record review. A review of the application, available service 
records, and additional documents (if any) submitted by the applicant.
    (ii) Hearing. A review involving an appearance before the DRB by the 
applicant or counsel or representative (or both).
    (4) Applicant's expenses. Unless otherwise specified by law or 
regulation, expenses incurred by the applicant, witnesses, counsel or 
representative will not be paid by the Department of Defense.
    (5) Withdrawal of application. An applicant shall be permitted to 
withdraw an application without prejudice at any time before the 
scheduled review.
    (6) Failure to appear at a hearing or respond to a scheduling 
notice. (i) Except as otherwise authorized by the Secretary concerned, 
further opportunity for a hearing shall not be made available in the 
following circumstances to an applicant who has requested a hearing:
    (A) When the applicant has been sent a letter containing the month 
and location of a proposed hearing and fails to make a timely response; 
or
    (B) When the applicant, after being notified by letter of the time 
and place of the hearing, fails to appear at the appointed time, either 
in person or by representative, without having made a prior, timely 
request for a continuation, postponement, or withdrawal.
    (ii) In such cases, the applicant shall be deemed to have waived the 
right to a hearing, and the DRB shall complete its review of the 
discharge. Further request for a hearing shall not be granted unless the 
applicant can demonstrate that the failure to appear or respond was due 
to circumstances beyond the applicant's control.
    (7) Continuance and postponements. (i) A continuance of a discharge 
review hearing may be authorized by the president of the DRB or 
presiding officer of the panel concerned, provided that such continuance 
is of reasonable duration and is essential to achieving a full and fair 
hearing. When a proposal for continuance is indefinite, the pending 
application shall be returned to the applicant with the option to 
resubmit when the case is fully ready for review.
    (ii) Postponements of scheduled reviews normally shall not be 
permitted other than for demonstrated good and sufficient reason set 
forth by the applicant in a timely manner, or for the convenience of the 
government.
    (8) Reconsideration. A discharge review shall not be subject to 
reconsideration except:
    (i) When the only previous consideration of the case was on the 
motion of the DRB;
    (ii) When the original discharge review did not involve a hearing 
and a hearing is now desired, and the provisions of paragraph (b)(6) of 
this section do not apply;
    (iii) When changes in discharge policy are announced after an 
earlier review of an applicant's discharge, and the new policy is made 
expressly retroactive;
    (iv) When the DRB determines that policies and procedures under 
which the applicant was discharged differ in material respects from 
policies and procedures currently applicable on a Service-wide basis to 
discharges of the type under consideration, provided

[[Page 382]]

that such changes in policies or procedures represent a substantial 
enhancement of the rights afforded a respondent in such proceedings;
    (v) When an individual is to be represented by a counsel or 
representative, and was not so represented in any previous consideration 
of the case by the DRB;
    (vi) When the case was not previously considered under uniform 
standards published pursuant to Pub. L. 95-126 and such application is 
made within 15 years after the date of discharge; or
    (vii) On the basis of presentation of new, substantial, relevant 
evidence not available to the applicant at the time of the original 
review. The decision whether evidence offered by an applicant in support 
of a request for reconsideration is in fact new, substantial, relevant, 
and was not available to the applicant at the time of the original 
review will be based on a comparison of such evidence with the evidence 
considered in the previous discharge review. If this comparison shows 
that the evidence submitted would have had a probable effect on matters 
concerning the propriety or equity of the discharge, the request for 
reconsideration shall be granted.
    (9) Availability of records and documents. (i) Before applying for 
discharge review, potential applicants or their designated 
representatives may obtain copies of their military personnel records by 
submitting a General Services Administration Standard Form 180, 
``Request Pertaining to Military Records,'' to the National Personnel 
Records Center (NPRC), 9700 Page Boulevard, St. Louis, MO 62132. Once 
the application for discharge review (DD Form 293) is submitted, an 
applicant's military records are forwarded to the DRBs where they cannot 
be reproduced. Submission of a request for an applicant's military 
records, including a request under the Freedom of Information Act (32 
CFR part 286) or Privacy Act (32 CFR part 286a) after the DD Form 293 
has been submitted, shall result automatically in the temporary 
suspension of processing of the application for discharge review until 
the requested records are sent to an appropriate location for copying, 
are copied, and are returned to the headquarters of the DRB. Processing 
of the application shall then be resumed at whatever stage of the 
discharge review process is practicable. Applicants are encouraged to 
submit any request for their military records before applying for 
discharge review rather than after submitting DD Form 293, to avoid 
delays in processing of applications and scheduling of reviews. 
Applicants and their counsel also may examine their military personnel 
records at the site of their scheduled review before the hearing. DRBs 
shall notify applicants of the dates the records are available for 
examination in their standard scheduling information.
    (ii) If the DRB is not authorized to provide copies of documents 
that are under the cognizance of another government department, office, 
or activity, applications for such information must be made by the 
applicant to the cognizant authority. The DRB shall advise the applicant 
of the mailing address of the government department, office, or activity 
to which the request should be submitted.
    (iii) If the official records relevant to the discharge review are 
not available at the agency having custody of the records, the applicant 
shall be so notified and requested to provide such information and 
documents as may be desired in support of the request for discharge 
review. A period of not less than 30 days shall be allowed for such 
documents to be submitted. At the expiration of this period, the review 
may be conducted with information available to the DRB.
    (iv) A DRB may take steps to obtain additional evidence that is 
relevant to the discharge under consideration beyond that found in the 
official military records or submitted by the applicant, if a review of 
available evidence suggests that it would be incomplete without the 
additional information, or when the applicant presents testimony or 
documents that require additional information to evaluate properly. Such 
information shall be made available to the applicant, upon request, with 
appropriate modifications regarding classified material.
    (A) In any case heard on request of an applicant, the DRB shall 
provide the

[[Page 383]]

applicant and counsel or representative, if any, at a reasonable time 
before initiating the decision process, a notice of the availability of 
all regulations and documents to be considered in the discharge review, 
except for documents in the official personnel or medical records and 
any documents submitted by the applicant. The DRB shall also notify the 
applicant or counsel or representative:
    (1) Of the right to examine such documents or to be provided with 
copies of the documents upon request;
    (2) Of the date by which such requests must be received; and
    (3) Of the opportunity to respond within a reasonable period of time 
to be set by the DRB.
    (B) When necessary to acquaint the applicant with the substance of a 
classified document, the classifying authority, on the request of the 
DRB, shall prepare a summary of or an extract from the document, 
deleting all references to sources of information and other matters, the 
disclosure of which, in the opinion of the classifying authority, would 
be detrimental to the national security interests of the United States. 
Should preparation of such summary be deemed impracticable by the 
classifying authority, information from the classified sources shall not 
be considered by the DRB in its review of the case.
    (v) Regulations of a Military Department may be obtained at many 
installations under the jurisdiction of the Military Department 
concerned or by writing to the following address: DA Military Review 
Boards Agency, Attention: SFBA (Reading Room), room 1E520, Washington, 
DC 20310.
    (10) Recorder/Secretary or Assistant. Such a person shall be 
designated to assist in the functioning of each DRB in accordance with 
the procedures prescribed by the Secretary of the Military Department 
concerned.
    (11) Hearings. Hearings (including hearing examinations) that are 
conducted shall recognize the rights of the individual to privacy. 
Accordingly, presence at hearings of individuals other than those 
required shall be limited to persons authorized by the Secretary 
concerned or expressly requested by the applicant, subject to reasonable 
limitations based upon available space. If, in the opinion of the 
presiding officer, the presence of other individuals could be 
prejudicial to the interests of the applicant or the government, 
hearings may be held in closed session.
    (12) Evidence and testimony. (i) The DRB may consider any evidence 
obtained in accordance with this part.
    (ii) Formal rules of evidence shall not be applied in DRB 
proceedings. The presiding officer shall rule on matters of procedure 
and shall ensure that reasonable bounds of relevancy and materiality are 
maintained in the taking of evidence and presentation of witnesses.
    (iii) Applicants undergoing hearings shall be permitted to make 
sworn or unsworn statements, if they so desire, or to introduce 
witnesses, documents, or other information on their behalf, at no 
expense to the Department of Defense.
    (iv) Applicants may also make oral or written arguments personally 
or through counsel or representatives.
    (v) Applicants who present sworn or unsworn statements and witnesses 
may be questioned by the DRB. All testimony shall be taken under oath or 
affirmation unless the applicant specifically requests to make an 
unsworn statement.
    (vi) There is a presumption of regularity in the conduct of 
governmental affairs. This presumption can be applied in any review 
unless there is substantial credible evidence to rebut the presumption.
    (c) Decision process. (1) The DRB or the DRB panel, as appropriate, 
shall meet in plenary session to review discharges and exercise its 
discretion on a case-by-case basis in applying the standards set forth 
in Sec. 70.9.
    (2) The presiding officer is responsible for the conduct of the 
discharge review. The presiding officer shall convene, recess, and 
adjourn the DRB panel as appropriate and shall maintain an atmosphere of 
dignity and decorum at all times.
    (3) Each DRB member shall act under oath or affirmation requiring 
careful, objective consideration of the application. DRB members are 
responsible for eliciting all facts necessary for a full and fair 
hearing. They shall consider

[[Page 384]]

all information presented to them by the applicant. In addition, they 
shall consider available Military Service and health records, together 
with other records that may be in the files of the Military Department 
concerned and relevant to the issues before the DRB, and any other 
evidence obtained in accordance with this part.
    (4) The DRB shall identify and address issues after a review of the 
following material obtained and presented in accordance with this part 
and the implementing instructions of the DRB: Available official 
records, documentary evidence submitted by or on behalf of an applicant, 
presentation of a hearing examination, testimony by or on behalf of an 
applicant, oral or written arguments presented by or on behalf of an 
applicant, and any other relevant evidence.
    (5) If an applicant who has requested a hearing does not respond to 
a notification letter or does not appear for a scheduled hearing, the 
DRB may complete the review on the basis of material previously 
submitted.
    (6) Application of standards. (i) When a DRB determines that an 
applicant's discharge was improper (Sec. 70.9(b)), the DRB will 
determine which reason for discharge should have been assigned based 
upon the facts and circumstances before the discharge authority, 
including the Service regulations governing reasons for discharge at the 
time the applicant was discharged. Unless it is also determined that the 
discharge was inequitable (Sec. 70.9(c)), the provisions as to 
characterization in the regulation under which the applicant should have 
been discharged will be considered in determining whether further relief 
is warranted.
    (ii) When the DRB determines that an applicant's discharge was 
inequitable (see Sec. 70.9(c)), any change will be based on the 
evaluation of the applicant's overall record of service and relevant 
regulations of the Military Service of which the applicant was a member.
    (7) Voting shall be conducted in closed session, a majority of the 
five members' votes constituting the DRB decision. Voting procedures 
shall be prescribed by the Secretary of the Military Department 
concerned.
    (8) Details of closed session deliberations of a DRB are privileged 
information and shall not be divulged.
    (9) There is no requirement for a statement of minority views in the 
event of a split vote. The minority, however, may submit a brief 
statement of its views under procedures established by the Secretary 
concerned.
    (10) DRBs may request advisory opinions from staff officers of their 
Military Departments. These opinions are advisory in nature and are not 
binding on the DRB in its decision-making process.
    (11) The preliminary determinations required by 38 U.S.C. 3103(e) 
shall be made upon majority vote of the DRB concerned on an expedited 
basis. Such determination shall be based upon the standards set forth in 
Sec. 70.9 of this part.
    (12) The DRB shall: (i) Address items submitted as issues by the 
applicant under paragraph (d) of this section;
    (ii) Address decisional issues under paragraph (e) of this section; 
and
    (iii) Prepare a decisional document in accordance with paragraph (h) 
of this section.
    (d) Response to items submitted as issues by the applicant--(1) 
General guidance. (i) If an issue submitted by an applicant contains two 
or more clearly separate issues, the DRB should respond to each issue 
under the guidance of this paragraph as if it had been set forth 
separately by the applicant.
    (ii) If an applicant uses a ``building block'' approach (that is, 
setting forth a series of conclusions on issues that lead to a single 
conclusion purportedly warranting a change in the applicant's 
discharge), normally there should be a separate response to each issue.
    (iii) Nothing in this paragraph precludes the DRB from making a 
single response to multiple issues when such action would enhance the 
clarity of the decisional document, but such response must reflect an 
adequate response to each separate issue.
    (2) Decisional issues. An item submitted as an issue by an applicant 
in accordance with this part shall be addressed as a decisional issue 
under paragraph (e), in the following circumstances:
    (i) When the DRB decides that a change in discharge should be 
granted,

[[Page 385]]

and the DRB bases its decision in whole or in part on the applicant's 
issue; or
    (ii) When the DRB does not provide the applicant with the full 
change in discharge requested, and the decision is based in whole or in 
part on the DRB's disagreement on the merits with an issue submitted by 
the applicant.
    (3) Response to items not addressed as decisional issues. (i) If the 
applicant receives the full change in discharge requested (or a more 
favorable change), that fact shall be noted and the basis shall be 
addressed as a decisional issue. No further response is required to 
other issues submitted by the applicant.
    (ii) If the applicant does not receive the full change in discharge 
requested with respect to either the character of or reason for 
discharge (or both), the DRB shall address the items submitted by the 
applicant under paragraph (e) of this section (decisional issues) unless 
one of the following responses is applicable:
    (A) Duplicate issues. The DRB may state that there is a full 
response to the issue submitted by the applicant under a specified 
decisional issue. This response may be used only when one issue clearly 
duplicates another or the issue clearly requires discussion in 
conjunction with another issue.
    (B) Citations without principles and facts. The DRB may state that 
the applicant's issue, which consists of a citation to a decision 
without setting forth any principles and facts from the decision that 
the applicant states are relevant to the applicant's case, does not 
comply with the requirements of paragraph (a)(4)(iv)(A).
    (C) Unclear issues. The DRB may state that it cannot respond to an 
item submitted by the applicant as an issue because the meaning of the 
item is unclear. An issue is unclear if it cannot be understood by a 
reasonable person familiar with the discharge review process after a 
review of the materials considered under paragraph (c)(4) of this 
section.
    (D) Nonspecific issues. The DRB may state that it cannot respond to 
an item submitted by the applicant as an issue because it is not 
specific. A submission is considered not specific if a reasonable person 
familiar with the discharge review process after a review of the 
materials considered under paragraph (c)(4) of this section, cannot 
determine the relationship between the applicant's submission and the 
particular circumstances of the case. This response may be used only if 
the submission is expressed in such general terms that no other response 
is applicable. For example, if the DRB disagrees with the applicant as 
to the relevance of matters set forth in the submission, the DRB 
normally will set forth the nature of the disagreement under the 
guidance in paragraph (e) of this section, with respect to decisional 
issues, or it will reject the applicant's position on the basis of 
paragraphs (d)(3)(ii)(A) or (d)(3)(ii)(B) of this section. If the 
applicant's submission is so general that none of those provisions is 
applicable, then the DRB may state that it cannot respond because the 
item is not specific.
    (e) Decisional issues--(1) General. Under the guidance in this 
section, the decisional document shall discuss the issues that provide a 
basis for the decision whether there should be a change in the character 
of or reason for discharge. In order to enhance clarity, the DRB should 
not address matters other than issues relied upon in the decision or 
raised by the applicant.
    (i) Partial change. When the decision changes a discharge, but does 
not provide the applicant with the full change in discharge requested, 
the decisional document shall address both the issues upon which change 
is granted and the issues upon which the DRB denies the full change 
requested.
    (ii) Relationship of issue to character of or reason for discharge. 
Generally, the decisional document should specify whether a decisional 
issue applies to the character of or reason for discharge (or both), but 
it is not required to do so.
    (iii) Relationship of an issue to propriety or equity. (A) If an 
applicant identifies an issue as pertaining to both propriety and 
equity, the DRB will consider it under both standards.
    (B) If an applicant identifies an issue as pertaining to the 
propriety of the discharge (for example, by citing a propriety standard 
or otherwise claiming

[[Page 386]]

that a change in discharge is required as a matter of law), the DRB 
shall consider the issue solely as a matter of propriety. Except as 
provided in paragraph (e)(1)(iii)(D) of this section, the DRB is not 
required to consider such an issue under the equity standards.
    (C) If the applicant's issue contends that the DRB is required as a 
matter of law to follow a prior decision by setting forth an issue of 
propriety from the prior decision and describing its relationship to the 
applicant's case, the issue shall be considered under the propriety 
standards and addressed under paragraph (e)(2) or (e)(3) of this 
section.
    (D) If the applicant's issue sets forth principles of equity 
contained in a prior DRB decision, describes the relationship to the 
applicant's case, and contends that the DRB is required as a matter of 
law to follow the prior case, the decisional document shall note that 
the DRB is not bound by its discretionary decisions in prior cases under 
the standards in Sec. 70.9. However, the principles cited by the 
applicant, and the description of the relationship of the principles to 
the applicant's case, shall be considered under the equity standards and 
addressed under paragraph (e)(5) or (e)(6) of this section.
    (E) If the applicant's issue cannot be identified as a matter of 
propriety or equity, the DRB shall address it as an issue of equity.
    (2) Change of discharge: issues of propriety. If a change in the 
discharge is warranted under the propriety standards in Sec. 70.9 the 
decisional document shall state that conclusion and list the errors of 
expressly retroactive changes in policy that provide a basis for the 
conclusion. The decisional document shall cite the facts in the record 
that demonstrate the relevance of the error or change in policy to the 
applicant's case. If the change in discharge does not constitute the 
full change requested by the applicant, the reasons for not granting the 
full change shall be addressed under the guidance in paragraph (e)((3) 
or (e)(6) of this section.
    (3) Denial of the full change requested: issues of propriety. (i) If 
the decision rejects the applicant's position on an issue of propriety, 
or if it is otherwise decided on the basis of an issue of propriety that 
the full change in discharge requested by the applicant is not 
warranted, the decisional document shall note that conclusion.
    (ii) The decisional document shall list reasons for its conclusion 
on each issue of propriety under the following guidance:
    (A) If a reason is based in whole or in part upon a regulation, 
statute, constitutional provision, judicial determination, or other 
source of law, the DRB shall cite the pertinent source of law and the 
facts in the record that demonstrate the relevance of the source of law 
to the particular circumstances in the case.
    (B) If a reason is based in whole or in part on a determination as 
to the occurrence or nonoccurrence of an event or circumstance, 
including a factor required by applicable Service regulations to be 
considered for determination of the character of and reason for the 
applicant's discharge, the DRB shall make a finding of fact for each 
such event or circumstance.
    (1) For each such finding, the decisional document shall list the 
specific source of the information relied upon. This may include the 
presumption of regularity in appropriate cases. If the information is 
listed in the service record section of the decisional document, a 
citation is not required.
    (2) If a finding of fact is made after consideration of 
contradictory evidence in the record (including information cited by the 
applicant or otherwise identified by members of the DRB), the decisional 
document shall set forth the conflicting evidence and explain why the 
information relied upon was more persuasive than the information that 
was rejected. If the presumption of regularity is cited as the basis for 
rejecting such information, the decisional document shall set forth the 
basis for relying on the presumption of regularity and explain why the 
contradictory evidence was insufficient to overcome the presumption. In 
an appropriate case, the explanation as to why the contradictory 
evidence was insufficient to overcome the presumption of regularity may 
consist of a statement that the applicant failed to provide sufficient 
corroborating evidence,

[[Page 387]]

or that the DRB did not find the applicant's testimony to be 
sufficiently credible to overcome the presumption.
    (C) If the DRB disagrees with the position of the applicant on an 
issue of propriety, the following guidance applies in addition to the 
guidance in paragraphs (e)(3)(ii) (A) and (B) of this section:
    (1) The DRB may reject the applicant's position by explaining why it 
disagrees with the principles set forth in the applicant's issue 
(including principles derived from cases cited by the applicant in 
accordance with paragraph (e)(4)(iv) of this section).
    (2) The DRB may reject the applicant's position by explaining why 
the principles set forth in the applicant's issue (including principles 
derived from cases cited by the applicant in accordance with paragraph 
(a)(4)(iv) of this section) are not relevant to the applicant's case.
    (3) The DRB may reject an applicant's position by stating that the 
applicant's issue of propriety is not a matter upon which the DRB grants 
a change in discharge, and by providing an explanation for this 
position. When the applicant indicates that the issue is to be 
considered in conjunction with one or more other specified issues, the 
explanation will address all such specified issues.
    (4) The DRB may reject the applicant's position on the grounds that 
other specified factors in the case preclude granting relief, regardless 
of whether the DRB agreed with the applicant's position.
    (5) If the applicant takes the position that the discharge must be 
changed because of an alleged error in a record associated with the 
discharge, and the record has not been corrected by the organization 
with primary responsibility for corrective action, the DRB may respond 
that it will presume the validity of the record in the absence of such 
corrective action. If the organization empowered to correct the record 
is within the Department of Defense, the DRB should provide the 
applicant with a brief description of the procedures for requesting 
correction of the record. If the DRB on its own motion cites this issue 
as a decisional issue on the basis of equity, it shall address the issue 
under paragraph (d)(5) or (d)(6) of this section.
    (6) When an applicant's issue contains a general allegation that a 
certain course of action violated his or her constitutional rights, the 
DRB may respond in appropriate cases by noting that the action was 
consistent with statutory or regulatory authority, and by citing the 
presumption of constitutionality that attaches to statutes and 
regulations. If, on the other hand, the applicant makes a specific 
challenge to the constitutionality of the action by challenging the 
application of a statute or regulation in a particular set of 
circumstances, it is not sufficient to respond solely by citing the 
presumption of constitutionality of the statute or regulation when the 
applicant is not challenging the constitutionality of the statute or 
regulation. Instead, the response must address the specific 
circumstances of the case.
    (4) Denial of the full change in discharge requested when propriety 
is not at issue. If the applicant has not submitted an issue of 
propriety and the DRB has not otherwise relied upon an issue of 
propriety to change the discharge, the decisional document shall contain 
a statement to that effect. The DRB is not required to provide any 
further discussion as to the propriety of the discharge.
    (5) Change of discharge: issues of equity. If the DRB concludes that 
a change in the discharge is warranted under the equity standards in 
Sec. 70.9 the decisional document shall list each issue of equity upon 
which this conclusion is based. The DRB shall cite the facts in the 
record that demonstrate the relevance of the issue to the applicant's 
case. If the change in discharge does not constitute the full change 
requested by the applicant, the reasons for not giving the full change 
requested shall be discussed under the guidance in paragraph (e)(6) of 
this section.
    (6) Denial of the full change in discharge requested: issues of 
equity. (i) If the DRB rejects the applicant's position on an issue of 
equity, or if the decision otherwise provides less than the full change 
in discharge requested by the applicant, the decisional document shall 
note that conclusion.

[[Page 388]]

    (ii) The DRB shall list reasons for its conclusion on each issue of 
equity under the following guidance:
    (A) If a reason is based in whole or in part upon a regulation, 
statute, constitutional provision, judicial determination, or other 
source of law, the DRB shall cite the pertinent source of law and the 
facts in the record that demonstrate the relevance of the source of law 
to the exercise of discretion on the issue of equity in the applicant's 
case.
    (B) If a reason is based in whole or in part on a determination as 
to the occurrence or nonoccurrence of an event or circumstance, 
including a factor required by applicable Service regulations to be 
considered for determination of the character of and reason for the 
applicant's discharge, the DRB shall make a finding of fact for each 
such event or circumstance.
    (1) For each such finding, the decisional document shall list the 
specific source of the information relied upon. This may include the 
presumption of regularity in appropriate cases. If the information is 
listed in the service record section of the decisional document, a 
citation is not required.
    (2) If a finding of fact is made after consideration of 
contradictory evidence in the record (including information cited by the 
applicant or otherwise identified by members of the DRB), the decisional 
document shall set forth the conflicting evidence and explain why the 
information relied upon was more persuasive than the information that 
was rejected. If the presumption of regularity is cited as the basis for 
rejecting such information, the decisional document shall set forth the 
basis for relying on the presumption of regularity and explain why the 
contradictory evidence was insufficient to overcome the presumption. In 
an appropriate case, the explanation as to why the contradictory 
evidence was insufficient to overcome the presumption of regularity may 
consist of a statement that the applicant failed to provide sufficient 
corroborating evidence, or that the DRB did not find the applicant's 
testimony to be sufficiently credible to overcome the presumption.
    (C) If the DRB disagrees with the position of the applicant on an 
issue of equity, the following guidance applies in addition to the 
guidance in paragraphs (e)(6)(ii) (A) and (B) of this section:
    (1) The DRB may reject the applicant's position by explaining why it 
disagrees with the principles set forth in the applicant's issue 
(including principles derived from cases cited by the applicant in 
accordance with paragraph (a)(4)(iv) of this section).
    (2) The DRB may reject the applicant's position by explaining why 
the principles set forth in the applicant's issue (including principles 
derived from cases cited by the applicant) are not relevant to the 
applicant's case.
    (3) The DRB may reject an applicant's position by explaining why the 
applicant's issue is not a matter upon which the DRB grants a change in 
discharge as a matter of equity. When the applicant indicates that the 
issue is to be considered in conjunction with other specified issues, 
the explanation will address all such specified issues.
    (4) The DRB may reject the applicant's position on the grounds that 
other specified factors in the case preclude granting relief, regardless 
of whether the DRB agreed with the applicant's position.
    (5) If the applicant takes the position that the discharge should be 
changed as a matter of equity because of an alleged error in a record 
associated with the discharge, and the record has not been corrected by 
the organization with primary responsibility for corrective action, the 
DRB may respond that it will presume the validity of the record in the 
absence of such corrective action. However, the DRB will consider 
whether it should exercise its equitable powers to change the discharge 
on the basis of the alleged error. If it declines to do so, it shall 
explain why the applicant's position did not provide a sufficient basis 
for the change in the discharge requested by the applicant.
    (D) When the DRB concludes that aggravating factors outweigh 
mitigating factors, the DRB must set forth reasons such as the 
seriousness of the offense, specific circumstances surrounding the 
offense, number of offenses, lack of mitigating circumstances, or 
similar factors. The

[[Page 389]]

DRB is not required, however, to explain why it relied on any such 
factors unless the applicability or weight of such a factor is expressly 
raised as an issue by the applicant.
    (E) If the applicant has not submitted any issues and the DRB has 
not otherwise relied upon an issue of equity for a change in discharge, 
the decisional document shall contain a statement to that effect, and 
shall note that the major factors upon which the discharge was based are 
set forth in the service record portion of the decisional document.
    (f) The recommendation of the DRB President--(1) General. The 
president of the DRB may forward cases for consideration by the 
Secretarial Reviewing Authority (SRA) under rules established by the 
Secretary concerned. There is no requirement that the President submit a 
recommendation when a case is forwarded to the SRA. If the president 
makes a recommendation with respect to the character of or reason for 
discharge, however, the recommendation shall be prepared under the 
guidance in paragraph (f)(2) of this section.
    (2) Format for recommendation. If a recommendation is provided, it 
shall contain the president's views whether there should be a change in 
the character of or reason for discharge (or both). If the president 
recommends such a change, the particular change to be made shall be 
specified. The recommendation shall set forth the president's position 
on decisional issues and issues submitted by the applicant under the 
following guidance:
    (i) Adoption of the DRB's decisional document. The recommendation 
may state that the president has adopted the decisional document 
prepared by the majority. The president shall ensure that the decisional 
document meets the requirements of this section.
    (ii) Adoption of the specific statements from the majority. If the 
President adopts the views of the majority only in part, the 
recommendation shall cite the specific matter adopted from the majority. 
If the president modifies a statement submitted by the majority, the 
recommendation shall set forth the modification.
    (iii) Response to issues not included in matter adopted from the 
majority. The recommendation shall set forth the following if not 
adopted in whole or in part from the majority:
    (A) The issues on which the president's recommendation is based. 
Each such decisional issue shall be addressed by the president under 
paragraph (e) of this section,
    (B) The president's response to items submitted as issues by the 
applicant under paragraph (d) of this section.
    (C) Reasons for rejecting the conclusions of the majority with 
respect to decisional issues which, if resolved in the applicant's 
favor, would have resulted in greater relief for the applicant than that 
afforded by the president's recommendation. Suh issues shall be 
addressed under the principles in paragraph (e) of this section.
    (g) Secretarial reviewing authority (SRA)--(1) Review by the SRA. 
The Secretarial Reviewing Authority (SRA) is the Secretary concerned or 
the official to whom Secretary's discharge review authority has been 
delegated.
    (i) The SRA may review the following types of cases before issuance 
of the final notification of a decision:
    (A) Any specific case in which the SRA has an interest.
    (B) Any specific case that the president of the DRB believes is of 
significant interest to the SRA.
    (ii) Cases reviewed by the SRA shall be considered under the 
standards set forth in Sec. 70.9.
    (2) Processing the decisional document. (i) The decisional document 
shall be transmitted by the DRB president under paragraph (e) of this 
section.
    (ii) The following guidance applies to cases that have been 
forwarded to the SRA except for cases reviewed on the DRB's own motion 
without the participation of the applicant or the applicant's counsel:
    (A) The applicant and counsel or representative, if any, shall be 
provided with a copy of the proposed decisional document, including the 
DRB president's recommendation to the SRA, if any. Classified 
information shall be summarized.
    (B) The applicant shall be provided with a reasonable period of 
time, but not less than 25 days, to submit to the

[[Page 390]]

SRA a rebuttal. An issue in rebuttal consists of a clear and specific 
statement by the applicant in support of or in opposition to the 
statements of the DRB or DRB president on decisional issues and other 
clear and specific issues that were submitted by the applicant in 
accordance with paragraph (a)(4)(i) of this section. The rebuttal shall 
be based solely on matters in the record before when the DRB closed the 
case for deliberation or in the president's recommendation.
    (3) Review of the decisional document. If corrections in the 
decisional document are required, the decisional document shall be 
returned to the DRB for corrective action. The corrected decisional 
document shall be sent to the applicant (and counsel, if any), but a 
further opportunity for rebuttal is not required unless the correction 
produces a different result or includes a substantial change in the 
discussion by the DRB (or DRB president) of the issues raised by the 
majority or the applicant.
    (4) The Addendum of the SRA. The decision of the SRA shall be in 
writing and shall be appended as an addendum to the decisional document 
under the guidance in this subsection.
    (i) The SRA's decision. The addendum shall set forth the SRA's 
decision whether there will be a change in the character of or reason 
for discharge (or both); if the SRA concludes that a change is 
warranted, the particular change to be made shall be specified. If the 
SRA adopts the decision recommended by the DRB or the DRB president, the 
decisional document shall contain a reference to the matter adopted.
    (ii) Discussion of issues. In support of the SRA's decision, the 
addendum shall set forth the SRA's position on decisional issues, items 
submitted as issues by an applicant in accordance with paragraph 
(a)(4)(i) of this section, and issues raised by the DRB and the DRB 
president in accordance with the following guidance:
    (A) Adoption of the DRB president's recommendation. The addendum may 
state that the SRA has adopted the DRB president's recommendation.
    (B) Adoption of the DRB's proposed decisional document. The addendum 
may state that the SRA has adopted the proposed decisional document 
prepared by the DRB.
    (C) Adoption of specific statements from the majority or the DRB 
president. If the SRA adopts the views of the DRB or the DRB president 
only in part, the addendum shall cite the specific statements adopted. 
If the SRA modifies a statement submitted by the DRB or the DRB 
president, the addendum shall set forth the modification.
    (D) Response to issues not included in matter adopted from the DRB 
or the DRB president. The addendum shall set forth the following if not 
adopted in whole or in part from the DRB or the DRB president:
    (1) A list of the issues on which the SRA's decision is based. Each 
such decisional issue shall be addressed by the SRA under paragraph (e) 
of this section. This includes reasons for rejecting the conclusion of 
the DRB or the DRB president with respect to decisional issues which, if 
resolved in the applicant's favor, would have resulted in change to the 
discharge more favorable to the applicant than that afforded by the 
SRA's decision. Such issues shall be addressed under the principles in 
paragraph (e) of this section.
    (2) The SRA's response to items submitted as issues by the applicant 
under paragraph (d) of this section.
    (iii) Response to the rebuttal. (A) If the SRA grants the full 
change in discharge requested by the applicant (or a more favorable 
change), that fact shall be noted, the decisional issues shall be 
addressed under paragraph (e) of this section, and no further response 
to the rebuttal is required.
    (B) If the SRA does not grant the full change in discharge requested 
by the applicant (or a more favorable change), the addendum shall list 
each issue in rebuttal submitted by an applicant in accordance with this 
section, and shall set forth the response of the SRA under the following 
guidance:
    (1) If the SRA rejects an issue in rebuttal, the SRA may respond in 
accordance with the principles in paragraph (e) of this section.
    (2) If the matter adopted by the SRA provides a basis for the SRA's 
rejection of the rebuttal material, the SRA may

[[Page 391]]

note that fact and cite the specific matter adopted that responds to the 
issue in rebuttal.
    (3) If the matter submitted by the applicant does not meet the 
requirements for rebuttal material in paragraph (b)(2)(ii)(B) of this 
section.
    (iv) Index entries. Appropriate index entries shall be prepared for 
the SRA's actions for matters that are not adopted from the DRB's 
proposed decisional document.
    (h) The decisional document. A decisional document shall be prepared 
for each review. At a minimum, this document shall contain:
    (1) The circumstances and character of the applicant's service as 
extracted from available service records, including health records, and 
information provided by other Government authorities or the applicant, 
such as, but not limited to:
    (i) Information concerning the discharge at issue in the review, 
including:
    (A) Date (YYMMDD) of discharge.
    (B) Character of discharge.
    (C) Reason for discharge.
    (D) The specific regulatory authority under which the discharge was 
issued.
    (ii) Date (YYMMDD) of enlistment.
    (iii) Period of enlistment.
    (iv) Age at enlistment.
    (v) Length of service.
    (vi) Periods of unauthorized absence.
    (vii) Conduct and efficiency ratings (numerical or narrative).
    (viii) Highest rank received.
    (ix) Awards and decorations.
    (x) Educational level.
    (xi) Aptitude test scores.
    (xii) Incidents of punishment pursuant to Article 15, Uniform Code 
of Military Justice (including nature and date (YYMMDD) of offense or 
punishment).
    (xiii) Convictions by court-martial.
    (xiv) Prior military service and type of discharge received.
    (2) A list of the type of documents submitted by or on behalf of the 
applicant (including a written brief, letters of recommendation, 
affidavits concerning the circumstances of the discharge, or other 
documentary evidence), if any.
    (3) A statement whether the applicant testified, and a list of the 
type of witnesses, if any, who testified on behalf of the applicant.
    (4) A notation whether the application pertained to the character of 
discharge, the reason for discharge, or both.
    (5) The DRB's conclusions on the following:
    (i) Whether the character of or reason for discharge should be 
changed.
    (ii) The specific changes to be made, if any.
    (6) A list of the items submitted as issues on DD Form 293 or 
expressly incorporated therein and such other items submitted as issues 
by the applicant that are identified as inadvertently omitted under 
paragraph (a)(4)(i)(D) of this section. If the issues are listed 
verbatim on DD Form 293, a copy of the relevant portion of the Form may 
be attached. Issues that have been withdrawn or modified with the 
consent of the applicant need not be listed.
    (7) The response to the items submitted as issues by the applicant 
under the guidance in paragraph (d) of this section.
    (8) A list of decisional issues and a discussion of such issues 
under the guidance in paragraph (e) of this section.
    (9) Minority views, if any, when authorized under rules of the 
Military Department concerned.
    (10) The recommendation of the DRB president when required by 
paragraph (f) of this section.
    (11) The addendum of the SRA when required by paragraph (g) of this 
section.
    (12) Advisory opinions, including those containing factual 
information, when such opinions have been relied upon for final decision 
or have been accepted as a basis for rejecting any of the applicant's 
issues. Such advisory opinions or relevant portions thereof that are not 
fully set forth in the discussion of decisional issues or otherwise in 
response to items submitted as issues by the application shall be 
incorporated by reference. A copy of opinions incorporated by reference 
shall be appended to the decision and included in the record of 
proceedings.
    (13) A record of the voting, including:

[[Page 392]]

    (i) The number of votes for the DRB's decision and the number of 
votes in the minority, if any.
    (ii) The DRB member's names (last name, first name, M.I.) and votes. 
The copy provided to the applicant may substitute a statement that the 
names and votes will be made available to the applicant at the 
applicant's request.
    (14) Index entries for each decisional issue under appropriate 
categories listed in the index of decisions.
    (15) An authentication of the document by an appropriate official.
    (i) Issuance of decisions following discharge review. The applicant 
and counsel or representative, if any, shall be provided with a copy of 
the decisional document and of any further action in review. The 
applicant (and counsel, if any) shall be notified of the availability of 
the complaint process under Sec. 70.10. Final notification of decisions 
shall be issued to the applicant with a copy to the counsel or 
representative, if any, and to the Military Service concerned.
    (1) Notification to applicants, with copies to counsel or 
representatives, shall normally be made through the U.S. Postal Service. 
Such notification shall consist of a notification of decision, together 
with a copy of the decisional document.
    (2) Notification to the Military Services shall be for the purpose 
of appropriate action and inclusion of review matter in personnel 
records. Such notification shall bear appropriate certification of 
completeness and accuracy.
    (3) Actions on review by superior authority, when occurring, shall 
be provided to the applicant and counsel or representative in the same 
manner as the notification of the review decision.
    (j) Record of DRB proceedings. (1) When the proceedings in any 
review have been concluded, a record thereof will be prepared. Records 
may include written records, electromagnetic records, videotape 
recordings, or a combination thereof.
    (2) At a minimum, the record will include the following:
    (i) The application for review;
    (ii) A record of the testimony in verbatim, summarized, or recorded 
form at the option of the DRB concerned;
    (iii) Documentary evidence or copies thereof, considered by the DRB 
other than the Military Service record;
    (iv) Briefs and arguments submitted by or on behalf of the 
applicant;
    (v) Advisory opinions considered by the DRB, if any;
    (vi) The findings, conclusions, and reasons developed by the DRB;
    (vii) Notification of the DRB's decision to the cognizant custodian 
of the applicant's records, or reference to the notification document;
    (viii) Minority reports, if any;
    (ix) A copy of the decisional document.
    (k) Final disposition of the Record of Proceedings. The original 
record of proceedings and all appendices thereto shall in all cases be 
incorporated in the Military Service record of the applicant and the 
Military Service record shall be returned to the custody of the 
appropriate records holding facility. If a portion of the original 
record of the proceedings cannot be stored with the Military Service 
record, the Military Service record shall contain a notation as to the 
place where the record is stored. Other copies shall be filed and 
disposed of in accordance with appropriate Military Service regulations.
    (l) Availability of Discharge Review Board documents for inspection 
and copying. (1) A copy of the decisional document prepared in 
accordance with paragraph (d) of this section shall be made available 
for public inspection and copying promptly after a notice of final 
decision is sent to the applicant.
    (2) To prevent a clearly unwarranted invasion of personal privacy, 
identifying details of the applicant and other persons will be deleted 
from documents made available for public inspection and copying.
    (i) Names, addresses, social security numbers, and Military Service 
numbers must be deleted. Written justification shall be made for all 
other deletions and shall be available for public inspection.
    (ii) Each DRB shall ensure that there is a means for relating a 
decisional document number to the name of the applicant to permit 
retrieval of the applicant's records when required in processing a 
complaint under Sec. 70.10.

[[Page 393]]

    (3) Any other privileged or classified material contained in or 
appended to any documents required by this part to be furnished the 
applicant and counsel or representative or made available for public 
inspection and copying may be deleted therefrom only if a written 
statement of the basis for the deletions is provided the applicant and 
counsel or representative and made available for public inspection. It 
is not intended that the statement be so detailed as to reveal the 
nature of the withheld material.
    (4) DRB documents made available for public inspection and copying 
shall be located in the Armed Forces Discharge Review/Correction Board 
Reading Room. The documents shall be indexed in a usable and concise 
form so as to enable the public, and those who represent applicants 
before the DRBs, to isolate from all these decisions that are indexed, 
those cases that may be similar to an applicant's case and that indicate 
the circumstances under or reasons for (or both) which the DRB or the 
Secretary concerned granted or denied relief.
    (i) The reading file index shall include, in addition to any other 
items determined by the DRB, the case number, the date, character of, 
reason and authority for the discharge. It shall also include the 
decisions of the DRB and reviewing authority, if any, and the issues 
addressed in the statement of findings, conclusions, and reasons.
    (ii) The index shall be maintained at selected permanent locations 
throughout the United States. This ensures reasonable availability to 
applicants at least 30 days before a traveling panel review. A list of 
these locations shall be published in the Federal Register by the 
Department of the Army. The index shall also be made available at sites 
selected for traveling panels or hearing examinations for such periods 
as the DRB or a hearing examiner is present and in operation. An 
applicant who has requested a traveling panel review or a hearing 
examination shall be advised in the notice of such review of the 
permanent index locations.
    (iii) The Armed Forces Discharge Review/Correction Board Reading 
Room shall publish indexes quarterly for all DRBs. All DRBs shall be 
responsible for timely submission to the Reading Room of individual case 
information required for update of the indexes. In addition, all DRBs 
shall be responsible for submission of new index categories based upon 
published changes in policy, procedures, or standards. These indexes 
shall be available for public inspection or purchase (or both) at the 
Reading Room. When the DRB has accepted an application, information 
concerning the availability of the index shall be provided in the DRB's 
response to the application.
    (iv) Copies of decisional documents will be provided to individuals 
or organizations outside the NCR in response to written requests for 
such documents. Although the Reading Room shall try to make timely 
responses to such requests, certain factors such as the length of a 
request, the volume of other pending requests, and the impact of other 
responsibilities of the staff assigned to such duties may cause some 
delays. A fee may be charged for such documents under appropriate DoD 
and Department of the Army directives and regulations. The manual that 
accompanies the index of decisions shall notify the public that if an 
applicant indicates that a review is scheduled for a specific date, an 
effort will be made to provide requested decisional documents before 
that date. The individual or organization will be advised if that cannot 
be accomplished.
    (v) Correspondence relating to matters under the cognizance of the 
Reading Room (including requests for purchase of indexes) shall be 
addressed to: DA Military Review Boards Agency, Attention: SFBA (Reading 
Room), Room 1E520, The Pentagon, Washington, DC 20310.
    (m) Privacy Act information. Information protected under the Privacy 
Act is involved in the discharge review functions. The provisions of 
part 286a of this title shall be observed throughout the processing of a 
request for review of discharge or dismissal.
    (n) Information requirement. Each Military Department shall provide 
the Deputy Assistant Secretary of Defense (Military Personnel and Force 
Management) DASD (MP&FM), Office of the

[[Page 394]]

ASD (MRA&L), with a semiannual report of discharge review actions in 
accordance with Sec. 70.11.

[47 FR 37785, Aug. 26, 1982, as amended at 48 FR 9855, Mar. 9, 1983; 48 
FR 35644, Aug. 5, 1983]



Sec. 70.9  Discharge review standards.

    (a) Objective of review. The objective of a discharge review is to 
examine the propriety and equity of the applicant's discharge and to 
effect changes, if necessary. The standards of review and the underlying 
factors that aid in determining whether the standards are met shall be 
historically consistent with criteria for determining honorable service. 
No factors shall be established that require automatic change or denial 
of a change in discharge. Neither a DRB nor the Secretary of the 
Military Department concerned shall be bound by any methodology of 
weighting of the factors in reaching a determination. In each case, the 
DRB or the Secretary of the Military Department concerned shall give 
full, fair, and impartial considerations to all applicable factors 
before reaching a decision. An applicant may not rceive a less favorable 
discharge than that issued at the time of separation. This does not 
preclude correction of clerical errors.
    (b) Propriety. (1) A discharge shall be deemed proper unless, in the 
course of discharge review, it is determined that:
    (i) There exists an error of fact, law, procedure, or discretion 
associated with the discharge at the time of issuance; and that the 
rights of the applicant were prejudiced thereby (such error shall 
constitute prejudicial error if there is substantial doubt that the 
discharge would have remained the same if the error had not been made); 
or
    (ii) A change in policy by the Military Service of which the 
applicant was a member, made expressly retroactive to the type of 
discharge under consideration, requires a change in the discharge.
    (2) When a record associated with the discharge at the time of 
issuance involves a matter in which the primary responsibility for 
corrective action rests with another organization (for example, another 
Board, agency, or court), the DRB will recognize an error only to the 
extent that the error has been corrected by the organization with 
primary responsibility for correcting the record.
    (3) The primary function of the DRB is to exercise its discretion on 
issues of equity by reviewing the individual merits of each application 
on a case-by-case basis. Prior decisions in which the DRB exercised its 
discretion to change a discharge based on issues of equity (including 
the factors cited in such decisions or the weight given to factors in 
such decisions) do not bind the DRB in its review of subsequent cases 
because no two cases present the same issues of equity.
    (4) The following applies to applicants who received less than fully 
Honorable administrative discharges because of their civilian misconduct 
while in an inactive reserve component and who were discharged or had 
their discharge reviewed on or after April 20, 1971: the DRB shall 
either recharacterize the discharge to Honorable without any additional 
proceedings or additional proceedings shall be conducted in accordance 
with the Court's Order of December 3, 1981, in Wood v. Secretary of 
Defense to determine whether proper grounds exist for the issuance of a 
less than Honorable discharge, taking into account that;
    (i) An Other than Honorable (formerly undesirable) Discharge for an 
inactive reservist can only be based upon civilian misconduct found to 
have affected directly the performance of military duties;
    (ii) A General Discharge for an inactive reservist can only be based 
upon civilian misconduct found to have had an adverse impact on the 
overall effectiveness of the military, including military morale and 
efficiency.
    (c) Equity. A discharge shall be deemed to be equitable unless:
    (1) In the course of a discharge review, it is determined that the 
policies and procedures under which the applicant was discharged differ 
in material respects from policies and procedures currently applicable 
on a Service-wide basis to discharges of the type under consideration 
provided that:
    (i) Current policies or procedures represent a substantial 
enhancement of the rights afforded a respondent in such proceedings; and

[[Page 395]]

    (ii) There is substantial doubt that the applicant would have 
received the same discharge if relevant current policies and procedures 
had been available to the applicant at the time of the discharge 
proceedings under consideration.
    (2) At the time of issuance, the discharge was inconsistent with 
standards of discipline in the Military Service of which the applicant 
was a member.
    (3) In the course of a discharge review, it is determined that 
relief is warranted based upon consideration of the applicant's service 
record and other evidence presented to the DRB viewed in conjunction 
with the factors listed in this section and the regulations under which 
the applicant was discharged, even though the discharge was determined 
to have been otherwise equitable and proper at the time of issuance. 
Areas of consideration include, but are not limited to:
    (i) Quality of service, as evidenced by factors such as:
    (A) Service history, including date of enlistment, period of 
enlistment, highest rank achieved, conduct or efficiency ratings 
(numerical or narrative);
    (B) Awards and decorations;
    (C) Letters of commendation or reprimand;
    (D) Combat service;
    (E) Wounds received in action;
    (F) Records of promotions and demotions;
    (G) Level of responsibility at which the applicant served;
    (H) Other acts of merit that may not have resulted in a formal 
recognition through an award or commendation;
    (I) Length of service during the service period which is the subject 
of the discharge review;
    (J) Prior military service and type of discharge received or 
outstanding postservice conduct to the extent that such matters provide 
a basis for a more thorough understanding of the performance of the 
applicant during the period of service which is the subject of the 
discharge review;
    (K) Convictions by court-martial;
    (L) Records of nonjudicial punishment;
    (M) Convictions by civil authorities while a member of the Service, 
reflected in the discharge proceedings or otherwise noted in military 
service records;
    (N) Records of periods of unauthorized absence;
    (O) Records relating to a discharge instead of court-martial.
    (ii) Capability to serve, as evidenced by factors such as:
    (A) Total capabilities. This includes an evaluation of matters, such 
as age, educational level, and aptitude scores. Consideration may also 
be given whether the individual met normal military standards of 
acceptability for military service and similar indicators of an 
individual's ability to serve satisfactorily, as well as ability to 
adjust to military service.
    (B) Family and Personal Problems. This includes matters in 
extenuation or mitigation of the reason for discharge that may have 
affected the applicant's ability to serve satisfactorily.
    (C) Arbitrary or capricious action. This includes actions by 
individuals in authority that constitute a clear abuse of such authority 
and that, although not amounting to prejudicial error, may have 
contributed to the decision to discharge or to the characterization of 
service.
    (D) Discrimination. This includes unauthorized acts as documented by 
records or other evidence.



Sec. 70.10  Complaints concerning decisional documents and index entries.

    (a) General. (1) The procedures in this section--are established for 
the sole purpose of ensuring that decisional documents and index entries 
issued by the DRBs of the Military Departments comply with the 
decisional document and index entry principles of this part.
    (2) This section may be modified or supplemented by the DASD(MP&FM).
    (3) The following persons may submit complaints:
    (i) A former member of the Armed Forces (or the former member's 
counsel) with respect to the decisional document issued in the former 
member's own case; and
    (ii) A former member of the Armed Forces (or the former member's 
counsel) who states that correction of the decisional document will 
assist the

[[Page 396]]

former member in preparing for an administrative or judicial proceeding 
in which the former member's own discharge will be at issue.
    (4) The Department of Defense is committed to processing of 
complaints within the priorities and processing goals set forth in 
paragraph (d)(1)(iii) of this section. This commitment, however, is 
conditioned upon reasonable use of the complaint process under the 
following considerations. The DRBs were established for the benefit of 
former members of the Armed Forces. The complaint process can aid such 
persons most effectively if it is used by former members of the Armed 
Forces when necessary to obtain correction of their own decisional 
documents or to prepare for discharge reviews. If a substantial number 
of complaints submitted by others interferes with the ability of the 
DRBs to process applications for discharge review in a timely fashion, 
the Department of Defense will adjust the processing goals to ensure 
that the system operates to the primary advantage of applicants.
    (5) The DASD(MP&FM) is the final authority with respect to action on 
such correspondence.
    (b) The Joint Service Review Activity (JSRA). A three member JSRA 
consisting of one judge advocate from each Military Department shall 
advise the DASD(MP&FM). The operations of the JSRA shall be coordinated 
by a full-time administrative director, who shall serve as recorder 
during meetings of the JSRA. The members and the administrative director 
shall serve at the direction of the DASD(MP&FM).
    (c) Classification and control of correspondence--(1) Address of the 
JSRA. Correspondence with the OSD concerning decisional documents or 
index entries issued by the DRBs shall be addressed as follows: Joint 
Service Review Activity, OASD(MRA&L) (MP&FM), Washington, DC 20301.
    (2) Docketing. All such correspondence shall be controlled by the 
administrative director through the use of a uniform docketing 
procedure.
    (3) Classification. Correspondence shall be reviewed by the 
administrative director and categorized either as a complaint or an 
inquiry in accordance with the following:
    (i) Complaints. A complaint is any correspondence in which it is 
alleged that a decisional document issued by a DRB or SRA contains a 
specifically identified violation of the Stipulation of Dismissal, 
Settlement Agreement, or related Orders in the Urban Law case or the 
decisional document or index entry principles of this Directive. A 
complainant who alleges error with respect to a decisional document 
issued to another person is encouraged to set forth specifically the 
grounds for determining that a reasonable person familiar with the 
discharge review process cannot understand the basis for the decision. 
See paragraph (d)(1)(i)(B) of this section.
    (ii) Inquiries. An inquiry is any correspondence other than a 
complaint.
    (d) Review of complaints--(1) Guidance. The following guidance 
applies to review of complaints:
    (i) Standards. Complaints shall be considered under the following 
standards:
    (A) The applicant's case. A complaint by an applicant with respect 
to the decisional document issued in the applicant's own discharge 
review shall be considered under the Stipulation of Dismissal in the 
Urban Law case and other decisional document requirements applicable at 
the time the document was issued, including those contained in the 
Settlement Agreement and related Orders, subject to any limitations set 
forth therein with respect to dates of applicability. If the authority 
empowered to take corrective action has a reasonable doubt whether a 
decisional document meets applicable requirements of the Urban Law case 
or other applicable rules, the complaint shall be resolved in the 
applicant's favor.
    (B) Other cases. With respect to all other complaints, the standard 
shall be whether a reasonable person familiar with the discharge review 
process can understand the basis for the decision, including the 
disposition of issues raised by the applicant. This standard is designed 
to ensure that the complaint process is not burdened with the need to 
correct minor errors in the preparation of decisional documents.
    (ii) Use of DD Form 293. With respect to any decisional document 
issued on

[[Page 397]]

or after November 27, 1982, a complaint alleging failure of the DRB to 
address adequately matter not submitted on DD Form 293 or expressly 
incorporated therein will be resolved in the complainant's favor only if 
the failure to address the issue was arbitrary, capricious, or an abuse 
of discretion.
    (iii) Scope of review. When a complaint concerns a specific issue in 
the applicant's own discharge review, the complaint review process shall 
involve a review of all the evidence that was before the DRB or SRA, 
including the testimony and written submissions of the applicant, to 
determine whether the issue was submitted, and if so, whether it was 
addressed adequately with respect to the Stipulation of Dismissal, 
Settlement Agreement, or related Orders in the Urban Law case and other 
applicable provisions of this Directive. With respect to all other 
complaints about specific issues, the complaint review process may be 
based solely on the decisional document, except when the complainant 
demonstrates that facts present in the review in question raise a 
reasonable likelihood of a violation of applicable provisions of the 
Stipulation of Dismissal and a reasonable person, familiar with the 
discharge review process, could resolve the complaint only after a 
review of the evidence that was before the DRB.
    (iv) Allegations pertaining to an applicant's submission. The 
following additional requirements apply to complaints about modification 
of an applicant's issue or the failure to list or address an applicant's 
issue:
    (A) When the complaint is submitted by the applicant, and the record 
of the hearing is ambiguous on the question whether there was a meeting 
of minds between the applicant and the DRB as to modification or 
omission of the issue, the ambiguity will be resolved in favor of the 
applicant.
    (B) When the complaint is submitted by a person other than the 
applicant, it must set forth facts (other than the mere omission or 
modification of an issue) demonstrating a reasonable likelihood that the 
issue was omitted or modified without the applicant's consent.
    (C) When the complaint is rejected on the basis of the presumption 
of regularity, the response to the complaint must be set forth the 
reasons why the evidence submitted by the complainant was not sufficient 
to overcome the presumption.
    (D) With respect to decisional documents issued on or after the 
effective date of the amendments to Sec. 70.8, any change in wording of 
an applicant's issue which is effected in violation of the principles 
set forth in Sec. 70.8(a)(5)(iii) constitutes an error requiring 
corrective action. With respect to a decisional document issued before 
that date, corrective action will be taken only when there has been a 
complaint by the applicant or counsel with respect to the applicant's 
own decisional document and it is determined that the wording was 
changed or the issue was omitted without the applicant's consent.
    (E) If there are references in the decisional document to matters 
not raised by the applicant and not otherwise relied upon in the 
decision, there is no requirement under the Urban Law case that such 
matters be accompanied by a statement of findings, conclusions, or 
reasons. For example, when the DRB discusses an aspect of the service 
record not raised as an issue by the applicant, and the issue is not a 
basis for the DRB's decision, the DRB is not required to discuss the 
reasons for declining to list that aspect of the service record as an 
issue.
    (v) Guidance as to other types of complaints. The following guidance 
governs other specified types of complaints:
    (A) The Stipulation of Dismissal requires only that those facts that 
are essential to the decision be listed in the decisional document. The 
requirement for listing specified facts from the military record was not 
established until March 29, 1978, in 32 CFR part 70 Decisional documents 
issued prior to that date are sufficient if they meet the requirements 
of the Stipulation.
    (B) When an applicant submits a brief that contains material in 
support of a proposed conclusion on an issue, the DRB is not required to 
address each aspect of the supporting material in the brief. However, 
the decisional document should permit the applicant to

[[Page 398]]

understand the DRB's position on the issue and provide reviewing 
authorities with an explanation that is sufficient to permit review of 
the DRB's decision. When an applicant submits specific issues and later 
makes a statement before the DRB that contains matter in support of that 
issue, it is not necessary to list such supporting matter as a separate 
issue.
    (C) For all decisional documents issued before November 27, 1982, 
failure to respond to an issue raised by an applicant constitutes error 
unless it reasonably may be inferred from the record that the DRB 
response relied on one of the exceptions listed in Sec. 70.8(d)(3)(ii); 
(e)(3)(ii)(C) (3) through (4) and (e)(6)(ii)(C) (3) through (4). If the 
decisional document supports a basis for not addressing an issue raised 
by the applicant (for example, if it is apparent that resolving the 
issue in the applicant's favor would not warrant an upgrade), there is 
no requirement in the Stipulation of Dismissal that the decisional 
document explain why the DRB did not address the issue. With respect to 
decisional documents issued on or after November 27, 1982, a response 
shall be prepared in accordance with the decisional document principles 
set forth in Sec. 70.8.
    (D) When a case is reviewed upon request of an applicant, and the 
DRB upgrades the discharge to ``General,'' the DRB must provide reasons 
why it did not upgrade to ``Honorable'' unless the applicant expressly 
requests lesser relief. This requirement applies to all requests for 
corrective action submitted by an applicant with respect to his or her 
decisional document. In all other cases, this requirement applies to 
decisional documents issued on or after November 9, 1978. When the DRB 
upgrades to General, its explanation for not upgrading to Honorable may 
consist of reference to adverse matter from the applicant's military 
record. When a discharge is upgraded to General in a review on the DRB's 
own motion, there is no requirement to explain why the discharge was not 
upgraded to Honorable.
    (E) There is no requirement under the Stipulation of Dismissal to 
provide reasons for uncontested findings. The foregoing applies to 
decisional documents issued before November 27, 1982. With respect to 
decisional documents issued on or after that date, the following 
guidance applies with respect to an uncontested issue of fact that forms 
the basis for a grant or denial of a change in discharge: the decisional 
document shall list the specific source of information relied upon in 
reaching the conclusion, except when the information is listed in the 
portion of the decisional document that summarizes the service record.
    (F) The requirements of Sec. 70.8(e)(3) (ii)(B)(2) and (e)(6) 
(ii)(B)(2) with respect to explaining use of the presumption of 
regularity apply only to decisional documents issued on or after 
November 27, 1982. When a complaint concerning a decisional document 
issued before that date addresses the adequacy of the DRB's use of the 
presumption of regularity, or words having a similar import, corrective 
action will be required only if a reasonable person familiar with the 
discharge review process can not understand the basis for relying on the 
presumption.
    (G) When the DRB balances mitigrating factors against aggravating 
factors as the reason for a conclusion, the Stipulation of Dismissal 
does not require the statement of reasons to set forth the specific 
factors that were balanced if such factors are otherwise apparent on the 
fact of the decisional document. The foregoing applies to decisional 
documents prepared before November 27, 1982. With respect to decisional 
documents prepared after that date, the statements addressing decisional 
issues in such a case will list or refer to the factors supporting the 
conclusion in accordance with Sec. 70.8(e)(6)(ii).
    (vi) Documents that were the subject of a prior complaint. The 
following applies to a complaint concerning a decisional document that 
has been the subject of prior complaints:
    (A) If the complaint concerns a decisional document that was the 
subject of a prior complaint in which action was completed, the 
complainant will be informed of the substance and disposition of the 
prior complaint, and will be further informed that no additional action 
will be taken unless the

[[Page 399]]

complainant within 30 days demonstrates that the prior disposition did 
not produce a decisional document that comports with the requirements of 
paragraph (d)(1)(i)(A) of this section.
    (B) If the complaint concerns a decisional document that is the 
subject of a pending complaint, the complainant will be informed that he 
or she will be provided with the results of the pending complaint.
    (C) These limitations do not apply to the initial complaint 
submitted on or after the effective date of the amendments to this 
section by an applicant with respect to his or her own decisional 
document.
    (2) Duties of the administrative director. The administrative 
director shall take the following actions:
    (i) Acknowledge receipt of the complaint;
    (ii) Assign a docket number and note the date of receipt; and
    (iii) Forward the complaint to the Military Department concerned, 
except that the case may be forwarded directly to the DASD (MP&FM) when 
the administrative director makes an initial determination that 
corrective action is not required.
    (3) Administrative processing. The following guidance applies to 
administrative processing of complaints:
    (i) Complaints normally shall be processed on a first-in/first-out 
basis, subject to the availability of records, pending discharge review 
actions, and the following priorities:
    (A) The first priority category consists of cases in which (1) there 
is a pending discharge review and the complainant is the applicant; and 
(2) the complainant sets forth the relevance of the complaint to the 
complainant's pending discharge review application.
    (B) The second priority category consists of requests for correction 
of the decisional document in the complainant's own discharge review 
case.
    (C) The third priority category consists of complaints submitted by 
former members of the Armed Forces (or their counsel) who state that the 
complaint is submitted to assist the former member's submission of an 
application for review.
    (D) The fourth priority category consists of other complaints in 
which the complainant demonstrates that correction of the decisional 
document will substantially enhance the ability of applicants to present 
a significant issue to the DRBs.
    (E) The fifth priority category consists of all other cases.
    (ii) Complainants who request consideration in a priority category 
shall set forth in the complaint the facts that give rise to the claim 
of placement in the requested category. If the complaint is relevent to 
a pending discharge review in which the complainant is applicant or 
counsel, the scheduled date of the review should be specified.
    (iii) The administrative director is responsible for monitoring 
compliance with the following processing goals:
    (A) The administrative director normally shall forward 
correspondence to the Military Department concerned within 3 days after 
the date of receipt specified in the docket number. Correspondence 
forwarded directly to the DASD(MP&FM) under paragraph (d)(2)(iii) of 
this section, normally shall be transmitted within 7 days after the date 
of receipt.
    (B) The Military Department normally shall request the necessary 
records within 5 working days after the date of receipt from the 
administrative director. The Military Department normally shall complete 
action under paragraph (d)(4) of this section within 45 days after 
receipt of all necessary records. If action by the Military Department 
is required under paragraph (d)(9) of this section, normally it shall be 
completed within 45 days after action is taken by the DASD(MP&FM).
    (C) The JSRA normally shall complete action under paragraph (d)(7) 
of this section at the first monthly meeting held during any period 
commencing 10 days after the administrative director receives the action 
of the Military Department under paragraph (d)(5) of this section.
    (D) The DASD(MP&FM) normally shall complete action under paragraph 
(d)(8) of this section within 30 days after action is taken by the JSRA 
under paragraph (d)(7) of this section or by the administrative director 
under paragraph (d)(2)(iii) of this section.

[[Page 400]]

    (E) If action is not completed within the overall processing goals 
specified in this paragraph, the complainant shall be notified of the 
reason for the delay by the administrative director and shall be 
provided with an approximate date for completion of the action.
    (iv) If the complaints are submitted in any 30 day period with 
respect to more than 50 decisional documents, the administrative 
director shall adjust the processing goals in light of the number of 
complaints and discharge review applications pending before the DRBs.
    (v) At the end of each month, the administrative director shall send 
each Military Department a list of complaints, if any, in which action 
has not been completed within 60 days of the docket date. The Military 
Department shall inform the administrative director of the status of 
each case.
    (4) Review of complaints by the Military Departments. The Military 
Department shall review the complaint under the following guidance:
    (i) Rejection of complaint. If the Military Department determines 
that all the allegations contained in the complaint are not specific or 
have no merit, it shall address the allegations using the format at 
attachment 1 (Review of Complaint).
    (ii) Partial agreement. If the Military Department determines that 
some of the allegations contained in the complaint are not specific or 
have no merit and that some of the allegations contained in the 
complaint have merit, it shall address the allegations using the format 
at attachment 1 and its DRB shall take appropriate corrective action in 
accordance with paragraph (d)(4)(v) of this section.
    (iii) Full agreement. If the Military Department determines that all 
of the allegations contained in the complaint have merit, its DRB shall 
take appropriate corrective action in accordance with paragraph 
(d)(4)(v) of this section.
    (iv) Other defects. If, during the course of its review, the 
Military Department notes any other defects in the decisional document 
or index entries (under the applicable requirements of the Urban Law 
case or under this part) the DRB shall take appropriate corrective 
action under paragraph (d)(4)(v) of this section. This does not 
establish a requirement for the Military Department to review a 
complaint for any purpose other than to determine whether the 
allegations contained in the complaint are specific and have merit; 
rather, it simply provides a format for the Military Department to 
address other defects noted during the course of processing the 
complaint.
    (v) Appropriate corrective action. The following procedures govern 
appropriate corrective action:
    (A) If a complaint concerns the decisional document in the 
complainant's own discharge review case, appropriate corrective action 
consists of amending the decisional document or providing the 
complainant with an opportunity for a new discharge review. An amended 
decisional document will be provided if the applicant requests that form 
of corrective action.
    (B) If a complaint concerns a decisional document involving an 
initial record review under the Special Discharge Review Program or the 
Pub. L. 95-126 rereview program, appropriate corrective action consists 
of (1) amending the decisional document; or (2) notifying the applicant 
and counsel, if any, of the opportunity to obtain a priority review 
using the letter providing at attachment 6. When the DRB takes 
corrective action under this provision by amending a decisional 
document, it shall notify the applicant and counsel, if any, of the 
opportunity to request a de novo review under the Special Discharge 
Review Program or under Pub. L. 95-126 rereview program, as appropriate.
    (C) When corrective action is taken with respect to a decisional 
document in cases prepared under Pub. L. 95-126 the DRB must address 
issues previously raised by the DRB or the applicant during review of 
the same case during the SDRP only insofar as required by the following 
guidance:
    (1) When the DRB bases its decision upon issues previously 
considered during the SDRP, the new decisional document under Pub. L. 
95-126 must address those issues;
    (2) If, during consideration of the case under Pub. L. 95-126 the 
applicant presents issues previously considered

[[Page 401]]

during the SDRP, the new decisional document must address those issues; 
and
    (3) If a decisional document concerning an initial record review 
under Pub. L. 95-126 is otherwise defective and corrective action is 
taken after a request by the applicant for a priority review in response 
to the letter at attachment 6, the new decisional document shall address 
all issues previously raised by the applicant during the SDRP.
    (D) Except for cases falling under paragraph (d)(4)(v)(B) of this 
section, if a complaint concerns a decisional document in which the 
applicant received an Honorable Discharge and the full relief requested, 
if any, with respect to the reason for discharge, appropriate corrective 
action consists of amending the decisional document.
    (E) In all other cases, appropriate corrective action consists of 
amending the decisional document or providing the applicant with the 
opportunity for a new review, except that an amended decisional document 
will be provided when the complainant expressly requests that form of 
corrective action.
    (vi) Amended decisional documents. One that reflects a determination 
by a DRB panel (or the SRA) as to what the DRB panel (or SRA) that 
prepared the defective decisional document would have entered on the 
decisional document to support its decision in this case.
    (A) The action of the amending authority does not necessarily 
reflect substantive agreement with the decision of the original DRB 
panel (or SRA) on the merits of the case.
    (B) A corrected decisional document created by amending a decisional 
document in response to a complaint will be based upon the complete 
record before the DRB (or the SRA) at the time of the original defective 
statement was issued, including, if available, a transcript, tape 
recording, videotape or other record of a hearing, if any. The new 
decisional document will be indexed under categories relevant to the new 
statements.
    (C) When an amended decisional document is required under paragraphs 
(d)(4)(v)(A) and (d)(4)(v)(D) of this section and the necessary records 
cannot be located, a notation to that effect will be made on the 
decisional document, and the applicant and counsel, if any, will be 
afforded an opportunity for a new review, and the complainant will be 
informed of the action.
    (D) When an amended decisional document is requested under paragraph 
(d)(4)(v)(C) and the necessary records cannot be located, a notation to 
that effect will be made on the decisional document, and the complainant 
will be informed that the situation precludes further action.
    (vii) Time limit for requesting a new review. An applicant who is 
afforded an opportunity to request a new review may do so within 45 
days.
    (viii) Interim notification. When the Military Department determines 
that some or all of the allegations contained in the complaint are not 
specific or have no merit but its DRB takes corrective action under 
paragraph (d)(4)(ii) or (d)(4)(iv) of this section, the DRB's 
notification to the applicant and counsel, if any, and to the 
complainant, if other than the applicant or counsel, should include the 
following or similar wording: ``This is in partial response to (your)/
(a) complaint to the Office of the Assistant Secretary of Defense 
(Manpower, Reserve Affairs, and Logistics) dated -------- concerning --
------ Discharge Review Board decisional document --------. A final 
response to (your)/(the) complaint, which has been returned to the 
Office of the Assistant Secretary of Defense (Manpower, Reserve Affairs, 
and Logistics) for further review, will be provided to you in the near 
future.''
    (ix) Final notification. When the Discharge Review Board takes 
corrective action under paragraphs (d)(4)(iii) and (d)(9) of this 
section -------- its notification to the applicant and counsel, if any, 
and to the complainant, if other than the applicant or counsel, should 
include the following or similar wording: ``This is in response to 
(your)/(a) complaint to the Office of the Assistant Secretary of Defense 
(Manpower, Reserve Affairs, and Logistics) dated -------- concerning --
------ Discharge Review Board decisional document --------.
    (5) Transmittal to the administrative director. The Military 
Department shall

[[Page 402]]

return the complaint to the administrative Director with a copy of the 
decisional document and, when applicable, any of the following 
documents:
    (i) The ``Review of Complaint.''
    (ii) A copy of the amendment to the decisional document and the 
accompanying transmittal letter or letters to the applicant and counsel, 
if any, and to the complainant, if other than the applicant or counsel.
    (iii) A copy of the notification to the applicant and counsel, if 
any, of the opportunity to request a new review, and a copy of the 
notification to the complainant, if other than the applicant or counsel, 
that the applicant has been authorized a new review.
    (6) Review by the administrative director. The administrative 
director shall review the complaint and accompanying documents to ensure 
the following:
    (i) If the Military Department determined that any of the 
allegations contained in the complaint are not specific or have no 
merit, the JSRA shall review the complaint and accompanying documents. 
The JSRA shall address the allegations using the format at attachment 2 
(Review of and Recommended Action on Complaint) and shall note any other 
defects in the decisional document or index entries not previously noted 
by the Military Department. This does not establish a requirement for 
the JSRA to review such complaints for any purpose other than to address 
the allegations contained in the complaint; rather, it simply provides a 
format for the JSRA to address other defects noted in the course of 
processing the complaint.
    (ii) If the Military Department determined that all of the 
allegations contained in the complaint have merit and its DRB amended 
the decisional document, the amended decisional document shall be 
subject to review by the JSRA on a sample basis each quarter using the 
format at attachment 3 (Review of any Recommendation on Amended 
Decisional Document).
    (iii) If the Military Department determined that all of the 
allegations contained in the complaint have merit and its DRB notified 
the applicant and counsel, if any, of the opportunity to request a new 
review, review of such corrective action is not required.
    (7) Review by the JSRA. The JSRA shall meet for the purpose of 
conducting the reviews required in paragraphs (d)(6)(i), (d)(6)(ii), and 
(d)(9)(iii)(A) of this section. The Administrative director shall call 
meetings once a month, if necessary, or more frequently depending upon 
the number of matters before the JSRA. Matters before the JSRA shall be 
presented to the members by the recorder. Each member shall have one 
vote in determining matters before the JSRA, a majority vote of the 
members determining all matters. Determinations of the JSRA shall be 
reported to the DASD(MP&FM) as JSRA recommendations using the prescribed 
format. If a JSRA recommendation is not unanimous, the minority member 
may prepare a separate recommendation for consideration by the 
DASD(MP&FM) using the same format. Alternatively, the minority member 
may indicate ``dissent'' next to his signature on the JSRA 
recommendation.
    (8) Review by the DASD(MP&FM). The DASD(MP&FM) shall review all 
recommendations of the JSRA and the administrative director as follows:
    (i) The DASD(MP&FM) shall review complaints using the format at 
Attachment 4 (Review of and Action on Complaint). The DASD(MP&FM) is the 
final authority in determining whether the allegations contained in a 
complaint are specific and have merit. If the DASD(MP&FM) determines 
that no further action by the Military Department is warranted, the 
complainant and the Military Department shall be so informed. If the 
DASD(MP&FM) determines that further action by the Military Department is 
required, the Military Department shall be directed to ensure that 
appropriate corrective action is taken by its DRB and the complainant 
shall be provided an appropriate interim response.
    (ii) The DASD(MP&FM) shall review amended decisional documents using 
the format at attachment 5 (Review of and Action on Amended Decisional 
Document). The DASD(MP&FM) is the final authority in determining whether 
an amended decisional document complies with applicable requirements of

[[Page 403]]

the Urban Law case and, when applicable, this Directive. If the 
DASD(MP&FM) determines that no further corrective action by the Military 
Department is warranted, the Military Department shall be so informed. 
If the DASD(MP&FM) determines that further corrective action by the 
Military Department is required, the Military Department shall be 
directed to ensure that appropriate corrective action is taken by its 
DRB.
    (iii) It is noted that any violation of applicable requirements of 
the Urban Law case is also a violation of this part. However, certain 
requirements under this part are not requirements under the Urban Law 
case. If the allegations contained in a complaint are determined to have 
merit or if an amended decisional document is determined to be defective 
on the basis of one of these additional requirements under this part the 
DASD(MP&FM) determination shall reflect this fact.
    (9) Further action by the Military Department. (i) With respect to a 
determination by the DASD (MP&FM) that further action by the Military 
Department is required, its DRB shall take appropriate corrective action 
in accordance with paragraph (d)(4) of this section.
    (ii) The Military Department shall provide the administrative 
director with the following documents when relevant to corrective action 
taken in accordance with paragraph (d)(4) of this section:
    (A) A copy of the amendment to the decisional document and the 
accompanying transmittal letter or letters to the applicant and counsel, 
if any, and to the complainant, if other than the applicant or counsel.
    (B) A copy of the notification to the applicant and counsel, if any, 
of the opportunity to request a new review, and a copy of the 
notification to the complainant, if other than the applicant or counsel, 
that the applicant has been authorized a new review.
    (iii) The administrative director shall review the documents 
relevant to corrective action taken in accordance with paragraph (d)(4) 
of this section, and ensure the following:
    (A) If the DRB amended the decisional document, the amended 
decisional document shall be subject to review by the JSRA on a sample 
basis each quarter using the format at attachment 3 (Review of and 
Recommended Action on Amended Decisional Document).
    (B) If the DRB notified the applicant and counsel, if any, of the 
opportunity to request a new review, review of such corrective action is 
not required.
    (10) Documents required by the JSRA or DASD (MP&FM). Upon request, 
the Military Department shall provide the administrative director with 
other documents required by the JSRA or the DASD (MP&FM) in the conduct 
of their reviews.
    (e) Responses to inquiries. The following procedures shall be used 
in processing inquiries:
    (1) The administrative director shall assign a docket number to the 
inquiry.
    (2) The administrative director shall forward the inquiry to the 
Military Department concerned.
    (3) The Military Department shall prepare a response to the inquiry 
and provide the administrative director with a copy of the response.
    (4) The Military Department's response shall include the following 
or similar wording: ``This is in response to your inquiry to the Office 
of the Assistant Secretary of Defense (Manpower, Reserve Affairs, and 
Logistics) dated -------- concerning --------.
    (f) Indexing. The DRB concerned shall reindex all amended decisional 
documents and shall provide copies of the amendments to the decisional 
documents to the Armed Forces Discharge Review/Correction Board Reading 
Room.
    (g) Disposition of documents. The administrative director is 
responsible for the disposition of all Military Department, DRB, JSRA, 
and DASD (MP&FM) documents relevant to processing complaints and 
inquiries.
    (h) Referral by the General Counsel, Department of Defense. The 
Stipulation of Dismissal permits Urban Law plaintiffs to submit 
complaints to the General Counsel, DoD, for comment. The General 
Counsel, DoD, may refer such complaints to the Military Department 
concerned or to the JSRA for initial comment.

[[Page 404]]

    (i) Decisional document and index entry principles. The DASD (MP&FM) 
shall identify significant principles concerning the preparation of 
decisional documents and index entries as derived from decisions under 
this section and other opinions of the Office of General Counsel, DoD. 
This review shall be completed not later than October 1 and April 1 of 
each year, or more frequently if deemed appropriate by the DASD (MP&FM). 
The significant principles identified in the review shall be coordinated 
as proposed as amendments to the sections of this part.
    (j) Implementation of amendments. The following governs the 
processing of any correspondence that is docketed prior to the effective 
date of amendments to this section except as otherwise provided in such 
amendments:
    (1) Any further action on the correspondence shall be taken in 
accordance with the amendments; and
    (2) No revision of any action taken prior to the effective date of 
such amendments is required.

                    Attachment 1--Review of Complaint

                          Military Department:

                       Decisional Document Number:

                          Name of Complainant:

                             Docket Number:

                          Date of this Review:

    1. Specific allegation(s) noted:
    2. With respect in support of the conclusion, enter the following 
information:
    a. Conclusion whether corrective action is required.
    b. Reasons in support of the conclusion, including findings of fact 
upon which the conclusion is based.
    3. Other defects noted in the decisional document or index entries:
(Authentication)

               Attachment 2--Joint Service Review Activity

Office of the Assistant Secretary of Defense (Manpower, Reserve Affairs, 
                             and Logistics)

               Review by the Joint Service Review Activity

                          Military Department:

                       Decisional Document Number:

                          Name of Complainant:

                           Name of Applicant:

                             Docket Number:

                          Date of this Review:

    1. The Military Department's ``Review of Complaint'' is attached as 
enclosure 1.
    2. Specific Allegations: See part 1 of Military Department's 
``Review of Complaint'' (enclosure 1).
    3. Specific allegation(s) not noted by the Military Department:
    4. With respect to each allegation, enter the following information:
    a. Conclusion as to whether corrective action is required.
    b. Reasons in support of the conclusion, including findings of fact 
upon which conclusion is based.

    Note. If JSRA agrees with the Military Departments, the JSRA may 
respond by entering a statement of adoption.

    5. Other defects in the decisional document or index entries not 
noted by the Military Departments:
    6. Recommendation:
    [ ] The complainant and the Military Department should be informed 
that no further action on the complaint is warranted.
    [ ] The Military Department should be directed to take corrective 
action consistent with the above comments.

Army Member, JSRA
Air Force Member, JSRA
Navy Member, JSRA
Recorder, JSRA

[[Page 405]]

               Attachment 3--Joint Service Review Activity

Office of the Assistant Secretary of Defense (Manpower, Reserve Affairs, 
                             and Logistics)

        Review of Amended Decisional Document (Quarterly Review)

                          Military Department:

                       Decisional Document Number:

                          Name of Complainant:

                           Name of Applicant:

                             Docket Number:

                          Date of this Review:

                             Recommendation:

    [ ] The amended decisional document complies with the requirements 
of the Stipulation of Dismissal and, when applicable, DoD Directive 
1332.28. The Military Department should be informed that no further 
corrective action is warranted.
    [ ] The amended decisional document does not comply with the 
Stipulation of Dismissal or DoD Directive 1332.28 as noted herein. The 
Military Department should be directed to ensure that corrective action 
consistent with the defects noted is taken by its Discharge Review 
Board.

Army Member, JSRA
Air Force Member, JSRA
Navy Member, JSRA
Recorder, JSRA

------------------------------------------------------------------------
   Yes       No        NA             Item                 Source
------------------------------------------------------------------------
[ballot]  [ballot]  [ballot]  1. Date of discharge  1. DoD Directive
                                                     1332.28, enclosure
                                                     3, subsection H.1.;
                                                     Stipulation (Jan.
                                                     31, 1977) para.
                                                     5.A.(1)(d)(i)
                                                     (reference (1)).
[ballot]  [ballot]  [ballot]    a. Date of
                                 discharge.
[ballot]  [ballot]  [ballot]    b. Character of
                                 discharge.
[ballot]  [ballot]  [ballot]    c. Reason for
                                 discharge.
[ballot]  [ballot]  [ballot]    d. Specific
                                 regulatory
                                 authority under
                                 which discharge
                                 was issued.
[ballot]  [ballot]  [ballot]  2. Service data.      2. DoD Directive
                               (This requirement     1332.28, enclosure
                               applies only in       3, subsection H.1.;
                               conjunction with      Annex B, (June ----
                               Military Department   , 1982) para. 2-2
                               Implementation of     (reference (1)).
                               General Counsel,
                               DoD, letter dated
                               July 20, 1977, or
                               to discharge
                               reviews conducted
                               on or after March
                               29, 1978.)
[ballot]  [ballot]  [ballot]    a. Date of
                                 enlistment.
[ballot]  [ballot]  [ballot]    b. Period of
                                 enlistment.
[ballot]  [ballot]  [ballot]    c. Age at
                                 enlistment.
[ballot]  [ballot]  [ballot]    d. Length of
                                 service.
[ballot]  [ballot]  [ballot]    e. Periods of
                                 unauthorized
                                 absence*.
[ballot]  [ballot]  [ballot]    f. Conduct and
                                 efficiency
                                 ratings
                                 (numerical and
                                 narrative)*.
[ballot]  [ballot]  [ballot]    g. Highest rank
                                 achieved.
[ballot]  [ballot]  [ballot]    h. Awards and
                                 decorations*.
[ballot]  [ballot]  [ballot]    i. Educational
                                 level.
[ballot]  [ballot]  [ballot]    j. Aptitude test
                                 scores.
[ballot]  [ballot]  [ballot]    k. Art. 15s
                                 (including nature
                                 and date of
                                 offense or
                                 punishment)*.
[ballot]  [ballot]  [ballot]    l. Convictions by
                                 court-martial*.
[ballot]  [ballot]  [ballot]    m. Prior military
                                 service and type
                                 of discharge(s)
                                 received*.
[ballot]  [ballot]  [ballot]  3. Reference to       3. DoD Directive
                               materials presented   1332.28, enclosure
                               by applicant. (This   3, subsection H.2.;
                               requirement applies   H.3.
                               only to discharge
                               reviews conducted
                               on or after March
                               29, 1978.)
[ballot]  [ballot]  [ballot]    a. Written brief*.
[ballot]  [ballot]  [ballot]    b. Documentary
                                 evidence*.
[ballot]  [ballot]  [ballot]    c. Testimony*.....
[ballot]  [ballot]  [ballot]  4. Items submitted    4. DoD Directive
                               as issues. (See       1332.28, enclosure
                               issues worksheet).    3, subsection H.6.
[ballot]  [ballot]  [ballot]  5. Conclusions. The   5. Dod Directive
                               decisional document   1332.28, enclosure
                               must indicate         3, subsection H.5.;
                               clearly the DRB's     Stipulation (Jan.
                               conclusion            31, 1977),
                               concerning:           paragraph
                                                     5.A.(1)(d)(iv)
                                                     (reference (1)).
[ballot]  [ballot]  [ballot]    a. Determination
                                 of whether a
                                 discharge
                                 upgraded under
                                 SDRP would have
                                 been upgraded
                                 under DoD
                                 Directive
                                 1332.28. (This
                                 applies only to
                                 mandatory reviews
                                 under P.L. 95-126
                                 or Special
                                 Discharge Review
                                 Program (SDRP).

[[Page 406]]

 
[ballot]  [ballot]  [ballot]    b. Character of
                                 discharge, when
                                 applicable \1\.
[ballot]  [ballot]  [ballot]    c. Reason for
                                 discharge, when
                                 applicable \2\.
[ballot]  [ballot]  [ballot]  6. Reasons for        6. DoD Directive
                               conclusions. The      1332.28, enclosure
                               decisional document   3, subsection H.7.,
                               must list and         H.8.; Stipulation
                               discuss the items     (Jan. 31, 1977)
                               submitted as issues   para. 5.A.(1)(d)(v)
                               by the applicant;     (reference (1)).
                               and list and
                               discuss the
                               decisional issues
                               providing the basis
                               for the DRB's
                               conclusion
                               concerning:
[ballot]  [ballot]  [ballot]    a. Whether a
                                 discharge
                                 upgraded under
                                 the SDRP would
                                 have been
                                 upgraded under
                                 DoD Directive
                                 1332.28. (This
                                 applies only to
                                 mandatory
                                 rereviews under
                                 P.L. 95-126 or
                                 SDRP reviews.).
[ballot]  [ballot]  [ballot]    b. Character of
                                 discharge, where
                                 applicable \1\.
[ballot]  [ballot]  [ballot]    c. Reason for
                                 discharge, where
                                 applicable \2\.
[ballot]  [ballot]  [ballot]  7. Advisory           7. DoD Directive
                               opinions*.            1332.28, enclosure
                                                     3, subsection
                                                     H.12., Stipulation
                                                     (Jan. 31, 1977)
                                                     para. 5.A.(1)(f)
                                                     (reference (1)).
[ballot]  [ballot]  [ballot]  8. Recommendation of  8. DoD Directive
                               DRB President.        1332.28, enclosure
                                                     3, subsection
                                                     H.12., Stipulation
                                                     (Jan. 31, 1977)
                                                     para. 5.A.(1)(g)
                                                     (reference (1)).
[ballot]  [ballot]  [ballot]  9. A record of        9. DoD Directive
                               voting.               1332.28, enclosure
                                                     3, subsection
                                                     H.13., Stipulation
                                                     (Jan. 31, 1977)
                                                     para. 5.A.(3)
                                                     (reference (1)).
[ballot]  [ballot]  [ballot]  10. Indexing of       10. DoD Directive
                               decisional document.  1332.28, enclosure
                                                     3, subsection
                                                     H.14., Stipulation
                                                     (Jan. 31, 1977)
                                                     para. 5.A.(5)(a)
                                                     (reference (1)).
[ballot]  [ballot]  [ballot]  11. Authentication    11. DoD Directive
                               of decisional         1332.28, enclosure
                               document. (This       3, subsection H.15.
                               requirement applies
                               only to discharge
                               reviews conducted
                               on or after March
                               29, 1978.)
[ballot]  [ballot]  [ballot]  12. Other...........  12. As appropriate.
------------------------------------------------------------------------
                   Explanation of items marked ``No.''
------------------------------------------------------------------------
 Key:
Yes: The decisional document meets the requirements of the Stipulation
  of Dismissal and, when applicable, DoD Directive 1332.28.
No: The decisional document does not meet the requirements of the
  Stipulation of Dismissal or DoD Directive 1332.28.
NA: Not applicable.
 
*Items marked by an asterisk do not necessarily pertain to each review.
  If the decisional document contains no reference to such an item, NA
  shall be indicated. When there is a specific complaint with respect to
  an item, the underlying discharge review record shall be examined to
  address the complaint.
\1\ In this instance ``when applicable'' means all reviews except:
a. Mandatory rereviews under P.L. 95-126 or SDRP reviews.
b. Reviews in which the applicant requested only a change in the reason
  for discharge and the DRB did not raise the character of discharge as
  a decisional issue.
\2\ In this instance ``when applicable'' means all reviews in which:
a. The applicant requested a change in the reason for discharge.
b. The DRB raised the reason for discharge as a decisional issue.
c. A change in the reason for discharge is a necessary component of a
  change in the character of discharge.


[[Page 407]]


                   Attachment 4--Issues Worksheets \1\
------------------------------------------------------------------------
                                                             Corrective
                                   Listed       Addressed      action
                                                              required
------------------------------------------------------------------------
A. Decisional issues providing
 a basis for the conclusion
 regarding a change in the
 character of or reason for
 discharge. (DoD Directive
 1332.28, enclosure 3,
 subsection D.2):
    1.                          [ballot]      [ballot]      [ballot]
    2.                          [ballot]      [ballot]      [ballot]
    3.                          [ballot]      [ballot]      [ballot]
B. Items submitted as issues
 by the applicant that are not
 identified as decisional
 issues. (DoD Directive
 1332.28, enclosure 3,
 subsection D.3):
    1.                          [ballot]      [ballot]      [ballot]
    2.                          [ballot]      [ballot]      [ballot]
    3.                          [ballot]      [ballot]      [ballot]
C. Remarks:
 
------------------------------------------------------------------------
\1\ This review may be made based upon the decisional document without
  reference to the underlying discharge review record except as follows:
  if there is an allegation that a specific contention made by the
  applicant to the DRB was not addressed by the DRB. In such a case, the
  complaint review process shall involve a review of all the evidence
  that was before the DRB, including the testimony and written
  submissions of the applicant, to determine whether the contention was
  made, and if so, whether it was addressed adequately with respect to
  the Stipulation of Dismissal and, when applicable, DoD Directive
  1332.28.
This review may be based upon the decisional document without reference
  to the regulation governing the discharge in question except as
  follows: if there is a specific complaint that the DRB failed to
  address a specific factor required by applicable regulations to be
  considered for determination of the character of and reason for the
  discharge in question [where such factors are a basis for denial of
  any of the relief requested by the applicant]. (The material in
  brackets pertains only to discharge reviews conducted on or before
  March 28, 1978.)

 Attachment 5--Office of the Assistant Secretary of Defense (Manpower, 
                     Reserve Affairs, and Logistics)

                    Review of Complaint (DASD(MP&FM))

                          Military Department:

                       Decisional Document Number:

                          Name of Complainant:

                           Name of Applicant:

                             Docket Number:

                          Date of this Review:

    1. Each allegation is addressed as follows:
    a. Allegation.
    b. Conclusion whether corrective action is required.
    c. Reasons in support of the conclusion, including findngs of fact 
upon which the conclusion is based.

    Note: If the DASD(MP&FM) agrees with the JSRA, he may respond by 
entering a statement of adoption.

    2. Other defects noted in the decisional document or index entries:
    3. Determinations:
    [ ] No further action on the complaint is warranted.
    [ ] Corrective action consistent with the above comments is 
required.

Deputy Assistant Secretary of Defense
(Military Personnel & Force Management)

 Attachment 6--Office of the Assistant Secretary of Defense (Manpower, 
                     Reserve Affairs, and Logistics)

          Review of Amended Decisional Document (DASD (MP&FM))

                          Military Department:

                       Decisional Document Number:

                          Name of Complainant:

                           Name of Applicant:

                             Docket Number:

                          Date of this Review:

                             Recommendation:

    [ ] The amended decisional document complies with the requirements 
of the Stipulation of Dismissal and, when applicable, DoD Directive 
1332.28. No further corrective action is warranted.
    [ ] The amended decisional document does not comply with the 
Stipulation of Dismissal or DoD Directive 1332.28 as noted herein. 
Further corrective action is required consistent with the defects noted 
in the attachment.

Deputy Assistant Secretary of Defense
(Military Personnel & Force Management)

Remarks:

                              Attachment 7

Dear ------:
    It has been determined that the decisional document issued in your 
case by the (Army) (Navy) (Air Force) Discharge Review Board

[[Page 408]]

during the (Special Discharge Review Program) (rereview program under 
Pub. L. No. 95-126) should be reissued to improve the clarity of the 
statement of findings, conclusions, and reasons for the decision in your 
case.
    In order to obtain a new decisional document you may elect one of 
the following options to receive a new review under the (Special 
Discharge Review Program) (rereview program mandated by Pub. L. No. 95-
126):
    1. You may request a new review, including a personal appearance 
hearing if you so desire, by responding on or before the suspense date 
noted at the top of this letter. Taking this action will provide you 
with a priority review before all other classes of cases.
    2. You may request correction of the original decisional document 
issued to you by responding on or before the suspense date noted at the 
top of this letter. After you receive a corrected decisional document, 
you will be entitled to request a new review, including a personal 
appearance hearing if you so desire. If you request correction of the 
original decisional document, you will not receive priority processing 
in terms of correcting your decisional document or providing you with a 
new review; instead, your case will be handled in accordance with 
standard processing procedures, which may mean a delay of several months 
or more.
    If you do not respond by the suspense date noted at the top of this 
letter, no action will be taken. If you subsequently submit a complaint 
about this decisional document, it will be processed in accordance with 
standard procedures.
    To ensure prompt and accurate processing of your request, please 
fill out the form below, cut it off at the dotted line, and return it to 
the Discharge Review Board of the Military Department in which you 
served at the address listed at the top of this letter.
Check only one:
    [ ] I request a new review of my case on a priority basis. I am 
requesting this priority review rather than requesting correction of the 
decisional document previously issued to me. I have enclosed DD Form 293 
as an application for my new review.
    [ ] I request correction of the decisional document previously 
issued to me. I understand that this does not entitle me to priority 
action in correcting my decisional document. I also understand that I 
will be able to obtain a further review of my case upon my request after 
receiving the corrected decisional document, but that such a review will 
not be held on a priority basis.
Dates___________________________________________________________________
Signatures______________________________________________________________
Printed Name and Address
________________________________________________________________________

[47 FR 37785, Aug. 26, 1982, as amended at 48 FR 9856, Mar. 9, 1983]



Sec. 70.11  DoD semiannual report.

    (a) Semiannual reports will be submitted by the 20th of April and 
October for the preceding 6-month reporting period (October 1 through 
March 31 and April 1 through September 30).
    (b) The reporting period will be inclusive from the first through 
the last days of each reporting period.
    (c) The report will contain four parts:
    (1) Part 1. Regular Cases.
    (2) Part 2. Reconsideration of President Ford's Memorandum of 
January 19, 1977, and Special Discharge Review Program Cases.
    (3) Part 3. Cases Heard under Pub. L. 95-126 by waiver of 10 U.S.C. 
1553, with regard to the statute of limitations.
    (4) Part 4. Total Cases Heard.

                                                Semiannual DRB Report--RCS DD-M(SA) 1489; Summary of Statistics for Discharge Review Board (FY )
                                                                                         [Sample format]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Nonpersonal appearance                                             Personal appearance                                        Total
                               -----------------------------------------------------------------------------------------------------------------------------------------------------------------
         Name of board                                                                                                                                                                 Percent
                                     Applied        Number approved    Percent approved       Applied        Number approved   Percent approved       Applied       Number approved    approved
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                .................  .................  .................  .................  .................  ................  ................  ................  ...........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
 Identify numbers separately for traveling panels, regional panels, or hearing examiners, as appropriate.
 Use of additional footnotes to clarify or amplify the statistics being reported is encouraged.



PART 74_APPOINTMENT OF DOCTORS OF OSTEOPATHY AS MEDICAL OFFICERS--Table of 

Contents



Sec.
74.1 Purpose.
74.2 Policy.

    Authority: 10 U.S.C. 3294, 5574, 8294.

    Source: 25 FR 14370, Dec. 31, 1960, unless otherwise noted.

[[Page 409]]



Sec. 74.1  Purpose.

    The purpose of this part is to implement the provisions of Pub. L. 
763, 84th Congress (70 Stat. 608), relating to the appointment of 
doctors of osteopathy as medical officers.



Sec. 74.2  Policy.

    In the interest of obtaining maximum uniformity, the following 
criteria are established for the appointment of doctors of osteopathy as 
medical officers:
    (a) To be eligible for appointment as Medical Corps officers in the 
Army and Navy or designated as medical officers in the Air Force, a 
doctor of osteopathy must:
    (1) Be a citizen of the United States;
    (2) Be a graduate of a college of osteopathy whose graduates are 
eligible for licensure to practice medicine or surgery in a majority of 
the States, and be licensed to practice medicine, surgery, or osteopathy 
in one of the States or Territories of the United States or in the 
District of Columbia;
    (3) Possess such qualifications as the Secretary concerned may 
prescribe for his service, after considering the recommendations for 
such appointment by the Surgeon General of the Army or the Air Force or 
the Chief of the Bureau of Medicine and Surgery of the Navy;
    (4) Have completed a minimum of three years college work prior to 
entrance into a college of osteopathy;
    (5) Have completed a four-year course with a degree of Doctor of 
Osteopathy from a school of osteopathy approved by the American 
Osteopathic Association; and
    (6) Have had subsequent to graduation from an approved school of 
osteopathy 12 months or more of intern or residency training approved by 
the American Osteopathic Association.
    (b) [Reserved]



PART 77_PROGRAM TO ENCOURAGE PUBLIC AND COMMUNITY SERVICE--Table of Contents



Sec.
77.1 Purpose.
77.2 Applicability and scope.
77.3 Definitions.
77.4 Policy.
77.5 Responsibilities.
77.6 Procedures.

Appendix A to Part 77--DD Form 2580, Operation Transition Department of 
          Defense Outplacement and Referral System/Public and Community 
          Service Individual Application
Appendix B to Part 77--DD Form 2581, Operation Transition Employer 
          Registration
Appendix C to Part 77--DD Form 2581-1, Public and Community Service 
          Organization Validation

    Authority: 10 U.S.C. 1143 (c).

    Source: 59 FR 40809, Aug. 10, 1994, unless otherwise noted.



Sec. 77.1  Purpose.

    This part implements Pub. L. 102-484, Section 4462 and Pub. L. 103-
160, Section 561 by establishing policy, assigning responsibilities, and 
prescribing procedures to:
    (a) Encourage and assist separating Service members, Service members 
retiring with 20 or more years of service, DoD civilian personnel 
leaving the Government, and spouses to enter public and community 
service employment.
    (b) Encourage and assist Service members requesting retirement with 
fewer than 20 years of service to register for public and community 
service employment.



Sec. 77.2  Applicability and scope.

    This part applies to:
    (a) The Office of the Secretary of Defense, the Military 
Departments, the Chairman of the Joint Chiefs of Staff, the Unified 
Combatant Commands, and the Defense Agencies (hereafter referred to 
collectively as ``the DoD Components''). The term ``Military Services,'' 
as used herein, refers to the Army, the Navy, the Air Force, and the 
Marine Corps.
    (b) All active duty Service members and former members under Pub. L. 
102-484, Section 4462 and Pub. L. 103-160, Section 561, and DoD civilian 
personnel leaving the Government, and their spouses.



Sec. 77.3  Definitions.

    (a) Community service employment. Work in nonprofit organizations 
that provide or coordinate services listed in paragraphs (d) (1) through 
(12) of this

[[Page 410]]

section. ``Nonprofit'' is defined as having been recognized by the 
Internal Revenue Service as having a tax-exempt status under 26 U.S.C. 
501 (c)(3) or (c)(4). These organizations shall not be administered by 
businesses organized for profit, labor unions, partisan political 
organizations, or organizations engaged in religious activities, unless 
such activities are unrelated to religious instructions, worship 
services, or any form of proselytization.
    (b) Creditable early retirement public or community service 
employment for service members. Employment in a DoD-registered public 
and community service organization that provides the services listed in 
paragraphs (d) (1) through (12) of this section, or that coordinates the 
provision of the services listed in paragraphs (d) (1) through (12) of 
this section. Federal employment shall count toward recomputed military 
retirement pay and Survivor Benefit Plan base amount for early retirees: 
however, working in a DoD-registered Federal public service organization 
may trigger the dual-compensation restrictions of 5 U.S.C. 5532. 
Employment must have occurred between that date of early retirement and 
the date in which the Service member would have attained 20 years of 
credible service for computing retired pay, or he or she must have 
retired on or after October 23, 1992 and before October 1, 1999.
    (c) Early retirement. Retirement from active duty with at least 15 
but fewer than 20 years of service, as provided by Pub. L. 102-484, 
Section 4403.
    (d) Public and community service organization. Government or private 
organizations that provide or coordinate the provision of the following 
services.
    (1) Elementary, secondary, or post secondary school teaching or 
administration.
    (2) Support of teachers or school administrators.
    (3) Law enforcement.
    (4) Public health care.
    (5) Social services.
    (6) Public safety.
    (7) Emergency relief.
    (8) Public housing.
    (9) Conservation.
    (10) Environment.
    (11) Job training.
    (12) Other public and community service not listed previously, but 
consistent with or related to services described in paragraphs(d)(1) 
through (11) of this section.
    (e) Public service employment. Work in a Federal, state or local 
government organization which provides or coordinates services listed in 
paragraphs (d)(1) through (12) of this section.
    (f) Separation. Normal separation from activity duty or civil 
service, military retirement with 20 or more year's service, release 
from active military service, and reduction in force.
    (g) Transition assistance program counselor. A person charged with 
the responsibility of conducting transition programs. Examples include 
personnel assigned to family centers, military or civilian personnel 
offices, unit transition counselors, and as command career counselors.



Sec. 77.4  Policy.

    It is DoD policy that:
    (a) All separating Service members and former members shall be 
encouraged to enter public or community service employment.
    (b) Service members determined to be eligible by the Secretary of 
their Military Department for, and who do request retirement with fewer 
than 20 years of service, are required by Pub. L. 102-484, Section 4403 
to register for public and community service employment.
    (1) This registration normally shall take place not earlier than 90 
days before retirement or terminal/transition leave.
    (2) In order to have their military retired pay and Survivor Benefit 
Plan base amount (if applicable) recomputed in accordance with DoD 
Instruction 1340.19 \1\ early retirees must be employed with a DoD-
registered public or community service organization that provides the 
services listed in sections 77.3(d)(1) through (d)(12), or that 
coordinates the provision of services listed in section 77.3(d)(1) 
through (d)(12).
---------------------------------------------------------------------------

    \1\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------

    (c) DoD civilian personnel leaving the Government, their spouses, 
and

[[Page 411]]

spouses of Service members who are seeking employment shall be 
encouraged to register for public and community service employment.



Sec. 77.5  Responsibilities.

    (a) The Under Secretary of Defense for Personnel and Readiness 
shall:
    (1) Monitor compliance with this rule.
    (2) Establish policy and provide guidance related to public and 
community service employment.
    (3) Provide program information to the public on the Department of 
Defense's public and community service employment program.
    (4) Ensure that the Director, Defense Manpower Data Center (DMDC):
    (i) Maintains the Public and Community Service Organizational 
Registry.
    (ii) Maintains the Public and Community Service Personnel Registry.
    (5) Decide the status of requests for reconsideration from employers 
resubmitting their request to be included on the Public and Community 
Service Organizational Registry, but whose first request was 
disapproved.
    (b) The Secretaries of the Military Departments shall:
    (1) Ensure compliance with this rule.
    (2) Encourage public and community service employment for separating 
Service members, their spouses, DoD civilian personnel leaving the 
Government, and their spouses.
    (3) Coordinate with the Under Secretary of Defense for Personnel and 
Readiness before promulgating public and community service employment 
policies and regulations.



Sec. 77.6  Procedures.

    (a) Military personnel offices shall advise Service members desiring 
to apply for early retirement that they shall register, normally, within 
90 days of their retirement date, for public and community service 
(PACS) employment, and refer them to a Transition Assistance Program 
Counselor for registration.
    (b) Personnel offices shall advise separating Service members, DoD 
civilian personnel leaving the Government, and their spouses to contact 
a Transition Assistance Program Counselor about PACS employment and 
registration.
    (c) Transition Assistance Program Counselors shall counsel 
separating Service members (during preseparation counseling established 
by DoD Instruction 1332.36 \2\), DoD civilian personnel leaving the 
Government, and their spouses on PACS employment. Counselors shall 
update into the Defense Outplacement Referral System (DORS) database 
Service members requesting early retirement and other DoD personnel or 
spouses who request registration. Transition Assistance Program 
Counselors shall use DD Form 2580 (Appendix A to this part) to register 
personnel for PACS employment. In addition, Counselors shall ensure that 
Service members who are requesting early retirement are advised that:
---------------------------------------------------------------------------

    \2\ See footnote 1 to section 77.4(b)(2).
---------------------------------------------------------------------------

    (1) Registering for PACS employment is a requirement for 
consummation of their early retirement under Pub. L. 102-484, Section 
4403 or Pub. L. 103-160, Section 561.
    (2) Early retirees must provide a copy of their confirmation DORS 
mini-resume to their servicing military personnel office for filing in 
their Service record before their final retirement processing.
    (3) Subsequent PACS employment is encouraged but not required.
    (4) Working in a DoD-approved Federal public service organization 
may subject him or her to dual compensation restrictions of 5 U.S.C. 
5532.
    (5) DoD-approved PACS employment qualifies the Service member who is 
retired under Pub. L. 102-484, Section 4403 or Pub. L. 103-160, Section 
561 for increased retired pay effective on the first day of the first 
month beginning after the date on which the member or former member 
attains 62 years of age. The former Service member must have worked in 
DoD-approved PACS employment between the date of early retirement and 
the date in which he or she would have attained 20 years of creditable 
service for computing retired pay, and have retired on or after October 
23, 1992 and before October 1, 1999.
    (6) It is the early retiree's responsibility to ensure that the DMDC 
is advised when the early retiree's PACS employment starts, and of any 
subsequent changes.

[[Page 412]]

    (d) Military personnel offices shall ensure a copy of the 
confirmation DORS mini-resume is filed in the permanent document section 
of the Service record of Service members who retire early.
    (e) DMDC shall maintain the PACS Personnel Registry, which includes 
information on the particular job skills, qualifications, and experience 
of registered personnel.
    (f) DMDC shall maintain the PACS Organizational Registry, which 
includes information regarding each organization, including its 
location, size, types of public or community service positions in the 
organization, points of contact, procedures for applying for such 
positions, and a description of each position that is likely to be 
available.
    (g) PACS Organizations shall use DD Form 2581 (Appendix B to this 
part) and DD Form 2581-1 (Appendix C to this part) to request 
registration on the PACS Organizational Registry. Instructions on how to 
complete the forms and where to send them are on the forms.
    (h) DMDC shall register those organizations meeting the definition 
of a PACS organization and include them on the PACS Organizational 
Registry. For organizations that do not appear to meet the criteria, 
DMDC shall refer the request to the Transition Support and Services 
Directorate, Office of the Assistant Secretary of Defense for Personnel 
and Readiness. The Transition Support and Services Directorate may 
consult individually on an ad hoc basis with appropriate agencies to 
determine whether or not the organization meets the validation criteria. 
For organizations which are denied approval as a creditable early 
retirement organization and which request reconsideration, the 
Transition Support and Services Directorate will forward that request to 
the next higher level for a final determination. DMDC shall advise 
organizations of their status.

[[Page 413]]



     Sec. Appendix A to Part 77--DD Form 2580, Operation Transition 

                          Department of Defense

Outplacement and Referral System/Public and Community Service Individual 

                               Application

[GRAPHIC] [TIFF OMITTED] TR10AU94.039


[[Page 414]]


[GRAPHIC] [TIFF OMITTED] TR10AU94.040


[[Page 415]]


[GRAPHIC] [TIFF OMITTED] TR10AU94.041


[[Page 416]]





Sec. Appendix B to Part 77--DD Form 2581, Operation Transition Employer 

                              Registration

[GRAPHIC] [TIFF OMITTED] TR10AU94.042


[[Page 417]]


[GRAPHIC] [TIFF OMITTED] TR10AU94.043


[[Page 418]]





Sec. Appendix C to Part 77--DD Form 2581-1, Public and Community Service 

                         Organization Validation

[GRAPHIC] [TIFF OMITTED] TR10AU94.044


[[Page 419]]


[GRAPHIC] [TIFF OMITTED] TR10AU94.045



PART 78_VOLUNTARY STATE TAX WITHHOLDING FROM RETIRED PAY--Table of Contents



Sec.
78.1 Purpose.
78.2 Applicability and scope.
78.3 Definitions.
78.4 Policy.
78.5 Procedures.
78.6 Responsibilities.
78.7 Standard agreement.

    Authority: 10 U.S.C. 1045.

    Source: 50 FR 47220, Nov. 15, 1985, unless otherwise noted.

[[Page 420]]



Sec. 78.1  Purpose.

    Under 10 U.S.C. 1045, this part provides implementing guidance for 
voluntary State tax withholding from the retired pay of uniformed 
Service members. The policy and procedures for this part are also 
located in the DoD Financial Management Regulation (``DoDFMR''), Volume 
7B, Chapter 26, ``State and Local Taxes'' (DoD 7000.14-R).

[50 FR 47220, Nov. 15, 1985, as amended at 71 FR 40657, July 18, 2006]



Sec. 78.2  Applicability and scope.

    (a) This part applies to the Office of the Secretary of Defense, the 
Military Departments, the Coast Guard (under agreement with the 
Department of Transportation), the Public Health Service (PHS) (under 
agreement with the Department of Health and Human Services and the 
National Oceanic and Atmospheric Administration (NOAA) (under agreement 
with the Department of Commerce). The term ``Uniformed Services,'' as 
used herein, refers to the Army, Navy, Air Force, Marine Corps, Coast 
Guard, commissioned corps of the PHS, and the Commissioned corps of the 
NOAA.
    (b) It covers members retired from the regular and reserve 
components of the Uniformed Services who are receiving retired pay.



Sec. 78.3  Definitions.

    (a) Income tax. Any form of tax under a State statute where the 
collection of that tax either imposes on employers generally the duty of 
withholding sums from the compensation of employees and making returns 
of such sums to the State, or grants employers generally the authority 
to withhold sums from the compensation of employees if any employee 
voluntarily elects to have such sum withheld. And, the duty to withhold 
generally is imposed, or the authority to withhold generally is granted, 
with respect to the compensation of employees who are residents of such 
State.
    (b) Member. A person originally appointed or enlisted in, or 
conscripted into, a Uniformed Service who has retired from the regular 
or reserve component of the Uniformed Service concerned.
    (c) Retired pay. Pay and benefits received by a member based on 
conditions of the retirement law, pay grade, years of service, date of 
retirement, transfer to the Fleet Reserve or Fleet Marine Corps Reserve, 
or disability. It also is known as retainer pay.
    (d) State. Any State, the District of Columbia, the Commonwealth of 
Puerto Rico, and any territory or possession of the United States.



Sec. 78.4  Policy.

    (a) It is the policy of the Uniformed Services to accept written 
requests from members for voluntary income tax withholding from retired 
pay when the Department of Defense has an agreement for such withholding 
with the State named in the request.
    (b) The Department of Defense shall enter into an agreement for the 
voluntary withholding of State income taxes from retired pay with any 
State within 120 days of a request for agreement from the proper State 
official. The agreement shall provide that the Uniformed Services shall 
withhold State income tax from the monthly retired pay of any member who 
voluntarily requests such withholding in writing.



Sec. 78.5  Procedures.

    (a) The Uniformed Services shall comply with the payment 
requirements of the state, city, or county tax laws. Therefore, the 
payment requirements (biweekly, monthly, or quarterly) of the state, 
city, or county tax laws currently in effect will be observed by the 
Uniformed Services. However, payment will not be made more frequently 
than required by the state, city, or county, or more frequently than the 
payroll is paid by the Uniformed Services. Payment procedures shall 
conform, to the extent practicable, to the usual fiscal practices of the 
Uniformed Services.
    (b) A member may request that the State designated for withholding 
be changed and that the subsequent withholdings be remitted as amended. 
A member may revoke his or her request for withholding at any time. Any 
request for a change in the State designated or any revocation is 
effective

[[Page 421]]

on the first day of the month after the month in which the request or 
revocation is processed by the Uniformed Service concerned, but in no 
event later than on the first day of the second month beginning after 
the day on which the request or revocation is received by the Uniformed 
Service concerned.
    (c) A member may have in effect at any time only one request for 
withholding under this part. A member may not have more than two such 
requests in effect during any one calendar year.
    (d) The agreements with States may not impose more burdensome 
requirements on the United States than on employers generally or subject 
the United States, or any member, to a penalty or liability because of 
such agreements.
    (e) The Uniformed Services shall perform the services under this 
part without accepting payment from States for such services.
    (f) The Uniformed Services may honor a retiree's request for refund 
until a payment has been made to the State. After that, the retiree may 
seek a refund of any State tax overpayment by filing the appropriate 
State tax form with the State that received the voluntary withholding 
payments. The Uniformed Services may honor a retiree's request for 
refund until a payment has been made to the State. State refunds will be 
in accordance with State income tax policy and procedures.
    (g) A member may request voluntary tax withholding by writing the 
retired pay office of his or her Uniformed Service. The request shall 
include: The member's full name, social security number, the fixed 
amount to be withheld monthly from retired pay, the State designated to 
receive the withholding, and the member's current residence address. The 
request shall be signed by the member, or in the case of incompetence, 
his or her guardian or trustee. The amount of the request for State tax 
withholding must be an even dollar amount, not less than $10 or less 
than the State's minimum withholding amount, if higher. The Uniformed 
Services' retired pay office addresses are given as follows:
    (1) Defense Finance and Accounting Service, Attn: DFAS/PRR/CL, 1240 
East Ninth Street, Cleveland, OH 44199-2055.
    (2) Coast Guard: Commanding Officer (RPB), U.S. Coast Guard Human 
Resources Service and Information Center, 444 S. E. Quincy Street, 
Topeka, KS 66683-3591.
    (3) U.S. Public Health Service Compensation Branch, 5600 Fishers 
Lane, Room 4-50, Rockville, MD 20857.
    (4) National Oceanic and Atmospheric Administration, Commanding 
Officer (RPB), U.S. Coast Guard Human Resources Service and Information 
Center, 444 S. E. Quincy Street, Topeka, KS 66683-3591.
    (h) If a member's retired pay is not sufficient to satisfy a 
member's request for a voluntary State tax, then the withholding will 
cease. A member may initiate a new request when such member's retired 
pay is restored in an amount sufficient to satisfy the withholding 
request.
    (i) A State requesting an agreement for the voluntary withholding of 
State tax from the retired pay of members of the Uniformed Services 
shall indicate, in writing, its agreement to be bound by the provisions 
of this part. If the State proposes an agreement that varies from the 
Standard Agreement, the State shall indicate which provisions of the 
Standard Agreement are not acceptable and propose substitute provisions. 
The letter shall be addressed to the Director, Defense Finance and 
Accounting Service, 1931 Jefferson Davis Highway, Arlington, VA 22240. 
To be effective, the letter must be signed by a State official 
authorized to bind the State under an agreement for tax withholding. 
Copies of applicable State laws that authorize employers to withhold 
State income tax and authorize the official to bind the State under an 
agreement for tax withholding shall be enclosed with the letter. The 
letter also shall indicate the title and address of the official whom 
the Uniformed Services may contact to obtain information necessary for 
implementing withholding.
    (j) Within 120 days of the receipt of a letter from a State, the 
Director, Defense Finance and Accounting Service, or designee, will 
notify the State, in writing, that DoD has either entered

[[Page 422]]

into the Standard Agreement or that an agreement cannot be entered into 
with the State and the reasons for that determination.

[50 FR 47220, Nov. 15, 1985, as amended at 50 FR 49930, Dec. 6, 1985; 68 
FR 36914, June 20, 2003]



Sec. 78.6  Responsibilities.

    (a) The Assistant Secretary of Defense (Comptroller) shall provide 
guidance, monitor compliance with this part, and have the authority to 
change or modify the procedures set forth.
    (b) The Secretaries of the Military Departments and Heads of the 
other Uniformed Services shall comply with this part.



Sec. 78.7  Standard agreement.

    Standard Agreement For Voluntary State Tax Withholding From The 
Retired Pay Of Uniformed Service Members

                           Article I--Purpose

    This agreement, hereafter referred to as the ``Standard Agreement,'' 
establishes administrative procedures and assigns responsibilities for 
voluntary State tax withholding from the retired pay of Uniformed 
Service members consistent with section 654 of the Department of Defense 
Authorization Act for Fiscal Year 1985 (Pub. L. 98-525), codified as 10 
U.S.C. 1045.

                           Article II--Parties

    The parties to this agreement are the Department of Defense on 
behalf of the Uniformed Services and the State that has entered into 
this agreement pursuant to 10 U.S.C. 1045.

                         Article III--Procedures

    The parties to the Standard Agreement are bound by the provisions in 
title 32, Code of Federal Regulations, part 78. The Secretary of Defense 
may amend, modify, supplement, or change the procedures for voluntary 
State tax withholding from retired pay of Uniformed Service members 
after giving notice in the Federal Register. In the event of any such 
changes, the State will be given 45 days to terminate this agreement.

                          Article IV--Reporting

    Copies of Internal Revenue Service Form 1099R, ``Distribution From 
Pensions, Annuities, Retirement, or Profit Sharing Plan, IRAs, Insurance 
Contracts, etc.'' may be used for reporting withheld taxes to the State. 
The media for reporting (paper copy, magnetic tape, electronic file 
transfer, etc.) will comply with the state reporting standards that 
apply to employers in general.

                       Article V--Other Provisions

    A. This agreement shall be subject to any amendment of 10 U.S.C. 
1045 and any regulations issued pursuant to such statutory change.
    B. In addition to the provisions of Article III, the agreement may 
be terminated by a party to the Standard Agreement by providing the 
other party with written notice to that effect at least 90 days before 
the proposed termination.
    C. Nothing in this agreement shall be deemed to:
    1. Require the collection of delinquent tax liabilities of retired 
members of the Uniformed Services;
    2. Consent to the application of any provision of State law that has 
the effect of imposing more burdensome requirements upon the United 
States than the State imposes on other employers, or subjecting the 
United States or any member to any penalty or liability;
    3. Consent to procedures for withholding, filing of returns, and 
payment of the withheld taxes to States that do not conform to the usual 
fiscal practices of the Uniformed Services;
    4. Allow the Uniformed Services to accept payment from a State for 
any services performed with regard to State income tax withholding from 
the retired pay of Uniformed Service members.

[50 FR 47220, Nov. 15, 1985, as amended at 68 FR 36915, June 20, 2003]



PART 80_PROVISION OF EARLY INTERVENTION SERVICES TO ELIGIBLE INFANTS AND 

TODDLERS WITH DISABILITIES AND THEIR FAMILIES, AND SPECIAL EDUCATION CHILDREN 

WITH DISABILITIES WITHIN THE SECTION 6 SCHOOL ARRANGEMENTS--Table of Contents



Sec.
80.1 Purpose.
80.2 Applicability and scope.
80.3 Definitions.
80.4 Policy.
80.5 Responsibilities.
80.6 Procedures.

Appendix A to Part 80--Procedures for the Provision of Early 
          Intervention Services for Infants and Toddlers With 
          Disabilities, Ages 0-2 (Inclusive), and Their Families

[[Page 423]]

Appendix B to Part 80--Procedures for Special Educational Programs 
          (Including Related Services) and for Preschool Children and 
          Children With Disabilities (3-21 Years Inclusive)
Appendix C to Part 80--Hearing Procedures

    Authority: 20 U.S.C. 1400 et seq.; 20 U.S.C. 241; 20 U.S.C. 241 
note.

    Source: 59 FR 37680, July 25, 1994, unless otherwise noted.



Sec. 80.1  Purpose.

    This part:
    (a) Establishes policies and procedures for the provision of early 
intervention services to infants and toddlers with disabilities (birth 
to age 2 inclusive) and their families, and special education and 
related services to children with disabilities (ages 3-21 inclusive) 
entitled to receive special educational instruction or early 
intervention services from the Department of Defense under Pub. L. 81-
874, sec. 6, as amended; Pub. L. 97-35, sec. 505(c); the Individuals 
with Disabilities Education Act, Pub. L. 94-142, as amended; Pub. L. 
102-119, sec. 23; and consistent with 32 CFR parts 285 and 310, and the 
Federal Rules of Civil Procedures (28 U.S.C.).
    (b) Establishes policy, assigns responsibilities, and prescribes 
procedures for:
    (1) Implementation of a comprehensive, multidisciplinary program of 
early intervention services for infants and toddlers ages birth through 
2 years (inclusive) with disabilities and their families.
    (2) Provision of a free, appropriate education including special 
education and related services for preschool children with disabilities 
and children with disabilities enrolled in the Department of Defense 
Section 6 School Arrangements.
    (c) Establishes a Domestic Advisory Panel (DAP) on Early 
Intervention and Education for Infants, Toddlers, Preschool Children and 
Children with Disabilities, and a DoD Coordinating Committee on Domestic 
Early Intervention, Special Education and Related Services.
    (d) Authorizes the publication of DoD Regulations and Manuals, 
consistent with DoD 5025.1-M, \1\ and DoD forms consistent with DoD 
5000.12-M \2\ and DoD Directive 8910.1 \3\ to implement this part.
---------------------------------------------------------------------------

    \1\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
    \2\ See footnote 1 to Sec. 80.1(c).
    \3\ See footnote 1 to Sec. 80.1(c).
---------------------------------------------------------------------------



Sec. 80.2  Applicability and scope.

    This part:
    (a) Applies to the Office of the Secretary of Defense, the Military 
Departments, the Chairman of the Joint Chiefs of Staff and the Joint 
Staff, the Unified and Specified Commands, the Inspector General of the 
Department of Defense, the Defense Agencies, and the DoD Field Agencies 
(hereafter referred to collectively as ``the DoD Components'').
    (b) Encompasses infants, toddlers, preschool children, and children 
receiving or entitled to receive early intervention services or special 
educational instruction from the DoD on installations with Section 6 
School Arrangements, and the parents of those individuals with 
disabilities.
    (c) Applies only to schools operated by the Department of Defense 
within the Continental United States, Alaska, Hawaii, Puerto Rico, Wake 
Island, Guam, American Samoa, the Northern Mariana Islands, and the 
Virgin Islands.



Sec. 80.3  Definitions.

    (a) Assistive technology device. Any item, piece of equipment, or 
product system, whether acquired commercially or off the shelf, 
modified, or customized, that is used to increase, maintain, or improve 
functional capabilities of individuals with disabilities.
    (b) Assistive technology service. Any service that directly assists 
an individual with a disability in the selection, acquisition, or use of 
an assistive technology device. This term includes:
    (1) Evaluating the needs of an individual with a disability, 
including a functional evaluation of the individual in the individual's 
customary environment.

[[Page 424]]

    (2) Purchasing, leasing, or otherwise providing for the acquisition 
of assistive technology devices by individuals with disabilities.
    (3) Selecting designing, fitting, customizing, adapting, applying, 
maintaining, repairing, or replacing of assistive technology devices.
    (4) Coordinating and using other therapies, interventions, or 
services with assistive technology devices, such as those associated 
with existing educational and rehabilitative plans and programs.
    (5) Training or technical assistance for an individual with 
disabilities, or, where appropriate, the family of an individual with 
disabilities.
    (6) Training or technical assistance for professionals (including 
individuals providing educational rehabilitative services), employers, 
or other individuals who provide services to, employ, or are otherwise 
substantially involved in the major life functions of an individual with 
a disability.
    (c) Attention deficit disorder (ADD). As used to define students, 
encompasses attention-deficit hyperactivity disorder and attention 
deficit disorder without hyperactivity. The essential features of this 
disorder are developmentally inappropriate degrees of inattention, 
impulsiveness, and hyperactivity.
    (1) A diagnosis of ADD may be made only after the child is evaluated 
by appropriate medical personnel, and evaluation procedures set forth in 
this part (appendix B to this part) are followed.
    (2) A diagnosis of ADD, in and of itself, does not mean that a child 
requires special education; it is possible that a child diagnosed with 
ADD, as the only finding, can have his or her educational needs met 
within the regular education setting.
    (3) For a child with ADD to be eligible for special education, the 
Case Study Committee, with assistance from the medical personnel 
conducting the evaluation, must then make a determination that the ADD 
is a chronic or acute health problem that results in limited alertness, 
which adversely affects educational performance. Children with ADD who 
are eligible for special education and medically related services will 
qualify for services under ``Other Health Impaired'' as described in 
Criterion A, paragraph (h)(1) of this section.
    (d) Autism. A developmental disability significantly affecting 
verbal and non-verbal communication and social interaction generally 
evident before age 3 that adversely affects educational performance. 
Characteristics of autism include irregularities and impairments in 
communication, engagement in repetitive activities and stereotyped 
movements, resistance to environmental change or change in daily 
routines, and unusual responses to sensory experiences. The term does 
not include children with characteristics of the disability of serious 
emotional disturbance.
    (e) Case Study Committee (CSC). A school-based committee that 
determines a child's eligibility for special education, develops and 
reviews a child's individualized education program (IEP), and determines 
appropriate placement in the least restrictive environment. A CSC is 
uniquely composed for each child. Participants on a CSC must include:
    (1) The designated representative of the Section 6 School 
Arrangement, who is qualified to supervise the provision of special 
education. Such representative may not be the child's special education 
teacher.
    (2) One, or more, of the child's regular education teachers, if 
appropriate.
    (3) A special education teacher.
    (4) One, or both, of the child's parents.
    (5) The child, if appropriate.
    (6) A member of the evaluation team or another person knowledgeable 
about the evaluation procedures used with the child.
    (7) Other individuals, at the discretion of the parent or the 
Section 6 School Arrangement, who may have pertinent information.
    (f) Child-find. The ongoing process used by the Military Services 
and a Section 6 School Arrangement to seek and identify children (from 
birth to 21 years of age) who show indications that they might be in 
need of early intervention services or special education

[[Page 425]]

and related services. Child-find activities include the dissemination of 
information to the public and identification, screening, and referral 
procedures.
    (g) Children with disabilities ages 5-21 (inclusive). Those children 
ages 5-21 years (inclusive), evaluated in accordance with this part, who 
are in need of special education as determined by a CSC and who have not 
been graduated from a high school or who have not completed the 
requirements for a General Education Diploma. The terms ``child'' and 
``student'' may also be used to refer to this population. The student 
must be determined eligible under one of the following four categories:
    (1) Criterion A. The educational performance of the student is 
adversely affected, as determined by the CSC, by a physical impairment; 
visual impairment including blindness; hearing impairment including 
deafness; orthopedic impairment; or other health impairment, including 
ADD, when the condition is a chronic or acute health problem that 
results in limited alertness; autism; and traumatic brain injury 
requiring environmental and/or academic modifications.
    (2) Criterion B. A student who manifests a psychoemotional condition 
that is the primary cause of educational difficulties; a student who 
exhibits maladaptive behavior to a marked degree and over a long period 
of time that interferes with skill attainment, classroom functioning or 
performance, social-emotional condition, and who as a result requires 
special education. The term does not usually include a student whose 
difficulties are primarily the result of:
    (i) Intellectual deficit;
    (ii) Sensory or physical impairment;
    (iii) Attention deficit hyperactivity disorder;
    (iv) Antisocial behavior;
    (v) Parent-child or family problems;
    (vi) Disruptive behavior disorders;
    (vii) Adjustment disorders;
    (viii) Interpersonal or life circumstance problems; or
    (ix) Other problems that are not the result of a severe emotional 
disorder.
    (3) Criterion C. The educational performance of the student is 
adversely affected, as determined by the CSC, by a speech and/or 
language impairment.
    (4) Criterion D. The measured academic achievement of the student in 
math, reading, or language is determined by the CSC to be adversely 
affected by underlying disabilities (including mental retardation and 
specific learning disability) including either an intellectual deficit 
or an information processing deficit.
    (5) Criterion E. A child, 0-5 inclusive, whose functioning level as 
determined by the CSC, is developmentally delayed and would qualify for 
special education and related services as determined by this regulation.
    (h) Consent. This term means that:
    (1) The parent of an infant, toddler, child, or preschool child with 
a disability has been fully informed, in his or her native language, or 
in another mode of communication, of all information relevant to the 
activity for which permission is sought.
    (2) The parent understands and agrees in writing to the 
implementation of the activity for which his or her permission is 
sought. The writing must describe that activity, list the child's 
records that will be released and to whom, and acknowledge that the 
parent understands consent is voluntary and may be prospectively revoked 
at any time.
    (3) The parent of an infant, toddler, preschool child or child must 
consent to the release of records. The request for permission must 
describe that activity, list each individual's records that will be 
released and to whom, and acknowledge that the parent understands that 
consent is voluntary and may be prospectively revoked at any time.
    (4) The written consent of a parent of an infant or toddler with a 
disability is necessary for implementation of early intervention 
services described in the individualized family service plan (IFSP). If 
such parent does not provide consent with respect to a particular early 
intervention service, then the early intervention services for which 
consent is obtained shall be provided.
    (i) Deaf. A hearing loss or deficit so severe that the child is 
impaired in processing linguistic information

[[Page 426]]

through hearing, with or without amplification, to the extent that his 
or her educational performance is adversely affected.
    (j) Deaf-blind. Concomitant hearing and visual impairments, the 
combination of which causes such severe communication and other 
developmental and educational problems that they cannot be accommodated 
in special education programs solely for children with deafness or 
children with blindness.
    (k) Developmental delay. A significant discrepancy in the actual 
functioning of an infant or toddler when compared with the functioning 
of a nondisabled infant or toddler of the same chronological age in any 
of the following areas of development: Physical development, cognitive 
development, communication development, social or emotional development, 
and adaptive development as measured using standardized evaluation 
instruments and confirmed by clinical observation and judgment. A 
significant discrepancy exists when the one area of development is 
delayed by 25 percent or 2 standard deviations or more below the mean or 
when two areas of development are each delayed by 20 percent or 1\1/2\ 
standard deviations or more below the mean. (Chronological age should be 
corrected for prematurity until 24 months of age.)
    (l) Early intervention service coordination services. Case 
management services that include integration and oversight of the 
scheduling and accomplishment of evaluation and delivery of early 
intervention services to an infant or toddler with a disability and his 
or her family.
    (m) Early intervention services. Developmental services that:
    (1) Are provided under the supervision of a military medical 
department.
    (2) Are provided using Military Health Service System and community 
resources.
    (i) Evaluation IFSP development and revision, and service 
coordination services are provided at no cost to the infant's or 
toddler's parents.
    (ii) Incidental fees (e.g., child care fees) that are normally 
charged to infants, toddlers, and children without disabilities or their 
parents may be charged.
    (3) Are designed to meet the developmental needs of an infant or 
toddler with a disability in any one or more of the following areas: 
Physical development, cognitive development, communication development, 
social or emotional development, or adaptive development.
    (4) Meet the standards developed by the Assistant Secretary of 
Defense for Health Affairs (ASD(HA)).
    (5) Include the following services: Family training, counseling, and 
home visits; special instruction; speech pathology and audiology; 
occupational therapy; physical therapy; psychological services; early 
intervention program coordination services; medical services only for 
diagnostic or evaluation purposes; early identification, screening, and 
assessment services; vision services; and social work services. Also 
included are assistive technology devices and assistive technology 
services; health services necessary to enable the infant or toddler to 
benefit from the above early intervention services; and transportation 
and related costs that are necessary to enable an infant or toddler and 
the infant's or toddler's family to receive early intervention services.
    (6) Are provided by qualified personnel, including: Special 
educators; speech and language pathologists and audiologists; 
occupational therapists; physical therapists; psychologists; social 
workers; nurses' nutritionists; family therapists; orientation and 
mobility specialists; and pediatricians and other physicians.
    (7) To the maximum extent appropriate, are provided in natural 
environments, including the home and community settings in which infants 
and toddlers without disabilities participate.
    (8) Are provided in conformity with an IFSP.
    (n) Evaluation. Procedures used to determine whether an individual 
(birth through 21 inclusive) has a disability under this part and the 
nature and extent of the early intervention services and special 
education and related services that the individual needs. These 
procedures must be used selectively with an individual and may not 
include

[[Page 427]]

basic tests administered to, or used with, all infants, toddlers, 
preschool children or children in a school, grade, class, program, or 
other grouping.
    (o) Family training, counseling, and home visits. Services provided, 
as appropriate, by social workers, psychologists, and other qualified 
personnel to assist the family of an infant or toddler eligible for 
early intervention services in understanding the special needs of the 
child and enhancing the infant or toddler's development.
    (p) Free appropriate public education. Special education and related 
services for children ages 3-21 years (inclusive) that:
    (1) Are provided at no cost (except as provided in paragraph (xx)(1) 
of this section, to parents or child with a disability and are under the 
general supervision and direction of a Section 6 School Arrangement.
    (2) Are provided at an appropriate preschool, elementary, or 
secondary school.
    (3) Are provided in conformity with an Individualized Education 
Program.
    (4) Meet the requirements of this part.
    (q) Frequency and intensity. The number of days or sessions that a 
service will be provided, the length of time that the service is 
provided during each session, whether the service is provided during 
each session, and whether the service is provided on an individual or 
group basis.
    (r) Health services. Services necessary to enable an infant or 
toddler, to benefit from the other early intervention services under 
this part during the time that the infant or toddler is receiving the 
other early intervention services. The term includes:
    (1) Such services as clean intermittent catheterization, 
tracheostomy care, tube feeding, the changing of dressings or osteotomy 
collection bags, and other health services.
    (2) Consultation by physicians with other service providers on the 
special health care needs of infants and toddlers with disabilities that 
will need to be addressed in the course of providing other early 
intervention services.
    (3) The term does not include the following:
    (i) Services that are surgical in nature or purely medical in 
nature.
    (ii) Devices necessary to control or treat a medical condition.
    (iii) Medical or health services that are routinely recommended for 
all infants or toddlers.
    (s) Hearing impairment. A hearing loss, whether permanent or 
fluctuating, that adversely affects an infant's, toddler's, preschool 
child's, or child's educational performance.
    (t) High probability for developmental delay. An infant or toddler 
with a medical condition that places him or her at substantial risk of 
evidencing a developmental delay before the age of 5 years without the 
benefit of early intervention services.
    (u) Include; such as. Not all the possible items are covered, 
whether like or unlike the ones named.
    (v) Independent evaluation. An evaluation conducted by a qualified 
examiner who is not employed by the DoD Section 6 Schools.
    (w) Individualized education program (IEP). A written statement for 
a preschool child or child with a disability (ages 3-21 years inclusive) 
developed and implemented in accordance with this part (appendix B to 
this part).
    (x) Individualized family service plan (IFSP). A written statement 
for an infant or toddler with a disability and his or her family that is 
based on a multidisciplinary assessment of the unique needs of the 
infant or toddler and concerns and the priorities of the family, and an 
identification of the services appropriate to meet such needs, concerns, 
and priorities.
    (y) Individuals with disabilities. Infants and toddlers with 
disabilities, preschool children with disabilities, and children with 
disabilities, collectively, ages birth to 21 years (inclusive) who are 
either entitled to enroll in a Section 6 School Arrangement or would, 
but for their age, be so entitled.
    (z) Infants and toddlers with disabilities. Individuals from birth 
to age 2 years (inclusive), who need early intervention services because 
they:
    (1) Are experiencing a developmental delay, as measured by 
appropriate diagnostic instruments and procedures, of 25 percent (or 2 
standard deviations below the mean), in one or more areas,

[[Page 428]]

or 20 percent (or 1\1/2\ standard deviations below the mean), in two or 
more of the following areas of development: Cognitive, physical, 
communication, social or emotional, or adaptive development.
    (2) Are at-risk for a developmental delay; i.e., have a diagnosed 
physical or mental condition that has a high probability of resulting in 
developmental delay; e.g., chromosomal disorders and genetic syndromes.
    (aa) Intercomponent. Cooperation among the DoD Components and 
programs so that coordination and integration of services to individuals 
with disabilities and their families occur.
    (bb) Medically related services. (1) Medical services (as defined in 
paragraph (cc) of this section) and those services provided under 
professional medical supervision that are required by a CSC either to 
determine a student's eligibility for special education or, if the 
student is eligible, the special education and related services required 
by the student under this part in accordance with 32 CFR part 345.
    (2) Provision of either direct or indirect services listed on an IEP 
as necessary for the student to benefit from the educational curriculum. 
These services may include: Medical; social work; community health 
nursing; dietary; psychiatric diagnosis; evaluation, and follow up; 
occupational therapy; physical therapy; audiology; ophthalmology; and 
psychological testing and therapy.
    (cc) Medical services. Those evaluative, diagnostic, and supervisory 
services provided by a licensed and credentialed physician to assist 
CSCs and to implement IEPs. Medical services include diagnosis, 
evaluation, and medical supervision of related services that by statute, 
regulation, or professional tradition are the responsibility of a 
licensed and credentialed physician.
    (dd) Mental retardation. Significantly subaverage general 
intellectual functioning, existing concurrently with deficits in 
adaptive behavior and manifested during the developmental period, that 
adversely affects a preschool child's or child's educational 
performance.
    (ee) Multidisciplinary. The involvement of two or more disciplines 
or professions in the provision of integrated and coordinated services, 
including evaluation and assessment activities, and development of an 
IFSP or IEP.
    (ff) Native language. When used with reference to an individual of 
limited English proficiency, the language normally used by such 
individuals, or in the case of an infant, toddler, preschool child or 
child, the language normally used by the parent of the infant, toddler, 
preschool child or child.
    (gg) Natural environments. Settings that are natural or normal for 
the infant or toddler's same age peers who have no disability.
    (hh) Non-section 6 school arrangement or facility. A public or 
private school or other institution not operated in accordance with 32 
CFR part 345. This term includes Section 6 special contractual 
arrangements.
    (ii) Nutrition services. These services include:
    (1) Conducting individual assessments in nutritional history and 
dietary intake; anthropometric, biochemical and clinical variables; 
feeding skills and feeding problems; and food habits and food 
preferences.
    (2) Developing and monitoring appropriate plans to address the 
nutritional needs of infants and toddlers eligible for early 
intervention services.
    (3) Making referrals to appropriate community resources to carry out 
nutrition goals.
    (jj) Orthopedic impairment. A severe physical impairment that 
adversely affects a child's educational performance. The term includes 
congenital impairments (such as club foot and absence of some member), 
impairments caused by disease (such as poliomyelitis and bone 
tuberculosis), and impairments from other causes such as cerebral palsy, 
amputations, and fractures or burns causing contracture.
    (kk) Other health impairment. Having an autistic condition that is 
manifested by severe communication and other developmental and 
educational problems; or having limited strength, vitality, or alertness 
due to chronic or acute health problems that adversely affect a child's 
educational performance as determined by the CSC, such

[[Page 429]]

as: ADD, heart condition, tuberculosis, rheumatic fever, nephritis, 
asthma, sickle cell anemia, hemophilia, epilepsy, lead poisoning, 
leukemia, and diabetes.
    (ll) Parent. The biological father or mother of a child; a person 
who, by order of a court of competent jurisdiction, has been declared 
the father or mother of a child by adoption; the legal guardian of a 
child; or a person in whose household a child resides, provided that 
such person stands in loco parentis to that child and contributes at 
least one-half of the child's support.
    (mm) Personally identifiable information. Information that includes 
the name of the infant, toddler, preschool child, child, parent or other 
family member; the home address of the infant, toddler, preschool child, 
child, parent or other family member; another personal identifier, such 
as the infant's, toddler's, preschool child's, child's, parent's or 
other family member's social security number; or a list of personal 
characteristics or other information that would make it possible to 
identify the infant, toddler, preschool child, child, parent, or other 
family member with reasonable certainty.
    (nn) Preschool children with disabilities. These are students, ages 
3-5 years (inclusive), who need special education services because they:
    (1) Are experiencing developmental delays, as measured by 
appropriate diagnostic instruments and procedures in one or more of the 
following areas: Cognitive development, physical development, 
communication development, social or emotional development, and adaptive 
development; and
    (2) Who, by reason thereof, need special education and related 
services.
    (oo) Primary referral source. The DoD Components, including child 
care centers, pediatric clinics, and parents that suspect an infant, 
toddler, preschool child or child has a disability and bring that 
infant, toddler, preschool child or child to the attention of the Early 
Intervention Program or school CSC.
    (pp) Public awareness program. Activities focusing on early 
identification of infants and toddlers with disabilities, including the 
preparation and dissemination by the military medical department to all 
primary referral sources of information materials for parents on the 
availability of early intervention services. Also includes procedures 
for determining the extent to which primary referral sources within the 
Department of Defense, especially within DoD medical treatment 
facilities, and physicians disseminate information on the availability 
of early intervention services to parents of infants or toddlers with 
disabilities.
    (qq) Qualified. With respect to instructional personnel, a person 
who holds at a minimum a current and applicable teaching certificate 
from any of the 50 States, Puerto Rico, or the District of Columbia, or 
has met other pertinent requirements in the areas in which he or she is 
providing special education or related services not of a medical nature 
to children with disabilities. Providers of early intervention services 
and medically related services must meet standards established by the 
ASD(HA).
    (rr) Related services. This includes transportation, and such 
developmental, corrective, and other supportive services (including 
speech pathology and audiology; psychological services; physical and 
occupational therapy; recreation, including therapeutic recreation and 
social work services; and medical and counseling services), including 
rehabilitation counseling (except that such medical services shall be 
for diagnostic and evaluative purposes only) as may be required to 
assist a child with a disability to benefit from special education, and 
includes the early identification and assessment of disabling conditions 
in preschool children or children. The following list of related 
services is not exhaustive and may include other developmental, 
corrective, or supportive services (such as clean intermittent 
catheterization), if they are required to assist a child with a 
disability to benefit from special education, as determined by a CSC.
    (1) Audiology. This term includes:
    (i) Audiological, diagnostic, and prescriptive services provided by 
audiologists who have a Certificate of Clinical Competence--Audiology 
(CCC-A) and pediatric experience. Audiology shall not include speech 
therapy.

[[Page 430]]

    (ii) Identification of children with hearing loss.
    (iii) Determination of the range, nature, and degree of hearing 
loss, including referral for medical or other professional attention 
designed to ameliorate or correct that loss.
    (iv) Provision of ameliorative and corrective activities, including 
language and auditory training, speech-reading (lip-reading), hearing 
evaluation, speech conservation, the recommendation of amplification 
devices, and other aural rehabilitation services.
    (v) Counseling and guidance of children, parents, and service 
providers regarding hearing loss.
    (vi) Determination of the child's need for group and individual 
amplification, selecting and fitting an appropriate aid, and evaluating 
the effectiveness of amplification.
    (2) Counseling services. Services provided by qualified social 
workers, psychologists, guidance counselors, or other qualified 
personnel to help a preschool child or child with a disability to 
benefit from special education.
    (3) Early identification. The implementation of a formal plan for 
identifying a disability as early as possible in the individual's life.
    (4) Medical services. Those evaluative, diagnostic, and supervisory 
services provided by a licensed and credentialed physician to assist 
CSCs in determining whether a child has a medically related disability 
condition that results in the child's need for special education and 
related services and to implement IEPs. Medical services include 
diagnosis, evaluation, and medical supervision of related services that, 
by statute, regulation, or professional tradition, are the 
responsibility of a licensed and credentialed physician.
    (5) Occupational therapy. Therapy that provides developmental 
evaluations and treatment programs using selected tasks to restore, 
reinforce, or enhance functional performance. It addresses the quality 
and level of functions in areas such as behavior, motor coordination, 
spatial orientation; visual motor and sensory integration; and general 
activities of daily living. This therapy, which is conducted or 
supervised by a qualified occupational therapist, provides training and 
guidance in using special equipment to improve the patient's functioning 
in skills of daily living, work, and study.
    (6) Parent counseling and training. Assisting parents in 
understanding the special needs of their preschool child or child and 
providing parents with information about child development and special 
education.
    (7) Physical therapy. Therapy that provides evaluations and 
treatment programs using exercise, modalities, and adaptive equipment to 
restore, reinforce, or enhance motor performance. It focuses on the 
quality of movement, reflex development, range of motion, muscle 
strength, gait, and gross motor development, seeking to decrease 
abnormal movement and posture while facilitating normal movement and 
equilibrium reactions. The therapy, which is conducted by a qualified 
physical therapist, provides for measurement and training in the use of 
adaptive equipment and prosthetic and orthotic appliances. Therapy may 
be conducted by a qualified physical therapist assistant under the 
clinical supervision of a qualified physical therapist.
    (8) Psychological services. Services listed in paragraphs (rr) (8) 
(i) through (rr) (8) (iv) of this section that are provided by a 
qualified psychologist:
    (i) Administering psychological and educational tests and other 
assessment procedures.
    (ii) Interpreting test and assessment results.
    (iii) Obtaining, integrating, and interpreting information about a 
preschool child's or child's behavior and conditions relating to his or 
her learning.
    (iv) Consulting with other staff members in planning school programs 
to meet the special needs of preschool children and children, as 
indicated by psychological tests, interviews, and behavioral 
evaluations.
    (v) Planning and managing a program of psychological services, 
including psychological counseling for preschool children, children, and 
parents. For the purpose of these activities, a qualified psychologist 
is a psychologist licensed in a State of the United States who has a 
degree in clinical or school

[[Page 431]]

psychology and additional pediatric training and/or experience.
    (9) Recreation. This term includes:
    (i) Assessment of leisure activities.
    (ii) Therapeutic recreational activities.
    (iii) Recreational programs in schools and community agencies.
    (iv) Leisure education.
    (10) School health services. Services provided, pursuant to an IEP, 
by a qualified school health nurse, or other qualified person, that are 
required for a preschool child or child with a disability to benefit 
from special education.
    (11) Social work counseling services in schools. This term includes:
    (i) Preparing a social and developmental history on a preschool 
child or child identified as having a disability.
    (ii) Counseling the preschool child or child with a disability and 
his or her family on a group or individual basis, pursuant to an IEP.
    (iii) Working with problems in a preschool child's or child's living 
situation (home, school, and community) that adversely affect his or her 
adjustment in school.
    (iv) Using school and community resources to enable the preschool 
child or child to receive maximum benefit from his or her educational 
program.
    (12) Speech pathology. This term includes the:
    (i) Identification of preschool children and children with speech or 
language disorders.
    (ii) Diagnosis and appraisal of specific speech or language 
disorders.
    (iii) Referral for medical or other professional attention to 
correct or ameliorate speech or language disorders.
    (iv) Provision of speech and language services for the correction, 
amelioration, and prevention of communicative disorders.
    (v) Counseling and guidance of preschool children, children, 
parents, and teachers regarding speech and language disorders.
    (13) Transportation. This term includes transporting the individual 
with a disability and, when necessary, an attendant or family member or 
reimbursing the cost of travel ((e.g., mileage, or travel by taxi, 
common carrier or other means) and related costs (e.g., tolls and 
parking expenses)) when such travel is necessary to enable a preschool 
child or child to receive special education (including related services) 
or an infant or toddler and the infant's or toddler's family to receive 
early intervention services. Transportation services include:
    (i) Travel to and from school and between schools, including travel 
necessary to permit participation in educational and recreational 
activities and related services.
    (ii) Travel from school to a medically related service site and 
return.
    (iii) Travel in and around school buildings.
    (iv) Travel to and from early intervention services.
    (v) Specialized equipment (including special or adapted buses, 
lifts, and ramps) if required to provide special transportation for an 
individual with a disability.
    (vi) If necessary, attendants assigned to vehicles transporting an 
individual with a disability when that individual requires assistance to 
be safely transported.
    (ss) Section 6 School Arrangement. The schools (pre-kindergarten 
through grade 12) operated by the Department of Defense within the 
CONUS, Alaska, Hawaii, Puerto Rico, Wake Island, Guam, American Samoa, 
the Northern Mariana Islands, and the Virgin Islands. Section 6 School 
Arrangements are operated under DoD Directive 1342.21. \4\
---------------------------------------------------------------------------

    \4\ See footnote 1 to Sec. 80.1(c).
---------------------------------------------------------------------------

    (tt) Separate facility. A school or a portion of a school, 
regardless of whether it is used by the Section 6 School Arrangement, 
that is only attended by children with disabilities.
    (uu) Serious emotional disturbance. The term includes:
    (1) A condition that has been confirmed by clinical evaluation and 
diagnosis and that, over a long period of time and to a marked degree, 
adversely affects educational performance and that exhibits one or more 
of the following characteristics:
    (i) An inability to learn that cannot be explained by intellectual, 
sensory, or health factors.

[[Page 432]]

    (ii) An inability to build or maintain satisfactory interpersonal 
relationships with peers and teachers.
    (iii) Inappropriate types of behavior under normal circumstances.
    (iv) A tendency to develop physical symptoms or fears associated 
with personal or school problems.
    (v) A general, pervasive mood of unhappiness or depression.
    (2) Schizophrenia, but does not include children who are socially 
maladjusted, unless it is determined that they are otherwise seriously 
emotionally disturbed.
    (vv) Service provider. Any individual who provides services listed 
in an IEP or an IFSP.
    (ww) Social work services. This term includes:
    (1) Preparing a social or developmental history on an infant, 
toddler, preschool child or child with a disability.
    (2) Counseling with the infant, toddler, preschool child or child 
and family in a group or individual capacity.
    (3) Working with individuals with disabilities (0-21 inclusive) in 
the home school, and/or community environment to ameliorate those 
conditions that adversely affect development or educational performance.
    (4) Using school and community resources to enable the child to 
receive maximum benefit from his or her educational program or for the 
infant, toddler, and family to receive maximum benefit from early 
intervention services.
    (xx) Special education. Specially designed instruction, at no cost 
to the parent, to meet the unique needs of a preschool child or child 
with a disability, including instruction conducted in the classroom, in 
the home, in hospitals and institutions, and in other settings, and 
instruction in physical education. The term includes speech pathology or 
any other related service, if the service consists of specially designed 
instruction, at no cost to the parents, to meet the unique needs of a 
preschool child or child with a disability, and is considered ``special 
education'' rather than a ``related service.'' The term also includes 
vocational education if it consists of specially designed instruction, 
at no cost to the parents, to meet the unique needs of a child with a 
disability.
    (1) At no cost. With regard to a preschool child or child eligible 
to attend Section 6 School Arrangements, specially designed instruction 
and related services are provided without charge, but incidental fees 
that are normally charged to nondisabled students, or their parents, as 
a part of the regular educational program may be imposed.
    (2) Physical education. The development of:
    (i) Physical and motor fitness.
    (ii) Fundamental motor skills and patterns.
    (iii) Skills in aquatics, dance, and individual and group games and 
sports (including intramural and lifetime sports).
    (iv) A program that includes special physical education, adapted 
physical education, movement education, and motor development.
    (3) Vocational education. This term means organized educational 
programs that are directly related to the preparation of individuals for 
paid or unpaid employment, or for additional preparation for a career 
requiring other than a baccalaureate or advanced degree.
    (yy) Special instruction. This term includes:
    (1) Designing learning environments and activities that promote the 
infant's, toddler's, preschool child's or child's acquisition of skills 
in a variety of developmental areas, including cognitive processes and 
social interaction.
    (2) Planning curriculum, including the planned interaction of 
personnel, materials, and time and space, that leads to achieving the 
outcomes in the infant's, toddler's, preschool child's or child's IEP or 
IFSP.
    (3) Providing families with information, skills, and support related 
to enhancing the skill development of the infant, toddler, or preschool 
child or child.
    (4) Working with the infant, toddler, preschool child, or child to 
enhance the infant's, toddler's, preschool child's or child's 
development and cognitive processes.
    (zz) Specific learning disability. A disorder in one or more of the 
basic psychological processes involved in understanding or in using 
spoken or written

[[Page 433]]

language that may manifest itself as an imperfect ability to listen, 
think, speak, read, write, spell, or do mathematical calculations. The 
term includes such conditions as perceptual disabilities, brain injury, 
minimal brain dysfunction, dyslexia, and developmental aphasia. The term 
does not include preschool children or children who have learning 
problems that are primarily the result of visual, hearing, or motor 
disabilities, mental retardation, emotional disturbance, or 
environmental, cultural, or economic differences.
    (aaa) Speech and language impairments. A communication disorder, 
such as stuttering, impaired articulation, voice impairment, or a 
disorder in the receptive or expressive areas of language that adversely 
affects a preschool child's or child's educational performance.
    (bbb) Superintendent. The chief official of a Section 6 School 
Arrangement responsible for the implementation of this part on his or 
her installation.
    (ccc) Transition services. A coordinated set of activities for a 
toddler that may be required to promote movement from early 
intervention, preschool, and other educational programs into different 
programs or educational settings. For a student 14 years of age and 
older, transition services are designed within an outcome-oriented 
process, which promotes movement from school to post-school activities, 
including post-secondary education, vocational training, integrated 
employment (including supported employment), continuing and adult 
education, adult services, independent living, or community 
participation. The coordinated set of activities shall be based upon the 
individual student's needs, taking into account the student's 
preferences and interests, and shall include instruction, community 
experiences, the development of employment and other post-school adult 
living objectives, and when appropriate, acquisition of daily living 
skills and functional vocational evaluation.
    (ddd) Traumatic brain injury. An injury to the brain caused by an 
external physical force or by an internal occurrence, such as stroke or 
aneurysm, resulting in total or partial functional disability or 
psychosocial maladjustment that adversely affects educational 
performance. The term includes open or closed head injuries resulting in 
mild, moderate, or severe impairments in one or more areas, including 
cognition; language, memory; attention; reasoning; abstract thinking; 
judgment; problem solving; sensory; perceptual and motor abilities; 
psychosocial behavior; physical function; and information processing and 
speech. The term does not include brain injuries that are congenital or 
degenerative or brain injuries that are induced by birth trauma.
    (eee) Vision services. Services necessary to ameliorate the effects 
of sensory impairment resulting from a loss of vision.
    (fff) Visual impairment. A sensory impairment including blindness 
that, even with correction, adversely affects a preschool child's or 
child's educational performance. The term includes both partially seeing 
and blind preschool children and children.



Sec. 80.4  Policy.

    It is DoD policy that:
    (a) All individuals with disabilities ages 3 to 21 years receiving 
or entitled to receive educational instruction from the Section 6 School 
Arrangements shall be provided a free, appropriate education under this 
part in accordance with the IDEA as amended, 20 U.S.C. Chapter 33; Pub. 
L. 102-119, Section 23; and DoD Directive 1342.21.
    (b) All individuals with disabilities ages birth through 2 years 
(inclusive) and their families are entitled to receive early 
intervention services under this part, provided that such infants and 
toddlers would be eligible to enroll in a Section 6 School Arrangement 
but for their age.



Sec. 80.5  Responsibilities.

    (a) The Under Secretary of Defense for Personnel and Readiness 
(USD(P&R)) shall:
    (1) Ensure that all infants and toddlers with disabilities (birth 
through 2 years inclusive) who but for their age would be eligible to 
attend the Section 6 Arrangement Schools, and their families are 
provided early intervention services in accordance with IDEA as

[[Page 434]]

amended, (20 U.S.C., Chapter 33, Subchapter VIII.) and in conformity 
with the procedures in appendix A to this part.
    (2) Ensure that preschool children and children with disabilities 
ages 3-21 years (inclusive) receiving educational instruction from 
Section 6 School Arrangements are provided a free appropriate public 
education and that the educational needs of such preschool children and 
children with disabilities are met using the procedures established by 
this part.
    (3) Ensure that educational facilities and services provided by 
Section 6 School Arrangements for preschool children and children with 
disabilities are comparable to educational facilities and services for 
non-disabled students.
    (4) Maintain records on special education and related services 
provided to children with disabilities, consistent with 32 CFR part 310.
    (5) Ensure the provision of all necessary diagnostic services and 
special education and related services listed on an IEP (including those 
supplied by or under the supervision of physicians) to preschool 
children and children with disabilities who are enrolled in Section 6 
School Arrangements. In fulfilling this responsibility, (USD(P&R)), or 
designee, may use intercomponent arrangements, or act through contracts 
with private parties, when funds are authorized and appropriated.
    (6) Develop and implement a comprehensive system of personnel 
development, in accordance with 20 U.S.C. 1413-(a)(3), for all 
professional staff employed by a Section 6 School Arrangement. This 
system shall include:
    (i) Inservice training of general and special educational 
instructional and support personnel,
    (ii) Implementing innovative strategies and activities for the 
recruitment and retention of medically related service providers,
    (iii) Detailed procedures to assure that all personnel necessary to 
carry out the purposes of this part are appropriately and adequately 
prepared and trained, and
    (iv) Effective procedures for acquiring and disseminating to 
teachers and administrators of programs for children with disabilities 
significant information derived from educational research, 
demonstration, and similar projects, and
    (v) Adopting, where appropriate, promising practices, materials, and 
technology.
    (7) Provide technical assistance to professionals in Section 6 
School Arrangements involved in, or responsible for, the education of 
preschool children or children with disabilities.
    (8) Ensure that child-find activities are coordinated with other 
relevant components and are conducted to locate and identify every 
individual with disabilities.
    (9) Issue guidance implementing this part.
    (10) Undertake evaluation activities to ensure compliance with this 
part through monitoring, technical assistance, and program evaluation.
    (11) Chair the DoD Coordinating Committee on Domestic Early 
Intervention, Special Education, and Related Services, which shall be 
composed of representatives of the Secretaries of the Military 
Departments, the Assistant Secretary of Defense for Health Affairs 
(ASD(HA)), the General Counsel of the Department of Defense (GC, DoD), 
and the Director, Section 6 Schools.
    (12) Through the DoD Coordinating Committee on Demestic Early 
Intervention, Special Education, and Related Services, monitor the 
provision of special education and related services and early 
intervention services furnished under this part, and ensure that related 
services, special education, and early intervention services are 
properly coordinated.
    (13) Ensure that appropriate personnel are trained to provide 
mediation services in cases that otherwise might result in due process 
proceedings under this part.
    (14) Ensure that transition services from early intervention 
services to regular or special education and from special education to 
the world of work are provided.
    (15) Ensure that all DoD programs that provide services to infants 
and toddlers and their families (e.g., child

[[Page 435]]

care, medical care, recreation) are involved in a comprehensive 
intercomponent system for early intervention services.
    (16) Ensure, whenever practicable, that planned construction not yet 
past the 35 percent design phase and new design begun after the date of 
this part of renovation of school or child care facilities includes 
consideration of the space required for the provision of medically 
related services and early intervention services.
    (17) Shall establish the Domestic Advisory Panel that shall:
    (i) Consist of members appointed by the USD (P&R) or Principal 
Deputy USD (P&R). Membership shall include at least one representative 
from each of the following groups:
    (A) Individuals with disabilities.
    (B) Parents, including minority parents of individuals with 
disabilities from various age groups.
    (C) Section 6 School Arrangements special education teachers.
    (D) Section 6 School Arrangements regular education teachers.
    (E) Section 6 School Arrangements Superintendent office personnel.
    (F) The Office of Director, Section 6 Schools.
    (G) The Surgeons General of the Military Departments.
    (H) The Family Support Programs of the Military Departments.
    (I) Section 6 School Arrangements School Boards.
    (J) Early Intervention service providers on installations with 
Section 6 School Arrangements.
    (K) Other appropriate personnel.
    (ii) Meet as often as necessary.
    (iii) Perform the following duties:
    (A) Review information and provide advice to ASD (P&R) regarding 
improvements in services provided to individuals with disabilities in 
Section 6 Schools and early intervention programs.
    (B) Receive and consider the views of various parent, student, and 
professional groups, and individuals with disabilities.
    (C) When necessary, establish committees for short-term purposes 
composed of representatives from parent, student, family and other 
professional groups, and individuals with disabilities.
    (D) Review the findings of fact and decision of each impartial due 
process hearing conducted pursuant to this part.
    (E) Assist in developing and reporting such information and 
evaluations as may aid Section 6 Schools and the Military Departments in 
the performance of duties under the part.
    (F) Make recommendations, based on program and operational 
information, for changes in the budget, organization, and general 
management of the special education program, and in policy and 
procedure.
    (G) Comment publicly on rules or standards regarding the education 
of individuals with disabilities.
    (H) Assist in developing recommendations regarding the transition of 
toddlers with disabilities to preschool services.
    (b) The Assistant Secretary of Defense for Health Affairs in 
consultation with the USD(P&R), the GC, DoD, and the Secretaries of the 
Military Departments, shall:
    (1) Establish staffing and personnel standards for personnel who 
provide early intervention services and medically related services.
    (2) Develop and implement a comprehensive system of personnel 
development in accordance with 20 U.S.C. 1413(a)(3), including the 
training of professionals, paraprofessionals and primary referral 
sources, regarding the basic components of early intervention services 
and medically related services. Such a system may include:
    (i) Implementing innovative strategies and activities for the 
recruitment and retention of early intervention service providers.
    (ii) Ensuring that early intervention service providers and 
medically related service providers are fully and appropriately 
qualified to provide early intervention services and medically related 
services, respectively.
    (iii) Training personnel to work in the military environment.
    (iv) Training personnel to coordinate transition services for 
infants and toddlers with disabilities from an early intervention 
program to a preschool program.

[[Page 436]]

    (3) Develop and implement a system for compiling data on the numbers 
of infants and toddlers with disabilities and their families in need of 
appropriate early intervention services, the numbers of such infants and 
toddlers and their families served, the types of services, and other 
information required to evaluate the implementation of early 
intervention programs.
    (4) Resolve disputes among the DoD Components arising under appendix 
A of this part.
    (c) Secretaries of the Military Departments shall:
    (1) Provide quality assurance for medically related services in 
accordance with personnel standards and staffing standards under DoD 
Directive 6025.13 \5\ developed by the Assistant Secretary of Defense 
for Health Affairs (ASD(HA)).
---------------------------------------------------------------------------

    \5\ See footnote 1 to Sec. 80.1(c).
---------------------------------------------------------------------------

    (2) Plan, develop, and implement a comprehensive, coordinated, 
intercomponent, community-based system of early intervention services 
for infants and toddlers with disabilities (birth through 2 inclusive) 
and their families who are living on an installation with a Section 6 
School Arrangement, or who but for their age, would be entitled to 
enroll in a Section 6 School Arrangement, using the procedures 
established by this part and guidelines from the ASD(HA) on staffing and 
personnel standards.
    (3) Undertake activities to ensure compliance with this part through 
technical assistance, program evaluation, and monitoring.
    (d) The Director, Defense Office of Hearings and Appeals (DOHA) 
shall ensure the provision of impartial due process hearings under 
appendix C of this part.



Sec. 80.6  Procedures.

    (a) Procedures for the provision of early intervention services for 
infants and toddlers with disabilities and their families are in 
appendix A to this part. Provision of early intervention services 
includes establishing a system of coordinated, comprehensive, 
multidisciplinary, intercomponent services providing appropriate early 
intervention services to all eligible infants and toddlers with 
disabilities and their families.
    (b) Procedures for special educational programs (including related 
services) for preschool children and children with disabilities (3-21 
years inclusive) are in appendix B to this part.
    (c) Procedures for adjudicative requirements required by Pub. L. 
101-476, as amended, and Pub. L. 102-119 are in appendix C to this part. 
These procedures establish adjudicative requirements whereby the parents 
of an infant, toddler, preschool child or child with a disability and 
the military department concerned or Section 6 School System are 
afforded an impartial due process hearing on early intervention services 
or on the identification, evaluation, and educational placement of, and 
the free appropriate public education provided to, such infant, toddler, 
preschool child or child, as the case may be.



   Sec. Appendix A to Part 80--Procedures for the Provision of Early 

 Intervention Services for Infants and Toddlers With Disabilities, Ages 

                0-2 years (Inclusive), and Their Families

       A. Requirements For A System of Early Intervention Services

    1. A system of coordinated, comprehensive, multidisciplinary, and 
intercomponent programs providing appropriate early intervention 
services to all infants and toddlers with disabilities and their 
families shall include the following minimum components:
    a. A timely, comprehensive, multidisciplinary evaluation of the 
functioning of each infant and toddler with a disability and the 
priorities and concerns of the infant's or toddler's family to assist in 
the development of the infant or toddler with a disability.
    b. A mechanism to develop, for each infant and toddler with a 
disability, an IFSP and early intervention services coordination, in 
accordance with such service plan.
    c. A comprehensive child-find system, coordinated with the 
appropriate Section 6 School Arrangement, including a system for making 
referrals to service providers that includes timelines and provides for 
participation by primary referral sources, such as the CDC and the 
pediatric clinic.
    d. A public awareness program including information on early 
identification of infants and toddlers with disabilities and the 
availability of resources in the community to address and remediate 
these disabilities.

[[Page 437]]

    e. A central directory that includes a description of the early 
intervention services and other relevant resources available in the 
community.

B. Each Military Medical Department Shall Develop and Implement a System 
                             To Provide for:

    1. The administration and supervision of early intervention programs 
and services, including the identification and coordination of all 
available resources.
    2. The development of procedures to ensure that services are 
provided to infants and toddlers with disabilities and their families in 
a timely manner.
    3. The execution of agreements with other DoD components necessary 
for the implementation of this appendix. Such agreements must be 
coordinated with the ASD(HA) and the GC, DoD, in consultation with the 
USD(P&R).
    4. The collection and reporting of data required by ASD(HA).
    5. A multidisciplinary assessment of the unique strengths and needs 
of the infant or toddler and the identification of services appropriate 
to meet such needs.
    6. A family-directed assessment of the resources, priorities, and 
concerns of the family and the identification of the supports and 
services necessary to enhance the family's capacity to meet the 
developmental needs of its infant or toddler with a disability.

   C. Each Military Medical Department Shall Develop and Implement a 
 Program To Ensure That an IFSP Is Developed for Each Infant or Toddler 
With a Disability and the Infant's or Toddler's Family According to the 
                          Following Procedures:

    1. The IFSP shall be evaluated once a year and the family shall be 
provided a review of the plan at 6-month intervals (or more often where 
appropriate), based on the needs of the infant or toddler and family.
    2. Each initial meeting and each annual meeting to evaluate the IFSP 
must include the following participants:
    a. The parent or parents of the infant or toddler.
    b. Other family members, as requested by a parent, if feasible to do 
so.
    c. An advocate, if his or her participation is requested by a 
parent.
    d. The Early Intervention Program Services Coordinator who has been 
working with the family since the initial referral of the infant or 
toddler or who has been designated as responsible for the implementation 
of the IFSP.
    e. A person or persons directly involved in conducting the 
evaluation and assessments.
    f. Persons who will be providing services to the infant, toddler, or 
family, as appropriate.
    g. If a person or persons listed in paragraph C.2 of this section is 
unable to attend a meeting, arrangements must be made for involvement 
through other means, including:
    (1) Participating in a telephone call.
    (2) Having a knowledgeable authorized representative attend the 
meeting.
    (3) Making pertinent records available at the meeting.
    3. The IFSP shall be developed within a reasonable time after the 
assessment. With the parent's consent, early intervention services may 
start before the completion of such an assessment under an IFSP.
    4. The IFSP shall be in writing and contain:
    a. A statement of the infant's or toddler's present levels of 
physical development, cognitive development, communication development, 
social or emotional development, and adaptive development, based on 
acceptable objective criteria.
    b. A statement of the family's resources, priorities, and concerns 
for enhancing the development of the family's infant or toddler with a 
disability.
    c. A statement of the major outcomes expected to be achieved for the 
infant or toddler and the family, and the criteria, procedures, and 
timelines used to determine the degree to which progress toward 
achieving the outcomes is being made and whether modifications or 
revisions of the outcomes or services are necessary.
    d. A statement of the specific early intervention services necessary 
to meet the unique needs of the infant or toddler and the family, 
including the frequency, intensity, and the method of delivering 
services.
    e. A statement of the natural environments in which early 
intervention services shall be provided.
    f. The projected dates for initiation of services and the 
anticipated duration of such services.
    g. The name of the Early Intervention Program Service Coordinator.
    h. The steps to be taken supporting the transition of the toddler 
with a disability to preschool services or other services to the extent 
such services are considered appropriate.
    5. The contents of the IFSP shall be fully explained to the parents 
by the Early Intervention Program Service Coordinator, and informed 
written consent from such parents shall be obtained before the provision 
of early intervention services described in such plan. If the parents do 
not provide such consent with respect to a particular early intervention 
service, then the early intervention services to which such consent is 
obtained shall be provided.

       D. Procedural Safeguards for the Early Intervention Program

    1. The procedural safeguards include:

[[Page 438]]

    a. The timely administrative resolution of complaints by the 
parent(s), including hearing procedures (appendix C to this part).
    b. The right to protection of personally identifiable information 
under 32 CFR part 310.
    c. The right of the parent(s) to determine whether they, their 
infant or toddler, or other family members will accept or decline any 
early intervention service without jeopardizing the delivery of other 
early intervention services to which such consent is obtained.
    d. The opportunity for the parent(s) to examine records on 
assessment, screening, eligibility determinations, and the development 
and implementation of the IFSP.
    e. Written prior notice to the parent(s) of the infant or toddler 
with a disability whenever the Military Department concerned proposes to 
initiate or change or refuses to initiate or change the identification, 
evaluation, placement, or the provision of appropriate early 
intervention services to the infant and toddler with a disability.
    f. Procedures designed to ensure that the notice required in 
paragraph D.1.e. of this appendix fully informs the parents in the 
parents' native language, unless it clearly is not feasible to do so.
    g. During the pending of any proceeding under appendix C to this 
part, unless the Military Department concerned and the parent(s) 
otherwise agree, the infant or toddler shall continue to receive the 
early intervention services currently being provided, or, if applying 
for initial services, shall receive the services not in dispute.



Sec. Appendix B to Part 80--Procedures for Special Educational Programs 

 (Including Related Services) for Preschool Children and Children With 

                   Disabilities (3-21 years Inclusive)

                     A. Identification and Screening

    1. Each Section 6 School Arrangement shall locate, identify, and, 
with the consent of a parent of each preschool child or child, evaluate 
all preschool children or children who are receiving or are entitled to 
receive an education from Section 6 School Arrangements and who may need 
special education and/or related services.
    2. Each Section 6 School Arrangement shall:
    a. Provide screening, through the review of incoming records and the 
use of basic skills tests in reading, language arts, and mathematics, to 
determine whether a preschool child or child may be in need of special 
education and related services.
    b. Analyze school health data for those preschool children and 
children who demonstrate possible disabling conditions. Such data shall 
include:
    (1) Results of formal hearing, vision, speech, and language tests.
    (2) Reports from medical practitioners.
    (3) Reports from other appropriate professional health personnel as 
may be necessary, under this part, to aid in identifying possible 
disabling conditions.
    c. Analyze other pertinent information, including suspensions, 
exclusions, other disciplinary actions, and withdrawals, compiled and 
maintained by Section 6 School Arrangements that may aid in identifying 
possible disabling conditions.
    3. Each Section 6 School Arrangement, in cooperation with cognizant 
authorities at the installation on which the Section 6 School 
Arrangement is located, shall conduct ongoing child-find activities that 
are designed to identify all infants, toddlers, preschool children, and 
children with possible disabling conditions who reside on the 
installation or who otherwise either are entitled, or will be entitled, 
to receive services under this part.
    a. If an element of the Section 6 School Arrangement, a qualified 
professional authorized to provide related services, a parent, or other 
individual believes that an infant, toddler, preschool child or child 
has a possible disabling condition, that individual shall be referred to 
the appropriate CSC or early intervention coordinator.
    b. A Section 6 School Arrangement CSC shall work in cooperation with 
the Military Departments in identifying infants, toddlers, preschool 
children and children with disabilities (birth to 21 years inclusive).

                        B. Evaluation Procedures

    1. Each CSC will provide a full and comprehensive diagnostic 
evaluation of special educational, and related service needs to any 
preschool child or child who is receiving, or entitled to receive, 
educational instruction from a Section 6 School Arrangement, operated by 
the Department of Defense under Directive 1342.21, and who is referred 
to a CSC for a possible disability. The evaluation will be conducted 
before any action is taken on the development of the IEP or placement in 
a special education program.
    2. Assessment materials, evaluation procedures, and tests shall be:
    a. Racially and culturally nondiscriminatory.
    b. Administered in the native language or mode of communication of 
the preschool child or child unless it clearly is not feasible to do so.
    c. Validated for the specific purpose for which they are used or 
intended to be used.
    d. Administered by qualified personnel, such as a special educator, 
school psychologist, speech therapist, or a reading specialist, in 
conformity with the instructions

[[Page 439]]

provided by the producers of the testing device.
    e. Administered in a manner so that no single procedure is the sole 
criterion for determining eligibility and an appropriate educational 
program for a disabled preschool child or child.
    f. selected to assess specific areas of educational strengths and 
needs, not merely to provide a single general intelligence quotient.
    3. The evaluation shall be conducted by a multidisciplinary team and 
shall include a teacher or other specialist with knowledge in the areas 
of the suspected disability.
    4. The preschool child or child shall be evaluated in all areas 
related to the suspected disability. When necessary, the evaluation 
shall include:
    a. The current level of academic functioning, to include general 
intelligence.
    b. Visual and auditory acuity.
    c. Social and emotional status, to include social functioning within 
the educational environment and within the family.
    d. Current physical status, including perceptual and motor 
abilities.
    e. Vocational transitional assessment (for children ages 14-21 years 
(inclusive)).
    5. The appropriate CSC shall met as soon as possible after the 
preschool child's or child's formal evaluation to determine whether he 
or she is in need of special education and related services. The 
preschool child's or child's parents shall be invited to the meeting and 
afforded the opportunity to participate in such a meeting.
    6. The school CSC shall issue a written report that contains:
    a. A review of the formal and informal diagnostic evaluation 
findings of the multidisciplinary team.
    b. A summary of information from the parents, the preschool child or 
child, or other persons having significant previous contact with the 
preschool child or child.
    c. A description of the preschool child's or child's current 
academic progress, including a statement of his or her learning style.
    d. A description of the nature and severity of the preschool child's 
or child's disability(ies).
    7. A preschool child or child with a disability shall receive an 
individual comprehensive diagnostic evaluation every 3 years, or more 
frequently if conditions warrant, or if the preschool child's or child's 
parent, teacher, or related service provider requests an evaluation. The 
scope and nature of the reevaluation shall be determined individually, 
based upon the preschool child's or child's performance, behavior, and 
needs when the reevaluation is conducted, and be used to update or 
revise the IEP.

                C. Individualized Education Program (IEP)

    1. Section 6 School Arrangements shall ensure that an IEP is 
developed and implemented for each preschool child or child with a 
disability enrolled in a Section 6 School Arrangement or placed on 
another institution by a Section 6 School Arrangement CSC under this 
part.
    2. Each IEP shall include:
    a. A statement of the preschool child's or child's present levels of 
educational performance.
    b. A statement of annual goals, including short-term instructional 
objectives.
    c. A statement of the specific special educational services and 
related services to be provided to the preschool child or child 
(including the frequency, number of times per week/month and intensity, 
amount of times each day) and the extent to which the preschool child or 
child may be able to participate in regular educational programs.
    d. The projected anticipated date for the initiation and the 
anticipated length of such activities and services.
    e. Appropriate objective criteria and evaluation procedures and 
schedules for determining, on an annual basis, whether educational goals 
and objectives are being achieved.
    f. A statement of the needed transition services for the child 
beginning no later than age 16 and annually thereafter (and when 
determined appropriate for the child, beginning at age 14 or younger) 
including, when appropriate, a statement of DoD Component 
responsibilities before the child leaves the school setting.
    3. Each preschool child or child with a disability shall be provided 
the opportunity to participate, with adaptations when appropriate, in 
the regular physical education program available to students without 
disabilities unless:
    a. The preschool child or child with a disability is enrolled full-
time in a separate facility; or
    b. The preschool child or child with a disability needs specially 
designed physical education, as prescribed in his or her IEP.
    4. If specially designed physical education services are prescribed 
in the IEP of a preschool child or child with a disability, the Section 
6 School Arrangement shall provide such education directly, or shall 
make arrangements for the services to be provided through a non-Section 
6 School Arrangement or another facility.
    5. Section 6 School Arrangements shall ensure that a preschool child 
or child with a disability, enrolled by a CSC in a separate facility, 
receives appropriate, physical education in compliance with this part.

[[Page 440]]

    6. The IEP for each preschool child or child with a disability shall 
be developed and reviewed at least annually in meetings that include the 
following participants:
    a. The designated representative of the Section 6 School 
Arrangement, who is qualified to supervise the provision of special 
education. Such representative may not be the preschool child's or 
child's special education teacher.
    b. One, or more, of the preschool child's or child's regular 
education teachers, if appropriate.
    c. The preschool child's or child's special education teacher or 
teachers.
    d. One, or both, of the preschool child's or child's parents.
    e. The child, if appropriate.
    f. For a preschool child or child with a disability who has been 
evaluated, a member of the evaluation team or another person 
knowledgeable about the evaluation procedures used with that student and 
familiar with the results of the evaluation.
    g. Other individuals, at the reasonable discretion of the parent(s) 
or the school.
    7. Section 6 School Arrangements shall:
    2a. Ensure that an IEP meeting is held, normally within 10 working 
days, following a determination by the appropriate CSC that the 
preschool child or child is eligible to receive special education and/or 
related services.
    b. Address the needs of a preschool child or child with a current 
IEP who transfers from a school operated by the DoD in accordance with 
32 CFR part \1\ or from a Section 6 School Arrangement to a Section 6 
School Arrangement, by:
---------------------------------------------------------------------------

    \1\ Copies of DoD Directive 1342.6 may be obtained, at cost, from 
the National Technical Information Service, 5285 Port Royal Road, 
Springfield, VA 22161.
---------------------------------------------------------------------------

    (1)Implementing the current IEP; or
    (2) Revising the current IEP with the consent of a parent; or
    (3) Initiating, with the consent of a parent, an evaluation of the 
preschool child or child, while continuing to provide appropriate 
services through a current IEP; or
    (4) Initiating, with the consent of the parent, an evaluation of the 
preschool child or child without the provision of the services in the 
current IEP; or
    (5) Initiating mediation, and if necessary, due process procedures.
    c. Afford the preschool child's or child's parent(s) the opportunity 
to participate in every IEP or CSC meeting about their preschool child 
or child by:
    (1) Providing the parent(s) adequate written notice of the purpose, 
time, and place of the meeting.
    (2) Attempting to schedule the meeting at a mutually agreeable time 
and place.
    8. If neither parent can attend the meeting, other methods to 
promote participation by a parent, such as telephone conservations and 
letters, shall be used.
    9. A meeting may be conducted without a parent in attendance if the 
Section 6 School Arrangement is unable to secure the attendance of the 
parent. In this case, the Section 6 School Arrangement must have written 
records of its attempts to arrange a mutually acceptable time and place.
    10. If the parent(s) attends the IEP meeting, the Section 6 School 
Arrangement shall take necessary action to ensure that at least one of 
the parents understands the proceedings at the meeting, including 
providing an interpreter for a parent who is deaf or whose native 
language is other than English.
    11. The section 6 School Arrangement shall give a parent a copy of 
the preschool child's IEP.
    12. Section 6 School Arrangements shall provide special education 
and related services, in accordance with an IEP, provided that the 
Department of Defense, its constituent elements, and its personnel, are 
not accountable if a preschool child or child does not achieve the 
growth projected in the IEP.
    13. Section 6 School Arrangements shall ensure that an IEP is 
developed and implemented for each preschool child or child with a 
disability whom the CSC places in a non-Section 6 School or other 
facility.

        D. Placement Procedures and Least Restrictive Environment

    1. The placement of a preschool child or child in any special 
education program by the Section 6 School Arrangement shall be made only 
under an IEP and after a determination has been made that such student 
has a disability and needs special education and/or related services.
    2. The Section 6 School Arrangement CSC shall identify the special 
education and related services to be provided under the IEP.
    3. A placement decision may not be implemented without the consent 
of a parent of the preschool child or child, except as otherwise 
provided in accordance with this part.
    4. The placement decision must be designed to educate a preschool 
child or child with a disability in the least restrictive environment so 
that such student is educated to the maximum extent appropriate with 
students who do not have disabilities. Special classes, separate 
schooling, or other removal of preschool children or children with 
disabilities from the regular educational environment shall occur only 
when the nature or severity of the disability is such that the preschool 
child or child with disabilities cannot be educated satisfactorily in 
the regular classes with the use of supplementary aids and services, 
including related services.

[[Page 441]]

    5. Each educational placement for a preschool child or child with a 
disability shall be:
    a. Determined at least annually by the appropriate CSC.
    b. Based on the preschool child or child's IEP.
    c. Located as close as possible to the residence of the parent who 
is sponsoring the preschool child or child for attendance in a Section 6 
School Arrangement.
    d. Designed to assign the preschool child or child to the school 
such student would attend if he or she were not a student with a 
disability, unless the IEP requires some other arrangement.
    e. Predicated on the consideration of all factors affecting the 
preschool child's or child's well-being, including the effects of 
separation from parent(s).
    f. To the maximum extent appropriate, designed so that the preschool 
child or child participates in school activities, including meals and 
recess periods, with students who do not have a disability.

      E. Children With Disabilities Placed in Non-Section 6 School 
                              Arrangements

    1. Before a Section 6 School Arrangement CSC, with the concurrence 
of the Section 6 School Arrangement Superintendent concerned, places a 
preschool child or child with a disability in a non-Section 6 School or 
facility, the Section 6 School CSC shall conduct a meeting in accordance 
with this part to initiate the development of an IEP for such student.
    2. Preschool children and children with disabilities eligible to 
receive instruction in Section 6 School Arrangements who are referred to 
another school or facility by the Section 6 School CSC have all the 
rights of students with disabilities who are attending the Section 6 
School Arrangement.
    a. If a Section 6 School Arrangement CSC places a preschool child or 
child with a disability in a non-Section 6 School Arrangement or 
facility as a means of providing special education and related services, 
the program of that facility, including nonmedical care, room, and 
board, as set forth in the student's IEP, must be at no cost to the 
student or the student's parents.
    b. A Section 6 School Arrangement CSC may place a preschool child or 
child with a disability in a non-Section 6 School Arrangement or 
facility only if required by an IEP. An IEP for a student placed in a 
non-Section 6 School is not valid until signed by the Section 6 School 
Arrangement Superintendent, or designee, who must have participated in 
the IEP meeting. The IEP shall include determinations that:
    (1) The Section 6 School Arrangement does not currently have, and 
cannot reasonably create, an educational program appropriate to meet the 
needs of the student with a disability.
    (2) The non-Section 6 School Arrangement or facility and its 
educational program conform to this part.
    3. A Section 6 School Arrangement is not responsible for the cost of 
a non-Section 6 School Arrangement placement when placement is made 
unilaterally, without the approval of the cognizant CSC and the 
Superintendent, unless it is directed by a hearing officer under 
appendix C of this part or a court of competent jurisdiction.

                        F. Procedural Safeguards

    1. Parents shall be given written notice before the Section 6 School 
Arrangement CSC proposes to initiate or change, or refuses to initiate 
or change, either the identification, evaluation, or educational 
placement of a preschool child or child receiving, or entitled to 
receive, special education and related services from a Section 6 School 
Arrangement, or the provision of a free appropriate public education by 
the Section 6 School Arrangement to the child. The notice shall fully 
inform a parent of the procedural rights conferred by this part and 
shall be given in the parent's native language, unless it clearly is not 
feasible to do so.
    2. The consent of a parent of a preschool child or child with a 
disability or suspected of having a disability shall be obtained before 
any:
    a. Initiation of formal evaluation procedures;
    b. Initial special educational placement; or
    c. Change in educational placement.
    3. If a parent refuses consent to any formal evaluation or initial 
placement in a special education program, the Section 6 School 
Arrangement Superintendent may initiate an impartial due process 
hearing, as provided in appendix C of this part to show why an 
evaluation or placement in a special education program should occur 
without such consent. If the hearing officer sustains the Section 6 
School Arrangement CSC position in the impartial due process hearing, 
the appropriate CSC may evaluate or provide special education and 
related services to the preschool child or child without the consent of 
a parent, subject to the parent's due process rights.
    4. A parent is entitled to an independent evaluation of his or her 
preschool child or child at the Section 6 School Arrangement's expense, 
if the parent disagrees with the findings of an evaluation of the 
student conducted by the school and the parent successfully challenges 
the evaluation in an impartial due process hearing.
    a. If an independent evaluation is provided at the expense of a 
Section 6 School Arrangement, it must meet the following criteria:
    (1) Conform to the requirements of this part.

[[Page 442]]

    (2) Be conducted, when possible, within the area where the preschool 
child or child resides.
    (3) Meet applicable DoD standards governing persons qualified to 
conduct an evaluation.
    b. If the final decision rendered in an impartial due process 
hearing sustains the evaluation of the Section 6 School Arrangement CSC, 
the parent has the right to an independent evaluation, but not at the 
expense of the Department of Defense or any DoD Component.
    5. The parents of a preschool child or child with a disability shall 
be afforded an opportunity to inspect and review all relevant 
educational records concerning the identification, evaluation, and 
educational placement of such student, and the provision of a free 
appropriate public education to him or her.
    6. Upon complaint presented in a written petition, the parent of a 
preschool child or child with a disability or the Section 6 School 
System shall have the opportunity for an impartial due process hearing 
provided by the Department of Defense as prescribed by appendix C of 
this part.
    7. During the pendency of any impartial due process hearing or 
judicial proceeding on the identification, evaluation, or educational 
placement of a preschool child or child with a disability receiving an 
education from a Section 6 School Arrangement or the provision of a free 
appropriate public education to such a student, unless the Section 6 
School Arrangement and a parent of the student agree otherwise, the 
student shall remain in his or her present educational placement, 
subject to the disciplinary procedures prescribed in this part.
    8. If a preschool child or child with a disability, without a 
current IEP, who is entitled to receive educational instruction from a 
Section 6 School Arrangement is applying for initial admission to a 
Section 6 School Arrangement, that student shall enter that Arrangement 
on the same basis as a student without a disability.
    9. The parent of a preschool child or child with a disability or a 
Section 6 School Arrangement employee may file a written communication 
with the Section 6 School Arrangement Superintendent about possible 
general violations of this part or Pub. L. 101-476, as amended. Such 
communications will not be treated as complaints under appendix C of 
this part.

                       G. Disciplinary Procedures

    1. All regular disciplinary rules and procedures applicable to 
students receiving educational instruction in the Section 6 School 
Arrangements shall apply to preschool children and children with 
disabilities who violate school rules and regulations or disrupt regular 
classroom activities, subject to the provisions of this section.
    2. The appropriate CSC shall determine whether the conduct of a 
preschool child or child with a disability is the result of that 
disability before the long-term suspension (10 consecutive or cumulative 
days during the school year) or the expulsion of that student.
    3. If the CSC determines that the conduct of such a preschool child 
or child with a disability results in whole or part from his or her 
disability, that student may not be subject to any regular disciplinary 
rules and procedures; and
    a. The student's parent shall be notified in accordance with this 
part of the right to have an IEP meeting before any change in the 
student's special education placement. (A termination of the student's 
education for more than 10 days, either cumulative or consecutive, 
constitutes a change of placement.)
    b. The Section 6 School Arrangement CSC or another authorized school 
official shall ensure that an IEP meeting is held to determine the 
appropriate educational placement for the student in consideration of 
his or her conduct before the tenth cumulative day of the student's 
suspension or an expulsion.
    4. A preschool child or child with a disability shall neither be 
suspended for more than 10 days nor expelled, and his or her educational 
placement shall not otherwise be changed for disciplinary reasons, 
unless in accordance with this section, except that:
    a. This section shall be applicable only to preschool children and 
children determined to have a disability under this part.
    b. Nothing contained herein shall prevent the emergency suspension 
of any preschool child or child with a disability who endangers or 
reasonable appears to endanger the health, welfare, or safety of himself 
or herself, or any other student, teacher, or school personnel, provided 
that:
    (1) The appropriate Section 6 School Arrangement CSC shall 
immediately meet to determine whether the preschool child's or child's 
conduct results from his or her disability and what change in special 
education placement is appropriate for that student.
    (2) The child's parent(s) shall be notified immediately of the 
student's suspension and of the time, purpose, and location of the CSC 
meeting and their right to attend the meeting.
    (3) A component is included in the IEP that addresses the behavioral 
needs of the student.
    (4) The suspension of the student is only effective for the duration 
of the emergency.

[[Page 443]]



             Sec. Appendix C to Part 80--Hearing Procedures

                               A. Purpose

    This appendix establishes adjudicative requirements whereby the 
parents of infants, toddlers, preschool children, and children who are 
covered by this part and, as the case may be, the cognizant Military 
Department or Section 6 School System are afforded impartial due process 
hearings and administrative appeals on the early intervention services 
or identification, evaluation, and educational placement of, and the 
free appropriate public education provided to, such children by the 
Department of Defense, in accordance with Pub. L. 101-476, as amended, 
20 U.S.C. sec. 1401 et seq.; Pub. L. 81-874, sec. 6, as amended, 20 
U.S.C. sec. 241; Pub. L. 97-35, sec. 505(c), 20 U.S.C. sec. 241 note; 
and Pub. L. 102-119, sec. 23, 20 U.S.C. sec. 241(a).

                            B. Administration

    1. The Directorate for the Defense Office of Hearings and Appeals 
(DOHA) shall have administrative responsibility for the proceedings 
authorized by this appendix.
    2. This appendix shall be administered to ensure that the findings, 
judgments, and determinations made are prompt, fair, and impartial.
    3. Impartial hearing officers, who shall be DOHA Administrative 
Judges, shall be appointed by the Director, DOHA, and shall be attorneys 
who are independent of the Section 6 School System or the Military 
Department concerned in proceedings conducted under this appendix. A 
parent shall have the right to be represented in such proceedings, at no 
cost to the government, by counsel and by persons with special knowledge 
or training with respect to the problems of individuals with 
disabilities. DOHA Department Counsel normally shall appear and 
represent the Section 6 School System in proceedings conducted under 
this appendix, when such proceedings involve a preschool child or child. 
When an infant or toddler is involved, the Military Department 
responsible under this part for delivering early intervention services 
shall either provide its own counsel or request counsel from DOHA.

                              C. Mediation

    1. Mediation can be initiated by either a parent or, as appropriate, 
the Military Department concerned or the Section 6 School System to 
resolve informally a disagreement on the early intervention services for 
an infant or toddler or the identification, evaluation, educational 
placement of, or the free appropriate public education provided to, a 
preschool child or child. The cognizant Military Department, rather than 
the Section 6 School System, shall participate in mediation involving 
early intervention services. Mediation shall consist of, but not be 
limited to, an informal discussion of the differences between the 
parties in an effort to resolve those differences. The parents and the 
appropriate school or Military Department officials may attend mediation 
sessions.
    2. Mediation must be conducted, attempted, or refused in writing by 
a parent of the infant, toddler, preschool child or child whose early 
intervention or special education services (including related services) 
are at issue before a request for, or initiation of, a hearing 
authorized by this appendix. Any request by the Section 6 School System 
or Military Department for a hearing under this appendix shall state how 
this requirement has been satisfied. No stigma may be attached to the 
refusal of a parent to mediate or to an unsuccessful attempt to mediate.

                        D. Practice and Procedure

                               1. Hearing

    a. Should mediation be refused or otherwise fail to resolve the 
issues on the provision of early intervention services or a free, 
appropriate public education to a disabled infant, toddler, preschool 
child or child or the identification, evaluation, or educational 
placement of such an individual, the parent or either the school 
principal, on behalf of the Section 6 School System, or the military 
medical treatment facility commander, on behalf of the Military 
Department having jurisdiction over the infant or toddler, may request 
and shall receive a hearing before a hearing officer to resolve the 
matter. The parents of an infant, toddler, preschool child or child and 
the Section 6 School System or Military Department concerned shall be 
the only parties to a hearing conducted under this appendix.
    b. The party seeking the hearing shall submit a written request, in 
the form of a petition, setting forth the facts, issues, and proposed 
relief, to the Director, DOHA. The petitioner shall deliver a copy of 
the petition to the opposing party (that is, the parent or the school 
principal, on behalf of the Section 6 School System, or the military 
medical treatment facility commander, on behalf of the Military 
Department), either in person or by first-class mail, postage prepaid. 
Delivery is complete upon mailing. When the Section 6 School System or 
Military Department petitions for a hearing, it shall inform the other 
parties of the deadline for filing an answer under paragraph D.1.c. of 
this appendix, and shall provide the other parties with a copy of this 
part.
    c. An opposing party shall submit an answer to the petition to the 
Director, DOHA,

[[Page 444]]

with a copy to the petitioner, within 15 calendar days of receipt of the 
petition. The answer shall be as full and complete as possible, 
addressing the issues, facts, and proposed relief. The submission of the 
answer is complete upon mailing.
    d. Within 10 calendar days after receiving the petition, the 
Director, DOHA, shall assign a hearing officer, who then shall have 
jurisdiction over the resulting proceedings. The Director, DOHA, shall 
forward all pleadings to the hearing officer.
    e. The questions for adjudication shall be based on the petition and 
the answer, provided that a party may amend a pleading if the amendment 
is filed with the hearing officer and is received by the other parties 
at least 5 calendar days before the hearing.
    f. The Director, DOHA, shall arrange for the time and place of the 
hearing, and shall provide administrative support. Such arrangements 
shall be reasonably convenient to the parties.
    g. The purpose of a hearing is to establish the relevant facts 
necessary for the hearing officer to reach a fair and impartial 
determination of the case. Oral and documentary evidence that is 
relevant and material may be received. The technical rules of evidence 
shall be relaxed to permit the development of a full evidentiary record, 
with the Federal Rules of Evidence (28 U.S.C.) serving as a guide.
    h. The hearing officer shall be the presiding officer, with judicial 
powers to manage the proceeding and conduct the hearing. Those powers 
shall include the authority to order an independent evaluation of the 
child at the expense of the Section 6 School System or Military 
Department concerned and to call and question witnesses.
    i. Those normally authorized to attend a hearing shall be the 
parents of the individual with disabilities, the counsel and personal 
representative of the parents, the counsel and professional employees of 
the Section 6 School System or Military Department concerned, the 
hearing officer, and a person qualified to transcribe or record the 
proceedings. The hearing officer may permit other persons to attend the 
hearing, consistent with the privacy interests of the parents and the 
individual with disabilities, provided the parents have the right to an 
open hearing upon waiving in writing their privacy rights and those of 
the individual with disabilities.
    j. A verbatim transcription of the hearing shall be made in written 
or electronic form and shall become a permanent part of the record. A 
copy of the written transcript or electronic record of the hearing shall 
be made available to a parent upon request and without cost. The hearing 
officer may allow corrections to the written transcript or electronic 
recording for the purpose of conforming it to actual testimony after 
adequate notice of such changes is given to all parties.
    k. The hearing officer's decision of the case shall be based on the 
record, which shall include the petition, the answer, the written 
transcript or the electronic recording of the hearing, exhibits admitted 
into evidence, pleadings or correspondence properly filed and served on 
all parties, and such other matters as the hearing officer may include 
in the record, provided that such matter is made available to all 
parties before the record is closed under paragraph D.1.m. of this 
appendix.
    l. The hearing officer shall make a full and complete record of a 
case presented for adjudication.
    m. The hearing officer shall decide when the record in a case is 
closed.
    n. The hearing officer shall issue findings of fact and render a 
decision in a case not later than 50 calendar days after being assigned 
to the case, unless a discovery request under section D.2. of this 
appendix is pending.

                              2. Discovery

    a. Full and complete discovery shall be available to parties to the 
proceeding, with the Federal Rules of Civil Procedure (28 U.S.C.) 
serving as a guide.
    b. If voluntary discovery cannot be accomplished, a party seeking 
discovery may file a motion to accomplish discovery, provided such 
motion is founded on the relevance and materiality of the proposed 
discovery to the issues. An order granting discovery shall be 
enforceable as is an order compelling testimony or the production of 
evidence.
    c. A copy of the written or electronic transcription of a deposition 
taken by the Section 6 School System or Military Department concerned 
shall be made available free of charge to a parent.

                  3. Witnesses; Production of Evidence

    a. All witnesses testifying at the hearing shall be advised that it 
is a criminal offense knowingly and willfully to make a false statement 
or representation to a Department or Agency of the United States 
Government as to any matter within the jurisdiction of the Department or 
Agency. All witnesses shall be subject to cross-examination by the 
parties.
    b. A party calling a witness shall bear the witness' travel and 
incidental expenses associated with testifying at the hearing. The 
Section 6 School System or Military Department concerned shall pay such 
expenses when a witness is called by the hearing officer.
    c. The hearing officer may issue an order compelling the attendance 
of witnesses or the production of evidence upon the hearing

[[Page 445]]

officer's own motion or, if good cause be shown, upon motion of a party.
    d. When the hearing officer determines that a person has failed to 
obey an order to testify or to produce evidence, and such failure is in 
knowing and willful disregard of the order, the hearing officer shall so 
certify.
    e. The party or the hearing officer seeking to compel testimony or 
the production of evidence may, upon the certification provided for in 
paragraph D.3.d. of the section, file an appropriate action in a court 
of competent jurisdiction to compel compliance with the hearing 
officer's order.

           4. Hearing Officer's Findings of Fact and Decision

    a. The hearing officer shall make written findings of fact and shall 
issue a decision setting forth the questions presented, the resolution 
of those questions, and the rationale for the resolution. The hearing 
officer shall file the findings of fact and decision with the Director, 
DOHA, with a copy to the parties.
    b. The Director, DOHA, shall forward to the Director, Section 6 
Schools or the Military Department concerned and the Domestic Advisory 
Panel copies, with all personally identifiable information deleted, of 
the hearing officer's findings of fact and decision or, in cases that 
are administratively appealed, of the final decision of the DOHA Appeal 
Board.
    c. The hearing officer shall have the authority to impose financial 
responsibility for early intervention services, educational placements, 
evaluations, and related services under his or her findings of fact and 
decision.
    d. The findings of fact and decision of the hearing officer shall 
become final unless a notice of appeal is filed under section F.1. of 
this appendix. The Section 6 School System or Military Department 
concerned shall implement a decision as soon as practicable after it 
becomes final.

                    E. Determination Without Hearing

    1. At the request of a parent of the infant, toddler, preschool 
child or child when early intervention or special educational (including 
related) services are at issue, the requirement for a hearing may be 
waived, and the case may be submitted to the hearing officer on written 
documents filed by the parties. The hearing officer shall make findings 
of fact and issue a decision within the period fixed by paragraph D.1.n. 
of this appendix.
    2. The Section 6 School System or Military Department concerned may 
oppose a request to waive the hearing. In that event, the hearing 
officer shall rule on the request.
    3. Documents submitted to the hearing officer in a case determined 
without a hearing shall comply with paragraph D.1.g. of this appendix. A 
party submitting such documents shall provide copies to all other 
parties.

                                F. Appeal

    1. A party may appeal the hearing officer's findings of fact and 
decision by filing a written notice of appeal with the Director, DOHA, 
within 5 calendar days of receipt of the findings of fact and decision. 
The notice of appeal must contain the appellant's certification that a 
copy of the notice of appeal has been provided to all other parties. 
Filing is complete upon mailing.
    2. Within 10 calendar days of the filing the notice of appeal, the 
appellant shall submit a written statement of issues and arguments to 
the Director, DOHA, with a copy to the other parties. The other parties 
shall submit a reply or replies to the Director, DOHA, within 15 
calendar days of receiving the statement, and shall deliver a copy of 
each reply to the appellant. Submission is complete upon mailing.
    3. The Director, DOHA, shall refer the matter on appeal to the DOHA 
Appeal Board. It shall determine the matter, including the making of 
interlocutory rulings, within 60 calendar days of receiving timely 
submitted replies under section F.2. of this appendix. The DOHA Appeal 
Board may require oral argument at a time and place reasonable 
convenient to the parties.
    4. The determination of the DOHA Appeal Board shall be a final 
administrative decision and shall be in written form. It shall address 
the issues presented and set forth a rationale for the decision reached. 
A determination denying the appeal of a parent in whole or in part shall 
state that the parent has the right under Pub. L. 101-476, as amended, 
to bring a civil action on the matters in dispute in a district court of 
the United States without regard to the amount in controversy.
    5. No provision of this part or other DoD guidance may be construed 
as conferring a further right of administrative review. A party must 
exhaust all administrative remedies afforded by this appendix before 
seeking judicial review of a determination made under this appendix.

             G. Publication and Indexing of Final Decisions

    The Director, DOHA, shall ensure that final decisions in cases 
arising under this Appendix are published and indexed to protect the 
privacy rights of the parents who are parties in those cases and the 
children of such parents, in accordance with 32 CFR part 310.

[[Page 446]]



PART 81_PATERNITY CLAIMS AND ADOPTION PROCEEDINGS INVOLVING MEMBERS AND FORMER 

MEMBERS OF THE ARMED FORCES--Table of Contents



Sec.
81.1 Reissuance and purpose.
81.2 Applicability.
81.3 Policy.

    Authority: Sec. 301, 80 Stat. 379; (5 U.S.C. 301).

    Source: 43 FR 15149, Apr. 11, 1978, unless otherwise noted.



Sec. 81.1  Reissuance and purpose.

    This part reissued DoD Directive 1344.3, ``Paternity Claims and 
Adoption Proceedings Involving Members and Former Members of the Armed 
Forces,'' to standardize procedures for the handling of:
    (a) Paternity claims against members and former members of the Armed 
Forces, and
    (b) Requests from civilian courts concerning the availability of 
members and former members of the Armed Forces to appear at an adoption 
hearing where it is alleged that such member is the father of an 
illegitimate child.



Sec. 81.2  Applicability.

    The provisions of this part apply to the Military Departments.



Sec. 81.3  Policy.

    (a) Members on active duty. (1) Allegations of paternity against 
members of the Armed Forces who are on active duty will be transmitted 
to the individual concerned by the appropriate military authorities.
    (2) If there exists a judicial order or decree of paternity or child 
support duly rendered by a United States or foreign court of competent 
jurisdiction against such a member, the commanding officer in the 
appropriate Military Departments will advise the member of his moral and 
legal obligations as well as his legal rights in the matter. See 42 
U.S.C. 659. The member will be encouraged to render the necessary 
financial support to the child and take any other action considered 
proper under the circumstances.
    (3) Communications from a judge of a civilian court, including a 
court summons or a judical order, concerning the availability of 
personnel to appear at an adoption hearing, where it is alleged that an 
active duty member is the father of an illegitimate child, shall receive 
a reply that:
    (i) Due to military requirements, the member cannot be granted leave 
to attend any court hearing until (date), or
    (ii) A request by the member for leave to attend an adoption court 
hearing on (date), if made, would be approved, or
    (iii) The member has stated in a sworn written statement (forward a 
copy with response) that he is not the natural parent of the child, or
    (iv) Due to the member's unavaila-bility caused by a specific 
reason, a completely responsive answer cannnot be made.
    (4) The member should be informed of the inquiry and the response 
and urged to obtain legal assistance for guidance (including an 
explanation of sections of the Soldiers' and Sailors' Civil Relief Act, 
50 U.S.C. appendix, section 501 et seq., if appropriate).
    (b) Members not on active duty. (1) Allegations of paternity against 
members of the Armed Forces who are not on active duty shall be 
forwarded to the individual concerned in such manner as to ensure that 
the allegations are delivered to the addressee only. Military channels 
will be used when practicable.
    (2) Communications from a judge of a civilian court, including a 
court summons or judicial order, concerning the availability of 
personnel to appear at an adoption hearing, where it is alleged that the 
member not on active duty is the father of an illegitimate child shall 
receive a reply that such person is not on active duty. A copy of the 
communication and the reply will be forwarded to the named individual.
    (3) When requested by a court, the last known address of inactive 
members may be furnished under the same conditions as set forth for 
former members under paragraph (c)(2) (i) and (ii) of this section.
    (c) Former members. (1) In all cases of allegations of paternity 
against former members of the Armed Forces or communication from a judge 
of a civilian

[[Page 447]]

court, including a judicial summons or court order, concerning the 
adoption of an illegitimate child of former members of the Armed Forces 
who have been separated from the Military Services, i.e., those members 
now holding no military status whatsoever, the claimant or requester 
will be (i) informed of the date of discharge, and (ii) advised that the 
individual concerned is no longer a member of the Armed Forces in any 
capacity, and that the Military Departments assume no responsibility for 
the whereabouts of individuals no longer under their jurisdiction. The 
correspondence and all accompanying documentation shall be returned to 
the claimant or requester.
    (2) In addition, the last known address of the former member will be 
furnished to the requester:
    (i) If the request is supported by a certified copy of either:
    (A) A judicial order or decree of paternity or support duly rendered 
against a former member by a United States or foreign court of competent 
jurisdiction; or
    (B) A document which establishes that the former member has made an 
official admission or statement acknowledging paternity or 
responsibility for support of a child before a court of competent 
jurisdiction, administrative or executive agency, or official authorized 
to receive it; or
    (C) A court summons, judicial order, or similar document of a court 
within the United States in a case concerning the adoption of an 
illegitimate child; wherein the former serviceman is alleged to be the 
father.
    (ii) If the claimant, with the corroboration of a physician's 
affidavit, alleges and explains an unusual medical situation which makes 
it essential to obtain information from the alleged father to protect 
the physical health of either the prospective mother or the unborn 
child.



PART 85_HEALTH PROMOTION--Table of Contents



Sec.
85.1 Purpose.
85.2 Applicability and scope.
85.3 Definitions.
85.4 Policy.
85.5 Responsibilities.
85.6 Procedures.

    Authority: 5 U.S.C. 301.

    Source: 53 FR 33123, Aug. 30, 1988, unless otherwise noted.



Sec. 85.1  Purpose.

    (a) This part establishes a health promotion policy within the 
Department of Defense to improve and maintain military readiness and the 
quality of life of DoD personnel and other beneficiaries.
    (b) This part replaces 32 CFR part 203 and establishes policy on 
smoking in DoD occupied buildings and facilities.



Sec. 85.2  Applicability and scope.

    (a) This part applies to the Office of the Secretary of Defense 
(OSD), the Military Departments, and the Defense Agencies.
    (b) It is directed to all military personnel and retirees, their 
families, and, where specified, to civilian employees.



Sec. 85.3  Definitions.

    Health Promotion. Any combination of health education and related 
organizational, social, economic or health care interventions designed 
to facilitate behavioral and environmental alterations that will improve 
or protect health. It includes those activities intended to support and 
influence individuals in managing their own health through lifestyle 
decisions and selfcare. Operationally, health promotion includes smoking 
prevention and cessation, physical fitness, nutrition, stress 
management, alcohol and drug abuse prevention, and early identification 
of hypertension.
    Lifestyle. The aggregated habits and behaviors of individuals.
    Military Personnel. Includes all U.S. military personnel on active 
duty, U.S. National Guard or Reserve personnel on active duty, and 
Military Service Academy cadets and midshipmen.
    Self-Care. Includes acceptance of responsibility for maintaining 
personal health, and decisions concerning medical care that are 
appropriate for the individual to make.
    Target Populations. Military personnel, retirees, their families, 
and civilian employees.



Sec. 85.4  Policy.

    It is DoD policy to:

[[Page 448]]

    (a) Encourage military personnel, retirees, their families and 
civilian employees to live healthy lives through an integrated, 
coordinated and comprehensive health promotion program.
    (b) Foster an environment that enhances the development of healthful 
lifestyles and high unit performance.
    (c) Recognize the right of individuals working or visiting in DoD 
occupied buildings to an environment reasonably free of contaminants.
    (d) Disallow DoD Components' participation with manufacturers or 
distributors of alcohol or tobacco products in promotional programs, 
activities, or contests aimed primarily at DoD personnel. This does not 
prevent accepting support from these manufacturers or distributors for 
worthwhile programs benefiting military personnel when no advertised 
cooperation between the Departmment of Defense and the manufacturer or 
distributor directly or indirectly identifying an alcohol or tobacco 
product with the program is required. Neither does it prevent the 
participation of military personnel in programs, activities, or contests 
approved by the manufacturers or distributors of such products when that 
participation is incidental to general public participation.



Sec. 85.5  Responsibilities.

    (a) The Assistant Secretary of Defense (Health Affairs) (ASD(HA)) 
shall coordinate and monitor the DoD health promotion program in 
accordance with this part, executing this responsibility in cooperation 
with the Assistant Secretary of Defense (Force Management and Personnel) 
and the Assistant Secretary of Defense (Reserve Affairs). The Office of 
the Assistant Secretary of Defense (Health Affairs) (ASD(HA)) shall:
    (1) Establish and chair the Health Promotion Coordinating Committee 
comprised of representatives of the Office of the Assistant Secretary of 
Defense (Force Management and Personnel) (OASD(FM&P)), Office of the 
Assistant Secretary of Defense (Acquisition and Logistics) (OASD(A&L)), 
the Office of the Assistant Secretary of Defense (Reserve Affairs) 
(OASD(RA)), each Military Service, and such other advisors as the 
OASD(HA) considers appropriate.
    (2) Facilitate exchanges of technical information and problem 
solving within and among Military Services and Defense Agencies.
    (3) Provide technical assistant, guidance and consultation.
    (4) Coordinate health data collection efforts to ensure 
standardization and facilitate joint studies across DoD components.
    (5) Review dietary standards for DoD dining facilities as specified 
in DoD Directive 3235.2 \1\
---------------------------------------------------------------------------

    \1\ Copies may be obtained, if needed, from the U.S. Naval 
Publications and Forms Center, Attn: Code 1062, 5801 Tabor Avenue, 
Philadelphia, PA 19120.
---------------------------------------------------------------------------

    (b) The Assistant Secretary of Defense (Force Management and 
Personnel) (ASD(FM&P)) shall, in collaboration with the ASD(HA), 
coordinate and monitor relevant aspects of the health promotion program. 
These include:
    (1) Use of tobacco products in DoD occupied facilities.
    (2) Operation of health promotion and screening programs at the 
worksite and in Professional Military Education, DoD Dependents Schools, 
and section 6 schools.
    (3) Dietary regulation of DoD snack concessions, and vending 
machines.
    (4) Reduction of stress in work setting.
    (5) Designate two representatives to the Health Promotion 
Coordinating Committee.
    (c) The Assistant Secretary of Defense (Reserve Affairs) (OASD(RA)) 
shall:
    (1) Coordinate and monitor relevant aspects of the health promotion 
program as it pertains to National Guard and Reserve Personnel.
    (2) Designate a representative to the Health Promotion Coordinating 
Committee.
    (d) The Secretaries of the Military Departments shall:
    (1) Develop a comprehensive health promotion program plan for their 
respective Service(s).
    (2) Establish and operate an integrated, coordinated and 
comprehensive health promotion program as prescribed by this Directive.

[[Page 449]]

    (3) Designate from their respective Service(s) a health promotion 
coordinator who shall also serve as representative to the Health 
Promotion Coordinating Committee.
    (4) Evaluate the effectiveness of their respective health promotion 
program(s).
    (e) The Directors of Defense Agencies shall develop and implement 
health promotion plans and programs for their civilian employees in 
accordance with this part.
    (f) The Assistant Secretary of Defense (Comptroller) (ASD(C)) shall 
develop and implement a health program promotion for OSD civilian 
employees.



Sec. 85.6  Procedures.

    (a) Each Military Service shall establish a health promotion program 
coordinator to serve as the focal point for all health promotion program 
issues and to integrate the activities of the medical and personnel 
departments.
    (b) A Health Promotion Coordinating Committee shall be established 
to enhance communication among the Military Services, recommend joint 
policy and program actions, review program implementation, and recommend 
methodologies and procedures for program evaluation. The Committee shall 
be chaired by the Assistant Secretary of Defense (Health Affairs) 
(ASD(HA)) or designee. Additional members shall include two 
representatives from the Office of the Assistant Secretary of Defense 
(Force Management and Personnel); one representative from the Office of 
the Assistant Secretary of Defense (Reserve Affairs); one representative 
from the office of the Assistant Secretary of Defense (Acquisition & 
Logistics); and the health promotion coordinator from each Military 
Service.
    (c) Each Component shall prepare a plan for the implementation of a 
comprehensive health promotion program that includes specific objectives 
(planned accomplishments) with measurable action steps. The plan shall 
address all of the program elements identified in the definition of 
health promotion for each group in the target populations. The plan 
shall consider workload, systems support, and training needs of 
individuals charged with responsibility at all organizational levels.
    (d) Health promotion plans and programs shall address smoking 
prevention and cessation, physical fitness, nutrition, stress 
management, alcohol and drug abuse, and early identification of 
hypertension.
    (1) Smoking prevention and cessation programs shall aim to create a 
social environment that supports abstinence and discourage use of 
tobacco products, create a healthy working environment, and provide 
smokers with encouragement and professional assistance in quitting. In 
addition to these aims, smoking prevention and cessation programs shall 
include the following elements.
    (i) Smoking shall be permitted in buildings only to the extent that 
it does not endanger the life or property, or risk impairing nonsmokers' 
health.
    (ii) The smoking of tobacco products within DoD occupied space shall 
be controlled in accordance with the following guidelines:
    (A) Smoking shall be prohibited in auditoriums, conference rooms and 
classrooms. No Smoking signs shall be prominently displayed, and 
ashtrays shall not be permitted. Receptacles may be placed at entrances 
so that visitors may dispose of lighted smoking material when entering a 
nonsmoking area.
    (B) Nonsmoking areas shall be designated and posted in all eating 
facilities in DoD occupied buildings. Smoking areas shall be permitted 
only if adequate space is available for nonsmoking patrons and 
ventilation is adequate to provide them a healthy environment.
    (C) Elevators shall be designated as nonsmoking areas.
    (D) Smoking shall be prohibited in official buses and vans.
    (E) Within the confines of medical treatment facilities, smoking 
shall be restricted to private offices and specially designated areas. 
Smoking by patients shall be limited to specially designated areas, and 
health care providers shall not smoke in the presence of patients while 
performing their duties. Smoking is permitted in visitor waiting areas 
only where space and ventilation capacities permit division

[[Page 450]]

into smoking and nonsmoking sections.
    (F) Smoking shall not be permitted in common work areas shared by 
smokers and nonsmokers unless adequate space is available for nonsmokers 
and ventilation is adequate to provide them a healthy environment. Where 
feasible, smoking preference should be considered when planning 
individual work stations so that smoking and nonsmoking areas may be 
established.
    (G) When individual living quarters are not available and two or 
more individuals are assigned to one room, smoking and nonsmoking 
preferences shall be considered in the assignment of rooms.
    (H) Smoking by students attending DoD Dependents Schools or section 
6 schools shall not be permitted on school grounds except as provided by 
policy regulations promulgated by the Director, DoDDS. Faculty and staff 
shall smoke only in specifically designated areas and shall not smoke in 
the presence of students.
    (iii) Installations shall assess the current resources, referral 
mechanisms, and need for additional smoking cessation programs. 
Occupational health clinics shall consider the feasibility of smoking 
cessation programs for civilian employees or, at a minimum, be able to 
refer employees to such programs. While smoking cessation should be 
encouraged, care shall be taken to avoid coercion or pressure on 
employees to enter smoking cessation programs against their will. 
Smoking prevention programs shall be made available in DoD Dependents 
Schools and section 6 schools.
    (iv) Information on the health consequences of smoking shall be 
incorporated with the information on alcohol and drug abuse provided to 
military personnel at initial entry and at permanent change of station 
as specified in 32 CFR part 62a. At initial entry, nonsmokers shall be 
encouraged to refrain from smoking. Smokers shall be encouraged to quit 
and be offered assistance in quitting.
    (v) As part of routine physical and dental examinations and at other 
appropriate times, health care providers should be encouraged to inquire 
about the patient's tobacco use, including use of smokeless tobacco 
products; to advise him or her of the risks associated with use, the 
health benefits of abstinence, and of where to obtain help to quit.
    (vi) Appropriate DoD health care providers should advise all 
pregnant smokers of the risks to the fetus.
    (vii) The Military Services shall conduct public education programs 
appropriate to various target audiences on the negative health 
consequences of smoking.
    (2) Physical fitness programs shall aim to encourage and assist all 
target populations to establish and maintain the physical stamina and 
cardiorespiratory endurance necessary for better health and a more 
productive lifestyle. In addition to the provisions of DoD Directive 
1308.1 \2\ and Secretary of Defense Memorandum physical fitness programs 
shall include the following elements.
---------------------------------------------------------------------------

    \2\ See footnote 1 to Sec. 85.5(a)(5).
---------------------------------------------------------------------------

    (i) Health professionals shall consider exercise programs conducive 
to improved health, and encourage appropriate use by patients. For 
military personnel, recommendations shall accord with military readiness 
requirements.
    (ii) Commanders and managers should assess the availability of 
fitness programs at or near work sites and should consider integrating 
fitness regimens into normal work routines for military personnel as 
operational commitments allow.
    (iii) The chain of command should encourage and support community 
activities that develop and promote fitness among all target 
populations. Activities should be designed to encourage the active 
participation of many people rather than competition among a highly 
motivated few.
    (3) Nutrition programs shall aim to encourage and assist all target 
populations to establish and maintain dietary habits contributing to 
good health, disease prevention, and weight control. Weight control 
involves both nutrition and exercise, and is addressed in part in DoD 
Directive 1308.1. Nutrition programs include efforts not only to help 
individuals develop appropriate dietary habits, but also to modify the

[[Page 451]]

environment so that it encourages and supports appropriate habits. 
Additionally, nutrition programs shall include the following elements.
    (i) Nutritional advice and assistance shall be provided by 
appropriate DoD health care professionals to military personnel, 
retirees, and family members.
    (ii) In military and civilian dining facilities, where feasible, 
calorie information and meals with reduced amounts of fat, salt, and 
calories shall be made readily available.
    (iii) Snack concessions and vending machines, when feasible, shall 
offer nutritious alternatives, such as fresh fruit, fruit juices, and 
whole grain products.
    (iv) Public information campaigns shall be conducted by the Military 
Services to alert all target populations about the relationship between 
diet and risk of chronic diseases.
    (4) Stress management programs shall aim to reduce environmental 
stressors and help target populations cope with stress. Additionally, 
stress management programs shall include the following elements.
    (i) Commanders should develop leadership practices, work policies 
and procedures, and physical settings that promote productivity and 
health for military personnel and civilian employees.
    (ii) Health and fitness professionals are encouraged to advise 
target groups on scientifically supported stress management techniques.
    (iii) The topic of stress management should be considered for 
integration into the curricula at appropriate Professional Military 
Education programs and in the DoD Dependents Schools and section 6 
schools to familiarize students with scientifically supported concepts 
of stress management for day-to-day problems, life transitions, and life 
crises.
    (5) Alcohol and drug abuse prevention programs shall aim to prevent 
the misuse of alcohol and other drugs, eliminate the illegal use of such 
substances, and provide counseling or rehabilitation to abusers who 
desire assistance in accordance with the provisions of 32 CFR parts 62a 
and 62 and DoD Instruction 1010.6 \3\ Additionally, alcohol and drug 
abuse prevention programs shall include the following elements.
---------------------------------------------------------------------------

    \3\ See footnote 1 to Sec. 85.5(a)(5).
---------------------------------------------------------------------------

    (i) Appropriate DoD health care professionals shall advise all 
pregnant patients and patients contemplating pregnancy about the risks 
associated with the use of alcohol and other drugs during pregnancy.
    (ii) The Military Services shall conduct public education programs 
appropriate to various target audiences. Programs should include such 
topics as alcohol and drug use and pregnancy, driving while intoxicated, 
and adolescent alcohol and drug abuse.
    (6) Hypertension prevention programs shall aim to identify 
hypertension early, provide information regarding control and lifestyle 
factors, and provide treatment referral where indicated. Early 
identification of hypertension programs shall include the following 
elements.
    (i) Hypertension screening shall be provided as part of all medical 
examinations and the annual dental examination for active duty service 
members. Screening shall also be provided to other beneficiaries, 
excluding those in the Children's Preventive Dentistry Program, at the 
time of their original request for care. Patients with abnormal 
screening results shall receive appropriate medical referrals.
    (ii) Each DoD medical facility should periodically offer mass 
hypertension screening to encourage beneficiaries to monitor their blood 
pressure regularly.
    (iii) Occupational health clinics shall make hypertension screening 
readily available to civilian employees, and shall encourage employees 
to use this service.
    (iv) Public information campaigns emphasizing the dangers of 
hypertension and the importance of periodic hypertension screening and 
dietary regulation shall be conducted.



PART 86_CRIMINAL HISTORY BACKGROUND CHECKS ON INDIVIDUALS IN CHILD CARE 

SERVICES--Table of Contents



Sec.
86.1 Purpose.

[[Page 452]]

86.2 Applicability.
86.3 Definitions.
86.4 Policy.
86.5 Responsibilities.
86.6 Procedures.

Appendix A to Part 86--Criminal History Background Check Procedures
Appendix B to Part 86--Criteria For Criminal History Background Check 
          Disqualifications
Appendix C to Part 86--State Information

    Authority: 42 U.S.C. 13041.

    Source: 58 FR 52010, Oct. 6, 1993, unless otherwise noted.



Sec. 86.1  Purpose.

    This part: (a) Implements Public Law 101-647, section 231 and Public 
Law 102-190, section 1094.
    (b) Requires procedures for existing and newly hired individuals and 
includes a review of personnel and security records to include a Federal 
Bureau of Investigation (FBI) fingerprint check and State Criminal 
History Repositories (SCHR) checks of residences listed on employment or 
certification applications.
    (c) Establishes policy, assigns responsibilities, and prescribes 
procedures for criminal history background checks for all existing and 
newly hired individuals involved in the provision of child care services 
as Federal employees, contractors, or in Federal facilities to children 
under the age of 18. The checks are required of all individuals in the 
Department of Defense involved in providing child care services defined 
in Public Law 101-647, and for policy reasons, those categories of 
individuals not expressly governed by the statute.
    (d) Allows the Department to provisionally hire such individuals 
before the completion of a background check. However, at all times while 
children are in the care of that individual, the child care provider 
must be within sight and under the supervision of a staff person whose 
background check has been successfully completed. Healthcare personnel 
shall comply with guidance provided in the Memorandum from the Assistant 
Secretary of Defense for Health Affairs (ASD(HA)) \1\, April 20, 1992.
---------------------------------------------------------------------------

    \1\ Copies may be obtained from OASD(HA) Room 3E346, The Pentagon, 
Washington, DC 220301-1200.
---------------------------------------------------------------------------

    (e) Includes all individuals providing child care services to 
children in accordance with 32 CFR part 310, Federal Personnel Manual 
(FPM), \2\ 32 CFR part 154, DoD Directive 6400.1, \3\ DoD Instruction 
6060.2, \4\ DoD Instruction 6400.2, \5\ DoD Directive 1400.13, \6\ 32 
CFR part 68, DoD Directive 6025.11, \7\ DoD Directive 1015.1, \8\, and 
32 CFR part 212.
---------------------------------------------------------------------------

    \2\ Copies may be obtained from a Federal Depositary Library, or a 
Federal Agency Personnel Office.
    \3\ Copies may be obtained from the National Technical Information 
Service, 5285 Port Royal, Springfield, VA 22161.
    \4\ See footnote 3 to Sec. 86.1(e).
    \5\ See footnote 3 to Sec. 86.1(e).
    \6\ See footnote 3 to Sec. 86.1(e).
    \7\ See footnote 3 to Sec. 86.1(e).
    \8\ See footnote 3 to Sec. 86.1(e).
---------------------------------------------------------------------------



Sec. 86.2  Applicability.

    This part applies to the Office of the Secretary of Defense, the 
Military Departments, the Chairman of the Joint Chiefs of Staff and the 
Joint Staff, the Unified and Specified Commands, the Inspector General 
of the Department of Defense, the Defense Agencies, and the DoD Field 
Activities (hereafter referred to collectively as ``the DoD 
Components'').



Sec. 86.3  Definitions.

    Terms used in this part are defined as follows.
    (a) Appropriated Fund (APF) Employees. Personnel hired by DoD 
Components with appropriated funds as defined in the FPM, Chapter 731. 
This includes temporary employees, 18 years old or older, who work with 
children.
    (b) Care provider. As defined in Public Law 101-647, section 231 and 
Public Law 102-190, section 1094. Providers included are current and 
prospective individuals hired with APF and nonappropriated funds (NAF) 
for education, treatment or healthcare, child care or youth activities, 
individuals employed under contract who work with children and those who 
are certified for care. Care providers are individuals working within 
programs that include alphabetically: Child Development Programs, DoD 
Dependents Schools, DoD-Operated or -Sponsored Activities, DoD Section 6 
School Arrangements, Foster

[[Page 453]]

Care, Private Organizations on DoD Installations, and Youth Programs. 
Background checks are required for all civilian and military providers 
(except military health care providers) involved in child care services 
who have regular contact with children.
    (c) Child. An unmarried person, whether natural child, adopted 
child, foster child, stepchild, or ward, who is a family member of a 
military member or DoD civilian or their spouse, and who is under the 
age of 18 years; or is incapable of self support because of a mental or 
physical incapacity and for whom treatment is authorized in a medical 
facility of the Military Services, ad defined in DoD Directive 6400.1.
    (d) Child abuse and/or neglect. The physical injury, sexual 
maltreatment, emotional maltreatment, deprivation of necessities, or 
other maltreatment of a child. The term encompasses both acts and 
omissions on the part of a responsible person, as defined in DoD 
Directive 6400.1.
    (e) Child care services. DoD personnel and contractors who are 
involved in any of the following: ``Child protective services (including 
the investigation of child abuse and neglect reports), social services, 
health and mental health care, child (day) care, education (whether or 
not directly involved in teaching), foster care, residential care, 
recreational or rehabilitative programs, and detention, correctional, or 
treatment services,'' as defined in Public Law 101-647, section 231.
    (f) Child Development Center (CDC). An installation facility or part 
of a facility used for child care operated under the oversight of 
Component's Child Development Programs (CDPs) and as defined in DoD 
Instruction 6060.2.
    (g) Child Development Programs (CDPs). Programs for dependents of 
DoD personnel provided in CDCs, family child care (FCC) homes, and 
alternative child care options. The care provided is on a full-day, 
part-day, or hourly basis. Care is designed to protect the health and 
safety of children and promote their physical, social, emotional, and 
intellectual development, as defined in DoD Instruction 6060.2.
    (h) Child sexual abuse. Employment, use, persuasion, inducement, 
enticement, or coercion of any child to engage in, or having a child 
assist any other person to engage in, any sexually explicit conduct (or 
any simulation of such conduct) or the rape, molestation, prostitution, 
or any other such form of sexual exploitation of children, or incest 
with children. All sexual activity between an offender and a child, when 
the offender is in a position of power over the child, is considered 
sexual maltreatment, as defined in DoD Instruction 6400.2.
    (i) Criminal history background check. An investigation based on 
fingerprints and other identifying information obtained by a law 
enforcement officer conducted through the Federal Bureau of 
Investigation-Identification Division (FBI-ID) and SCHR of all States 
that an employee or prospective employee list as current and former 
residences on an employment application initiated through the personnel 
programs of the applicable Federal Agencies, as defined in Public Law 
101-647 or through the personnel program of a given government 
contractor.
    (j) Defense Clearance and Investigations Index (DCII). The central 
DoD record of investigative files and adjudicative actions such as 
clearances and access determinations, revocations, and denials 
concerning military, civilian, and contract personnel.
    (k) DoD Dependents Schools (DoDDS). Schools operated by the 
Department of Defense for minor dependents of military members or DoD 
civilians assigned to duty in foreign countries, as defined in DoD 
Directive 1400.13.
    (l) DoD-operated or -sponsored activity. A contracted entity 
authorized by appropriate DoD officials to perform child care, 
education, treatment, or supervisory functions on DoD-controlled 
property. Examples include but are not limited to CDPs, FCC Programs, 
Medical Treatment Facilities, DoDDS, DoD Section 6 Schools, and Youth 
Programs.
    (m) DoD Section 6 Schools. The educational arrangements made for the 
provision of education to eligible dependent children by the Department 
of Defense under Public Law 81-874, section 6, as defined in 32 CFR part 
68, in the Continental United States, Alaska, Hawaii, Puerto Rico, Wake 
Island,

[[Page 454]]

Guam, American Samoa, the Northern Mariana Islands, and the Virgin 
Islands.
    (n) Family Child Care (FCC). Quarters-based child care provided in 
Government-owned or -leased quarters, in which care is provided on a 
regular basis for compensation, usually for more than 10 hours a week 
per child, to one or more (up to six) children, including the provider's 
own children under 8 years of age, as defined in DoD Instruction 6060.2
    (o) Foreign National Employees Overseas. Non-U.S. citizens hired by 
the Department of Defense for employment on an overseas installation.
    (p) Foster care. A voluntary or court-mandated program that provides 
24-hour care and supportive services in a family home or group facility 
for children who cannot be properly cared for by their own family.
    (q) Government-contracted care providers. An individual or a group 
of individuals hired under a Government contract to provide instruction, 
child care services, healthcare, or youth services. FCC providers are 
not considered contracted Government employees for this part.
    (r) Healthcare personnel. Personnel involved in the delivery of 
healthcare to children under the age of 18 on a frequent and regular 
basis. See ASD(HA) memorandum dated April 20, 1992.
    (1) Medical and dental care staff. Physicians, dentists, nurse 
practitioners, clinical social workers, clinical psychologists, 
physicians' assistants, physical therapists, and speech pathologists.
    (2) Clinical support staff. Clinical providers not granted defined 
clinical privileges to include residents, registered nurses, licensed 
practical nurses, nursing assistants, play therapists, and technicians, 
and defined in DoD Directive 6025.11.
    (s) Installation Records Check (IRC). An investigation conducted 
through the records of all installations of an individual's identified 
residences for the preceding 2 years before the date of the application. 
This record check shall include, at a minimum, police (base and/or 
military police, security office, or criminal investigators or local law 
enforcement) local files check, Drug and Alcohol Program, Family 
Housing, Medical Treatment Facility for Family Advocacy Program to 
include Service Central Registry records and mental health records, and 
any other record checks as appropriate, to the extent permitted by law.
    (t) National Agency Check (NAC). As defined in 32 CFR part 154.
    (u) National Agency Check and Inquiries (NACI). As defined in the 
FPM, Chapters 731 and 736.
    (v) Nonappropriated Fund Instrumentalities (NAFI) Employees. 
Personnel hired by the DoD Components, compensated from NAFI funds as 
defined in DoD Directive 1015.1. This includes temporary employees, 18 
years old or older, who work with children.
    (w) Private Organizations on DoD Installations. A nongovernmental 
entity authorized by the Department of Defense to perform child care 
services, education, or supervisory functions with children on DoD-
controlled property, as defined in 32 CFR part 212. Examples include 
religious groups and associations, such as scouts.
    (x) Respite care. Provides short-term child care and supportive 
services in a family home or group facility for children to relieve 
stress, prevent child abuse, and promote family unity for a parent, 
foster parent, guardian, or family member.
    (y) Regular contact. Responsible for a child or with access to 
children on a frequent basis as defined by the Component.
    (z) Specified volunteer position. A position, designated by the DoD 
Component Head or designee, such as installation commander, requiring an 
installation record check because of the nature of the volunteer work in 
child care services.
    (aa) State Criminal History Repository (SCHR). The State's central 
record of investigative files. State information, including addresses, 
phone numbers, costs and remarks, is listed in appendix C to this part.
    (bb) Supervision. Refers to having temporary responsibility for 
children in child care services, and temporary or permanent authority to 
exercise direction and control by an individual over an individual whose 
required

[[Page 455]]

background checks have been initiated but not completed.
    (cc) Temporary employees. This category includes nonstatus 
appointments to a competitive service position for a specified period, 
not to exceed a year. This includes summer hires, student interns, and 
NAFI flexible category employees.
    (dd) Volunteer activities. Activities where individuals offer 
assistance on an unpaid basis in child and youth programs or other 
activities on DoD installations. Examples include sports programs, 
religious programs, scouting programs, and preschools sponsored by 
private parent cooperatives or other associations conducted on the 
installation.
    (ee) Volunteers. Individuals who offer program assistance on an 
unpaid basis.
    (ff) Youth programs. DoD-sponsored activities, events, services, 
opportunities, information, and individual assistance responsive to the 
recreational, developmental, social, psychological, and cultural needs 
of eligible children and youth. Includes before and after school 
programs as well as holiday and summer camps.



Sec. 86.4  Policy.

    It is Department of Defense policy to:
    (a) Establish a standardized and comprehensive process for screening 
applicants for positions involving child care services on DoD 
installations and in DoD activities.
    (b) Provide fair, impartial, and equitable treatment before an 
individual may be deemed suitable to serve as an employee, a certified 
care provider, a specified volunteer position, or as an individual 
employed under contract in activities covered by this part, 32 CFR part 
310, Federal Personnel Manual (FPM), 32 CFR part 154, DoD Directive 
6400.1, DoD Instruction 6060.2, DoD Instruction 6400.2, DoD Directive 
1400.13, 32 CFR part 68, DoD Directive 6025.11, DoD Directive 1015.1, 
and 32 CFR part 212 by conducting a thorough review of all appropriate 
records as described in this part.
    (c) Protect children by denying or removing from employment, 
contract, or volunteer status any applicant or current employee who is 
determined unsuitable to provide child care services because derogatory 
information is contained in a suitability investigation.
    (d) Ensure than an individual is advised of proposed disciplinary 
action, decertification, or refusal to hire by the hiring authority or 
designee if disqualifying derogatory information is contained in a 
suitability investigation. The individual is given the opportunity to 
challenge the accuracy and completeness of reported information.
    (e) Foster cooperation among the DoD Components, other Federal 
Agencies, State and county agencies, and other civilian authorities in 
conducting criminal history background checks.



Sec. 86.5  Responsibilities.

    (a) The Assistant Secretary of Defense for Personnel and Readiness 
shall: (1) Develop policy for conducting criminal history background 
checks on individuals seeking positions involving child care services.
    (2) Monitor compliance with this part.
    (3) Coordinate oversight of criminal history background checks as 
specified under this part.
    (b) The Heads of the DoD Components shall: (1) Develop procedures to 
ensure compliance with the requirements of this part, in accordance with 
appendix A to this part.
    (2) Provide oversight of process and procedures to conduct criminal 
history background checks to include assignment of proponency.
    (3) Provide technical support and resources as required.
    (4) Coordinate participation of specific organizations within the 
DoD Component involved in the conduct of the checks.
    (5) Ensure that applicants and employees are made aware of their 
rights under 32 CFR part 310 including the right to challenge accuracy 
of records.
    (6) Maintain the records of all individuals hired, certified, or 
employed under contract for positions that involve child care services 
for 2 years following termination of their service.
    (7) Establish a mechanism to evaluate all adverse information 
resulting from criminal history background checks, using the criteria in 
appendix

[[Page 456]]

B to this part. Final suitability decisions are made by the DoD 
Component Head or designee.



Sec. 86.6  Procedures.

    The records of all existing employees and applicants for positions 
in child care services are reviewed by the Component designee according 
to the procedures prescribed in appendix A to this part.



Sec. Appendix A to Part 86--Criminal History Background Check Procedures

    This appendix establishes the procedures for conducting criminal 
history background checks on existing and newly hired individuals 
required by Public Law 101-647, section 231 and Public Law 102-190, 
section 1094. Background checks are required for all civilian providers 
involved in child care services who have regular contact with children. 
The categories of providers include current and prospective individuals 
hired with APF and NAFI funds for education, treatment or healthcare, 
child care or youth activities, and individuals employed under contract 
involved in the provision of child care services. In addition to the 
mandates of Public Law 102-190, section 1094, the Department of Defense 
requires that military members (except healthcare personnel), foster or 
respite care providers, FCC providers and family members, and specified 
volunteers shall have checks specified in this part.

                          A. Conducting Checks

    Component designees shall notify existing and newly hired 
individuals and contractors of the requirement for a review of personnel 
and security records to include an FBI fingerprint check and SCHR checks 
of residences listed on employment and security applications.
    1. Fingerprint Check. Law enforcement personnel shall forward 
completed forms through channels to the Office of Personnel Management 
(OPM) or Defense Investigative Service (DIS) for processing of FBI 
fingerprint forms.
    2. State Criminal History Repository (SCHR) Check. DoD Installation-
level personnel offices, in collaboration with law enforcement and 
security personnel, shall process State criminal history background 
checks for employment and shall ordinarily communicate in writing with 
each State identified in appendix B to part 86, providing full 
identifying information on each applicant and request confirmation that 
the individual has not been convicted in that State of a sex crime, an 
offense involving a child victim, a drug felony, or a violent crime. The 
DoD Component Heads may establish alternate procedures for conducting 
SCHR checks; e.g., a computerized, written, or telephonic check. The DoD 
Components are not required to wait longer than 60 days from the date of 
the request for a response from the SCHR personnel before taking action 
on a particular application. Authorities will depend on FBI fingerprint 
check validation if States do not respond.
    3. Installation Record Checks (IRC). Consists of a local record 
check on an individual for a minimum of 2 years before the date of the 
application. This record check shall include, at a minimum, police (base 
and/or military police, security office, criminal investigators, or 
local law enforcement) local files checks, Drug and Alcohol Program, 
Family Housing, Medical Treatment Facility for Family Advocacy Program 
Service Central Registry records and mental health records, and any 
other record checks as appropriate to the extent permitted by law. A 
Service DCII may be conducted. The IRC shall be conducted by DoD 
Component personnel at the installation level. An IRC will be completed 
on individuals with a DoD affiliation such as living or working on an 
installation or is active duty member or family member. Individuals 
without DoD affiliation have no installation system of records to check 
and an IRC is not completed. Upon favorable completion of the IRC, an 
individual may be selected and provide child care services under line of 
sight supervision until the required background checks are completed.

                              B. Applicants

                  1. Appropriated Fund (APF) Applicants

    a. Except as otherwise provided in this subsection, the DoD 
Components shall process APF applicants using currently established 
procedures for completing background checks described in 32 CFR part 
310. APF applicants must complete a SF-171, ``Application for Federal 
Employment,'' and attach an SF-87, ``Fingerprint Chart,'' completed by a 
law enforcement officer; and an SF-85P, ``Questionnaire for Public Trust 
Positions'' (Annotate Block ``B'' with code 03), for conduct of a NACI. 
The package shall be forwarded to the OPM.
    b. The DoD Components shall assign responsibility for conducting the 
criminal history background checks through the SCHR to personnel offices 
working with law enforcement or investigative agencies. They shall 
conduct checks in all States that an employee or prospective employee 
lists as current and former residences in an employment or security 
application. It is deemed unnecessary to conduct checks before 18 years 
of age because juvenile records are unavailable. If no response is 
received from the State(s) within 60 days, determinations

[[Page 457]]

based upon the FBI report may be made. Responses received after this 
determination has been made must be provided to the determining 
authority.
    c. Under Public Law 102-190, section 1094, the DoD Components may 
employ an individual pending completion of successful background checks 
described in Public Law 101-647, section 231. If an individual is so 
employed, at all times while children are in the care of that 
individual, he or she must be within sight and under the supervision of 
an individual whose background checks have been completed, with no 
derogatory reports.
    d. Once it is clear that no derogatory information exists, line of 
sight supervision is terminated by the designee. If a derogatory report 
exists, Component personnel procedures shall prescribe appropriate 
action consistent with the criteria contained in this part.

       2. Nonappropriated Fund Instrumentalities (NAFI) Applicants

    a. Except as otherwise provided in this subsection, the DoD 
Components shall process NAFI applicants following established 
procedures for completing background checks. NAFI applicants must 
complete a DD Form 398-2 ``Department of Defense National Agency 
Questionnaire,'' with reason for request identified as OTHER and 
annotated as CHILD CARE, and FD Form 258, ``FBI Applicant Fingerprint 
Card.'' Fingerprints shall be taken by the local law enforcement 
organization personnel and together with the DD Form 398-2 shall be 
forwarded to: Defense Investigative Service, Personnel Investigations 
Center, P.O. Box 1083, Baltimore, MD 21203-1083.
    b. The DoD Components shall follow the procedures in the FPM, 
Chapter 731 and 736 and in paragraph B.1.b.,c., and d. of this appendix 
to obtain fingerprints for the FBI, conduct criminal history background 
checks through the SCHR, and maintain employment of individuals pending 
the successful completion of the background checks.

                 3. Foreign National Employees Overseas

    Foreigh national employees overseas, while not expressly included 
within the law, are subject to the following record checks or those 
equivalent in scope to checks conducted on U.S. citizens:
    a. Host-government law enforcement and security agency checks at the 
city, State (province), and national level, whenever permissible by the 
laws of the host government.
    b. Defense Central Investigative Index (DCII).
    c. FBI checks (when information exists regarding residence by the 
individual in the United States for 1 year or more since age 18).
    d. When permissible by the laws of the host government, host-
government checks are requested directly by the employing Service or 
agency. As an alternative, the DoD Components may request that overseas 
Military Service investigative elements obtain appropriate host-
government checks. Where host-nations' arrangements preclude comparable 
criminal history checks, foreign nationals will not be eligible for 
employment in child care services.

                         4. Temporary Employees

    This category includes summer hires, student interns, and NAFI 
flexible category employees. Background checks for these individuals are 
processed according to funding source; i.e., for APF employees (to OPM) 
or NAFI employees (to DIS). Installation designated points of contact 
shall notify applicants of report disposition.

                         5. Healthcare Personnel

    This category includes civilian personnel involved in the delivery 
of healthcare. Within the context of such medical care, line of sight 
supervision must be viewed through the prism of existing medical quality 
assurance, clinical privileging, and licensure directives, which require 
pre-employment screens, enhanced surveillance of new employees, and 
ongoing monitoring of the performance of all healthcare providers. These 
programs are inherent to both quality medical care and patient safety 
and are adequate and equivalent mechanisms for the sight and supervision 
requirements in paragraph B.1.c. and d. of this appendix. It should be 
noted that these quality assurance programs are not sufficient in and of 
themselves under Public Law 101-647, section 231. Therefore, the 
required FBI fingerprint check and the SCHR check must be completed as 
expeditiously as possible.

                          C. Current Employees

    All currently employed individuals covered by this part shall have 
the FBI fingerprint and criminal history background check as described 
in Public Law 101-647, section 231. If the results of such checks, to 
include the SCHR, cannot be confirmed through an examination of 
available local records, action shall be initiated in accordance with 
paragraph B.1. of this appendix for APF employees and paragraph B.2. of 
this appendix for NAFI employees, and with paragraph D. of this appendix 
for individuals employed under contract. The SCHR checks are conducted 
in all cases in accordance with paragraph A.2. of this appendix. For the 
purposes of this part, no IRC is required for individuals employed 
before June 1991.

[[Page 458]]

                    D. Government Contract Employees

    1. Sponsoring activities are responsible for ensuring that the 
requirements in this part are included in the statement of work for all 
child care programs to be contracted. The contracting officer is 
responsible for performing any action necessary to verify that services 
provided by the contractor conform to contract quality requirements. 
Component designees for requiring activities shall ensure that the 
statement of work, at a minimum:
    a. States that the contractor must ensure its employees have proper 
criminal history background checks as outlined in this part.
    b. States that actual checks are performed by the Government.
    c. Includes procedures that the contractor must follow to obtain 
checks for its employees; for example, identify the office where 
employees report for processing, identify proper forms to be completed, 
etc. Also, identify the DoD Component for billing purposes, and identify 
the appropriate security point of contact or installation commander as 
the authorized recipient of background check results.
    d. States that employees may be permitted to work before completion 
of background checks, provided the employee is within sight of an 
individual who has successfully completed a background check.
    e. States that employees have the right to obtain a copy of the 
background check report, whom they should contact for the copy and whom 
to contact for procedures to challenge the accuracy and completeness of 
the information in the report.
    f. Requires that contractor employees who have previously received a 
background check must provide proof of the check or obtain a new one.
    2. Requirements for child care services must be submitted to the 
contracting officer sufficiently in advance of the required performance 
start date to provide time for obtaining background checks. Sponsoring 
activities' designees shall coordinate with the contracting officer as 
soon as possible after a requirement for child care services becomes 
known.
    3. Procedures for obtaining responses for background checks are the 
same as those for NAFI employees and response to derogatory information 
will occur through the appropriate designee and contractor. An IRC will 
be performed if the individual is a military member or family member, or 
has worked or lived on a military installation within 5 years.

                           E. Other Providers

    Criminal history background checks with the FBI and the States are 
not required. Duplication of previous background checks are not required 
for personnel where official records demonstrate that an adequate check 
has already been conducted. This category includes the following:
    1. Military Members. These are active duty individuals (other than 
healthcare personnel) who seek to provide child care services as part of 
a normal duty assignment or are involved during off-duty hours. For 
these members an IRC and a current security clearance meet the 
requirements of this part. In the absence of a current security 
clearance, a name check of the DCII must be conducted. When military 
members are employed in an APF or a NAFI position they will abide by 
background check requirements listed in paragraphs B.1. and B.2. of this 
appendix.
    2. Foster and Respite Care Providers and Family Members. These are 
individuals who seek to provide foster care or respite child care within 
Government-owned or -leased quarters. The care provider, all other 
adults, and each child, age 12 and older, residing within the 
applicant's household must receive an IRC. In addition, the Component 
designee must also obtain a name check of the DCII on all adults.
    FCC Providers and Family Members. These are individuals who seek 
licensing to provide child care within government-owned or -leased 
quarters. The care provider, all other adults, and each child, age 12 
and older, residing within the applicant's household receive an IRC. In 
addition, the Component designee must obtain a name check of the DCII on 
all adults.
    4. Specified Volunteers. Installation commanders shall designate 
those positions that are determined to be ``specified.'' Individuals 
working in specified volunteer positions will have an IRC check because 
of the nature of their work in child care services. The opportunity for 
contact may be extensive, frequent, or over a period of time. They 
include, but are not limited to, positions involving extensive 
interaction alone, extended travel, and/or overnight activities with 
children. An IRC is required for volunteers who are active-duty, a 
family member, or a DoD civilian overseas. A volunteer is allowed to 
work upon completion of a favorable IRC. Background checks are not 
required for volunteers whose services will be of shorter duration than 
is required to perform the background checks and who are under line of 
sight supervision by an individual who has successfully completed a 
background check. The Components are required to provide additional 
implementing guidance.

                  F. Employment Application Requirement

    Public Law 101-647, section 231 requires that each application for 
employment shall include a question asking whether the individual has 
ever been arrested for or charged with a crime involving a child, and, 
if so, requires a description of the disposition of the

[[Page 459]]

arrest or charge. The forms identified in paragraphs B.1.a. and B.2.a. 
of this appendix are signed by the applicant under penalty of perjury, 
with the applicable Federal punishment for perjury stated on the 
respective forms.
    1. An applicant's signature indicates an understanding of the 
employer's obligation to require a record check as a condition of 
employment. Information on background checks shall be maintained in 
accordance with applicable Component implementing regulations.
    2. Payment for the conduct of any criminal history background check 
is the responsibility of the requesting Service or agency.
    3. The results of the background check are forwarded to the 
Component designee at the sending installation for appropriate action. A 
derogatory report would include, but not be limited to, the following 
applicable crimes: Any charge or conviction for a sex crime, an offense 
involving a child victim, a substance abuse felony, or a violent crime.
    4. The hiring authority or designee is responsible for notifying the 
individual of a derogatory report. The individual may obtain a copy of 
the criminal history report and has the right to challenge the accuracy 
and completeness of any information contained in the report through the 
Privacy Program described in 32 CFR part 310. The individual may provide 
information concerning positive mitigating factors for any adverse 
information presented.
    5. Employees whose criminal history background checks result in 
nonselection for employment or service shall be informed by the 
Component designee of the right to an administrative appeal under 32 CFR 
part 310. The individual may appeal with a specific request such as 
amendments to the records or request to file statement disagreeing with 
information in the record. If the employee's request for record 
information is refused, the individual is informed of his or her right 
to an administrative appeal. As appropriate, Component designees shall 
inform individuals of other avenues available to resolve matters of 
concern such as an administrative or negotiated grievance procedures. If 
the employee remains dissatisfied, he or she may seek a review. The 
Department of Defense recognizes the privacy interests and rights of all 
applicants and employees, and its own responsibility in ensuring a safe 
and secure environment for children within DoD activities or private 
organizations on DoD installations.

                        G. Record Re-Verification

    This procedure consists of an IRC and a DCII name check and is 
required by the Component designee at a minimum every 5 years for all 
employees providing child care services and covers the time period since 
the completion of the last background check. NAFI employees who change 
duty stations will complete a new investigation when considered for 
employment. A new investigation is required by the Department of Defense 
if a break in service results in a time-lapse of more than 2 years. FCC, 
foster care and respite care providers, and their family members will 
complete an IRC annually.

                             H. Supervision

    Refers to temporary responsibility for children in child care 
services, and relates to oversight for temporary or permanent authority 
to exercise direction and control by an individual over an individual 
whose required background checks have been initiated but not completed. 
Use of video equipment is acceptable provided it is monitored by an 
individual who has successfully completed a background check. 
Supervision procedures pending completion of background checks for 
healthcare personnel suggest that the Surgeons General shall require 
close clinical supervision and full compliance with existing DoD 
Directives, Instructions, and other guidance (issued by the Department 
of Defense and the Military Department concerned) on quality assurance, 
risk management, licensure, employee orientation, and credentials 
certification. These policies rely on process and judgment, and meet the 
intent of the ``direct sight supervision'' provision, affording local 
commanders a flexible and reasonable alternative.
I. Programs. Requirements cover all DoD-operated activities and private 
          organizations on DoD installations and include, but are not 
          limited to:
    1. Child Development Programs.
    a. Child development centers, part-day preschools, and enrichment 
programs.
    b. Family child care.
    c. Contracted Services, whether personal or non-personal services.
    2. Youth Programs.
    3. Dependents Schools operated by the Department of Defense.
    4. Medical treatment facilities.
    5. Other contracted services.
    6. Private organizations on DoD installations.
    7. Volunteer activities.

                       J. Background Check Matrix

    This identifies the requirements of this part for background checks 
by category of personnel. These checks are initiated through the 
personnel offices in collaboration with law enforcement and security 
personnel. (Reminder: An IRC may only be completed on an individual who 
is a military member or family member, or who lives or works on a 
military installation.)
    1. Appropriated Fund (APF) Employees. FBI, SCHR, and IRC. (SF-171, 
SF-87, and SF-85P).

[[Page 460]]

    2. Non-appropriated Fund Instrumentalities (NAFI) Employees. FBI, 
SCHR, and IRC. (DD Form 398-2 and FD Form 258).
    3. Foreign National Employees Overseas. IRC and local government 
check.
    4. Temporary Employees. FBI, SCHR, and IRC.
    5. Current Employees. FBI and SCHR.
    6. Government Contract Employees. FBI, SCHR, and IRC.
    7. Other Providers.
    a. Military Members. Military members will have an IRC and, if no 
current security clearance exists, a name check of the DCII. Checks are 
not required for military healthcare personnel.
    b. Foster and Respite Care Providers and Family Members (age 12 and 
older). IRC and Service DCII (for adults).
    c. Family Child Care Providers and Family Members (age 12 and 
older). IRC and Service DCII (for adults).
    d. Specified Volunteers. IRC.



  Sec. Appendix B to Part 86--Criteria For Criminal History Background 

                         Check Disqualification

    The ultimate decision to determine how to use information obtained 
from the criminal history background checks in selection for positions 
involving the care, treatment, supervision, or education of children 
must incorporate a common sense decision based upon all known facts. 
Adverse information is evaluated by the DoD Component Head or designee 
who is qualified at the appropriate level of command in interpreting 
criminal history background checks. All information of record both 
favorable and unfavorable will be assessed in terms of its relevance, 
recentness, and seriousness. Likewise, positive mitigating factors 
should be considered. Final suitability decisions shall be made by that 
commander or designee. Criteria that will result in disqualification of 
an applicant require careful screening of the data and include, but are 
not limited to, the following:

                   A. Mandatory Disqualifying Criteria

    Any conviction for a sexual offense, a drug felony, a violent crime, 
or a criminal offense involving a child or children.

                        B. Discretionary Criteria

    1. Acts that may tend to indicate poor judgment, unreliability, or 
untrustworthiness in working with children.
    2. Any behavior; illness; or mental, physical, or emotional 
condition that in the opinion of a competent medical authority may cause 
a defect in judgment or reliability.
    3. Offenses involving assault, battery, or other abuse of a victim, 
regardless of age of the victim.
    4. Evidence or documentation of substance abuse dependency.
    5. Illegal or improper use, possession, or addiction to any 
controlled or psychoactive substances, narcotic, cannibas, or other 
dangerous drug.
    6. Sexual acts, conduct, or behavior that, because of the 
circumstances in which they occur, may indicate untrustworthiness, 
unreliability, lack of judgment, or irresponsibility in working with 
children.
    7. A wide range of offenses such as arson, homicide, robbery, fraud, 
or any offense involving possession or use of a firearm.
    8. Evidence that the individual is a fugitive from justice.
    9. Evidence that the individual is an illegal alien who is not 
entitled to accept gainful employment for a position.
    10. A finding of negligence in a mishap causing death or serious 
injury to a child or dependent person entrusted to their care.

                      C. Suitability Considerations

    In making a determination of suitability, the evaluator shall 
consider the following additional factors to the extent that these 
examples are considered pertinent to the individual case:
    1. The kind of position for which the individual is applying or 
employed.
    2. The nature and seriousness of the conduct.
    3. The recentness of the conduct.
    4. The age of the individual at the time of the conduct.
    5. The circumstances surrounding the conduct.
    6. Contributing social or environmental conditions.
    7. The absence or presence of rehabilitation or efforts toward 
rehabilitation.
    8. The nexus of the arrests in regard to the job to be performed.

                              D. Questions

    1. All applications, for each of the categories of individuals 
identified in Sec. 86.3, will include the following questions: ``Have 
you ever been arrested for or charged with a crime involving a child? 
Have you ever been asked to resign because of or been decertified for a 
sexual offense? And, if so, ``provide a description of the case 
disposition.'' For FCC, foster care, and respite care providers, this 
question is asked of the applicant regarding all adults, and all 
children 12 years and older, who reside in the household.
    2. All applications shall state that the form is being signed under 
penalty of perjury. In addition, a false statement rendered by an 
employee may result in adverse action up to and including removal from 
Federal service.
    3. Evaluation of criminal history background checks is made and 
monitored by

[[Page 461]]

qualified personnel at the appropriate level designated by the 
Component. Final suitability decisions are made by the designee.



              Sec. Appendix C to Part 86--State Information

    All SCHR checks should be accompanied by the following: 1. State 
form, if required. If no State form is required, the request should be 
on letterhead, beginning with the statement that the check is in 
accordance with Public Law 101-647. The request must include full 
identifying information, such as: Name, date of birth, social security 
number, complete addresses, etc.
    2. Fingerprint set if required. Some State laws require a 
fingerprint set either on a State form or forms used by the agency.
    3. Release statement signed by the applicant or employee. If 
required by the State, the release must be notarized.
    4. Payment for the SCHR check.
    5. Self-addressed, stamped envelope.
    The following is an updated listing of State addresses, fees, and 
other information:

------------------------------------------------------------------------
             Address                    Fee               Remarks
------------------------------------------------------------------------
State of Alabama, Alabama Dept.   $25............  Name check, COMM: 205-
 of Public Safety, Attn: ABI                        242-4372.
 Division, 5002 Washington Ave.,
 Montgomery, AL 36130.
State of Alaska, Alaska Dept, of  20.............  Fingerprints
 Public Safety, Information                         required, reason for
 Systems Section, 5700 Tudor                        request required
 Road, Anchorage, AK 99507.                         (comply with Pub.
                                                    L.), name and
                                                    address authorized
                                                    request and receive
                                                    SCHRC, COMM: 907-269-
                                                    5511.
State of Arizona, Arizona         No check.......  Limited release, call/
 Criminal Justice, Dept. of                         write, write for
 Public Safety, Information                         information. COMM:
 Systems Division, PO Box 6638,                     602-223-2229.
 Phoenix, AZ 80550.
State of Arkansas, Arkansas       No fee.........  Name check, written
 State Police, PO Box 5901,                         consent required,
 Little Rock, AR 72215.                             COMM: 501-221-8233.
State of California, Dept. of     27.............  Fingerprints
 Justice, Bureau of Criminal                        required, COMM: 916-
 Justice, Identification and                        739-2786.
 Information Bureau, PO Box
 903417, Sacramento, CA 94203-
 4170.
State of Colorado, Crime          4.50...........  Write/call for form,
 Information Center, Colorado                       name check, COMM:
 Bureau of Investigation, 690                       303-239-4222/4229.
 Kipling Street, 3000,
 Lakewood, CO 80215.
State of Connecticut, Dept. of    No fee.........  Name check, written
 State Police, Bureau of                            consent required,
 Investigation, Building 4, 294                     copy of Pub. L.
 Colony Street, Meriden, CT                         required, COMM: 203-
 06450.                                             238-6155.
State of Delaware, Delaware       25.............  Fingerprints
 State Police-SBI, State Bureau                     required, COMM: 302-
 of Investigation, PO Box 430,                      739-5871.
 Dover, DE 19903.
Washington, DC, Identification    No fee.........  Name check, wittten
 and Records Division,                              request required,
 Metropolitan Police Dept., Room                    COMM: 202-727-4245.
 2076, 300 Indiana Avenue, NW.,
 Washington, DC 20001.
State of Florida, Florida Dept.   10.............  Name check, check to:
 of Law Enforcement, PO Box                         Dept. of Law
 1489, Tallahassee, FL 32302.                       Enforcement, COMM:
                                                    904-488-6236.
State of Georgia, Georgia         15.............  Write or call for
 Criminal Information Center, PO                    form, notary and
 Box 370748, Decatur, GA 30037-                     fingerprints
 0748.                                              required, COMM: 404-
                                                    244-2644.
State of Hawaii, Criminal         No fee.........  Name check, COMM: 808-
 Justice Data Center, 465 South                     587-3100.
 King Street, Room 101,
 Honolulu, HI 96813.
State of Idaho, Idaho Dept. of    5..............  Name check, written
 Law Enforcement, Criminal                          consent required,
 Identification Bureau, 6064                        payment to: Dept. of
 Corporal Lane, Boise, ID 83704.                    Law Enforcement,
                                                    COMM: 208-327-7130.
State of Illinois, Bureau of      14.............  Write or call for
 Identification, 260 North                          form, name check,
 Chicago Street, Joliet, IL                         COMM: 815-740-5184.
 60431-1060.
State of Indiana, Indiana State   7..............  Write or call for
 Police, 100 North Senate                           form, name check,
 Avenue, Room 312, Indianapolis,                    COMM: 317-232-8266.
 IN 46204.
State of Iowa, Commissioner Paul  6..............  Release within State,
 H. Wieck II, Iowa Dept. of                         COMM: 515-281-5138.
 Public Safety, Wallace State
 Office Building, Des Moines, IA
 50319.
State of Kansas, Kansas Bureau    10.............  Write or call for
 of Investigation, 1620                             form, name check, $5
 Southwest Tyler, Topeka, KS                        per name, over two
 66612.                                             names, COMM: 913-232-
                                                    6000.
State of Kentucky, Kentucky       4..............  Write or call for
 State Police Records, State                        form, name check,
 Office Building, 1250                              COMM: 502-227-
 Louisville Road, Frankfort, KY                     8700x214.
 40601.
State of Louisiana, Louisiana     13.............  Write or call for
 State Police, Department of                        form, fingerprints
 Public Safety, PO Box 66614,                       required, COMM: 502-
 Baton Rouge, LA 70896.                             925-6095.
State of Maine, State Bureau of   No fee.........  Name check, reason
 Investigation, Department of                       for check required;
 Public Safety, Maine State                         i.e., comply with
 Police, 36 Hospital Street,                        Pub. L., COMM: 207-
 Augusta, ME 04333.                                 624-7009.
State of Maryland, Criminal       18.............  Write or call for
 Justice Information Service,                       form, name check,
 Central Repository, Building                       COMM: 410-764-4501.
 G4, 1201 Reistertown Road,
 Pikesville, MD 21208.
State of Massachusetts,           No fee.........  Write or call for
 Executive Office of Public                         form, name check,
 Safety, Criminal History                           COMM: 617-727-
 Systems Board, 1010                                0090x12.
 Commonwealth Avenue, Boston, MA
 02215.
State of Michigan, Michigan       No check.......  No release, COMM: 517-
 State Police, FOI Unit, 7150                       322-5531.
 Harris Drive, Lansing, MI 48913.

[[Page 462]]

 
State of Minnesota, Criminal      8..............  Name check, written
 Justice Information Systems,                       consent required,
 Bureau of Criminal                                 COMM: 612-642-0670.
 Apprehension, Minnesota Dept.
 of Public Safety, 1246
 University Avenue, St. Paul, MN
 55104.
State of Mississippi, Department  No fee.........  Write or call for
 of Public Safety, ATTN:                            form, name check,
 Identification Bureau, PO Box                      COMM: 607-987-1212.
 958, Jackson, MS 39225.
State of Missouri, Criminal       5..............  Write or call for
 Records Division, State Highway                    form, name check
 Patrol, Department of Public                       COMM: 314-751-3313.
 Safety, PO Box 568, Jefferson
 City, MO 65102.
State of Montana, Identification  5..............  Name check, COMM: 406-
 Bureau, Department of Justice,                     444-3625.
 303 North Roberts, Helena, MT
 59620-1418.
State of Nebraska, Nebraska       10.............  Name check, COMM: 402-
 State Patrol, PO Box 94907,                        471-4545.
 State House Station, ATTN: CID,
 Lincoln, NE 68509-4907.
State of Nevada, Nevada Highway   15.............  Write or call for
 Patrol, 555 Wright Way, Carson                     form, fingerprints
 City, NV 89711.                                    required, COMM: 702-
                                                    687-5300.
State of New Hampshire, New       10.............  Write or call for
 Hampshire State Policy HQ,                         form, name check,
 Criminal Records, 10 Hazen                         COMM: 603-271-2538.
 Drive, Concord, NH 03305.
State of New Jersey, Division of  12.............  Copy of Pub. L.
 State Police, Records and ID                       required, name
 Section, PO Box 7068, West                         check, COMM: 609-882-
 Trenton, NJ 08625-0068.                            2000.
State of New Mexico, Department   5..............  Write or call for
 of Public Safety, Records                          form, name check,
 Bureau, PO Box 1628, Sante Fe,                     notary required,
 NM 87504-1628.                                     COMM: 505-827-9181.
State of New York, Division of    No check.......  No release at current
 Criminal Justice Services,                         time, state requires
 Executive Park Tower,                              an agreement with
 Stuyvesant Plaza, Albany, NY                       agency to process,
 12203.                                             COMM: 518-485-7685.
State of North Carolina,          14.............  Fingerprint form
 Division of Criminal                               required, copy of
 Information, Bureau of                             Pub. L. required,
 Investigation, 407 North Blount                    call/write for form,
 Street, Raleigh, NC 27601-1009.                    COMM: 919-662-4500.
State of North Dakota, Bureau of  20.............  Name check, written
 Criminal Information, PO Box                       consent required,
 1054, Bismark, ND 58502.                           COMM: 702-221-6180.
State of Ohio, Bureau of          15.............  Write or call for
 Criminal Information, PO Box                       form, written
 365, London, OH 43140.                             consent required,
                                                    fingerprints
                                                    required, COMM: 614-
                                                    852-2556.
State of Oklahoma, Oklahoma Law   10.............  Write or call for
 Enforcement, Criminal History                      form, name check,
 Information, ATTN: Criminal                        COMM: 405-848-6724.
 History, PO 11497, Oklahoma
 City, OK 73136.
State of Oregon, Criminal ID,     10.............  Name check, COMM: 503-
 State Police, 155 Cottage                          378-3070.
 Street, NE, Salem, OR 97310.
State of Pennsylvania, Records    10.............  Write or call for
 and ID Division, Pennsylvania                      form, name check, 10
 State Police, Dept. HQ, 1800                       COMM: 717-783-5592.
 Elmerton Avenue, Harrisburg, PA
 17110.
State of Rhode Island, Rhode      No fee.........  Name check, written
 Island State Police, PO Box                        consent required,
 185, North Scituate, RI 02857.                     COMM: 401-647-3311.
State of South Carolina, State    10.............  Name check, COMM: 803-
 Law Enforcement Division, ATTN:                    737-4205, DSN: 734-
 Criminal Records, PO Box 21398,                    1110.
 Columbia, SC 29221-1398.
State of South Dakota, Division   15.............  Write or call for
 Criminal Investigation,                            form, fingerprints
 Attorney General's Office, East                    required, COMM: 605-
 Highway 34, Pierre, SD 57501-                      773-3334.
 5070.
State of Tennessee, Tennessee     23.............  Write or call for
 Criminal Information Center,                       form, fingerprints
 Tennessee Bureau of                                required, COMM: 615-
 Investigation, PO Box 100940,                      741-3241.
 Nashville, TN 37210.
State of Texas, Texas Crime       15.............  Fingerprints
 Records Division, Texas Dept.                      required, written
 of Public Safety, PO Box 15999,                    consent required,
 Austin, TX 78761-5999.                             COMM: 512-465-2079.
State of Utah, Bureau of          No fee.........  Write or call for
 Criminal Identification, Utah                      form, name check,
 Dept. of Public Safety, 4501                       copy of law
 South 2700 West, Salt Lake                         required, COMM: 801-
 City, UT 84119.                                    965-4571.
State of Vermont, Vermont         No fee.........  Name check, written
 Criminal Information Center,                       consent required,
 Dept. of Public Safety, PO Box                     COMM: 802-244-8786.
 189, Waterbury, VT 05676.
Commonwealth of Virginia,         10.............  Write or call for
 Virginia Records Management                        form, name check,
 Div., Dept. of State Police, PO                    COMM: 804-674-2024.
 Box 850761, Richmond, VA 23261-
 5076.
State of Washington, Washington,  10.............  Write or call for
 State Patrol, Identification                       form, name check,
 Section, PO Box 42633, Olympia,                    COMM: 206-753-0230/
 WA 98504-2633.                                     7272.
West Virginia State Police,       5..............  Write or call for
 Dept. of Public Safety, 725                        form, name check,
 Jefferson Road, South                              COMM: 304-746-2180.
 Charleston, WV 25309.
State of Wisconsin, Crime         2..............  Write or call for
 Information Bureau, Dept. of                       form, name check,
 Justice, ATTN: Records Data                        COMM: 608-266-7314.
 Unit, PO Box 2718, Madison, WI
 53701-2718.
State of Wyoming, Division of     15.............  Write or call for
 Criminal Investigation, 316                        form, fingerprints
 West 22nd Street, Cheyenne, WY                     required, written
 82002.                                             consent required,
                                                    COMM: 307-777-7181.
------------------------------------------------------------------------


[[Page 463]]



PART 88_TRANSITION ASSISTANCE FOR MILITARY PERSONNEL--Table of Contents



Sec.
88.1 Purpose.
88.2 Applicability and scope.
88.3 Definitions.
88.4 Policy.
88.5 Responsibilities.
88.6 Information requirements.

    Authority: 10 U.S.C. chapter 58.

    Source: 59 FR 14559, Mar. 29, 1994, unless otherwise noted.



Sec. 88.1  Purpose.

    (a) This part supersedes the Assistant Secretary of Defense For 
Force Management and Personnel memorandum, \1\ ``Policy Changes For 
Transition Assistance Initiatives,'' June 7, 1991, establishes policy, 
and assigns responsibilities for transition assistance programs for 
active duty military personnel and their families.
---------------------------------------------------------------------------

    \1\ Copies may be obtained, at cost, from the Directorate of 
Transition Support and Services, Office of the Assistant Secretary of 
Defense for Personnel and Readiness, 4000 Defense Pentagon, Washington, 
DC 20301-4000.
---------------------------------------------------------------------------

    (b) Implements transition assistance programs for DoD military 
personnel and their families as outlined in section 502, Public Law 101-
510; section 661 and section 662, Public Law 102-190, and sections 4401-
4501, Public Law 102-484.



Sec. 88.2  Applicability and scope.

    This part applies to: (a) The Office of the Secretary of Defense, 
the Military Departments, the Chairman of the Joint Chiefs of Staff, the 
Unified Combatant Commands, and the Defense Agencies (hereafter referred 
to collectively as ``the DoD Components''). The term ``Military 
Services,'' as used herein, refers to the Army, the Navy, the Air Force, 
and the Marine Corps.
    (b) All active duty Service members and their families.



Sec. 88.3  Definitions.

    (a) Involuntary separation. A member of the Military Service shall 
be considered to be involuntarily separated if he or she was on active 
duty or full-time National Guard duty on September 30, 1990 and:
    (1) In the case of a Regular officer (other than a retired officer), 
he or she was involuntarily discharged under other than adverse 
conditions, as characterized by the Secretary of the separating Service 
member's Military Department. Discharge under adverse conditions is 
determined by referring to the reason for separation as well as the 
officer's service, as outlined in Department of Defense Directive 
1332.30. \2\
---------------------------------------------------------------------------

    \2\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------

    (2) In the case of a Reserve officer who is on the active duty list 
or, if not on the active duty list, is on full-time active duty (or in 
the case of a member of the National Guard, full time National Guard 
duty) for the purpose of organizing, administering, recruiting, 
instructing, or training the Reserve components, he or she is 
involuntarily discharged or released from active duty or full-time 
National Guard duty (other than a release from active duty or full-time 
National Guard duty incident to a transfer to retired status) under 
other than adverse conditions as characterized by the Secretary of the 
separating Service member's Military Department. Discharge under adverse 
conditions is determined by referring to the reason for separation as 
well as the officer's service, as outlined in Department of Defense 
Directive 1332.30.
    (3) In the case of a Regular enlisted member serving on active duty, 
he or she is denied reenlistment or involuntarily discharged under other 
than adverse conditions, as characterized by the Secretary of the 
separating Service member's Military Department. Discharge under adverse 
conditions is determined by referring to the reason for separation as 
well as the enlisted member's service, as outlined in Department of 
Defense Directive 1332.14. \3\
---------------------------------------------------------------------------

    \3\ See footnote 2 to section 88.3(a)(1).
---------------------------------------------------------------------------

    (4) In the case of a Reserve enlisted member who is on full-time 
active duty (or in the case of a member of the National Guard, full-time 
National Guard duty) for the purpose of organizing, administering, 
recruiting, instructing, or training the Reserve components, he or she 
is denied reenlistment or is involuntarily discharged or released from

[[Page 464]]

active duty (or full-time National Guard duty) under other than adverse 
conditions as determined by referring to the reason for separation as 
well as the enlisted member's service, as outlined in Department of 
Defense Directive 1332.14.
    (b) Separation entitlements. Benefits provided to Service members 
being involuntarily separated on or before September 30, 1995 as defined 
in paragraphs (a)(1) through (a)(4) of this section, and their families. 
Benefits provided to Service members being separated under the Special 
Separation Benefit or Voluntary Separation Incentive on or before 
September 30, 1995, as defined in paragraph (c) of this section and 
their families. These benefits include: Training opportunities under the 
Job Training Partnership Act as described in section 4465 of Public Law 
102-484; priority affiliation with the National Guard and Reserve, as 
described in section 502(a)(1) of Public Law 101-510, as amended; 
enrolled in the All-Volunteer Force Educational Assistance Program 
(``Montgomery G.I. Bill''), as described in section 4404 of Public Law 
102-484; extended medical and dental care, as described in section 
502(a)(1) of Public Law 101-510, as amended, and sections 4407 and 4408 
of Public Law 102-484; continued use of military family housing as 
described in section 502 (a)(1) of Public Law 101-510, as amended 
(subject to Status of Forces Agreements overseas); extended and 
commissary privileges as detailed in section 502(a)(1) of Public Law 
101-510, as amended (subject to Status of Forces Agreements overseas); 
travel and transportation allowances, as detailed in section 503 of 
Public Law No. 101-510, as amended; continuation of enrollment in 
Department of Defense Dependents Schools as detailed in section 504 of 
Public Law 101-510, as amended (subject to Status of Forces Agreements 
overseas.)
    (c) Special separation benefit and voluntary separation incentive. 
Voluntary separation programs established in section 661 and section 662 
of Public Law 102-190, as amended. Service members separated under these 
programs are eligible for both transition services and separation 
entitlements outlined in paragraphs (b) and (d) of this section.
    (d) Transition services. Preseparation counseling, individual 
transition planning, employment assistance, excess leave and permissive 
temporary duty, and relocation assistance for personnel overseas as 
described in section 502 (a)(1) of Public Law 101-510, as amended.



Sec. 88.4  Policy.

    It is DoD policy that: (a) Transition assistance programs prepare 
separating Service members and their families with the skills, tools, 
and self-confidence necessary to ensure successful reentry into the 
Nation's civilian work force.
    (b) Transition assistance programs be designed to complete the 
military personnel ``life cycle.'' This cycle begins with the Service 
member's recruitment from the civilian sector, continues with training 
and sustainment throughout a Service members's active service in the 
Armed Forces, and ends when the Service member returns to the civilian 
sector.
    (c) Transition assistance programs include: (1) Transition service 
as defined in )88.3 (d) to be provided to Service members and their 
families for up to 90 days after separation, space and work load 
permitting.
    (2) Separation entitlements as defined in Sec. 88.3 (b) for Service 
members who are involuntarily separating as defined in Sec. 99.3 (a) or 
separating under the Voluntary Separation Incentive or Special 
Separation Benefit Programs as defined in Sec. 88.3 (c).
    (d) Service members from one Service shall not restricted from 
participating in another Service's transition assistance program unless 
workload or other unusual circumstances dictate. Every effort will be 
made to accommodate all eligible personnel, especially if referral to 
another transition site will require the Service member to travel a long 
distance and incur significant expense.
    (e) [Reserved]
    (f) When being discharged, released from active duty, or retiring 
(hereafter referred to as ``separating Service members''), Service 
members and their families bear primary responsibility for their 
successful transition into the civilian sector.

[[Page 465]]

    (g) Spouses shall be encouraged to participate in transition 
planning and counseling to the maximum extent possible.
    (h) Enhanced transition programs shall be established for Service 
members and their families who are overseas to help alleviate the 
special difficulties overseas personnel encounter when job and house 
hunting.
    (i) Installations in the United States shall give priority 
transition assistance to personnel who recently returned from overseas.



Sec. 88.5  Responsibilities.

    (a) The Assistant Secretary of Defense for Personnel and Readiness 
shall; (1) Issue guidance on transition assistance programs for Service 
members and their families, as necessary.
    (2) Coordinate, as necessary, within the Department of Defense to 
ensure the availability of high quality, equitable, and cost-effective 
transition programs among the Military Services.
    (3) Coordinate with and seek the assistance of the Departments of 
Labor and Veterans Affairs, and other Federal Agencies to facilitate 
delivery of high quality transition assistance programs to separating 
Service members.
    (4) Evaluate the level of resources needed to deliver quality 
transition programs and facilitate efforts to obtain these resources.
    (5) Monitor and evaluate the overall effectiveness of transition 
assistance programs.
    (6) Coordinate with theater commanders, though the Chairman of the 
Joint Chiefs of Staff, on transition assistance programs (job fairs and 
training conferences, for example) impacting overseas Unified Combatant 
Commands.
    (7) Establish the Department of Defense Service Member Transition 
Assistance Coordinating Committee, consisting of representatives from 
the Military Services and Assistant Secretary of Defense for Personnel 
and Readiness. The purpose of this committee is to provide DoD-level 
direction and coordination for transition assistance programs.
    (8) Collect data to determine systematically the degree to which 
transition assistance programs satisfy the needs of transitioning 
Service members and their families.
    (9) Review, modify, and reissue policy guidance, as required.
    (b) The Assistant Secretary of Defense for Reserve Affairs shall 
establish and publish guidance on transition assistance programs for 
Reserve personnel and their families.
    (c) The Assistant Secretary of Defense for Health Affairs shall 
establish guidance on transitional medical and dental care, including 
health insurance and preexisting conditions coverage, for Service 
members and their families.
    (d) The Secretaries of the Military Departments shall ensure 
compliance with the criteria in Public Law 101-510, 102-190, and 102-
484, as amended, and the following provisions:
    (1) Preparation counseling shall be available no later than 90 days 
before separation to all separating Service members.
    (2) High quality transition counseling and employment assistance 
programs are established on military facilities with more than 500 
Service members permanently assigned or serving at that installation.
    (3) The participation of separating Service members in transition 
assistance programs shall be coordinated with mission requirements.
    (4) Transition assistance programs are allocated the resources 
necessary to delivery quality transition assistance programs.
    (5) The Military Services are represented on the Department of 
Defense Service Member Transition Assistance Coordinating Committee. 
Each of the Military Services may invite an installations-level 
transition manager to participate.
    (6) Quarterly reports on the status of transition programs are 
submitted to the Assistant Secretary of Defense for Personnel and 
Readiness beginning the second quarter after this publication is 
published, and continuing each quarter until cancellation of this part.
    (7) The Inspector General of each Military Service shall review and 
report compliance with Sec. 88.5(d)(1) through (d)(6) to the Service 
Secretary, on an annual basis, due no later than January 31 of the next 
calendar year.

[[Page 466]]



Sec. 88.6  Information requirements.

    The quarterly report requirement in Sec. 88.5(d)(6) has been 
assigned Report Control Symbol DD-P&R(Q) 1927.



PART 93_ACCEPTANCE OF SERVICE OF PROCESS; RELEASE OF OFFICIAL INFORMATION IN 

LITIGATION; AND TESTIMONY BY NSA PERSONNEL AS WITNESSES--Table of Contents



Sec.
93.1 References.
93.2 Purpose and applicability.
93.3 Definitions.
93.4 Policy.
93.5 Procedures.
93.6 Fees.
93.7 Responsibilities.

    Authority: E.O. 12333, 3 CFR, 1981 Comp., p. 200; 50 U.S.C. apps. 
401, 402.

    Source: 56 FR 51328, Oct. 11, 1991, unless otherwise noted.



Sec. 93.1  References.

    (a) DoD Directive 5405.2, \1\ ``Release of Official Information in 
Litigation and Testimony by DoD Personnel as Witnesses,'' July 23, 1985, 
reprinted in 32 CFR part 97.
---------------------------------------------------------------------------

    \1\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------

    (b) E.O. 12333, United States Intelligence Activities, 3 CFR, 1981 
Comp., p. 200, reprinted in 50 U.S.C. app. 401.
    (c) The National Security Agency Act of 1959, Public Law No. 86-36, 
as amended, 50 U.S.C. app. 402.
    (d) Rule 4, Federal Rules of Civil Procedure.
    (e) DoD Instruction 7230.7, \2\ ``User Charges'', January 29, 1985.
---------------------------------------------------------------------------

    \2\ See footnote 1 to Sec. 93.1(a).
---------------------------------------------------------------------------

    (f) 28 CFR 50.15.



Sec. 93.2  Purpose and applicability.

    (a) This part implements Sec. 93.1(a) in the National Security 
Agency/Central Security Service including all field sites (hereinafter 
referred to collectively as NSA). The procedures herein are also 
promulgated pursuant to the NSA's independent authority, under Sec. 
1.12(b)(10) of E.O. 12333 referenced under Sec. 93.1(b), to protect the 
security of its activities, information and employees. This part 
establishes policy, assigns responsibilities, and prescribes mandatory 
procedures for service of process at NSA and for the release of official 
information in litigation by NSA personnel, through testimony or 
otherwise.
    (b) This part is intended only to provide guidance for the internal 
operation of the NSA and does not create any right or benefit, 
substantive or procedural, enforceable at law against the United States, 
the Department of Defense, or NSA. This part does not override the 
statutory privilege against the disclosure of the organization or any 
function of the NSA, of any information with respect to the activities 
thereof, or of the names, titles, salaries, or numbers of the persons 
employed by the NSA. See section 6(a) of the DoD Directive referenced 
under Sec. 93.1(a).



Sec. 93.3  Definitions.

    (a) Service of process. Refers to the delivery of a summons and 
complaint, or other document the purpose of which is to give notice of a 
proceeding or to establish the jurisdiction of a court or administrative 
proceeding, in the manner prescribed by Sec. 93.1(d), to an officer or 
agency of the United States named in court or administrative 
proceedings.
    (b) Demand. Refers to the delivery of a subpoena, order, or other 
directive of a court of competent jurisdiction, or other specific 
authority, for the production, disclosure, or release of official 
information, or for the appearance and testimony of NSA personnel as 
witnesses.
    (c) NSA personnel. (or NSA person) Includes present and former 
civilian employees of NSA (including non-appropriated fund activity 
employees), and present and former military personnel assigned to NSA. 
NSA personnel also includes non-U.S. nationals who perform services 
overseas for NSA under the provisions of status of forces or other 
agreements, and specific individuals hired through contractual 
agreements by or on behalf of NSA.
    (d) Litigation. Refers to all pretrial, trial, and post-trial stages 
of all existing or reasonably anticipated judicial or administrative 
actions, hearings, investigations, or similar proceedings before 
civilian courts, commissions,

[[Page 467]]

boards, or other tribunals, foreign and domestic. It includes responses 
to discovery requests, depositions, and other pretrial proceedings, as 
well as responses to formal or informal requests by attorneys or others 
in situations involving litigation.
    (e) Official information. Is information of any kind, in any storage 
medium, whether or not classified or protected from disclosure by Sec. 
93.l(c) that:
    (1) Is in the custody and control of NSA; or
    (2) Relates to information in the custody and control of NSA; or
    (3) Was acquired by NSA personnel as part of their official duties 
or because of their official status within NSA.
    (f) General Counsel. Refers to the NSA General Counsel (GC), or in 
the GC's absence, the NSA Deputy GC, or in both of their absences, the 
NSA Assistant GC (Administration/Litigation).
    (g) NSA attorney. Refers to an attorney in the NSA Office of General 
Counsel (OGC).



Sec. 93.4  Policy.

    Official information that is not classified, privileged, or 
otherwise protected from public disclosure, should generally be made 
reasonably available for use in Federal and State courts and by other 
governmental bodies.



Sec. 93.5  Procedures.

    (a) Release of official information in litigation. NSA personnel 
shall not produce, disclose, release, comment upon, or testify 
concerning any official information during litigation without the prior 
written approval of the GC. In exigent circumstances, the GC may issue 
oral approval, but a record of such approval will be made and retained 
in the OGC. NSA personnel shall not provide, with or without 
compensation, opinion or expert testimony concerning official NSA 
information, subjects, or activities, except on behalf of the United 
States or a party represented by the Department of Justice (DoJ). Upon a 
showing by the requester of exceptional need or unique circumstances and 
that the anticipated testimony will not be adverse to the interests of 
the NSA or the United States, the GC may, in writing, grant special 
authorization for NSA personnel to appear and testify at no expense to 
the United States. Official information may be released in litigation 
only in compliance with the following procedures.
    (1) If official information is sought, through testimony or 
otherwise, by a litigation demand, the individual seeking such release 
or testimony must set forth, in writing and with as much specificity as 
possible, the nature and relevance of the official information sought. 
Subject to paragraph (a)(5) of this section, NSA personnel may only 
produce, disclose, release, comment upon or testify concerning those 
matters that were specified in writing and approved by the GC.
    (2) Whenever a litigation demand is made upon NSA personnel for 
official information or for testimony concerning such information, the 
person upon whom the demand was made shall immediately notify the OGC. 
After consultation and coordination with the DoJ, if required, the GC 
shall determine whether the individual is required to comply with the 
demand and shall notify the requester or the court or other authority of 
that determination.
    (3) If a litigation demand requires a response before instructions 
from the GC are received, the GC shall furnish the requester or the 
court or other authority with a copy of Sec. 93.1(a) and this part 93. 
The GC shall also inform the requester or the court or other authority 
that the demand is being reviewed, and seek a stay of the demand pending 
a final determination.
    (4) If a court or other authority declines to stay the demand in 
response to action taken pursuant to paragraph 3 of this section, or if 
such court or other authority orders that the demand must be complied 
with notwithstanding the final decision of the GC, the NSA personnel 
upon whom the demand was made shall notify the GC of such ruling or 
order. If the GC determines that no further legal review of or challenge 
to the ruling or order will be sought, the affected NSA personnel shall 
comply with the demand or order. If directed by the GC, however, the 
affected NSA personnel must decline to

[[Page 468]]

provide the information. \3\ The NSA personnel shall state the following 
to the Court:
---------------------------------------------------------------------------

    \3\ See United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951) 
wherein the Supreme Court held that a government employee could not be 
held in contempt for following an agency regulation requiring agency 
approval before producing government information in response to a court 
order.

    ``I must respectfully advise the Court that under instructions given 
to me by the General Counsel of the National Security Agency, in 
accordance with Department of Defense Directive 5405.2 and NSA 
Regulation 10-62, I must respectfully decline to [produce/disclose] that 
---------------------------------------------------------------------------
information.''

    (5) In the event NSA personnel receive a litigation demand for 
official information originated by another U.S. Government component, 
the GC shall forward the appropriate portions of the request to the 
other component. The GC shall notify the requester, court, or other 
authority of the transfer, unless such notice would itself disclose 
classified information.
    (b) Acceptance of service of process. The following are mandatory 
procedures for accepting service of process for NSA personnel sued or 
summoned in their official capacities, and for attempting service of 
process on NSA premises.
    (1) Service on NSA or on NSA personnel in their official capacities. 
Sec. 93.1(d) requires service of process on the NSA or NSA personnel 
sued or summoned in their official capacity to be made by serving the 
United States Attorney for the district in which the action is brought, 
and by sending copies of the summons and complaint by registered or 
certified mail to the Attorney General of the United States and to the 
NSA or such NSA personnel. Only the GC or an NSA attorney is authorized 
to accept the copies of the summons and complaint sent to the NSA or NSA 
personnel pursuant to Sec. 93.1(d). Acceptance of the copies of the 
summons and complaint by the GC or an NSA attorney does not constitute 
an admission or waiver with respect to the validity of the service of 
process or of the jurisdiction of the court or other body. Such copies 
shall be sent by registered or certified mail to: General Counsel, 
National Security Agency, 9800 Savage Road, Fort George G. Meade, MD 
20755-6000. The envelope shall be conspicuously marked ``Copy of Summons 
and Complaint Enclosed.'' Except as provided in paragraph (b)(3) of this 
section, no other person may accept the copies of the summons and 
complaint for NSA or NSA personnel sued or summoned in their official 
capacities, including the sued or summoned NSA personnel, without the 
prior express authorization of the GC.
    (i) Parties who wish to deliver, instead of sending by registered or 
certified mail, the copies of the service of process to NSA or to NSA 
personnel sued or summoned in their official capacities, will comply 
with the procedures for service of process on NSA premises in paragraph 
(b) of this section.
    (ii) Litigants may attempt to serve process upon NSA personnel in 
their official capacities at their residences or other places. Because 
NSA personnel are not authorized to accept such service of process, such 
service is not effective under Sec. 93.1(d). NSA personnel should 
refuse to accept service. However, NSA personnel may find it difficult 
to determine whether they are being sued or summoned in their private or 
official capacity. Therefore, NSA personnel shall notify the OGC as soon 
as possible if they receive any summons or complaint that appears to 
relate to actions in connection with their official duties so that the 
GC can determine the scope of service.
    (2) Service upon NSA personnel in their individual capacities on NSA 
premises. Service of process is not a function of NSA. An NSA attorney 
will not accept service of process for NSA personnel sued or summoned in 
their individual capacities, nor will NSA personnel be required to 
accept service of process on NSA premises. Acceptance of such service of 
process in a person's individual capacity is the individual's 
responsibility. NSA does, however, encourage cooperation with the courts 
and with judicial officials.
    (i) When the NSA person works at NSA Headquarters at Fort George G. 
Meade, Maryland, the process server should first telephone the OGC on 
(301) 688-6054, and attempt to schedule a time for the NSA person to 
accept

[[Page 469]]

process. If the NSA person's affiliation with NSA is not classified, the 
NSA attorney will communicate with the NSA person and serve as the 
contact point for the person and the process server. If the person 
consents to accept service of process, the NSA attorney will arrange a 
convenient time for the process server to come to NSA, and will notify 
the Security Duty Officer of the arrangement.
    (ii) A process server who arrives at NSA during duty hours without 
first having contacted the OGC, will be referred to the Visitor Control 
Center (VCC) at Operations Building 2A. The VCC will contact the OGC. If 
an NSA attorney is not available, the process server will be referred to 
the Security Duty Officer, who will act in accordance with Office of 
Security (M5) procedures approved by the GC. Service of process will not 
be accepted during non-duty hours unless prior arrangements have been 
made by the OGC. For purposes of this part, duty hours at NSA 
Headquarters are 0800 to 1700, Monday through Friday, excluding legal 
holidays. A process server who arrives at NSA during non-duty hours 
without having made arrangements through the OGC to do so will be told 
to call the OGC during duty hours to arrange to serve process.
    (iii) Upon being notified that a process server is at the VCC, an 
NSA attorney will review the service of process and determine whether 
the NSA person is being sued or summoned in his official or individual 
capacity. (If the person is being sued or summoned in his or her 
official capacity, the NSA attorney will accept service of process by 
noting on the return of service form that ``service is accepted in 
official capacity only.'') If the person is being sued or summoned in 
his or her individual capacity, the NSA attorney will contact that 
person to see if that person will consent to accept service.
    (3) Procedures at field activities. Chiefs of NSA field activities 
may accept copies of service of process for themselves or NSA personnel 
assigned to their field component who are sued or summoned in their 
official capacities. Field Chiefs or their designees will accept by 
noting on the return of service form that ``service is accepted in 
official capacity only.'' The matter will then immediately be referred 
to the GC. Additionally, Field Chiefs will establish procedures at the 
field site, including a provision for liaison with local judge 
advocates, to ensure that service of process on persons in their 
individual capacities is accomplished in accordance with local law, 
relevant treaties, and Status of Forces Agreements. Such procedures must 
be approved by the GC. Field Chiefs will designate a point of contact to 
conduct liaison with the OGC.
    (4) No individual will confirm or deny that the person sued or 
summoned is affiliated with NSA until a NSA attorney or the Field Chief 
has ascertained that the individual's relationship with NSA is not 
classified. If the NSA person's association with NSA is classified, 
service of process will not be accepted. In such a case, the GC must be 
immediately informed. The GC will then contact the DoJ for guidance.
    (5) Suits in Foreign Courts. If any NSA person is sued or summoned 
in a foreign court, that person, or the cognizant Field Chief, will 
immediately telefax a copy of the service of process to the OGC. Such 
person will not complete any return of service forms unless advised 
otherwise by an NSA attorney. OGC will coordinate with the DoJ to 
determine whether service is effective and whether the NSA person is 
entitled to be represented at Government expense pursuant to Sec. 
93.1(f).



Sec. 93.6  Fees.

    Consistent with the guidelines in Sec. 93.1(e), NSA may charge 
reasonable fees to parties seeking, by request or demand, official 
information not otherwise available under the Freedom of Information 
Act, 5 U.S.C. 552. Such fees are calculated to reimburse the Government 
for the expense of providing such information, and may include:
    (a) The costs of time expended by NSA employees to process and 
respond to the request or demand;
    (b) Attorney time for reviewing the request or demand and any 
information located in response thereto, and for related legal work in 
connection with the request or demand; and
    (c) Expenses generated by materials and equipment used to search 
for,

[[Page 470]]

produce, and copy the responsive information.



Sec. 93.7  Responsibilities.

    (a) The General Counsel. The GC is responsible for overseeing NSA 
compliance with Sec. 93.1(a) and this part 93, and for consulting with 
DoJ when appropriate. In response to a litigation demand requesting 
official information or the testimony of NSA personnel as witnesses, the 
GC will coordinate NSA action to determine whether official information 
may be released and whether NSA personnel may be interviewed, contacted, 
or used as witnesses. The GC will determine what, if any, conditions 
will be imposed upon such release, interview, contact, or testimony. In 
most cases, an NSA attorney will be present when NSA personnel are 
interviewed or testify concerning official information. The GC may 
delegate these authorities.
    (b) The Deputy Director for Plans and Policy (DDPP). The DDPP will 
assit the GC, upon request, in identifying and coordinating with NSA 
components that have cognizance over official information requested in a 
litigation demand. Additionally, the DDPP will advise the GC on the 
classified status of official information, and, when necessary, assist 
in declassifying, redacting, substituting, or summarizing official 
information for use in litigation. The DDPP may require the assistance 
of other Key Component Chiefs.
    (c) Chiefs of Key Components and Field Activities. Chiefs of Key 
Components and Field Activities shall ensure that their personnel are 
informed of the contents of this part 93, particularly of the 
requirements to consult with the OGC prior to responding to any 
litigation demand, and to inform the OGC whenever they receive service 
of process that is not clearly in their individual capacities. Field 
Chiefs will notify the OGC of the persons they designate under Sec. 
93.5(b)(3).
    (d) The Deputy Director for Administration (DDA). Within 60 days of 
the date of this part, the DDA shall submit to the GC for approval 
procedures for the attempted delivery of service of process during duty 
hours when an attorney of the OGC is not available.



PART 94_NATURALIZATION OF ALIENS SERVING IN THE ARMED FORCES OF THE UNITED 

STATES AND OF ALIEN SPOUSES AND/OR ALIEN ADOPTED CHILDREN OF MILITARY AND 

CIVILIAN PERSONNEL ORDERED OVERSEAS--Table of Contents



Sec.
94.1 Purpose.
94.2 Applicability.
94.3 Definitions.
94.4 Policy and procedures.
94.5 Forms required.

    Authority: Sec. 301, 80 Stat. 379; 5 U.S.C. 301.

    Source: 35 FR 17540, Nov. 14, 1970, unless otherwise noted.



Sec. 94.1  Purpose.

    This part prescribes uniform procedures acceptable to the 
Immigration and Naturalization Service of the Department of Justice, to 
(a) facilitate the naturalization of aliens who have served honorably in 
the Armed Forces of the United States and to (b) militarily certify 
alien dependents seeking naturalization under the provisions of 
Immigration and Nationality Act of 1952, as amended, sections 319(b) and 
323(c) (8 U.S.C. 1430(b) and 1434(c)); and furnishes policy guidance to 
the Secretaries of the Military Departments governing discharge or 
release from active duty in the Armed Forces of the United States of 
permanent-residence aliens who desire to be naturalized as U.S. citizens 
under the provisions of Act of June 27, 1952, section 328 (66 Stat. 
249); 8 U.S.C. 1439.



Sec. 94.2  Applicability.

    The provisions of this part apply to the Military Departments.



Sec. 94.3  Definitions.

    (a) Permanent-residence alien is an alien admitted into the United 
States under an immigration visa for permanent residence; or an alien, 
who, after admission without an immigrant visa, has had his status 
adjusted to that of an alien lawfully admitted for permanent residence.
    (b) Armed Forces of the United States denotes collectively all 
components of

[[Page 471]]

the Army, Navy, Air Force, Marine Corps, and Coast Guard.



Sec. 94.4  Policy and procedures.

    (a) Naturalization of an alien who has served honorably in the Armed 
Forces of the United States at any time. (1) Under the provisions of Act 
of June 27, 1952, section 328 (66 Stat. 249); 8 U.S.C. 1439, an alien 
who has served in the Armed Forces of the United States for a period(s) 
totaling three (3) years may be naturalized if he:
    (i) Has been lawfully admitted to the United States for permanent 
residence;
    (ii) Was separated from the military service under honorable 
conditions;
    (iii) Files a petition while still in the military service, or 
within six (6) months after the termination of such service; and
    (iv) Can comply in all other respects with the Immigration and 
Nationality Act of 1952, except that (a) no period of residence or 
specified period of physical presence in the United States or the State 
in which the petition for naturalization is filed is required, and (b) 
residence within the jurisdiction of the court is not required.
    (2) The prescribed 3-year period may be satisfied by a combination 
of active duty and inactive duty in a reserve status.
    (3) An alien member desiring to fulfill naturalization requirements 
through military service shall not be separated prior to completion of 
three (3) full years of active duty unless:
    (i) His performance or conduct does not justify retention, in which 
case he shall be separated in accordance with the provisions of part 41 
of this subchapter and chapter 47, title 10, United States Code (Uniform 
Code of Military Justice), as appropriate; or
    (ii) He is to be transferred to inactive duty in a reserve component 
in order to:
    (a) Complete a reserve obligation under the provisions of part 50 of 
this subchapter, or
    (b) Attend a recognized institution of learning under the early 
release program, as provided in DoD Instruction 1332.15, ``Early Release 
of Military Enlisted Personnel for College or Vocational/Technical 
School Enrollment,'' January 26, 1970. \1\
---------------------------------------------------------------------------

    \1\ Filed as part of original. Copies available from the U.S. Naval 
Publications and Forms Center, 5801 Tabor Avenue, Philadelphia, PA. 
19120, Attention: Code 300.
---------------------------------------------------------------------------

    (4) Caution shall be exercised to ensure that an alien's affiliation 
with the Armed Forces of the United States, whether on active duty or on 
inactive duty in a reserve status, is not terminated even for a few days 
short of the 3-year statutory period, since failure to comply with the 
exact 3-year requirement of Act of June 27, 1952, section 328 (66 Stat. 
249); 8 U.S.C. 1439 will automatically preclude a favorable 
determination by the Immigration and Naturalization Service on any 
petition for naturalization based on an alien's military service.
    (5) During a period of hostilities, as designated by the President 
of the United States, the expeditious naturalization provisions outlined 
in paragraph (b) of this section, will take precedence over the 
foregoing.
    (b) Naturalization of an alien who has served in the Armed Forces of 
the United States during a period of hostilities as designated by the 
President of the United States. (1) Under the provisions of Immigration 
and Nationality Act of 1952, as amended, section 329 (8 U.S.C. 1440), an 
alien who serves honorably on active duty in the Armed Forces of the 
United States during the period beginning February 28, 1961, and ending 
on a date designated by the President, by Executive order, as the date 
of termination of the Vietnam hostilities, or during any future period 
which President, by Executive order, shall designate as a period in 
which the Armed Forces of the United States are or were engaged in 
military operations involving armed conflict with a hostile foreign 
force, and who is otherwise eligible, may be naturalized whether or not 
he has been lawfully admitted to the United States for permanent 
residence, if the member was inducted, enlisted, or reenlisted in the 
United States (inclusive of Puerto Rico, Guam, Virgin Islands, Canal 
Zone, American Samoa, or Swains Island).
    (i) The induction, enlistment, or reenlistment in the United States 
or its

[[Page 472]]

stated possessions must actually be in these land areas, in ports, 
harbors, bays, enclosed sea areas along their routes, or within a 
marginal belt of the sea extending from the coastline outward three (3) 
geographical miles.
    (ii) Enlistment or reenlistment aboard a ship on the high seas or in 
foreign waters does not meet the requirements of Immigration and 
Nationality Act of 1952, as amended, section 329 (8 U.S.C. 1440). In 
such instances, the provisions of paragraph (a) of this section may 
apply.
    (2) Each Military Department will establish procedures containing 
the provisions outlined in paragraphs (b)(2) (i) and (ii) of this 
section. In addition, each qualifying alien shall be advised of the 
liberalized naturalization provisions of the Immigration and Nationality 
Act of 1952, as amended, section 329 (8 U.S.C. 1440), i.e., that the 
usual naturalization requirements concerning age, residence, physical 
presence, court jurisdiction and waiting periods are not applicable, and 
will be given appropriate assistance in processing his naturalization 
application in consonance with procedures contained in ``Naturalization 
Requirements and General Information,'' published by the U.S. Department 
of Justice (Form N-17).
    (i) Military basic training and orientation programs will include 
advice and assistance to interested aliens in completing and submitting 
the application and other forms required to initiate naturalization 
proceedings.
    (ii) In addition, applicants should be advised that:
    (a) Under the laws of certain foreign countries, military service in 
the Armed Forces of the United States may result in the loss of their 
native country citizenship but this same service may make them eligible 
for U.S. citizenship.
    (b) Their eligibility for naturalization, based upon the honorable 
service in an active duty status prescribed in the Immigration and 
Nationality Act of 1952, as amended, section 329 (8 U.S.C. 1440) will be 
retained, even though they apply for naturalization after their return 
to the United States following the termination or completion of their 
overseas assignment, or after their honorable discharge from the Armed 
Forces of the United States.
    (c) If they are stationed at a base in the continental United 
States, Alaska, Hawaii, Puerto Rico, Guam, or the Virgin Islands, they 
should apply for citizenship only if they expect to be stationed at the 
base for at least 60 days following application. Unless the Immigration 
and Naturalization Service has at least 60 days in which to complete the 
case, there is no assurance that it can be completed before the 
applicant is transferred, since the processing procedures outlined below 
take time and are not entirely within the control of the Immigration and 
Naturalization Service.
    (1) Every naturalization application must be processed when received 
by the Immigration and Naturalization Service. Special arrangements have 
been made to expedite the processing of petitions of alien members of 
the Armed Forces.
    (2) After processing, the alien applicant and two citizen witnesses 
must personally appear for examination by an officer of the Immigration 
and Naturalization Service in connection with the filing of a petition 
for naturalization in court.
    (3) Finally, the applicant must appear in person before the 
naturalization court on a date set by the court so that he may be 
admitted to citizenship.
    (d) If the alien member is scheduled for overseas assignment where 
naturalization courts are not available, he should apply for 
naturalization on the earliest possible date but no later than 60 days 
before departure for overseas assignment. No assurance that processing 
will be completed before the applicant's departure for overseas will be 
given by the Immigration and Naturalization Service unless it has 60 
days to complete the matter.
    (1) An alien serviceman who is serving overseas and has submitted or 
submits the required naturalization application and forms to the 
Immigration and Naturalization Service may not be granted ordinary 
leave, or Rest and Recuperation (R&R) leave (where authorized in 
overseas areas) for naturalization purposes, unless a written 
notification from the Immigration and Naturalization Service has been 
received by

[[Page 473]]

the serviceman informing him that the processing of his application has 
been completed, and requesting him to appear with two U.S. citizen 
witnesses before a representative of the Immigration and Naturalization 
Service at a designated location for the purpose of completing the 
naturalization.
    (2) If possible, an applicant granted leave for such purposes should 
advise the Immigration and Naturalization Service when he expects to 
arrive in the leave area and, in any event, should contact the 
Immigration and Naturalization Service office immediately upon arrival 
in the area. Every effort will be made to complete the naturalization 
within the leave period.
    (c) Naturalization of alien spouses and/or alien adopted children of 
military and civilian personnel ordered overseas. Alien spouses and/or 
alien adopted children of military and civilian personnel of the 
Department of Defense who are authorized to accompany or join their 
sponsors overseas and who wish to obtain U.S. citizenship prior to 
departure will be given maximum assistance by commanders of military 
installations.
    (1) DD Form 1278, ``Certificate of Overseas Assignment to Support 
Application to File Petition for Naturalization,'' \2\ will be issued to 
alien dependents by military commanders at the times indicated below in 
order that the alien may file such certificate with the nearest 
Immigration and Naturalization Service Office to initiate naturalization 
proceedings. Only DD Form 1278 will be accepted by the Immigration and 
Naturalization Service. Military commanders will not issue memoranda or 
letters of any kind in lieu thereof.
---------------------------------------------------------------------------

    \2\ Filed as part of original. Copies may be obtained from 
Departments of the Army, Navy, and Air Force.
---------------------------------------------------------------------------

    (i) When dependents are authorized automatic concurrent travel, DD 
Form 1278 will be issued not earlier than 90 days prior to the 
dependents' schedule date of travel.
    (ii) When advance application for concurrent travel is required, DD 
Form 1278 will be issued after approval is received and not earlier than 
90 days prior to the dependents' scheduled date of departure.
    (iii) When concurrent travel is not authorized, DD Form 1278 will be 
issued after authorization for dependents' movement is received and not 
earlier than 90 days prior to the dependents' scheduled date of travel.
    (2) Upon receipt of DD Form 1278, the alien will file this form, 
together with the application for petition for naturalization, 
Immigration and Naturalization Form N-400 (adult) or N-402 (child) as 
appropriate, if not previously filed, with the nearest office of the 
Immigration and Naturalization Service. The application must be 
accompanied by:
    (i) Three identical photographs.
    (ii) Form FD-358, Applicant Fingerprint Card, and
    (iii) Form G-325, Biographic Information.
    (3) Further processing of the application for citizenship is as 
prescribed by the Immigration and Naturalization Service.
    (4) Upon completion of the naturalization process, immediate 
application for passport should be made, in order that it can be issued 
prior to scheduled departure of the dependent for overseas.



Sec. 94.5  Forms required.

    The following forms required for naturalization purposes may be 
obtained from any office of the Immigration and Naturalization Service:
    (a) N-400 Application to File a Petition for Naturalization (Adult) 
(Submit original form only).
    (b) N-402 Application to File a Petition for Naturalization (Child) 
(Submit original form only).
    (c) G-325 Biographic Information (Submit original and duplicate of 
multileaf form).
    (d) G-325B Biographic Information (Submit original form only).
    (e) FD-258 Applicant Fingerprint Card (Submit one completed card).
    (f) N-426 Certificate of Military or Naval Service (Submit in 
triplicate). (Should be handled on a priority basis so as to avoid 
prejudicing the early completion of the naturalization process, 
particularly for an alien who may receive an overseas assignment.)
    (g) ``Naturalization Requirements and General Information,'' 
published

[[Page 474]]

by the U.S. Department of Justice (Form N-17) describes the 
naturalization requirements and lists Immigration and Naturalization 
offices which process applications.



PART 96_ACQUISITION AND USE OF CRIMINAL HISTORY RECORD INFORMATION BY THE 

MILITARY SERVICES--Table of Contents



Sec.
96.1 Purpose.
96.2 Applicability.
96.3 Definitions.
96.4 Policy.
96.5 Responsibilities.
96.6 Procedures.

    Authority: 10 U.S.C. 503, 504, 505, and 520a.

    Source: 49 FR 23042, June 4, 1984, unless otherwise noted.



Sec. 96.1  Purpose.

    Under title 10 U.S. Code, sections 503, 504, 505 and 520a, this part 
establishes policy guidance concerning the acquisition of criminal 
history record information for use in determining an enlistment 
applicant's suitability for entry and for participation in special 
programs that require a determination of trustworthiness (part 156 of 
this title), assigns responsibilities, and prescribes procedures.



Sec. 96.2  Applicability.

    This part applies to the Office of the Secretary of Defense, the 
Military Departments, and the Defense Investigative Service (DIS). The 
term ``Military Services,'' as used herein, refers to the Army, Navy, 
Air Force, and Marine Corps.



Sec. 96.3  Definitions.

    (a) Criminal history record information (with respect to any 
juvenile or adult arrest, citation, or conviction). The offense 
involved; age of the person involved; dates of arrest, citation, or 
conviction, if any; place of the alleged offense; place of arrest and 
assigned court; and disposition of the case.
    (b) Criminal justice system. State, county, and local government law 
enforcement agencies; courts and clerks of courts; and other government 
agencies authorized to collect, maintain, and disseminate criminal 
history record information.
    (c) Special programs. Military Services' programs that, because of 
their sensitivity or access to classified information, require the DIS 
to perform the investigations specified in chapter III of DoD 5200.2-R.



Sec. 96.4  Policy.

    Section 503 of title 10 U.S. Code requires the Secretaries of the 
Military Departments to conduct intensive recruiting campaigns to obtain 
enlistments. It is the policy of the Department of Defense that the 
Military Services review the background of applicants for enlistment and 
for participation in special programs to identify:
    (a) Those whose backgrounds pose serious questions as to fitness for 
service (10 U.S.C. 504 and 505) or suitability for participation in 
special programs (part 156 of this title).
    (b) Those who may not be enlisted in the Military Services unless a 
waiver is granted (section 504 of title 10, United States Code).
    (c) Those who may try to enlist fraudulently.



Sec. 96.5  Responsibilities.

    (a) The Assistant Secretary of Defense (Manpower, Installations, and 
Logistics) shall submit the implementing Military Service regulations to 
the Senate and House Committees on Armed Services, in accordance with 
section 520a of title 10 U.S. Code.
    (b) The Secretaries of the Military Departments shall develop and 
prepare uniform implementing regulations concerning acquisition, review, 
and safeguarding of criminal history record information by recruiting 
elements to conform with section 520a of title 10 U.S. Code, policies 
stated herein and shall include in the regulations procedures on 
obtaining and reviewing criminal history record information for 
recruitment purposes and for assignment of personnel to special 
programs.
    (c) The Director, Defense Investigative Service, shall ensure that 
the acquisition of all available criminal history record information, or 
criminal history record information provided to the DIS by other 
government agencies, is safeguarded in accordance with existing

[[Page 475]]

laws or DoD regulatory documents to ensure protection of the privacy of 
the enlistment applicant on whom the record exists.



Sec. 96.6  Procedures.

    (a) Under section 520a of title 10 U.S. Code, recruiters are 
authorized to request and receive criminal history record information 
from the criminal justice system.
    (b) The Military Services shall obtain criminal history record 
information on enlistment applicants from the criminal justice system 
and from the DIS and shall review this information to determine whether 
applicants are acceptable for enlistment and for assignment to special 
programs. Recruiters shall request such information in each instance by 
addressing their requests to the criminal justice system not later than 
90 days after each application for enlistment is made.
    (c) The Military Services shall ensure the confidentiality of 
criminal history record information obtained for recruiting purposes. 
Personnel who have access to this information may not disclose it except 
for the purposes for which obtained (10 U.S.C. 520a).
    (d) The DIS shall provide additional background information to the 
Military Services as needed to determine the suitability of applicants 
for enlistment and for participation in special programs. This 
additional background information shall be provided by Entrance National 
Agency Checks (ENTNACs) and other investigations as directed by DoD 
5200.2-R.



PART 97_RELEASE OF OFFICIAL INFORMATION IN LITIGATION AND TESTIMONY BY DoD 

PERSONNEL AS WITNESSES--Table of Contents



Sec.
97.1 Purpose.
97.2 Applicability and scope.
97.3 Definitions.
97.4 Policy.
97.5 Responsibilities.
97.6 Procedures.

    Authority: 5 U.S.C. 301; 10 U.S.C. 133.

    Source: 50 FR 32056, Aug. 8, 1985, unless otherwise noted.



Sec. 97.1  Purpose.

    This directive establishes policy, assigns responsibilities, and 
prescribes procedures for the release of official DoD information in 
litigation and for testimony by DoD personnel as witnesses during 
litigation.



Sec. 97.2  Applicability and scope.

    (a) This directive applies to the Office of the Secretary of Defense 
(OSD), the Military Departments, the Organization of the Joint Chiefs of 
Staff (OJCS), the Unified and Specified Commands, and the Defense 
Agencies (hereafter referred to as ``DoD Components''), and to all 
personnel of such DoD Components.
    (b) This directive does not apply to the release of official 
information or testimony by DoD personnel in the following situations:
    (1) Before courts-martial convened by the authority of the Military 
Departments or in administrative proceedings conducted by or on behalf 
of a DoD Component;
    (2) Pursuant to administrative proceedings conducted by or on behalf 
of the Equal Employment Opportunity Commission (EEOC) or the Merit 
Systems Protection Board (MSPB), or pursuant to a negotiated grievance 
procedure under a collective bargaining agreement to which the 
Government is a party;
    (3) In response to requests by Federal Government counsel in 
litigation conducted on behalf of the United States;
    (4) As part of the assistance required pursuant to DoD Directive 
5220.6, ``Industrial Personnel Security Clearance Program,'' December 20 
1976; or,
    (5) Pursuant to disclosure of information to Federal, State, and 
local prosecuting and law enforcement authorities, in conjunction with 
an investigation conducted by a DoD criminal investigative organization.
    (c) This Directive does not supersede or modify existing laws or DoD 
program governing the testimony of DoD personnel or the release of 
official DoD information during grand jury proceedings, the release of 
official information not involved in litigation, or the release of 
official information pursuant to the Freedom of Information Act, 5 
U.S.C. 552, or the Privacy Act, 5

[[Page 476]]

U.S.C. 552a, nor does this Directive preclude treating any written 
request for agency records that is not in the nature of legal process as 
a request under the Freedom of Information or Privacy Acts.
    (d) This Directive is not intended to infringe upon or displace the 
responsibilities committed to the Department of Justice in conducting 
litigation on behalf of the United States in appropriate cases.
    (e) This Directive does not preclude official comment on matters in 
litigation in appropriate cases.
    (f) This Directive is intended only to provide guidance for the 
internal operation of the Department of Defense and is not intended to, 
does not, and may not be relied upon to create any right or benefit, 
substantive or procedural, enforceable at law against the United States 
or the Department of Defense.



Sec. 97.3  Definitions.

    (a) Demand. Subpoena, order, or other demand of a court of competent 
jurisdiction, or other specific authority, for the production, 
disclosure, or release of official DoD information or for the appearance 
and testimony of DoD personnel as witnesses.
    (b) DoD personnel. Present and former U.S. military personnel; 
Service Academy cadets and midshipmen; and present and former civilian 
employees of any Component of the Department of Defense, including 
nonappropriated fund activity employees; non-U.S. nationals who perform 
services overseas, under the provisions of status of forces agreements, 
for the U.S. Armed Forces; and other specific individuals hired through 
contractual agreements by or on behalf of the Department of Defense.
    (c) Litigation. All pretrial, trial, and post-trial stages of all 
existing or reasonably anticipated judicial or administrative actions, 
hearings, investigations, or similar proceedings before civilian courts, 
commissions, boards (including the Armed Services Board of Contract 
Appeals), or other tribunals, foreign and domestic. This term includes 
responses to discovery requests, depositions, and other pretrial 
proceedings, as well as responses to formal or informal requests by 
attorneys or others in situations involving litigation.
    (d) Official information. All information of any kind, however 
stored, that is in the custody and control of the Department of Defense, 
relates to information in the custody and control of the Department, or 
was acquired by DoD personnel as part of their official duties or 
because of their official status within the Department while such 
personnel were employed by or on behalf of the Department or on active 
duty with the U.S. Armed Forces.



Sec. 97.4  Policy.

    It is DoD policy that official information should generally be made 
reasonably available for use in Federal and State courts and by other 
governmental bodies unless the information is classified, privileged, or 
otherwise protected from public disclosure.



Sec. 97.5  Responsibilities.

    (a) The General Counsel, Department of Defense, shall provide 
general policy and procedural guidance by the issuance of supplemental 
instructions or specific orders concerning the release of official DoD 
information in litigation and the testimony of DoD personnel as 
witnesses during litigation.
    (b) The Heads of DoD Components shall issue appropriate regulations 
to implement this Directive and to identify official information that is 
involved in litigation.



Sec. 97.6  Procedures.

    (a) Authority to act. (1) In response to a litigation request or 
demand for official DoD information or the testimony of DoD personnel as 
witnesses, the General Counsels of DoD, Navy, and the Defense Agencies; 
the Judge Advocates General of the Military Departments; and the Chief 
Legal Advisors to the JCS and the Unified and Specified Commands, with 
regard to their respective Components, are authorized--after consulting 
and coordinating with the appropriate Department of Justice litigation 
attorneys, as required--to determine whether official information may be 
released in litigation; whether DoD personnel assigned to or affiliated 
with the Component may be interviewed,

[[Page 477]]

contacted, or used as witnesses concerning official DoD information or 
as expert witnesses; and what, if any, conditions will be imposed upon 
such release, interview, contact, or testimony. Delegation of this 
authority, to include the authority to invoke appropriate claims of 
privilege before any tribunal, is permitted.
    (2) In the event that a DoD Component receives a litigation request 
or demand for official information originated by another Component, the 
receiving Component shall forward the appropriate portions of the 
request or demand to the originating Component for action in accordance 
with this Directive. The receiving Component shall also notify the 
requestor, court, or other authority of its transfer of the request or 
demand.
    (3) Notwithstanding the provisions of paragraph (a) (1) and (2) of 
this section, the General Counsel, DoD, in litigation involving 
terrorism, espionage, nuclear weapons, intelligence means or sources, or 
otherwise as deemed necessary, may notify Components that General 
Counsel, DoD, will assume primary responsibility for coordinating all 
litigation requests and demands for official DoD information or 
testimony of DoD personnel, or both; consulting with the Department of 
Justice, as required; and taking final action on such requests and 
demands.
    (b) Factors to consider. In deciding whether to authorize the 
release of official DoD information or the testimony of DoD personnel 
concerning official information (hereafter referred to as ``the 
disclosure'') pursuant to paragraph (a), DoD officials should consider 
the following types of factors:
    (1) Whether the request or demand is unduly burdensome or otherwise 
inappropriate under the applicable court rules;
    (2) Whether the disclosure, including release in camera, is 
appropriate under the rules of procedure governing the case or matter in 
which the request or demand arose;
    (3) Whether the disclosure would violate a statute, executive order, 
regulation, or directive;
    (4) Whether the disclosure, including release in camera, is 
appropriate or necessary under the relevant substantive law concerning 
privilege;
    (5) Whether the disclosure, except when in camera and necessary to 
assert a claim of privilege, would reveal information properly 
classified pursuant to DoD 5200.1-R, ``Information Security Program 
Regulation,'' August 1982; unclassified technical data withheld from 
public release pursuant to DoD Directive 5230.25, ``Withholding of 
Unclassified Technical Data from Public Disclosure,'' November 6, 1984; 
or other matters exempt from unrestricted disclosure; and,
    (6) Whether disclosure would interfere with ongoing enforcement 
proceedings, compromise constitutional rights, reveal the identity of an 
intelligence source or confidential informant, disclose trade secrets or 
similarly confidential commercial or financial information, or otherwise 
be inappropriate under the circumstances.
    (c) Decisions on litigation requests and demands. (1) Subject to 
paragraph (c)(5) of this section, DoD personnel shall not, in response 
to a litigation request or demand, produce, disclose, release, comment 
upon, or testify concerning any official DoD information without the 
prior written approval of the appropriate DoD official designated in 
Sec. 97.6(a). Oral approval may be granted, but a record of such 
approval will be made and retained in accordance with the applicable 
implementing regulations.
    (2) If official DoD information is sought, through testimony or 
otherwise, by a litigation request or demand, the individual seeking 
such release or testimony must set forth, in writing and with as much 
specificity as possible, the nature and relevance of the official 
information sought. Subject to paragraph (c)(5), DoD personnel may only 
produce, disclose, release, comment upon, or testify concerning those 
matters that were specified in writing and properly approved by the 
appropriate DoD official designated in paragraph (a) of this section. 
See United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951).
    (3) Whenever a litigation request or demand is made upon DoD 
personnel for official DoD information or for testimony concerning such 
information,

[[Page 478]]

the personnel upon whom the request or demand was made shall immediately 
notify the appropriate DoD official designated in Sec. 97.6(a) for the 
Component to which the individual contacted is or, for former personnel, 
was last assigned. In appropriate cases, the responsible DoD official 
shall thereupon notify the Department of Justice of the request or 
demand. After due consultation and coordination with the Department of 
Justice, as required, the DoD official shall determine whether the 
individual is required to comply with the request or demand and shall 
notify the requestor or the court or other authority of the 
determination reached.
    (4) If, after DoD personnel have received a litigation request or 
demand and have in turn notified the appropriate DoD official in 
accordance with paragraph (c)(3) of this section , a response to the 
request or demand is required before instructions from the responsible 
official are received, the responsible official designated in paragraph 
(a) shall furnish the requestor or the court or other authority with a 
copy of this directive and applicable implementing regulations, inform 
the requestor or the court or other authority that the request or demand 
is being reviewed, and seek a stay of the request or demand pending a 
final determination by the Component concerned.
    (5) If a court of competent jurisdiction or other appropriate 
authority declines to stay the effect of the request or demand in 
response to action taken pursuant to Sec. 97.6(c)(4), or if such court 
or other authority orders that the request or demand must be complied 
with notwithstanding the final decision of the appropriate DoD official, 
the DoD personnel upon whom the request or demand was made shall notify 
the responsible DoD official of such ruling or order. If the DoD 
official determines that no further legal review of or challenge to the 
court's order or ruling will be sought, the affected DoD personnel shall 
comply with the request, demand, or order. If directed by the 
appropriate DoD official, however, the affected DoD personnel shall 
respectfully decline to comply with the demand. See United States ex 
rel. Touhy v. Ragen, 340 U.S. 462 (1951).
    (d) Fees. Consistent with the guidelines in DoD Instruction 7230.7, 
``User Charges,'' January 29, 1985, the appropriate officials designated 
in Sec. 97.6(a) are authorized to charge reasonable fees, as 
established by regulation and to the extent not prohibited by law, to 
parties seeking, by request or demand, official DoD information not 
otherwise available under DoD 5400.7-R, ``DoD Freedom of Information Act 
Program,'' March 24, 1980. Such fees, in amounts calculated to reimburse 
the government for the expense of providing such information, may 
include the costs of time expended by DoD employees to process and 
respond to the request or demand; attorney time for reviewing the requst 
or demand and any information located in response thereto and for 
related legal work in connection with the request or demand; and 
expenses generated by materials and equipment used to search for, 
produce, and copy the responsive information. See Oppenheimer Fund, Inc. 
v. Sanders, 437 U.S. 340 (1978).
    (e) Expert or opinion testimony. DoD personnel shall not provide, 
with or without compensation, opinion or expert testimony concerning 
official DoD information, subjects, or activities, except on behalf of 
the United States or a party represented by the Department of Justice. 
Upon a showing by the requestor of exceptional need or unique 
circumstances and that the anticipated testimony will not be adverse to 
the interests of the Department of Defense or the United States, the 
appropriate DoD official designated in paragraph (a) of this section 
may, in writing, grant special authorization for DoD personnel to appear 
and testify at no expense to the United States. If, despite the final 
determination of the responsible DoD official, a court of competent 
jurisdiction or other appropriate authority, orders the appearance and 
expert or opinion testimony of DoD personnel, the personnel shall notify 
the responsible DoD official of such order. If the DoD official 
determines that no further legal review of or challenge to the court's 
order will be sought, the affected DoD personnel shall comply with the 
order. If directed by the appropriate DoD official, however, the 
affected DoD personnel shall respectfully

[[Page 479]]

decline to comply with the demand. See United States ex rel. Touhy v. 
Ragen, 340 U.S. 462 (1951).



PART 99_PROCEDURES FOR STATES AND LOCALITIES TO REQUEST INDEMNIFICATION--Table 

of Contents



Sec.
99.1 Scope and purpose.
99.3 General definitions.
99.5 Eligibility for indemnification.
99.7 Procedures for requesting an indemnification agreement.
99.9 Terms of indemnification.

Appendix to Part 99--Addresses of Relevant U.S. Government Agencies

    Authority: Access to Criminal History Records for National Security 
Purposes, of The Intelligence Authorization Act for Fiscal Year 1986, 
Pub. L. No. 99-169, secs. 801-803, 99 Stat. 1002, 1008-1011 (1985) 
(codified in part at 5 U.S.C. 9101).

    Source: 51 FR 42555, Nov. 25, 1986, unless otherwise noted.



Sec. 99.1  Scope and purpose.

    (a) The Department of Defense (DoD), Office of Personnel Management 
(OPM), or Central Intelligence Agency (CIA) has the right to criminal 
history information of States and local criminal justice agencies in 
order to determine whether a person may:
    (1) Be eligible for access to classified information;
    (2) Be assigned to sensitive national security duties; or
    (3) Continue to be assigned to national security duties.
    (b) This part sets out the conditions under which the DoD, OPM, or 
CIA may sign an agreement to indemnify and hold harmless a State or 
locality against claims for damages, costs, and other monetary loss 
caused by disclosure or use of criminal history record information by 
one of these agencies.
    (c) The procedures set forth in this part do not apply to situations 
where a Federal agency seeks access to the criminal history records of 
another Federal agency.
    (d) By law these provisions implementing 5 U.S.C. 9101 (b)(3) shall 
expire December 4, 1988, unless the duration of said section is extended 
or limited by Congress.



Sec. 99.3  General definitions.

    For the purposes of Sec. Sec. 99.1 through 99.9 of this part:
    Criminal history record information: information collected by 
criminal justice agencies on individuals consisting of identifiable 
descriptions and notations of arrests, indictments, information, or 
other formal criminal charges and any disposition arising therefrom, 
sentencing, correction supervision, and release. The term does not 
include identification information such as fingerprint records to the 
extent that such information does not indicate involvement of the 
individual in the criminal justice system. The term does not include 
those records of a State or locality sealed pursuant to law from access 
by State and local criminal justice agencies of that State or locality.
    Criminal justice agency: Federal, State, and local agencies 
including (a) courts, or (b) a government agency or any subunit thereof 
which performs the administration of criminal justice pursuant to a 
statute or executive order, and which allocates a substantial part of 
its annual budget to the administration of criminal justice.
    Department of Defense: the Defense Investigative Service, National 
Security Agency, Naval Investigative Service, Air Force Office of 
Special Investigations, and Army Intelligence and Security Command.
    Federal agency: the Department of Defense, the Office of Personnel 
Management, or the Central Intelligence Agency, or any other Federal 
agency subsequently authorized by Congress to obtain access to criminal 
history records information.
    Locality: any local government authority or agency or component 
thereof within a State having jurisdiction over matters at a county, 
municipal or other local government level.
    State: any of the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Northern Mariana Islands, Guam, the 
Virgin Islands, American Samoa, the Trust Territory of Pacific Islands, 
and any other territory or possession of the United States.

[[Page 480]]



Sec. 99.5  Eligibility for indemnification.

    As provided for under 5 U.S.C. 9101(b)(3), a State or locality may 
request an indemnification agreement.
    (a) To be eligible for an indemnification agreement a State or 
locality must have had a law in effect on December 4, 1985 that 
prohibited or had the effect of prohibiting the disclosure of criminal 
history record information to the DoD, OPM, or CIA.
    (b) A State or locality is also eligible for an indemnification 
agreement if it meets the conditions of paragraph (a) of this section, 
but nevertheless provided criminal history record information to the 
DoD, OPM, or CIA on or before December 4, 1985.



Sec. 99.7  Procedures for requesting an indemnification agreement.

    When requesting an indemnification agreement, the State or locality 
must notify each Federal agency as appropriate, at the address listed in 
the appendix to this part, of its eligibility of an indemnification 
agreement. It must also:
    (a) Certify that on December 4, 1985, the State or locality had in 
effect a law which prohibited or had the effect of prohibiting the 
disclosure of criminal history record information to the DoD, OPM, or 
CIA; and
    (b) Append to the request for an indemnification agreement a copy of 
such law.



Sec. 99.9  Terms of indemnification.

    The terms of the Uniform Federal Agency Indemnification Agreement 
(UFAIA), must conform to the following provisions:
    (a) Eligibility: The State or locality must certify that its law 
prohibits or has the effect of prohibiting the disclosure of criminal 
history record information to the DoD, OPM, or CIA for the purposes 
described in section 910.101(a) and that such law was in effect on 
December 4, 1985.
    (b) Liability: (1) The Federal agency agrees to indemnify and hold 
harmless the State or locality from any claim for damages, costs and 
other monetary loss arising from the disclosure or negligent use by the 
DoD, OPM, or CIA of criminal history record information obtained from 
that State or locality pursuant to 5 U.S.C. 9101(b). The indemnification 
will include the officers, employees, and agents of the State or 
locality.
    (2) The indemnification agreement will not extend to any act or 
omission prior to the transmittal of the criminal history record 
information to the Federal agency.
    (3) The indemnification agreement will not extend to any negligent 
acts on the part of the State or locality in compiling, transcribing or 
failing to delete or purge any of the information transmitted.
    (c) Consent and access requirements:
    (1) The Federal agency when requesting criminal history record 
information from the State or locality for the release of such 
information will attest that it has obtained the written consent of the 
individual under investigation after advising him or her of the purposes 
for which that information is intended to be used.
    (2) The Federal agency will attest that it has advised that 
individual of the right to access that information.
    (d) Purpose requirements: The Federal agency will use the criminal 
history record information only for the purposes stated in Sec. 
910.101(a).
    (e) Notice, litigation and settlement procedures: (1) The State or 
locality must give notice of any claim against it on or before the 10th 
day after the day on which claim against it is received, or it has 
notice of such a claim.
    (2) The notice must be given to the Attorney General and to the U.S. 
Attorney of the district embracing the place wherein the claim is made.
    (3) The Attorney General shall make all determinations regarding the 
settlement or defense of such claims.



Sec. Appendix to Part 99--Addresses of Relevant U.S. Government Agencies

Department of Defense, Office of the General Counsel, Room 3E988, 
Washington, DC 20301-1600
Office of Personnel Management, Office of Federal Investigations, P.O. 
Box 886, Washington, DC 20044
Central Intelligence Agency, Attention: Office of General Counsel, 
Washington, DC 20505

[[Page 481]]



PART 100_UNSATISFACTORY PERFORMANCE OF READY RESERVE OBLIGATION--Table of 

Contents



Sec.
100.1 Reissuance and purpose.
100.2 Applicability.
100.3 Policy.
100.4 Responsibility.
100.5 Procedures.
100.6 Definitions.

Enclosure to Part 100--Suggested Format, Affidavit of Service by Mail

    Authority: 10 U.S.C. 510, 511, 593, 597, or 651, and 32 U.S.C. 302.

    Source: 44 FR 51568, Sept. 4, 1979, unless otherwise noted.



Sec. 100.1  Reissuance and purpose.

    This part is reissued to update DoD policy on actions to be taken in 
regard to members of the Ready Reserve whose performance of duty or 
participation in Reserve training is unsatisfactory; and provides 
greater flexibility to the Military Departments when dealing with 
unsatisfactory performance.



Sec. 100.2  Applicability.

    The provisions of this part apply to the Office of the Secretary of 
Defense and the Military Departments.



Sec. 100.3  Policy.

    Persons who are enlisted or appointed in, or transferred to a 
Reserve component of the Armed Forces of the United States, under the 
provisions of 10 U.S.C. 510, 511, 593, 597, or 651 and 32 U.S.C. 302 are 
expected to participate and perform satisfactorily as members of the 
Ready Reserve to fulfill their obligation or service agreement. This 
policy is also in accordance with the standards prescribed by 32 CFR 
parts 102 and 101 and the Military Departments concerned.



Sec. 100.4  Responsibility.

    The Secretaries of the Military Departments shall ensure that:
    (a) Ready Reserve applicants understand their obligations for 
satisfactory participation in the Ready Reserve before their enlistment 
or appointment.
    (b) Members of the Ready Reserve continue to understand their 
obligations for satisfactory participation in the Ready Reserve after 
their enlistment or appointment in accordance with 32 CFR part 44.



Sec. 100.5  Procedures.

    (a) Unsatisfactory participation in the Ready Reserve. (1) Members 
of the Selected Reserve who have not fulfilled their statutory military 
service obligation under 10 U.S.C. 651 and whose participation has not 
been satisfactory may be:
    (i) Ordered to active duty, if they have not served on active duty 
or active duty for training for a total period of 24 months, for such 
period of time as may be deemed necessary by the Secretary of the 
Military Department concerned under the provisions of 10 U.S.C. 673a 
(such individuals may be required to serve on active duty until their 
total service on active duty or active duty for training equals 24 
months); or
    (ii) Ordered to active duty for training, regardless of the length 
of prior active duty or active duty for training, for a period of not 
more than 45 days under provisions of 10 U.S.C. 270; or
    (iii) Transferred to the Individual Ready Reserve (IRR) for the 
balance of their statutory military service obligation with a tentative 
characterization of service, normally under other than honorable 
conditions, when the Military Department concerned has determined that 
the individuals still possesses the potential for useful service under 
conditions of full mobilization; or
    (iv) Discharged for unsatisfactory participation under the 
provisions of 32 CFR part 41, when the Military Department concerned has 
determined that the individual has no potential for useful service under 
conditions of full mobilization.
    (2) Members of the Selected Reserve who have fulfilled their 
statutory military service obligation under 10 U.S.C. 651 or who did not 
incur such obligation, \2\ and whose participation has not been 
satisfactory may be:
---------------------------------------------------------------------------

    \2\ This includes women whose current enlistment or appointment was 
effected before February 1, 1978.

---------------------------------------------------------------------------

[[Page 482]]

    (i) Transferred to the IRR for the balance of their current 
enlistment contract or service agreement with a tentative 
characterization of service, normally under other than honorable 
conditions, when the Military Department concerned has determined that 
the individual still has a potential for useful service under conditions 
of full mobilization; or
    (ii) Discharged for unsatisfactory performance under 32 CFR part 41 
when the Military Department concerned has determined that the 
individual has no further potential for useful service under conditions 
of full mobilization.
    (3) When a member of the Selected Reserve is identified as an 
unsatisfactory participant and considered a possible candidate for 
involuntary transfer to the IRR or for discharge, a board of officers 
shall be convened, as required by 10 U.S.C. 1163 to consider the 
circumstances and recommend appropriate action.
    (4) When an individual is transferred to the IRR as a result of an 
approved board recommendation, no further board action shall be required 
before discharge if the individual fails to take affirmative action in 
an effort to upgrade the tentative characterization of service.
    (5) Members of the IRR who have not fulfilled their statutory 
military service obligation under 10 U.S.C. 651 were enlisted or 
appointed under any program that provided that the obligation could be 
fulfilled by service in the IRR only, and whose participation in such a 
program has not been satisfactory may be:
    (i) Retained in the IRR for the duration of their statutory military 
service obligation with a tentative characterization of service, 
normally under other than honorable conditions, when the Military 
Department concerned has determined that the individual still possesses 
the potential for useful service under conditions of full mobilization; 
or
    (ii) Discharged for unsatisfactory performance under 32 CFR part 41, 
when the Military Department concerned has determined that the 
individual has no potential for useful service under conditions of full 
mobilization.
    (6) When a member of the IRR, whose enlistment or appointment 
provided that the service concerned could be performed entirely in the 
IRR (as opposed to the Selected Reserve), is identified as an 
unsatisfactory participant, a board of officers shall be convened as 
required by 10 U.S.C. 1163 to consider the circumstances and recommend 
appropriate action. When an individual is retained as a result of an 
approved board action, no further board action shall be required before 
discharge if the individual fails to take affirmative action in an 
effort to upgrade the tentative characterization of service.
    (7) Individuals assigned to the Selected Reserve who are ordered to 
active duty under 10 U.S.C. 673a or to active duty for training under 
the provisions of 10 U.S.C. 270 may be returned to their previous unit 
of assignment or transferred to the IRR upon the completion of the 
active duty or active duty for training. When necessary, the 
individual's term of enlistment or service agreement may be extended to 
permit completion of the designated period of active duty or active duty 
for training in accordance with 10 U.S.C. 270(b) and 673(b).
    (8) Individuals who are transferred or assigned to the IRR who have 
a tentative characterization of service of less than honorable because 
of unsatisfactory participation in the Ready Reserve shall be discharged 
at the end of their statutory military service obligation or their 
period of enlistment or service agreement, whichever is later with such 
characterization unless the individuals have taken affirmative action to 
upgrade the tentative characterization of service. Affirmative actions 
may include, but are not limited to, rejoining a unit of the Selected 
Reserve and participating satisfactorily for a period of 12 months, or 
volunteering for and completing a tour of active duty for training of 
not less than 45 days. When necessary, the individual's term of 
enlistment or service agreement may be extended to complete the 
affirmative action and qualify for a more favorable characterization of 
service.
    (9) When members of the Selected Reserve are ordered to active duty, 
active duty for training, or transferred to the

[[Page 483]]

IRR because of unsatisfactory participation, copies of their orders 
should be furnished to the individuals through personal contact by a 
member of the command and a written acknowledgment of receipt obtained. 
When such efforts are unsuccessful, the orders shall be mailed to the 
individual.
    (i) Orders mailed to such members shall be sent by Certified Mail 
(Return Receipt Requested), and a Receipt for Certified Mail (PS Form 
3800) obtained. In addition, the individual who mails the orders shall 
prepare a Sworn Affidavit of Service by Mail (format at enclosure) that 
shall be inserted, together with the PS Form 3800, in the member's 
personnel file.
    (ii) Notification shall be made through the mailing of orders to the 
member's most recent mailing address.
    (iii) Provided the orders were properly mailed to the most recent 
address furnished by the member, absence of proof of delivery does not 
change the fact that the member was properly ordered to report for 
active duty, active duty for training, or transferred to the IRR, as 
appropriate.
    (iv) Individuals ordered to active duty who fail to report shall 
have their names entered into the National Crime Information Center of 
the Federal Bureau of Investigation within 30 days following their 
reporting date and appropriate screening by the Deserter Information 
Point concerned.
    (10) Orders affecting members of the IRR that involve active duty 
for training required by the terms of their enlistment or service 
agreement may be handled by mail in the manner prescribed in paragraph 
(a)(9)(i) of this section.
    (11) Each member of the IRR must keep the organization of assignment 
informed of:
    (i) His/her accurate and current mailing address;
    (ii) Any change of address, marital status, number of dependents, 
and civilian employment; and
    (iii) Any change in physical condition that would prevent the member 
from meeting the physical or mental standards prescribed by 10 U.S.C. 
652 and part 44 of this title.
    (12) Individuals involuntarily ordered to active duty or active duty 
for training under provisions of this part may be delayed as prescribed 
by the Secretary of the Military Department concerned.
    (13) Individuals whose involuntary order to active duty would result 
in extreme community or personal hardship may, upon their request, be 
transferred to the Standby Reserve, the Retired Reserve, or discharged, 
as appropriate, in accordance with 10 U.S.C. 673a(c) and part 44 of this 
title.
    (b) Exceptions. As exceptions to the criteria in paragraph (a) of 
this section, members of the Ready Reserve who do not or are unable to 
participate for any of the following reasons shall be processed as 
indicated:
    (1) Members of the Selected Reserve who are unable to participate in 
a unit of the Selected Reserve by reason of an action taken by the 
Military Department concerned, such as unit inactivation or relocation, 
to the effect that they now reside beyond a reasonable commuting 
distance (as defined in Sec. 100.6(e)) of a Reserve unit, shall be 
assigned to the IRR until they are able to join or be assigned to 
another unit, or complete their statutory military service obligation.
    (2) Members of the Selected Reserve who change their residence:
    (i) May lose their unit position. However, they will be transferred 
to another paid-drill unit with the same Reserve component if possible 
or be given 90 days after departing from their original unit to locate 
and join another unit. At the new unit, they will fill an existing 
vacancy or be assigned as a temporary overstrength within the 
congressionally authorized standard-years (defined in Sec. 100.6(f)) or 
funds under paragraph (b)(2)(iii) (A) and (B) of this section.
    (ii) May locate position vacancies that require different 
specialties than the ones they now possess. Therefore, the Secretary of 
the Military Department concerned may provide for the retaining of these 
individuals (with their consent) by ordering them to active duty for 
training to acquire the necessary specialties.
    (iii) Must be accepted in a Reserve unit by their parent Military 
Department regardless of vacancies, subject to the following conditions:

[[Page 484]]

    (A) The losing unit certifies that the reservist's performance of 
service has been satisfactory.
    (B) The reservist's specialty is usable in the unit, the member can 
be retrained by on-the-job training, or the member is willing to be 
retrained as outlined in paragraph (b)(2)(ii) of this section.
    (iv) Are authorized to transfer to another Reserve component under 
the provisions of DoD Directive 1205.51, ``Transfer of Persons Between 
Reserve Components of the Armed Forces,'' June 25, 1959, when the 
conditions outlined in paragraph (b)(2)(iii) apply.
    (3) If members of the Selected Reserve who change their residents 
fail to join another unit within a period of 90 days, and at least 1 
unit of their component is within a reasonable commuting distance, as 
such distance is defined in Sec. 100.6(e) they shall be processed in 
accordance with Sec. 100.5(a) unless they are considered eligible to be 
handled as ``exceptions'' under policies outlined in paragraph (b) (5) 
through (8) of this section.
    (4) If members of the Selected Reserve who change their residences 
locate in an area where they reside beyond a reasonable commuting 
distance, as such distance is defined in Sec. 100.6(e) of a paid-drill 
unit of the same Reserve component, they shall be assigned to the IRR of 
their service until they are able to transfer to a paid-drill unit of 
another Reserve component; or complete their statutory military service 
obligation.
    (5) Members of the Ready Reserve who are preparing for, or are 
engaged in, critical civilian occupations will be screened in accordance 
with 32 CFR part 44.
    (6) Individuals who are preparing for the ministry in a recognized 
theological or divinity school may participate voluntarily in the Ready 
Reserve. However, under 10 U.S.C. 685, such individuals may not be 
required to do so. Members who do not wish to participate shall be 
transferred to the Standby Reserve. If such training is terminated 
before graduation, the member may be transferred back to the Ready 
Reserve. A member eligible for assignment to the Standby Reserve under 
the provisions of 10 U.S.C. 268(b), 270, 510, 511, 593, 597, 651, 652, 
672, 673, 673a, 673b, 685, and 1163 who voluntarily remains assigned to 
the Selected Reserve and participates in the training required, waives 
any right to request delay to exemption from any later mobilization on 
the basis of preparation for the ministry.
    (7) Individuals who are enrolled in a course of graduate study in 
one of the health professions shall be screened in accordance with DoD 
Directive 1200.141, ``Reservists Who Are Engaged in Graduate Study or 
Training in Certain Health Progressions,'' July 30, 1969.
    (8) Individuals who incur a bona fide, temporary nonmilitary 
obligation requiring overseas residency outside the United States, or 
religious missionary obligation shall be processed in accordance with 32 
CFR art 103.
    (9) Nothing in this part shall be construed as limiting the right of 
the individual to voluntarily request transfer to the Standby Reserve or 
to the Retired Reserve, or discharge from the Reserve components when 
such action is authorized by regulations of the Military Department 
concerned.
    (10) Nothing in this part shall be construed as precluding action 
against a member of the Ready Reserve, either by court-martial or review 
by a board of officers convened by an authority designated by the 
Secretary of the Military Department concerned, when such action might 
otherwise be warranted under 10 U.S.C. 268(b), 270, 510, 511, 593, 597, 
651, 652, 672, 673, 673a, 673b, 685, and 1163 and the regulations of the 
Military Department concerned.



Sec. 100.6  Definitions.

    (a) Ready Reserve. Consists of the Selected Reserve and the 
Individual Ready Reserve. Members of both are subject to active duty as 
outlined in 10 U.S.C. 672 and 673.
    (b) Selected Reserve. Members of the Ready Reserve in training/pay 
categories A, B, C, F, M and P. These reservists are either members of 
units who participate regularly in drills and annual active duty for 
training, in annual field training in the case of the National Guard, or 
are on initial active duty for training; or they are individuals who 
participate in regular drills and annual active duty on the same

[[Page 485]]

basis as members of Reserve component units. Excluded from the Selected 
Reserve are Reserve component members who are:
    (1) Participating in annual active duty for training and not paid 
for attendance at regular drills (pay categories D and E), or awaiting, 
in a nonpay status, their initial active duty for training (pay category 
L).
    (2) Enrolled in officer training program (pay category J) members of 
the Individual Ready Reserve pool (pay category H), and reservists on 
extended active duty. (See 10 U.S.C. 268(b) 32 CFR part 102.)
    (3) Members of the Inactive Army National Guard.
    (c) Individual Ready Reserve (IRR). Members of the Ready Reserve not 
assigned to the Selected Reserve and not on active duty.
    (d) Unsatisfactory participation. A member of the Ready Reserve who 
fails to fulfill his/her obligation or agreement as a member of a unit 
of the Ready Reserve described in 10 U.S.C. 268(b), 270, 510, 511, 593, 
597, 651, 652, 672, 673, 673a, 673b, 685, and 1163. Or a member who 
fails to meet the standards as prescribed by the Military Departments 
concerned for attendance at training drills, attendance at active duty 
for training, training advancement, or performance of duty.
    (e) Reasonable commuting distance. The maximum distance a member of 
a Reserve component may travel involuntarily between residence and drill 
training site, in accordance with Sec. 100.5(b)(1). This distance may 
be within:
    (1) A 100-mile radius of the drill site that does not exceed a 
distance that can be traveled by automobile under average conditions of 
traffic, weather, and roads within 3 hours. This applies only to those 
units that normally conduct four drills on 2 consecutive days during the 
training year, if Government meals and quarters are provided at the base 
where the unit drills. (The provisions of this paragraph shall apply 
only to those individuals enlisting, reenlisting, or extending their 
enlistments after November 1, 1972.)
    (2) A 50-mile radius of the drill site that does not exceed a 
distance that can be traveled by automobile under average conditions of 
traffic, weather, and roads within a period of 1\1/2\ hours.
    (f) Standard-year. Personnel authorizations that describe the amount 
of work expected of one individual during a calendar or fiscal year.
    (g) Tentative characterization of service. An interim description of 
the quality of performance during a period which is less than the time 
required to earn an administrative discharge. The quality of performance 
shall be described as honorable, under honorable conditions, or under 
other than honorable conditions. If the quality is described as under 
honorable conditions a General Discharge certificate shall be provided 
upon discharge. If the quality is described as under other than 
honorable conditions a Discharge Under Other Than Honorable Conditions 
certificate shall be provided upon discharge.

[44 FR 51568, Sept. 4, 1979, as amended at 45 FR 48618, July 21, 1980]



     Sec. Enclosure--Suggested Format, Affidavit of Service by Mail

State of ----------
County of ----------
---------- (Name of individuals who mailed orders), being duly sworn, 
deposes and says:

    I am the ---------- (Job Title, e.g., Personnel Officer) of --------
-- (Unit) on the ------ day of ---------------- 19----, I mailed the 
original orders, a true copy of which is attached hereto, by Certified 
Mail (Return Receipt Requested) to ---------- (Name and address of 
member of orders) that being the last known address given to ---------- 
(Unit) as the one at which official mail would be received by or 
forwarded to the Reserve component member by depositing same in an 
official depository of the U.S. Postal Service at ---------- (Location 
of Postal Facility) in a securely wrapped and sealed U.S. Government 
official postal envelope with a Return Receipt Card (PS Form 3811) 
attached and the envelope addressed to the member at the address 
provided. A Receipt for Certified Mail (PS Form 3800) attesting to such 
action is attached.

---------- (Signature and Rank of Affiant)
Sworn and subscribed before me this ------ day of ----------------------
-- 19----.
---------- (Signature and Rank of Officer Administering Oath)

[[Page 486]]



PART 101_PARTICIPATION IN RESERVE TRAINING PROGRAMS--Table of Contents



Sec.
101.1 Reissuance and purpose.
101.2 Applicability.
101.3 Definitions.
101.4 Responsibilities.
101.5 Requirements.
101.6 Criteria for satisfactory performance.
101.7 Compliance measures.
101.8 Reserve training in sovereign foreign nations.

    Authority: 10 U.S.C. 270 (a), (b), (c), 511 (b), (d), and 673a, and 
32 U.S.C. 502(a).

    Source: 44 FR 53160, Sept. 13, 1979, unless otherwise noted.



Sec. 101.1  Reissuance and purpose.

    This part establishes: (a) The criteria and training requirements 
for satisfactory participation by members of the Reserve components of 
the U.S. Armed Forces who are subject to the provisions of 10 U.S.C. and 
32 U.S.C., and (b) uniform DoD policy for training members of such 
Reserve components who may be temporarily residing in sovereign foreign 
nations.



Sec. 101.2  Applicability.

    The provisions of this part apply to the Office of the Secretary of 
Defense and the Military Departments.



Sec. 101.3  Definitions.

    For the purposes of administering 10 U.S.C. 270(a), the terms 
enlisted and appointed refer to initial entry into an armed force 
through enlistment or appointment.



Sec. 101.4  Responsibilities.

    The Secretaries of the Military Departments will issue regulations 
prescribing criteria and training requirements for satisfactory 
participation in Reserve training programs by members of Reserve 
components of the U.S. Armed Forces and exceptions thereto, consistent 
with Sec. 101.5.



Sec. 101.5  Requirements.

    (a) Reserve participation--(1) Training requirements under 10 U.S.C. 
270(a). (i) Each individual inducted, enlisted, or appointed in the U.S. 
Armed Forces after August 9, 1955, who becomes a member of the Ready 
Reserve (by means other than through membership in the Army National 
Guard of the United States (see Sec. 101.5(a)(2)) during the required 
statutory period in the Ready Reserve, participate or serve as follows, 
except as provided in 32 CFR part 102.
    (A) In at least 48 scheduled drills or training periods and not less 
than 14 days (exclusive of travel time) of active duty training during 
each year; or
    (B) On active duty for training for no more than 30 days each year, 
unless otherwise specifically prescribed by the Secretary of Defense.
    (ii) The provisions of Sec. 101.5(a)(1) do not apply to graduates 
of the Federal and State Maritime Academies who are commissioned in the 
Naval Reserve.
    (2) Training requirements under 32 U.S.C. 502(a) apply to the 
Secretaries of the Army and Air Force only. Members of the Army and Air 
National Guard shall:
    (i) Assemble for drill and instruction at least 48 times a year, and
    (ii) Participate in training encampments, maneuvers, or other 
exercises at least 15 days a year, unless excused by the Secretaries of 
the Army or Air Force.
    (3) Active duty. Enlisted members who have served 2 years on active 
duty or who, under the policy and regulations of the Military Services 
concerned, were credited with having served 2 years of active duty will 
not be required to perform duty as described in paragraph (a)(1)(i) (A) 
and (B) of this section unless such members:
    (i) Enlisted under the provisions of 10 U.S.C. 511(b) or (d) thereby 
incurring a statutory obligation to participate in the Ready Reserve in 
an active training status for a specified period of time after the 2 
years of active duty described above.
    (ii) Performed part or all of their 2 years of active duty as a 
result of being ordered to active duty under 10 U.S.C. 673a for not 
participating satisfactorily in a unit of the Ready Reserve. However, 
the Secretary concerned, or designee, may waive this requirement in 
those cases where involuntary retention would not be in the best 
interest of the Service.
    (iii) Filled a vacancy in the Selected Reserve that otherwise cannot 
be

[[Page 487]]

filled, following a diligent recruiting effort by the Secretary 
concerned.
    (iv) Executed a separate written agreement incurring an obligation 
to participate in the Selected Reserve.
    (4) Active duty served in a combat zone. (i) Except as specified in 
paragraph (a)(4)(ii), enlisted members who (A) have served on active 
duty in a combat zone for hostile fire pay (or other areas as prescribed 
by the Secretary of Defense) for a total of 30 days or more, or (B) are 
wounded while on active duty in hostile areas, will not be required to 
perform duty involuntarily (as described paragraph (a) (1)(i)(A) and (2) 
of this section. However, these members may be required to participate 
or serve on active duty for no more than 30 days each year, unless 
otherwise specifically prescribed by the Secretary of Defense.
    (ii) Members, who enlisted under the provisions of 10 U.S.C. 511(b) 
or (d) and serve on active duty described in paragraph (a)(4)(i) are 
obligated to participate in the Ready Reserve in an active duty training 
status during the statutory period of service in the Ready Reserve.
    (5) Exclusion. Notwithstanding the exclusion of the member enlisted 
under the provisions of 10 U.S.C. 511(b) or (d), from the policies set 
forth in paragraph (a) (3) and (4) of this section, the Secretaries of 
the Military Departments may, with the approval of the Secretary of 
Defense, establish criteria which may excuse certain enlistees from 
performing the duty described in Sec. 101.5(a), depending upon the 
particular needs of the Military Department concerned.



Sec. 101.6  Criteria for satisfactory performance.

    Within the general policy outlined in Sec. 101.5(a), the minimum 
amount of annual training prescribed by the Secretaries of the Military 
Departments concerned will be no less than the training required to 
maintain the proficiency of the unit and the skill of the individual. In 
establishing annual training requirements under this policy, the 
Secretaries:
    (a) May grant exceptions under circumstances outlined below for 
individuals who are subject to the training requirements set forth in 
Sec. 101.5(a)(1) and (2):
    (1) To the degree that it is consistent with military requirements, 
the personal circumstances of an individual may be considered in 
assigning him/her to a training category prescribed in 32 CFR part 102, 
except as otherwise provided by 32 CFR part 100.
    (2) Members who have performed a minimum initial tour of extended 
active duty, as prescribed by the Military Departments concerned may be 
placed in Category I (no training) as defined in 32 CFR part 102, when 
the Secretary of the Military Department concerned determines that no 
training for mobilization requirement exists because of
    (i) Changes in military skills required;
    (ii) The degree of military skill held; or
    (iii) Compatibility of the member's civilian occupation with his/her 
military skill.
    (b) May grant exceptions regarding absences after considering the 
member's manner of performance of prescribed training duty under the 
provisions of Sec. 101.5(a)(1) and provided that the absences not so 
excepted do not exceed 10% of scheduled drills or training periods.
    (c) Shall require members to: (1) Meet the standards of satisfactory 
performance of training duty set forth in Sec. 101.6(b); or (2) 
participate satisfactorily in an officer training program. The placement 
of such members in the Standby Reserve as a result of the screening 
process prescribed in 32 CFR part 44, will continue to constitute 
satisfactory performance of service.



Sec. 101.7  Compliance measures.

    Under the provisions of 32 CFR part 100, members of the Ready 
Reserve who fail to meet the criteria for satisfactory performance, as 
set forth in Sec. 101.6, may be:
    (a) Ordered to active duty; or
    (b) Ordered to active duty for training; or
    (c) Transferred to, or retained in the Individual Ready Reserve with 
a tentative characterization of service, normally under other than 
honorable conditions; or

[[Page 488]]

    (d) Discharged for unsatisfactory participation under the provisions 
of 32 CFR part 41, when the Military Department concerned has determined 
that the individual has no potential for useful service under conditions 
of full mobilization.



Sec. 101.8  Reserve training in sovereign foreign nations.

    (a) The Secretaries of the Military Departments may authorize the 
conduct of scheduled drills or training periods, correspondence courses, 
and such other active or inactive duty training as they consider 
appropriate for members of the Reserve components who may be temporarily 
residing in sovereign foreign nations which permit the United States to 
maintain troops of the Active Forces (other than Military Advisory 
Assistance Group or attached personnel) within their boundaries.
    (b) Prior to authorizing such training, the Secretaries of the 
Military Departments will instruct the attaches representing their 
respective Departments to inform the U.S. Ambassador and the appropriate 
officials of the foreign government of the intent to conduct such 
training. If the foreign government objects, the Secretaries of the 
Military Departments will furnish all the facts and their 
recommendations to the Secretary of Defense.
    (c) This policy does not prohibit the conduct of inactive duty 
training, such as correspondence courses, in those sovereign foreign 
countries in which the United States does not maintain Active Forces and 
where an agreement exists between the United States and the sovereign 
foreign nation concerned for the conduct of such training.
    (d) This policy does not prohibit for a limited duration the 
augmentation of Defense Attache Offices by attache reservists 
(mobilization augmentees or mobilization designees) during periods of 
local emergencies or for short-term (less than 30 days) training 
periods, provided the provisions of paragraph (b) of this section are 
respected. Attache reservists who are available, possess the expertise 
required, and reside temporarily in foreign countries, shall be utilized 
to the maximum extent to augment Defense Attache Offices before the 
continental United States-based attache reservists are utilized.



PART 104_CIVILIAN EMPLOYMENT AND REEMPLOYMENT RIGHTS OF APPLICANTS FOR, AND 

SERVICE MEMBERS AND FORMER SERVICE MEMBERS OF THE UNIFORMED SERVICES--Table of 

Contents



Sec.
104.1 Purpose.
104.2 Applicability.
104.3 Definitions.
104.4 Policy.
104.5 Responsibilities.
104.6 Procedures.

Appendix A to Part 104--Civilian Employment and Reemployment Rights, 
          Benefits and Obligations for Applicants for, and Service 
          Members and Former Service Members of the Uniformed Services
Appendix B to Part 104--Sample Employer Notification of Uniformed 
          Service

    Authority: 10 U.S.C. 1161.

    Source: 62 FR 3466, Jan. 23, 1998, unless otherwise noted.



Sec. 104.1  Purpose.

    This part:
    (a) Updates implementation policy, assigns responsibilities, and 
prescribes procedures for informing Service members who are covered by 
the provisions of 38 U.S.C chapter 43 and individuals who apply for 
uniformed service, of their civilian employment and reemployment rights, 
benefits and obligations.
    (b) Implements 38 U.S.C. chapter 43, which updated, codified, and 
strengthened the civilian employment and reemployment rights and 
benefits of Service members and individuals who apply for uniformed 
service, and specifies the obligations of Service members and applicants 
for uniformed service.



Sec. 104.2  Applicability.

    This part applies to the Office of the Secretary of Defense; the 
Military Departments, including the Coast Guard when it is not operating 
as a Military Service in the Department of the Navy by agreement with 
the Department of Transportation; the Chairman of the Joint Chiefs of 
Staff; and the Defense Agencies (referred to collectively in

[[Page 489]]

this part as ``the DoD Components''). The term ``Military Departments,'' 
as used in this part, refers to the Departments of the Army, Navy, and 
Air Force. The term ``Secretary concerned'' refers to the Secretaries of 
the Military Departments and the Secretary of Transportation with 
respect to the Coast Guard when it is not operating as a Service in the 
Department of the Navy. The term ``Military Services'' refers to the 
Army, the Navy, the Air Force, the Marine Corps, and the Coast Guard.



Sec. 104.3  Definitions.

    Critical mission. An operational mission that requires the skills or 
resources available in a Reserve component or components.
    Critical requirement. A requirement in which the incumbent possesses 
unique knowledge, extensive experience, and specialty skill training to 
successfully fulfill the duties or responsibilities in support of the 
mission, operation or exercise. Also, a requirement in which the 
incumbent must gain the necessary experience to qualify for key senior 
leadership positions within his or her Reserve component.
    Escalator position. This is established by the principle that the 
returning Service member is entitled to the position of civilian 
employment that he or she would have attained had he or she remained 
continuously employed by that civilian employer. This may be a position 
of greater or lesser responsibilities, to include a layoff status, when 
compared to the employees of the same seniority and status employed by 
the company.
    Impossible or unreasonable. For the purpose of determining when 
providing advance notice of uniformed service to an employer is 
impossible or unreasonable, the unavailability of an employer or 
employer representative to whom notification can be given, an order by 
competent military authority to report for uniformed service within 
forty-eight hours of notification, or other circumstances that the 
Office of the Assistant Secretary of Defense for Reserve Affairs may 
determine are impossible or unreasonable are sufficient justification 
for not providing advance notice of pending uniformed service to an 
employer.
    Military necessity. For the purpose of determining when providing 
advance notice of uniformed service is not required, a mission, 
operation, exercise or requirement that is classified, or a pending or 
ongoing mission, operation, exercise or requirement that may be 
compromised or otherwise adversely affected by public knowledge is 
sufficient justification for not providing advance notice to an 
employer.
    Non-career service. The period of active uniformed service required 
to complete the initial uniformed service obligation; a period of active 
duty or full-time National Guard duty that is for a specified purpose 
and duration with no expressed or implied commitment for continued 
active duty; or participation in a Reserve component as a member of the 
Ready Reserve performing annual training, active duty for training or 
inactive duty training. Continuous or repeated active uniformed service 
or full-time National Guard duty that results in eligibility for a 
regular retirement from the Armed Forces is not considered non-career 
service.
    Officer. For determining those Service officials authorized to 
provide advance notice to a civilian employer of pending uniformed 
service by a Service member or an individual who has applied for 
uniformed service, an officer shall include all commissioned officers, 
warrant officers, and non-commissioned officers authorized by the 
Secretary concerned to act in this capacity.
    Uniformed service. Performance of duty on a voluntary or involuntary 
basis in the Army, the Navy, the Air Force, the Marine Corps or the 
Coast Guard, including their Reserve components, when the Service member 
is engaged in active duty, active duty for special work, active duty for 
training, initial active duty for training, inactive duty training, 
annual training or full-time National Guard duty, and, for purposes of 
this part, a period for which a person is absent from a position of 
employment for the purpose of an examination to determine the fitness of 
the person to perform such duty.

[[Page 490]]



Sec. 104.4  Policy.

    It is DoD policy to support non-career service by taking appropriate 
actions to inform and assist uniformed Service members and former 
Service members who are covered by the provisions of 38 U.S.C. chapter 
43, and individuals who apply for uniformed service of their rights, 
benefits, and obligations under 38 U.S.C. Chapter 43. Such actions 
include:
    (a) Advising non-career Service members and individuals who apply 
for uniformed service of their employment and reemployment rights and 
benefits provided in 38 U.S.C. chapter 43, as implemented by this part, 
and the obligations they must meet to exercise those rights.
    (b) Providing assistance to Service members, former Service members 
and individuals who apply for uniformed service in exercising employment 
and reemployment rights and benefits.
    (c) Providing assistance to civilian employers of non-career Service 
members in addressing issues involving uniformed service as it relates 
to civilian employment or reemployment.
    (d) Considering requests from civilian employers of members of the 
National Guard and Reserve to adjust a Service member's scheduled 
absence from civilian employment because of uniformed service or make 
other accommodations to such requests, when it is reasonable to do so.
    (e) Documenting periods of uniformed service that are exempt from a 
Service member's cumulative 5-year absence from civilian employment to 
perform uniformed service as provided in 38 U.S.C. chapter 43 and 
implemented by this part.
    (f) Providing, at the Service member's request, necessary 
documentation concerning a period or periods of service, or providing a 
written statement that such documentation is not available, that will 
assist the Service member in establishing civilian reemployment rights, 
benefits and obligations.



Sec. 104.5  Responsibilities.

    (a) The Assistant Secretary of Defense for Reserve Affairs, under 
the Under Secretary of Defense for Personnel and Readiness, shall:
    (1) In conjunction with the Departments of Labor (DoL) and Veterans 
Affairs, the Office of Personnel Management (OPM), and other appropriate 
Departments and activities of the executive branch, determine actions 
necessary to establish procedures and provide information concerning 
civilian employment and reemployment rights, benefits and obligations.
    (2) Establish procedures and provide guidance to the Secretaries 
concerned about civilian employment and reemployment rights, benefits 
and obligations of Service members who are covered by the provisions of 
38 U.S.C. chapter 43 and individuals who apply for uniformed service as 
provided in 38 U.S.C. chapter 43. This responsibility shall be carried 
out in coordination with DoL, OPM, and the Federal Retirement Thrift 
Investment Board.
    (3) Monitor compliance with 38 U.S.C. chapter 43 and this part.
    (4) Publish in the Federal Register, DoD policies and procedures 
established to implement 38 U.S.C. chapter 43.
    (b) The Secretaries of the Military Departments and the Commandant 
of the Coast Guard shall establish procedures to:
    (1) Ensure compliance with this part.
    (2) Inform Service members who are covered by the provisions of 38 
U.S.C. chapter 43 and individuals who apply for uniformed service of the 
provisions of 38 U.S.C. chapter 43 as implemented by this part.
    (3) Provide available documentation, upon request from a Service 
member or former Service member, that can be used to establish 
reemployment rights of the individual.
    (4) Specify, as required, and document those periods of active duty 
that are exempt from the 5-year cumulative service limitation that a 
Service member may be absent from a position of civilian employment 
while retaining reemployment rights.
    (5) Provide assistance to Service members and former Service members 
who are covered by the provisions of 38 U.S.C. chapter 43, and 
individuals who apply for uniformed service in exercising employment and 
reemployment rights.

[[Page 491]]

    (6) Provide assistance, as appropriate, to civilian employers of 
Service members who are covered by the provisions of 38 U.S.C. chapter 
43 and individuals who apply for uniformed service.
    (7) Cooperate with the DoL in discharging its responsibilities to 
assist persons with employment and reemployment rights and benefits.
    (8) Cooperate with OPM in carrying out its placement 
responsibilities under 38 U.S.C. chapter 43.



Sec. 104.6  Procedures.

    The Secretaries of the Military Departments and the Commandant of 
the Coast Guard shall:
    (a) Inform individuals who apply for uniformed service and members 
of a Reserve component who perform or participate on a voluntary or 
involuntary basis in active duty, active duty for special work, initial 
active duty for training, active duty for training, inactive duty 
training, annual training and full-time National Guard duty, of their 
employment and reemployment rights, benefits, and obligations as 
provided under 38 U.S.C. chapter 43 and described in Appendix A of this 
part. Other appropriate materials may be used to supplement the 
information contained in Appendix A of this part.
    (1) Persons who apply for uniformed service shall be advised that 
DoD strongly encourages applicants to provide advance notice in writing 
to their civilian employers of pending uniformed service or any absence 
for the purpose of an examination to determine the person's fitness to 
perform uniformed service. Providing written advance notice is 
preferable to verbal advance notice since it is easier to establish that 
this basic prerequisite to retaining reemployment rights was fulfilled. 
Regardless of the means of providing advance notice, whether verbal or 
written, it should be provided as early as practicable.
    (2) Annually and whenever called to duty for a contingency 
operation, advise Service members who are participating in a Reserve 
component of:
    (i) The requirement to provide advance written or verbal notice to 
their civilian employers for each period of military training, active 
and inactive duty, or full-time National Guard duty.
    (A) Reserve component members shall be advised that DoD strongly 
encourages that they provide advance notice to their civilian employers 
in writing for each period of pending uniformed service. Providing 
written advance notice is preferable to verbal advance notice since it 
easily establishes that this prerequisite to retaining reemployment 
rights was fulfilled.
    (B) Regardless of the means of providing advance notice, whether 
written or verbal, it should be provided as early as practicable. DoD 
strongly recommends that advance notice to civilian employers be 
provided at least 30 days prior to departure for uniformed service when 
it is feasible to do so.
    (C) The advance notice requirement can be met by providing the 
employer with a copy of the unit annual training schedule or preparing a 
standardized letter. The sample employer notification letter in Appendix 
B of this part may be used for this purpose.
    (ii) The 5-year cumulative limit on absences from their civilian 
employment due to uniformed service and exemptions to that limit.
    (iii) The requirements for reporting or submitting application to 
return to their position of civilian employment.
    (iv) Their general reemployment rights and benefits.
    (v) The option for continuing employer provided health care, if the 
employer provides such a benefit.
    (vi) The opportunity to use accrued leave in order to perform 
uniformed service.
    (vii) Who they may contact to obtain assistance with employment and 
reemployment questions and problems.
    (b) Inform Service members who are covered by the provisions of 38 
U.S.C. Chapter 43, upon completion of an extended period of active duty 
and before separation from active duty of their employment and 
reemployment rights, benefits, and obligations as provided under 38 
U.S.C. Chapter 43. This shall, as a minimum, include notification and 
reporting requirements for returning to employment with their civilian 
employer. While Appendix A of this part provides the necessary 
information to

[[Page 492]]

satisfy this requirement, other appropriate materials may be used to 
supplement this information.
    (c) Issue orders that span the entire period of service when 
ordering a member of the National Guard or Reserve to active duty for a 
mission or requirement. Order modifications shall be initiated, as 
required, to ensure continuous active duty should the period required to 
complete the mission or requirement change.
    (d) Document the length of a Service member's initial period of 
military service obligation performed on active duty.
    (e) Determine and certify in writing those additional training 
requirements not already exempt for the 5-year cumulative service limit 
which are necessary for the professional development, or skill training 
or retraining for members of the National Guard or Reserve. Once the 
Secretary concerned certifies those training requirements, performance 
of uniformed service to complete a certified training requirement is 
exempt from the 5-year cumulative service limit.
    (f) Determine those periods of active duty when a Service member is 
ordered to, or retained on, active duty (other than for training) under 
any provision of law because of a war or national emergency declared by 
the President or Congress. If the purpose of the order to, or retention 
on, active duty is for the direct or indirect support of the war or 
national emergency, then the orders of the Service member should be so 
annotated, since that period of service is exempt from the 5-year 
cumulative service limit established in 38 U.S.C. Chapter 43.
    (g) Determine those periods of active duty performed by a member of 
the National Guard or Reserve that are designated by the Secretary 
concerned as a critical mission or critical requirement, and for that 
reason are exempt form the 5-year cumulative service limit. The 
authority for determining what constitutes a critical mission or 
requirement shall not be delegated below the Assistant Secretary level 
or the Commandant of the Coast Guard. The designation of a critical 
requirement to gain the necessary experience to qualify for key senior 
leadership positions shall be used judiciously, and the necessary 
experience and projected key leadership positions fully documented. This 
authority shall not be used to grant exemptions to avoid the cumulative 
5-year service limit established by 38 U.S.C. Chapter 43 or to extend 
individuals in repeated statutory tours. The Assistant Secretary of 
Defense for Reserve Affairs shall be notified in writing of all 
occasions in which a Service member is granted more than one exemption 
for a critical requirement when the additional exemption(s) extend the 
Service member beyond the 5-year cumulative service limit established in 
38 U.S.C. Chapter 43.
    (h) When appropriate, ensure that orders to active duty or orders 
retaining members on active duty specify the statutory or Secretarial 
authority for those orders when such authority meets one or more of the 
exemptions from the 5-year cumulative service limit provided in 38 
U.S.C. Chapter 43. If circumstances arise that prevent placing this 
authority on the orders, the authority shall be included in a separation 
document and retained in the Service member's personnel file.
    (i) Ensure that appropriate documents verifying any period of 
service exempt from the 5-year cumulative service limit are place in the 
Service member's personnel record or other appropriate record.
    (j) Document those circumstances that prevent a Service member from 
providing advance notification of uniformed service to a civilian 
employer because of military necessity or when advance notification is 
otherwise impossible or unreasonable, as defined in Sec. 104.3.
    (k) Designate those officers, as defined in Sec. 104.3, who are 
authorized by the Secretary concerned to provide advance notification of 
service to a civilian employer on behalf of a Service member or 
applicant for uniformed service.
    (l) Provide documentation, upon request from a Service member or 
former Service member, that may be used to satisfy the Service member's 
entitlement to statutory reemployment rights and benefits. Appropriate 
documentation may include, as necessary:

[[Page 493]]

    (1) The inclusive dates of the initial period of military service 
obligation performed on active duty.
    (2) Any period of service during which a Service member was required 
to serve because he or she was unable to obtain a release from active 
duty though no fault of the Service member.
    (3) The cumulative length of all periods of active duty performed.
    (4) The authority under which a Service member was ordered to active 
duty when such service was exempt from the 5-year cumulative service 
limit.
    (5) The date the Service member was last released from active duty, 
active duty for special work, initial active duty for training, active 
duty for training, inactive duty training, annual training or full-time 
National Guard duty. This documentation establishes the timeliness of 
reporting to, or submitting application to return to, a position of 
civilian employment.
    (6) Whether service requirements prevent providing a civilian 
employer with advance notification of pending service.
    (7) That the Service member's entitlement to reemployment benefits 
has not been terminated because of the character of service as provided 
in 38 U.S.C. 4304.
    (8) When appropriate, a statement that sufficient documentation does 
not exist.
    (m) Establish a central point of contact at a headquarters or 
regional command who can render assistance to active duty Service 
members and applicants for uniformed service about employment and 
reemployment rights, benefits and obligations.
    (n) Establish points of contact in each Reserve component 
headquarters or Reserve regional command, and each National Guard State 
headquarters who can render assistance to:
    (1) Members of the National Guard or Reserve about employment and 
reemployment rights, benefits and obligations.
    (2) Employers of National Guard and Reserve members about duty or 
training requirements arising from a member's uniformed service or 
service obligation.
    (o) A designated Reserve component representative shall consider, 
and accommodate when it does not conflict with military requirements, a 
request from a civilian employer of a National Guard and Reserve member 
to adjust a Service member's absence from civilian employment due to 
uniformed service when such service has an adverse impact on the 
employer. The representative may make arrangements other than adjusting 
the period of absence to accommodate such a request when it serves the 
best interest of the military and is reasonable to do so.



   Sec. Appendix A to Part 104--Civilian Employment and Reemployment 

Rights, Benefits and Obligations for Applicants for, and Service Members 

          and Former Service Members of the Uniformed Services

                          A. Scope of Coverage

    1. The Uniformed Services Employment and Reemployment Rights Act 
(USERRA) which is codified in 38 U.S.C. Chapter 43 provides protection 
to anyone absent from a position of civilian employment because of 
uniformed service if:
    a. Advance written or verbal notice was given to the civilian 
employer.
    (1) Advance notice is not required if precluded by military 
necessity, or is otherwise unreasonable or impossible.
    (2) DoD strongly encourages Service members and or applicants for 
service to provide advance notice to their civilian employer in writing 
for each period of pending uniformed service. Providing written advance 
notice is preferable to verbal advance notice since it easily 
establishes that this prerequisite to retaining reemployment rights was 
fulfilled. Regardless of the means of providing advance notice, whether 
written or verbal, it should be provided as early as practicable. Also, 
DoD strongly recommends that Reserve component members provide advance 
notice to their civilian employers at least 30 days in advance when it 
is feasible to do so. The advance notice requirement can be met by 
providing the employer with a copy of the unit annual training schedule 
or preparing a standardized letter. The sample employer notification 
letter in Appendix B of this part may be used for this purpose;
    b. The cumulative length of absences does not exceed 5 years;
    c. The individual reports to, or submits an application for 
reemployment, within the specified period based on duration of services 
as described in section D of this Appendix; and,

[[Page 494]]

    d. The person's character of service was not disqualifying as 
described in paragraphs A.2.d. and e. of this appendix.
    2. A civilian employer is not required to reemploy a person if:
    a. The civilian employment was for a brief, non-recurrent period and 
there was no reasonable expectation that the employment would continue 
indefinitely or for a significant period.
    b. The employer's circumstances have so changed as to make 
reemployment impossible or unreasonable.
    c. The reemployment imposes an undue hardship on the employer in the 
case of an individual who:
    (1) Has incurred a service connected disability; or,
    (2) Is not qualified for the escalator position or the position last 
held, and cannot become qualified for any other position of lesser 
status and pay after a reasonable effort by the employer to qualify the 
person for such positions.
    d. The Service member or former Service member was separated from a 
uniformed service with a dishonorable or bad conduct discharge, or 
separated from a uniformed service under other than honorable 
conditions.
    e. An officer dismissed from any Armed Force or dropped from the 
rolls of any Armed Force as prescribed under 10 U.S.C. 1161.
    f. The cumulative length of service exceeds five years and no 
portion of the cumulative five years of uniformed service falls within 
the exceptions described in section C. of this Appendix.
    g. An employer asserting that he or she is not required to reemploy 
an individual because the employment was for a brief, non-recurrent 
period, or reemployment is impossible or unreasonable, or reemployment 
imposes an undue hardship on the employer, that employer has the burden 
of proving his or her assertion.
    3. Entitlement to protection under 38 U.S.C. Chapter 43 does not 
depend on the timing, frequency, and duration of training or uniformed 
service.

       B. Prohibition Against Discrimination and Acts of Reprisal

    1. A person who is a member of, applies to be a member of, has 
performed, applies to perform, or has an obligation to perform service 
in a uniformed service shall not be denied initial employment, 
reemployment, retention in employment, promotion, or any employment 
benefit by an employer on the basis of that membership, an application 
for membership, performance of service, or an obligation for service in 
the uniformed services.
    2. A person, including a non-Service member, shall not be subject to 
employment discrimination or any adverse employment action because he or 
she has taken an action to enforce a protection afforded a Service 
member, has testified or made a statement in or in connection with any 
proceeding concerning employment and reemployment rights of a service 
member, has assisted or participated in an investigation, or has 
otherwise exercised any right provided by 38 U.S.C. Chapter 43.
    3. An employer shall be considered to have engaged in an act of 
discrimination if an individual's membership, application for 
membership, service, application for service, or obligation for service 
in the uniformed services is a motivating factor in the employer's 
action, unless the employer can prove that the action would have been 
taken in the absence of such membership, application for membership, 
performance of service, application for service or obligation.

       C. Exceptions to the Maximum Period of Service for Coverage

    In order to retain reemployment rights and benefits provided by 38 
U.S.C. Chapter 43, the cumulative length of absences from the same 
employer cannot exceed 5 years. Not counted toward this limit is:
    1. Service beyond 5 years if required to complete an initial service 
obligation;
    2. Service during which an individual was unable to obtain release 
orders before the expiration of the 5-year cumulative service limit 
through no fault of his or her own;
    3. Inactive duty training; annual training; ordered to active duty 
for unsatisfactory participation; active duty by National Guardsmen for 
encampments, maneuvers, field operations or coastal defense; or to 
fulfill additional training requirements, as determined by the Secretary 
concerned, for professional skill development, or to complete skill 
training or retraining;
    4. Involuntary order or call to active duty, or retention on active 
duty;
    5. Ordered to or retained on active duty during a war or national 
emergency declared by the President or Congress;
    6. Ordered to active duty in support of an operational mission for 
which personnel have been involuntarily called to active duty;
    7. Performing service in support of a critical mission or 
requirement, as determined by the Secretary concerned;
    8. Performing service in the National Guard when ordered to active 
duty by the President to suppress an insurrection or rebellion, repel an 
invasion, or execute laws of the United States; and,
    9. Voluntary recall to active duty of retired regular Coast Guard 
officers or retired enlisted Coast Guard members.

[[Page 495]]

                    D. Applications for Reemployment

    1. For service of 30 days or less, or for an absence for an 
examination to determine the individual's fitness to perform uniformed 
service, the Service member or applicant must report to work not later 
than the beginning of the first full regularly scheduled work period on 
the first full calendar day following the completion of service or the 
examination, after allowing for an eight hour rest period following safe 
transportation to his or her residence.
    2. For service of 31 days or more but less that 181 days, the 
Service member must submit an application for reemployment not later 
than 14 days after completion of service, or by the next full calendar 
day when submitting an application within the 14 day limit was 
impossible or unreasonable through no fault of the Service member.
    3. For service of 181 days or more, the Service member must submit 
an application for reemployment not later than 90 days after the 
completion of service.
    4. If hospitalized or convalescing from an illness or injury 
incurred or aggravated during service, the Service member must, at the 
end of the period necessary for recovery, follow the same procedures, 
based on length of service, as described in sections D.1. through D.3. 
of this appendix. The period of hospitalization or convalescence may not 
normally exceed 2 years.
    5. Anyone who fails to report or apply for reemployment within the 
specified period shall not automatically forfeit entitlement to 
reemployment rights and benefits, but is subject to the rules of 
conduct, established policies, general practices of the employer 
pertaining to explanations and discipline because of an absence from 
scheduled work.

                      E. Documentation Upon Return

    1. If service is for 31 days or more, a Service member must provide 
documentation, upon request from the employer, that establishes:
    a. He or she made application to return to work within the 
prescribed time period;
    b. He or she has not exceeded the 5-year cumulative service limit; 
and
    c. His or her reemployment rights were not terminated because of 
character of service as described in paragraphs A.2.d. and e. of this 
appendix.
    2. Failure to provide documentation cannot serve as a basis for 
denying reemployment to the Service member, former Service member, or 
applicant if documentation does not exist or is not readily available at 
the time of the employer's request. However, if after reemployment, 
documentation becomes available that establishes that the Service member 
or former Service member does not meet one or more of the requirements 
contained in section E.1. of this appendix, the employer may immediately 
terminate the employment.

             F. Position to Which Entitled Upon Reemployment

    1. Reemployment position for service of 90 days or less:
    a. The position the person would have attained if continuously 
employed (the ``escalator'' position) and if qualified to perform the 
duties; or,
    b. The position in which the person was employed in when he or she 
departed for uniformed service, but only if the person is not qualified 
to perform the duties of the escalator position, despite the employer's 
reasonable efforts to qualify the person for the escalator position.
    2. Reemployment position for service of 91 days or more:
    a. The escalator position, or a position of like seniority, status 
and pay, the duties of which the person is qualified to perform; or,
    b. The position in which the person was employed in when he or she 
departed for uniformed service or a position of like seniority, status 
and pay, the duties of which the person is qualified to perform, but 
only if the person is not qualified to perform the duties of the 
escalator position after the employer has made a reasonable effort to 
qualify the person for the escalator position.
    3. If a person cannot become qualified, after reasonable efforts by 
the employer to qualify the person, for either the escalator position or 
the position formerly occupied by the employee as provided in sections 
F.1. and F.2. of this appendix, for any reason (other than disability), 
the person must be employed in any other position of lesser status and 
pay that the person is qualified to perform, with full seniority.

                G. Position to Which Entitled if Disabled

    If a person who is disabled because of service cannot (after 
reasonable efforts by the employer to accommodate the disability) be 
employed in the escalator position, he or she must be reemployed:
    1. In any other position that is equivalent to the escalator 
position in terms of seniority, status, and pay that the person is 
qualified or can become qualified to perform with reasonable efforts by 
the employer; or,
    2. In a position, consistent with the person's disability, that is 
the nearest approximation to the position in terms of seniority, status, 
and pay to the escalator or equivalent position.

                H. Reemployment by the Federal Government

    1. A person who was employed by a Federal Executive Agency when he 
or she departed for uniformed service must be reemployed

[[Page 496]]

using the same order of priorities as prescribed in sections F. and G. 
of this appendix as appropriate. If the Director of OPM determines that 
the Federal Executive Agency that employed the person no longer exists 
and the functions have not been transferred to another Federal Executive 
Agency, or it is impossible or unreasonable for the agency to reemploy 
the person, the Director of OPM shall identify a position of like 
seniority, status, and pay at another Federal Executive Agency that 
satisfies the reemployment criteria established for private sector 
employers, sections F. and G. of this appendix, and for which the person 
is qualified and ensure that the person is offered such position.
    2. If a person was employed by the Judicial Branch or the 
Legislative Branch of the Federal Government when he or she departed for 
uniformed service, and the employer determines that it is impossible or 
unreasonable to reemploy the person, the Director of OPM shall, upon 
application by the person, ensure that an offer of employment in a 
Federal Executive Agency is made.
    3. If the Adjutant General of a State determines that it is 
impossible or unreasonable to reemploy a person who was employed as a 
National Guard technician, the Director of OPM shall, upon application 
by the person, ensure that an offer of employment in a Federal Executive 
Agency is made.

               I. Reemployment by Certain Federal Agencies

    1. The heads of the Federal Bureau of Investigation, the Central 
Intelligence Agency, the Defense Intelligence Agency, the National 
Imagery and Mapping Agency, the National Security Agency, and, as 
determined by the President, any Executive Agency or unit thereof, the 
principal function of which is to conduct foreign intelligence or 
counterintelligence activities, shall prescribe procedures for 
reemployment rights for their agency that are similar to those 
prescribed for private and other Federal agencies.
    2. If an appropriate officer of an agency referred to in subsection 
I.1. of this appendix determines that reemployment of a person who was 
an employee of that agency when he or she departed for uniformed service 
is impossible or unreasonable, the agency shall notify the person and 
the Director of OPM. The Director of OPM shall, upon application by that 
person, ensure that the person is offered employment in a position in a 
Federal Executive Agency.

                     J. General Rights and Benefits

    1. A person who is reemployed under 38 U.S.C. Chapter 43 is entitled 
to the seniority, and other rights and benefits determined by seniority 
that the person had upon commencing uniformed service, and any 
additional seniority, and rights and benefits he or she would have 
attained if continuously employed.
    2. A person who is absent by reason of uniformed service shall be 
deemed to be on furlough or leave of absence from his or her civilian 
employer and is entitled to such other rights and benefits not 
determined by seniority as generally provided by the employer to 
employees on furlough or leave of absence having similar seniority, 
status and pay who are also on furlough or leave of absence, as provided 
under a contract, policy, agreement, practice or plan in effect during 
the Service member's absence because of uniformed service.
    3. The individual may be required to pay the employee cost, if any, 
of any funded benefit continued to the same extent other employees on 
furlough or leave of absence are required to pay.

                     K. Loss of Rights and Benefits

    If, after being advised by his or her employer of the specific 
rights and benefits to be lost, a Service member, former Service member 
or applicant of uniformed service knowingly provided written notice of 
intent not to seek reemployment after completion of uniformed service, 
he or she is no longer entitled to any non-seniority based rights and 
benefits. This includes all non-seniority based rights and benefits 
provided under any contract, plan, agreement, or policy in effect at the 
time of entry into uniformed service or established while performing 
such service, and are generally provided by the employer to employees 
having similar seniority, status and pay who are on furlough or leave of 
absence.

                           L. Retention Rights

    A person who is reemployed following uniformed service cannot be 
discharged from employment, except for cause:
    1. Within 1 year after the date of reemployment if that person's 
service was 181 days or more; or,
    2. Within 180 days after the date of reemployment if such service 
was 31 days or more but less than 181 days.

                            M. Accrued Leave

    During any period of uniformed service, a person may, upon request, 
use any vacation, annual leave, or similar leave with pay accrued before 
the commencement of that period of service.

                             N. Health Plans

    An employer who provides employee health plan coverage, including 
group health plans, must allow the Service member to elect to continue 
personal coverage, and coverage for his or her dependents under the 
following circumstances:

[[Page 497]]

    1. The maximum period of coverage of a person and the person's 
dependents under such an election shall be the lesser of:
    a. The 18 month period beginning on the date on which the person's 
absence begins; or
    b. The day after the date on which the person was required to apply 
for or return to a position or employment as specified in section D. of 
this appendix, and fails to do so.
    2. A person who elects to continue health plan coverage may be 
required to pay up to 102 percent of the full premium under the plan, 
except a person on active duty for 30 days or less cannot be required to 
pay more than the employee's share, if any, for the coverage.
    3. An exclusion or waiting period may not be imposed in connection 
with the reinstatement of coverage upon reemployment if one would not 
have been imposed had coverage not been terminated because of service. 
However, an exclusion or waiting period may be imposed for coverage of 
any illness or injury determined by the Secretary of Veterans Affairs to 
have been incurred in, or aggravated during, the performance of 
uniformed service.

                    O. Employee Pension Benefit Plans

    1. This section applies to individuals whose pension benefits are 
not provided by the Federal Employees' Retirement System (FERS) or the 
Civil Service Retirement System (CSRS), or a right provided under any 
Federal or State law governing pension benefits for governmental 
employees.
    2. A person reemployed after uniformed service shall be treated as 
if no break in service occurred with the employer(s) maintaining the 
employee's pension benefit plan. Each period of uniformed service, upon 
reemployment, shall be deemed to constitute service with the employer(s) 
for the purpose of determining the nonforfeitability of accrued benefits 
and accrual of benefits.
    3. An employer reemploying a Service member or former Service member 
under 38 U.S.C. Chapter 43 is liable to the plan for funding any 
obligation attributable to the employer of the employee's pension 
benefit plan that would have been paid to the plan on behalf of that 
employee but for his or her absence during a period of uniformed 
service.
    4. Upon reemployment, a person has three times the period of 
military service, but not to exceed five years after reemployment, 
within which to contribute the amount he or she would have contributed 
to the pension benefit plan if he or she had not been absent for 
uniformed service. He or she is entitled to accrued benefits of the 
pension plan that are contingent on the making of, or are derived from, 
employee contributions or elective deferrals only to the extent the 
person makes payment to the plan.

             P. Federal Employees' Retirement System (FERS)

    1. Federal employees enrolled in FERS who are reemployed with the 
Government are allowed to make up contributions to the Thrift Savings 
Fund over a period specified by the employee. However, the makeup period 
may not be shorter than two times nor longer than four times the period 
of absence for uniformed service.
    2. Employees covered by the FERS are entitled to have contributions 
made to the Thrift Savings Fund on their behalf by the employing agency 
for their period of absence in an amount equal to one percent of the 
employee's basic pay. If an employee covered by FERS makes 
contributions, the employing agency must make matching contributions on 
the employee's behalf.
    3. The employee shall be credited with a period of civilian service 
equal to the period of uniformed service, and the employee may elect, 
for certain purposes, to have his or her separation treated as if it had 
never occurred.
    4. This benefit applies to any employee whose release from uniformed 
service, discharge from hospitalization, or other similar event make him 
or her eligible to seek reemployment under 38 U.S.C. Chapter 43 on or 
after August 2, 1990.
    5. Additional information about Thrift Saving Plan (TSP) benefits is 
available in TSP Bulletins 95-13 and 95-20. A fact sheet is included in 
TSP Bulletin 95-20 which describes benefits and procedures for eligible 
employees. Eligible employees should contact their personnel office for 
information and assistance.

                Q. Civil Service Retirement System (CSRS)

    1. Employees covered by CSRS may make up contributions to the TSP, 
as in section P.1. of this appendix. However, no employer contributions 
are made to the TSP account of CSRS employees.
    2. This benefit applies to any employee whose release from uniformed 
service, discharge from hospitalization, or other similar event makes 
him or her eligible to seek reemployment under 38 U.S.C. Chapter 43 on 
or after August 2, 1990.
    3. Additional information about TSP benefits is available in TSP 
Bulletins 95-13 and 95-20. A fact sheet is included in TSP Bulletin 95-
20 which describes benefits and procedures for eligible employees. 
Eligible employees should contact their personnel office for information 
and assistance.

                      R. Information and Assistance

    Information and informal assistance concerning civilian employment 
and reemployment is available through the National Committee for 
Employer Support of the Guard

[[Page 498]]

and Reserve (NCESGR). NCESGR representatives can be contacted by calling 
1-800-336-4590.

                    S. Assistance in Asserting Claims

    1. A person may file a complaint with the Secretary of Labor if an 
employer, including any Federal Executive Agency or OPM, has failed or 
refused, or is about to fail or refuse, to comply with employment or 
reemployment rights and benefits. The complaint must be in writing, and 
include the name and address of the employer, and a summary of the 
allegation(s).
    2. The Secretary of Labor shall investigate each complaint and, if 
it is determined that the allegation(s) occurred, make reasonable 
efforts to ensure compliance. If these efforts are unsuccessful, the 
Secretary of Labor shall notify the complainant of the results and 
advise the complainant of his or her entitlement to pursue enforcement.
    3. The Secretary of Labor shall, upon request, provide technical 
assistance to a claimant and, when appropriate, to the claimant's 
employer.

                             T. Enforcement

    1. State or Private Employers.
    a. A person may request that the Secretary of Labor refer a 
complaint to the Department of Justice. If the Department of Justice is 
reasonably satisfied that the person is entitled to the rights or 
benefits sought, the Department of Justice may appear on behalf of, and 
act as attorney for, the complainant, and commence an action for 
appropriate relief, or the individual may commence an action on his or 
her own behalf in the appropriate Federal district court.
    b. The district court hearing the complaint can require the employer 
to:
    (1) Comply with the law;
    (2) Compensate the person for any loss of wages or benefits 
suffered; and
    (3) If the court determines that the employer willfully failed to 
comply with the law, pay the person an amount equal to the amount of 
lost wages or benefits as liquidated damages.
    c. A person may file a private suit against an employer without the 
Secretary of Labor's assistance if he or she:
    (1) Has chosen not to seek the Secretary's assistance;
    (2) Has chosen not to request that the Secretary refer the complaint 
to the Department of Justice; or
    (3) Has refused the Department of Justice's representation of his or 
her complaint.
    d. No fees or court costs shall be charged or taxed against any 
person filing a claim. The court may award the person who prevails 
reasonable attorney fees, expert witness fees, and other litigation 
expenses.
    2. Federal Government as the Employer.
    a. The same general enforcement procedures established for private 
employers are applied to Federal Executive Agencies as an employer; 
however, if unable to resolve the complaint, the Secretary of Labor 
shall refer the complaint to the Office of Special Counsel, which shall 
represent the individual in a hearing before the Merit Systems 
Protection Board if reasonably satisfied that the individual is entitled 
to the rights and benefits sought. The claimant also has the option of 
directly filing a complaint with the Merit Systems Protection Board on 
his or her own behalf.
    b. A person who is adversely affected or aggrieved by a final order 
or decision of the Merit Systems Protection Board may petition the 
United States Court of Appeals for the Federal Circuit to review the 
final order or decision.
    3. Federal Intelligence Agency as the Employer. An individual 
employed by a Federal Intelligence Agency listed in subparagraph I.1. of 
this appendix, may submit a claim to the inspector general of the 
agency.



 Sec. Appendix B to Part 104--Sample Employer Notification of Uniformed 

                                 Service

    This is to inform you that (insert applicant or Service member's 
name) must report for military training or duty on (insert date). My 
last period of work will be on (insert date), which will allow me 
sufficient time to report for military duty. I will be absent from my 
position of civilian employment for approximately (enter expected 
duration of duty as specified on your orders, and include the applicable 
period you have to return or submit notification of your return to work) 
while performing military training or duty unless extended by competent 
military authority or delayed by circumstances beyond my control. I 
otherwise expect to return to work on (insert date).

________________________________________________________________________
Signature and date

________________________________________________________________________
Employer acknowledgment and date



PART 107_PERSONAL SERVICES AUTHORITY FOR DIRECT HEALTH CARE PROVIDERS--Table 

of Contents



Sec.
107.1 Purpose.
107.2 Applicability and scope.
107.3 Definitions.
107.4 Policy.
107.5 Procedures.
107.6 Responsibilities.

Enclosure 1 to Part 107--Table of Authorized Compensation Rates


[[Page 499]]


    Authority: 10 U.S.C. 1091; Federal Acquisition Regulation (FAR), 
part 37.

    Source: 50 FR 11693, Mar. 25, 1985, unless otherwise noted.



Sec. 107.1  Purpose.

    This part establishes policy under 10 U.S.C. 1091, ``Contracts For 
Direct Health Care Providers,'' and assigns responsibility for 
implementing the authority for personal services contracts for direct 
health care providers.



Sec. 107.2  Applicability and scope.

    (a) This part applies to the Office of the Secretary of Defense 
(OSD) and the Military Departments.
    (b) It applies only to personal services contracts awarded under 10 
U.S.C. 1091 for direct health care providers.



Sec. 107.3  Definitions.

    (a) Personal Services Contract. A contract that, by its express 
terms or as administered, makes the contractor personnel appear, in 
effect, to be government employees.
    (b) Direct Health Care Providers. Health services personnel who 
participate in clinical patient care and services. This does not include 
personnel whose duties are primarily administrative or clerical, nor 
personnel who provide maintenance or security services.



Sec. 107.4  Policy.

    (a) It is the policy of the Department of Defense that when in-house 
sources are insufficient to support the medical mission of the Military 
Departments, personal services contracts under 10 U.S.C. 1091 may be 
executed.
    (b) It is the purpose of personal services contracts to facilitate 
mission accomplishment, maximize beneficiary access to military MTFs, 
maintain readiness capability, reduce use of the Civilian Health and 
Medical Program of the Uniformed Services (CHAMPUS), and enhance quality 
of care by promoting the continuity of the patient/provider 
relationship.
    (c) Personal services contractors shall be subject to the same 
quality assurance, credentialing processes, and other standards as those 
required of military health care providers. In addition, providers, 
other than para-professionals, must be licensed in accordance with State 
or host country requirements to perform the contract services.
    (d) In establishing lines of authority and accountability, DoD 
supervisors may direct the activities of personal services contractors 
on the same basis as DoD employees. However, the rights, benefits, and 
compensation of personal services contractors shall be determined solely 
in accordance with the personal service contract.
    (e) Requests for personal services contracts contemplating 
reimbursement at the maximum rate of basic pay and allowances under 10 
U.S.C. 1091 shall be approved at the major command level. The 0-6 grade 
shall be used sparingly and subsequently will be subject to review.



Sec. 107.5  Procedures.

    (a) Each contract under 10 U.S.C. 1091 with an individual or with an 
entity, such as a professional corporation or partnership, for the 
personal services of an individual must contain language specifically 
acknowledging the individual as a personal services contractor whose 
performance is subject to supervision and direction by designated 
officials of the Department of Defense.
    (b) The appearance of an employer-employee relationship created by 
the DoD supervision of a personal services contractor will normally 
support a limited recognition of the contractor as equal in status to a 
DoD employee in disposing of personal injury claims arising out of the 
contractor's performance. Personal injury claims alleging negligence by 
the contractor within the scope of his or her contract performance, 
therefore, will be processed as claims alleging negligence by DoD 
military or civil service personnel.
    (c) Compensation for personal services contractors under 10 U.S.C. 
1091 shall be within the limits established in the Table of Authorized 
Compensation Rates (see enclosure 1). Prorated compensation based upon 
hourly, daily, or weekly rates may be awarded when a contractor's 
services are not required on a full-time basis. In all cases, however, a 
contractor may be compensated only for periods of time actually devoted 
to the delivery of services required by the contract.

[[Page 500]]

    (d) Contracts for personal services entered into shall be awarded 
and administered pursuant to the provisions of the Federal Acquisition 
Regulation (FAR), part 37 and DoD and departmental supplementary 
contracting provisions.



Sec. 107.6  Responsibilities.

    (a) The Military Departments shall be responsible for the management 
of the direct health care provider contracting program, ensuring that 
effective means of obtaining adequate quality care is achieved in 
compliance with the FAR, part 37. The portion of the Military Department 
regulations ensuring that compensation provided for a particular type of 
service is based on objective criteria and is not susceptible to 
individual favoritism shall be stressed.
    (b) The Office of the Assistant Secretary of Defense (Health 
Affairs) (OASD(HA)) shall be responsible for monitoring the personal 
services contracting program.



  Sec. Enclosure 1 to Part 107--Table of Authorized Compensation Rates

------------------------------------------------------------------------
                                         Compensation rate not to exceed
                                        --------------------------------
       Occupation/specialty group          Pay
                                          grade      Years of service
------------------------------------------------------------------------
I. Physicians and dentists.............     0-6  Over 26.
II. Other individuals, including nurse      0-5  Over 20 but less than
 practitioners, nurse anesthetists, and           22.
 nurse midwives, but excluding
 paraprofessionals.
III. All registered nurses, except          0-4  Over 16 but less than
 those who are included in Group II.              18.
IV. Paraprofessionals..................     0-3  Over 6 but less than 8.
------------------------------------------------------------------------



PART 108_HEALTH CARE ELIGIBILITY UNDER THE SECRETARIAL DESIGNEE PROGRAM AND 

RELATED SPECIAL AUTHORITIES--Table of Contents



Sec.
108.1 Purpose.
108.2 Applicability.
108.3 Definition.
108.4 Policy.
108.5 Eligible senior officials of the U.S. Government.
108.6 Responsibilities.

    Authority: 10 U.S.C. 1074(c); 10 U.S.C. 2559.

    Source: 75 FR 72682, Nov. 26, 2010, unless otherwise noted.



Sec. 108.1  Purpose.

    This part:
    (a) Establishes policy and assigns responsibilities under 10 U.S.C. 
1074(c) for health care eligibility under the Secretarial Designee 
Program.
    (b) Implements the requirement of 10 U.S.C. 2559 that the United 
States receive reimbursement for inpatient health care provided in the 
United States to foreign military or diplomatic personnel or their 
dependents, except in certain cases covered by Reciprocal Health Care 
Agreements (RHCAs) between the Department of Defense and a foreign 
country.



Sec. 108.2  Applicability.

    This part:
    (a) Applies to the Office of the Secretary of Defense, the Military 
Departments, the Office of the Chairman of the Joint Chiefs of Staff and 
the Joint Staff, the Combatant Commands, the Office of the Inspector 
General of the Department of Defense, the Defense Agencies, the DoD 
Field Activities, and all other organizational entities in the 
Department of Defense (hereafter referred to collectively as the ``DoD 
Components'').
    (b) Does not apply to health care services provided to coalition 
forces in operational settings, or to allied forces in overseas training 
exercises and similar activities. Also, does not apply to health care 
services provided to foreign nationals overseas under DoD Instruction 
3000.05,\1\ DoD Instruction 2205.2,\2\ or DoD Instruction 2310.08E.\3\
---------------------------------------------------------------------------

    \1\ Copies available on the Internet at http://www.dtic.mil/whs/
directives/corres/pdf/300005p.pdf.
    \2\ Copies available on the Internet at http://www.dtic.mil/whs/
directives/corres/pdf/220502p.pdf.
    \3\ Copies available on the Internet at http://www.dtic.mil/whs/
directives/corres/pdf/231008p.pdf.
---------------------------------------------------------------------------



Sec. 108.3  Definition.

    Secretarial Designee Program. The program established under section 
1074(c) to create by regulation an eligibility for health care services 
in military medical treatment facilities (MTFs) as

[[Page 501]]

well as dental treatment facilities for individuals who have no such 
eligibility under 10 U.S.C. chapter 55.



Sec. 108.4  Policy.

    It is DoD policy that:
    (a) General Policy. The use of regulatory authority to establish DoD 
health care eligibility for individuals without a specific statutory 
entitlement or eligibility shall be used very sparingly, and only when 
it serves a compelling DoD mission interest. When used, it shall be on a 
reimbursable basis, unless non-reimbursable care is authorized by this 
part or reimbursement is waived by the Under Secretary of Defense 
(Personnel & Readiness) (USD(P&R)) or the Secretaries of the Military 
Departments when they are the approving authority.
    (b) Foreign Military Personnel and Their Dependents. (1) MTF Care in 
the United States. Foreign military personnel in the United States under 
the sponsorship or invitation of the Department of Defense, and their 
dependents approved by the Department of Defense to accompany them, are 
eligible for space-available care as provided in DoD Instruction 
1000.13.\4\ Consistent with 10 U.S.C. 2559, in cases in which 
reimbursement is required by DoD Instruction 1000.13, a RHCA may provide 
a waiver of reimbursement for inpatient and/or outpatient care in the 
United States in a military medical treatment facility for military 
personnel from a foreign country and their dependents, if comparable 
care is made available to at least a comparable number of U.S. military 
personnel and their dependents in that foreign country. A disparity of 
25 percent or less in the number of foreign personnel and dependents 
above U.S. personnel and dependents shall be considered within the range 
of comparable numbers.
---------------------------------------------------------------------------

    \4\ Copies available on the Internet at http://www.dtic.mil/whs/
directives/corres/pdf/100013p.pdf.
---------------------------------------------------------------------------

    (2) Non-MTF Care in the United States. Foreign military personnel in 
the United States under the sponsorship or invitation of the Department 
of Defense, and their dependents approved by the Department of Defense 
to accompany them, are not eligible for DoD payment for outpatient or 
inpatient care received from non-DoD providers, except for such 
personnel covered by the North Atlantic Treaty Organization Status of 
Forces Agreement (SOFA) or the Partnership for Peace SOFA and authorized 
care under the TRICARE Standard program according to Sec. 199.3 of 
title 32, Code of Federal Regulations, outpatient care may be provided 
as specified therein.
    (c) Foreign Diplomatic or Other Senior Foreign Officials. Foreign 
diplomatic or other senior foreign officials and the dependents of such 
officials may be provided inpatient or outpatient services in MTFs only 
in compelling circumstances, including both medical circumstances and 
mission interests, and through case-by-case approval.
    (1) In the United States, the approval authority is the USD(P&R). 
The authority to waive reimbursement for care provided in the United 
States, to the extent allowed by law, is the USD(P&R) or the Secretaries 
of the Military Departments when they are the approving authority.
    (2) Requests from the State Department or other agency of the U.S. 
Government will be considered on a reimbursable basis.
    (3) Under 10 U.S.C. 2559, reimbursement to the United States for 
care provided in the United States on an inpatient basis to foreign 
diplomatic personnel or their dependents is required.
    (d) Other Foreign Nationals. Other foreign nationals (other than 
those described in paragraphs (b) and (c) of this section) may be 
designated as eligible for space-available care in MTFs only in 
extraordinary circumstances.
    (1) The authority to waive reimbursement for care provided in the 
United States, to the extent allowed by law, is the USD(P&R) or the 
Secretaries of the Military Departments when they are the approving 
authority. Waiver requests will only be considered based on a direct and 
compelling relationship to a priority DoD mission objective.
    (2) Requests from the State Department or other agency of the U.S. 
Government will be considered on a reimbursable basis. Such requests 
must be supported by the U.S. Ambassador to the country involved and the 
Geographical Combatant Commander for

[[Page 502]]

that area of responsibility and must be premised on critically important 
interests of the United States.
    (e) Invited Persons Accompanying the Overseas Force. The Secretaries 
of the Military Departments and the USD(P&R) may designate as eligible 
for space-available care from the Military Health System outside the 
United States those persons invited by the Department of Defense to 
accompany or visit the military force in overseas locations or invited 
to participate in DoD-sponsored morale, welfare, and recreation 
activities. This authority is limited to health care needs arising in 
the course of the invited activities. Separate approval is needed to 
continue health care initiated under this paragraph in MTFs in the 
United States.
    (1) In the case of employees or affiliates of news organizations, 
all care provided under the authority of introductory paragraph (e) of 
this section is reimbursable. For other individuals designated as 
eligible under this paragraph (e), the designation may provide, to the 
extent allowed by law, for outpatient care on a non-reimbursable basis, 
and establish a case-by-case authority for waiver of reimbursement for 
inpatient care.
    (2) This paragraph (e) does not apply to employees of the Executive 
Branch of the United States or personnel affiliated with contractors of 
the United States.
    (f) U.S. Nationals Overseas. Health care for U.S. nationals overseas 
is not authorized, except as otherwise provided in this part.
    (g) U.S. Government Civilian Employees and Contractor Personnel. (1) 
Civilian employees of the Department of Defense and other government 
agencies, and employees of DoD contractors, and the dependents of such 
personnel are eligible for MTF care to the extent provided in DoD 
Instruction 1000.13.
    (2) Occupational health care services provided to DoD employees 
under 5 U.S.C. 7901, authorities cited in DoD Instruction 6055.1,\5\ or 
under other authorities except 10 U.S.C. 1074(c) are not affected by 
this Instruction. The Secretaries of the Military Departments and the 
USD(P&R) may designate DoD civilian employees, applicants for 
employment, and personnel performing services for the Department of 
Defense under Federal contracts as eligible for occupational health care 
services required by the Department of Defense as a condition of 
employment or involvement in any particular assignment, duty, or 
undertaking.
---------------------------------------------------------------------------

    \5\ Copies available on the Internet at http://www.dtic.mil/whs/
directives/corres/pdf/605501p.pdf.
---------------------------------------------------------------------------

    (3) Any health care services provided by the Military Health System 
to employees of DoD non-appropriated fund instrumentalities shall be on 
a reimbursable basis.
    (4) In the case of DoD civilian employees forward deployed in 
support of U.S. military personnel engaged in hostilities, eligibility 
for MTF care (in addition to all eligibility for programs administered 
by the Department of Labor Office of Workers' Compensation Programs 
(OWCP)) is as follows:
    (i) Consistent with Policy Guidance for Provision of Medical Care to 
DoD Civilian Employees Injured or Wounded While Forward Deployed in 
Support of Hostilities,\6\ DoD civilian employees who become ill, 
contract diseases, or are injured or wounded while so deployed are 
eligible for medical evacuation or health care treatment and services in 
MTFs at the same level and scope provided to military personnel, all on 
a non-reimbursable basis, until returned to the United States.
---------------------------------------------------------------------------

    \6\ Copies available at OASD (Health Affairs/TMA FHP&RP), 1200 
Defense Pentagon, Room 3E1073, Washington, DC 20301-1200.
---------------------------------------------------------------------------

    (ii) DoD civilian employees who, subsequent to such deployment, and 
have been determined to have OWCP-compensable conditions are eligible 
for MTF care for such conditions, all on a non-reimbursable basis.
    (iii) USD(P&R) may, under compelling circumstances, approve 
additional eligibility for care in MTFs for other U.S. Government 
civilian employees who become ill or injured while so deployed, or other 
DoD civilian employees overseas.
    (5) Contractor Personnel Authorized to Accompany U.S. Armed Forces. 
In the case of contractor personnel authorized

[[Page 503]]

to accompany U.S. Armed Forces in deployed settings under DoD 
Instruction 3020.41,\7\ MTF care may be provided as stated in DoD 
Instruction 3020.41.
---------------------------------------------------------------------------

    \7\ Copies available on the Internet at http://www.dtic.mil/whs/
directives/corres/pdf/302041p.pdf.
---------------------------------------------------------------------------

    (h) Emergency Health Care. The Secretaries of the Military 
Departments and the USD(P&R) may designate emergency patients as 
eligible for emergency health care from MTFs in the United States 
pursuant to arrangements with local health authorities or in other 
appropriate circumstances. Such care shall be on a reimbursable basis, 
unless waived by the USD(P&R) or the Secretaries of the Military 
Departments when they are the approving authority.
    (i) Research Subject Volunteers. Research subjects are eligible for 
health care services from MTFs to the extent DoD Components are required 
by DoD Directive 3216.02 \8\ to establish procedures to protect subjects 
from medical expenses that are a direct result of participation in the 
research. Such care is on a non-reimbursable basis and limited to 
research injuries (unless the volunteer is otherwise an eligible health 
care beneficiary). Care is authorized during the pendency of the 
volunteer's involvement in the research, and may be extended further 
upon the approval of the USD(P&R).
---------------------------------------------------------------------------

    \8\ Copies available on the Internet at http://www.dtic.mil/whs/
directives/corres/pdf/321602p.pdf.
---------------------------------------------------------------------------

    (j) Continuity of Care Extensions of Eligibility. The Secretaries of 
the Military Departments and the USD(P&R) may establish temporary 
eligibility on a space-available basis for former members and former 
dependents of members of the seven Uniformed Services for a limited 
period of time, not to exceed 6 months, or in the case of pregnancy the 
completion of the pregnancy, after statutory eligibility expires when 
appropriate to allow completion or appropriate transition of a course of 
treatment begun prior to such expiration. In the case of a pregnancy 
covered by this paragraph, the designation of eligibility may include 
initial health care for the newborn infant. Care under this paragraph is 
authorized on a non-reimbursable basis for the former member or former 
dependent of member. Care under this paragraph for the newborn of those 
former members or former dependents is authorized but on a full 
reimbursable basis unless the Secretary of the Military Department elect 
to use Secretarial Designee status for the newborn.
    (k) Members of the Armed Forces. The Secretaries of the Military 
Departments and the USD(P&R) may establish eligibility not specifically 
provided by statute for critical mission-related health care services 
for designated members of the Armed Forces, such as Reserve Component 
members not in a present duty status. This authority includes payment 
for health care services in private facilities to the extent authorized 
by 10 U.S.C. 1074(c). Care under this paragraph is non-reimbursable.
    (l) Certain Senior Officials of the U.S. Government. The officials 
and others listed in Sec. 108.5 of this part are designated as eligible 
for space-available inpatient and outpatient health care services from 
the Military Health System on a reimbursable basis.
    (m) Nonmedical Attendants. The Secretaries of the Military 
Departments and the USD(P&R) may designate as eligible for space 
available MTF care persons designated as nonmedical attendants as 
defined by 37 U.S.C. 411k(b). Costs of medical care rendered are 
reimbursable unless reimbursement is waived by the Secretary of the 
Military Department concerned or USD(P&R). This authority is limited to 
health care needs arising while designated as a nonmedical attendant.
    (n) Patient Movement. Provisions of this Instruction concerning 
inpatient care shall also apply to requests for patient movement through 
the medical evacuation system under DoD Instruction 6000.11.\9\ 
Aeromedical evacuation transportation assets are reserved for those 
individuals designated as Secretarial Designees who need transportation 
to attain necessary health care.
---------------------------------------------------------------------------

    \9\ Copies available on the Internet at http://www.dtic.mil/whs/
directives/corres/pdf/600011p.pdf.
---------------------------------------------------------------------------

    (o) Other Individuals Entitled to DoD Identification (ID) Card. 
Other individuals entitled to a DoD ID card under

[[Page 504]]

DoD Instruction 1000.13 are eligible for space-available MTF health care 
to the extent provided in DoD Instruction 1000.13.
    (p) Reciprocity Among Military Departments. Subject to the 
capabilities of the professional staff, the availability of space and 
facilities, and any other limitation imposed by the approving authority, 
all Services will provide medical treatment to individuals who have been 
granted Secretarial designee status by any of the Secretaries of the 
Military Departments. Each agreement must identify the specific MTF or 
geographical region in which medical care is requested, requiring close 
coordination among service program managers.



Sec. 108.5  Eligible senior officials of the U.S. government.

    (a) The following individuals are Secretarial Designees for space-
available care in MTFs on a reimbursable basis, unless specified 
otherwise by a Service Secretary:
    (1) The President and Vice President, and their spouses and minor 
children.
    (2) Members of Congress.
    (3) Members of the Cabinet.
    (4) Officials of the Department of Defense appointed by the 
President and confirmed by the Senate.
    (5) Article III Federal Judges. (Article III courts are: The Supreme 
Court of the United States, U.S. Courts of Appeal, U.S. District Courts, 
U.S. Court of International Trade, United States Foreign Intelligence 
Surveillance Court, United States Foreign Intelligence Surveillance 
Court of Review.)
    (6) Judges of the U.S. Court of Appeals for the Armed Forces.
    (7) Assistants to the President.
    (8) Director of the White House Military Office.
    (9) Former Presidents of the United States and their spouses, 
widows, and minor children.
    (b) [Reserved]



Sec. 108.6  Responsibilities.

    (a) The USD(P&R) shall:
    (1) Evaluate requests for and where appropriate, grant exceptions to 
policy established by this part and DoD Directive 5124.02,\10\ including 
waiver of reimbursement, to the extent allowed by law.
---------------------------------------------------------------------------

    \10\ Copies available on the Internet at http://www.dtic.mil/whs/
directives/corres/pdf/512402p.pdf.
---------------------------------------------------------------------------

    (2) Following approval of the USD(P) and in coordination with USD(P) 
and the GC, DoD, and in accordance with DoD Directive 5530.3,\11\ begin 
negotiations, negotiate, and have the authority to sign RHCAs.
---------------------------------------------------------------------------

    \11\ Copies available on the Internet at http://www.dtic.mil/whs/
directives/corres/pdf/553003p.pdf.
---------------------------------------------------------------------------

    (b) The USD(P) shall evaluate requests and determine DoD mission 
interest for Secretarial Designee Status and RHCAs to identify those 
agreements that would be in the best interest of the Department of 
Defense and approve negotiations of RHCAs by the USD(P&R).
    (c) The USD(C) shall in coordination with USD(P&R), establish 
appropriate reimbursement rates, including appropriate interagency rates 
and rates applicable to students in International Military Education and 
Training programs.
    (d) The Under Secretary of Defense for Acquisition, Technology, and 
Logistics shall evaluate requests for Exception to the Transportation 
Policy. The authority to grant such a exception is by USD(P&R) or the 
Secretary of the Military Department concerned.
    (e) The Secretaries of the Military Departments shall:
    (1) Issue, revise or modify as appropriate, regulations to comply 
with this part.
    (2) Appoint a Military Department representative who will administer 
the Secretarial Designee Program within the Military Department and 
coordinate with other DoD Components in its effective operation.
    (3) Where and when appropriate, the Military Department concerned 
shall coordinate with U.S. Transportation Command/Global Patient 
Movement Requirements Center.
    (4) Identify Secretarial Designees treated at MTFs.

[[Page 505]]

    (5) Provide an annual consolidated list reflecting the number of 
Secretarial Designees within their departments, reasons for such 
designation, location where designee is receiving treatment, the costs 
and sources of funding, nature and duration of treatment and expiration 
date of designee status to USD(P&R) and USD(C). The annual report is due 
30 days after the start of the fiscal year reflecting the prior fiscal 
year's information.
    (i) In cases where the USD(P&R) designates an individual as a 
Secretarial Designee, the Military Department concerned shall include 
this individual on any lists provided to USD(P&R) and USD(C) for 
reporting purposes.
    (ii) Annually consolidate Secretarial Designee patient costs and 
forward those data to USD(P&R) and OSD(C), along with a report of 
collection for reimbursable costs.
    (f) The Commanders of the Geographic Combatant Commands (GCCs) 
shall:
    (1) Refer requests to waive reimbursement through the Chairman of 
the Joint Chiefs of Staff to the USD(P&R).
    (2) Refer requests for Secretarial Designee status for medical care 
in the United States through the Chairman of the Joint Chiefs of Staff 
to USD(P&R).
    (3) Through the Chairman of the Joint Chiefs of Staff, provide 
written annual reports to the USD(P&R) and USD(C) reflecting the number 
of individuals designated as Secretarial Designees within their 
geographic area of responsibility, the reasons for such designation, the 
expected duration of such designation, the costs and sources of funding 
authorizing the support of such designee status for each designee.
    (4) Identify Secretarial Designees treated at MTFs within their 
geographic area of responsibility.
    (5) Provide for an accounting and collection system for 
reimbursement of medical costs within their geographic area of 
responsibility.
    (g) The Commander, United States Transportation Command shall:
    (1) Coordinate patient movement with all concerned Military 
Departments.
    (2) Upon request of the Military Department concerned or Commanders 
of the GCCs, determine availability of DoD transportation assets, or 
when cost effective, coordinate with civilian ambulance authorities, to 
effect transportation of Secretarial Designee as appropriate.
    (3) Ensure the Global Patient Movement Requirements Center, as the 
regulating agency, will consistently serve as the single point of 
contact for patient movement for Secretarial Designee patients using DoD 
assets upon request.
    (4) Annually consolidate Secretarial Designee patient listing who 
utilized the DoD patient movement system and forward to USD(P&R) and 
USD(C).



PART 110_STANDARDIZED RATES OF SUBSISTENCE ALLOWANCE AND COMMUTATION INSTEAD 

OF UNIFORMS FOR MEMBERS OF THE SENIOR RESERVE OFFICERS' TRAINING CORPS--Table 

of Contents



Sec.
110.1 Reissuance and purpose.
110.2 Applicability.
110.3 Policy.
110.4 Responsibilities.
110.5 Procedures.
110.6 Information requirement.

Appendix A to Part 110--Climatic Zones Used To Determine Rates of 
          Commutation Allowance
Appendix B to Part 110--Formula for ROTC Commutation Rates
Appendix C to Part 110--Application of Basic Course Formula (Male and 
          Female Members) (Sample)
Appendix D to Part 110--Application of Advanced Course Formula (Male and 
          Female Members) (Sample)
Appendix E to Part 110--Application of 4-Week Summer Field Training 
          Formula (Sample)

    Authority: 10 U.S.C. 2101-2111, 37 U.S.C. 209, 50 App. U.S.C. 
456(a).

    Source: 51 FR 26886, July 28, 1986, unless otherwise noted.



Sec. 110.1  Reissuance and purpose.

    This part reissues 32 CFR part 110 implementing Pub. L. 88-647, 92-
171, and 98-94 and updates policy, assigns responsibilities, and 
prescribes procedures for determining commutation rates for Reserve 
Officers' Training Corps (ROTC) detachments offered

[[Page 506]]

commutation funds instead of uniforms.



Sec. 110.2  Applicability.

    This part applies to the Office of the Secretary of Defense (OSD), 
the Military Departments, and the Defense Logistics Agency (DLA) 
(hereafter referred to collectively as ``DoD Components''). The term 
``Military Services,'' as used herein, refers to the Army, Navy, Air 
Force, and Marine Corps.



Sec. 110.3  Policy.

    It is DoD policy to provide subsistence allowance in accordance with 
Pub. L. 92-171 and to eligible participants of senior ROTC programs and 
commutation funds instead of uniforms (section 2110, Pub. L. 88-647) for 
members of senior ROTC programs at eligible schools.



Sec. 110.4  Responsibilities.

    (a) The Assistant Secretary of Defense (Force Management and 
Personnel) (ADS(FM&P)), or designee, shall:
    (1) Administer the overall DoD ROTC program.
    (2) Maintain liaison with the Military Departments regarding the 
functioning of the ROTC program.
    (3) Announce the standard rates of commutation instead of uniforms 
to the Military Departments not later than August 1 each year.
    (b) The Director, Defense Logistics Agency (DLA), shall provide the 
Military Departments during December of each year the current unit price 
list of uniform items to be used the following fiscal year.
    (c) The Secretaries of the Military Departments shall:
    (1) Prescribe the standard uniform items for each climatic zone, 
sex, and course (basic and advanced) in quantities authorized to be 
provided.
    (2) Develop the communication rates, based on the standard Military 
Service uniforms, and establish procedures for rate review on an annual 
basis.
    (3) Submit to the ASD(FM&P) an estimate of the rates of commutation, 
based on the latest DLA clothing rate, for climatic zones by sex and 
course not later than July 1 of each year.
    (4) Classify educational institutions as Military Colleges (MC), 
Civilian Colleges (CC), or Military Junior Colleges (MJC), hereafter 
also called schools.
    (5) Conduct inspections to ensure that the schools meet the 
requirements for the respective classifications and that those receiving 
commutation funds provide quality uniforms in sufficient quantities.
    (6) Program and budget for subsistence allowance and commutation, 
instead of uniforms, for members of the senior ROTC program.



Sec. 110.5  Procedures.

    (a) Classification of institutions hosting Senior ROTC Units. 
Educational institutions hosting senior ROTC units maintained by the 
Military Departments shall be classified as essentially military or 
civilian colleges or universities.
    (1) The classification MC shall be assigned to units established in:
    (i) Essentially military colleges or universities that, for purposes 
of qualifying as an MC under 50 U.S.C. App. 456(a)(1):
    (A) Confer baccalaureate or graduate degrees.
    (B) Require a course in military training throughout the 
undergraduate course for all qualified undergraduate students.
    (C) Organize their military students as a corps of cadets under 
constantly maintained military discipline.
    (D) Require all members of the corps, including those nonmembers 
enrolled in the ROTC, to be habitually in uniform when on campus.
    (E) Have as their objective the development of the military 
students' character by means of military training and the regulation of 
their conduct in accordance with the principles of military discipline.
    (F) In general, meet military standards similar to those maintained 
at the Military Service academies.
    (ii) The designation ``all qualified undergraduate students,'' under 
paragraph (a)(i)(B) of this section means all physically fit students 
except:
    (A) Female students who waive their right to participate as provided 
by Pub. L. 95-485, section 809.
    (B) Foreign nationals.

[[Page 507]]

    (C) Students who are not liable for induction by virtue of having 
honorably completed active training and service.
    (D) Students who are pursuing special undergraduate courses beyond 4 
years after completing the required military training.
    (E) Certain categories of students who are excused specifically by 
administrative decision and approved by the ROTC unit commander.
    (2) The classification CC shall be assigned when units are 
established at civilian colleges and universities that are not operated 
on an essentially military basis, but that confer baccalaureate or 
graduate degrees.
    (3) The classification MJC shall be assigned when ROTC units are 
established at essentially military schools that provide junior college 
or junior college and high school instruction, but DO NOT confer 
baccalaureate degrees. Those units shall meet all other requirements of 
an MC. (See Pub. L. 88-647).
    (b) Qualifying for the special rate of commutation. (1) To qualify 
for payment at the special rate of commutation instead of uniforms, an 
institution classified MC or CC shall meet in addition to paragraphs (a) 
(1), or (2), respectively the requirements below. An institution 
classified an MJC shall meet, in addition to paragraph (a)(1) (except 
paragraphs (a)(1)(i) (A) and (B)), the requirements below:
    (i) Organize and maintain within their undergradute student bodies a 
self-contained corps of cadets.
    (ii) Require all members of the corps of cadets to be in appropriate 
uniform at all times while on the campus.
    (iii) House all members of the corps of cadets in barracks separate 
from nonmembers.
    (iv) Require all members of the corps of cadets to be under 
constantly maintained military discipline on a 24-hours-per-day, 7-days-
per-week basis.
    (v) Require all physically qualified members of the above corps of 
cadets to be enrolled in the basic course of ROTC, except:
    (A) Female students who waive their right to participate as provided 
by Pub. L. 95-485.
    (B) Foreign nationals.
    (C) Students who are not liable for induction by virtue of having 
completed honorably active training and service.
    (D) Certain categories of students are excused specifically by 
administrative decisions.
    (E) Other students whose enrollment is prevented by provisions or 
appropriate regulations of a Military Department.
    (2) MCs, CCs, or MJCs may be paid the special rate of commutation 
only for those members of the corps of cadets meeting the requirements 
set forth in paragraph (b)(1), who are enrolled in ROTC. The 
requirements of paragraphs (b)(1) (iii) and (iv), may be waived for 
married students, graduate students, and day students who are not housed 
with the corps of cadets. Day students are those ROTC cadets who are 
authorized by university officials to reside off campus within a 
reasonable commuting distance to the university.
    (3) Institutions designated as MCs may enroll into the ROTC, of the 
appropriate Military Service, those students who, for various reasons, 
are not required to be members of the corps of cadets. These 
institutions shall receive, for such student only, the standard 
commutation rate. The special rate shall be authorized for eligible 
females who elect to participate as enrolled senior ROTC cadets, 
provided that the requirements of paragraphs (b)(1) (ii), (iii), and 
(iv) are met or unless these requirements are waived under the 
provisions of paragraph (a)(1)(ii)(E).
    (c) Subsistence allowance and commutation rates--(1) Subsistence 
allowances. Payment that is made by the Military Departments instead of 
rations to each contract cadet enrolled in the advanced course and for 
each scholarship cadet enrolled in the basic or advanced course.

Payments are as prescribed in the DoD Military Pay and Allowances 
Entitlements Manual, part 8, chapter 4. The following rates are 
established for payment of subsistence allowance:
    (i) Except when on summer fiel training or practice cruises, when 
subsistence in kind is furnished, or when otherwise on active duty, the 
subsistence allowance for each enrolled member of

[[Page 508]]

the advanced training program in the senior ROTC shall be $100 per month 
for not more than a total of 20 months.
    (ii) Except when on summer field training or practice cruises, when 
subsistence in kind is furnished, the subsistence allowance for each 
cadet or midshipman appointed under the financial assistance program for 
specially selected members, under the provisions of Pub. L. 88-647, 
shall be $100 per month for not more than a total of 20 months during 
the basic course training program and $100 per month for not more than a 
total of 20 months during the advanced course training program unless 
the individual has been authorized extended entitlements under the 
provisions of Pub. L. 98-94. The $100 per month subsistence may be 
authorized for not more than a total of 30 months during the advanced 
course training program when an extended financial assistance 
entitlement is approved by the Military Service Secretary of the 
Military Department concerned.
    (2) Commutation instead of uniforms. Commutation is payment made by 
the Military Departments to an institution instead of the issue of 
uniforms to ROTC cadets in accordance with Pub. L. 88-647. Certain MCs, 
CCs, and MJCs that maintain senior ROTC units may elect to receive 
commutation instead of Government clothing. In such instances, the 
commutation rate shall include not only the uniform, but the 
procurement, receipt, storage, maintenance, and issue of the uniform as 
outlined in paragraph (c)(2)(xi), and shown in Appendix B.
    (i) The Military Departments shall develop the commutation rates and 
establish procedures for their review on an annual basis. The review 
shall be scheduled during May so that the current unit price list 
disseminated by the DLA during the previous December of each year can be 
used to develop the commutation rates and made available to institutions 
for use at the beginning of the fall term. The commutation payment shall 
be made to the institutions based on the number of students enrolled and 
in attendance for at least 60 consecutive days.
    (ii) Commutation rates for uniforms shall be based on the latest 
approved items of clothing for each climatic zone and computed using the 
formulas listed in Appendix B. Appendices C, D, and E are examples of 
the application of the various formulas to determine the amounts that 
can be paid to qualifying institutions.
    (iii) Standard commutation rates for the basic course (first 2 
years) of the senior ROTC shall be payable in the indicated amount on an 
annual basis not to exceed 2 years to CCs that offer Military Science 
(MS) I and II or equivalent. The rates shall be paid after cadets have 
been enrolled 60 days.
    (iv) Standard rates for the advanced course cover the 2-year period 
that each member is enrolled in advanced course training in the senior 
ROTC (Appendix D). These rates shall be paid after cadets have been 
enrolled for 60 days in the advanced course. Commutation funds for camp 
uniforms, if paid, shall be in addition to payments for the advanced 
course.
    (v) Special rates of commutation shall be paid for students enrolled 
at MCs, CCs, or MJCs fulfilling the requirements of paragraph (b).
    (vi) Special rates of commutation shall be identical for all the 
Military Services for those qualifying institutions defined in paragraph 
(b). These rates shall be three times the highest standard rate 
submitted by sex and course from the Military Departments for climatic 
zones 1 or 2. Each Military Department shall submit special rate 
estimates for zones 1 and 2 to the Assistant Secretary of Defense 
(ASD(FM&P), or designee, not later than July 1. The special rates shall 
be announced by the ASD(FM&P), or designee, not later than August 1 of 
each year.
    (vii) Special rates of commutation for students enrolled in the 
basic course (MS I and II or equivalent) of MCs, CCs, and MJCs shall be 
paid on an annual basis not to exceed 2 years. Special rates for 
students enrolled in the advanced course (MS III and IV or equivalent) 
of MCs, CCs, or MJCs shall be paid for the 2-year period that each 
member is enrolled in the advanced course.
    (viii) Commutation for the basic course and the advanced course 
shall be paid based on Appendices C and D, respectively.

[[Page 509]]

    (ix) One-half of the special commutation rate shall be paid to the 
institution for those students enrolled in the second year of the 
advanced course for whom the institution previously has not received 
commutation.
    (x) The standard rates shown in Appendix E for summer field training 
are not subject to the special commutation rate adjustment.
    (xi) Commutation of uniform funds may be expended to support ONLY 
the following activities:
    (A) Procurement, receipt, storage, and issue expenses not to exceed 
10 percent of the cost for standard uniform items in quantities as 
prescribed by the Secretary of the Military Department concerned, or 
distinctive uniforms and insignia as prescribed by those institutions 
that meet the requirements of paragraph (b). Marking up or raising the 
price of that paid by an institution when items are purchased from 
military inventories is not authorized.
    (B) Alteration and maintenance of the uniform, which is defined as 
laundry, dry cleaning, renovation, alterations and sizing, not to exceed 
$10 per uniform.
    (C) Salary payments to the property custodian for custody of 
uniforms purchased with commutation funds. Such custodial fees shall not 
exceed the specified percent of the commutation funds received against 
the actual enrollments in each course listed below for the immediate 
past academic year:
    (1) 15 percent of basic course.
    (2) 5 percent of advance course.
    (3) 5 percent of field training (when applicable).
    (D) Purchase of hazard insurance to protect uniform inventory 
against loss.
    (xii) Unexpended commutation of uniform funds is the balance 
remaining after all commitments or obligations relating to the immediate 
past academic year and the amount of retained uniform commutation funds 
(see paragraph (c)(2)(xii)(A)) have been deducted. The unexpended 
balance shall be computed as of July 1 each year. Commitments or 
obligations relating to new year procurement, maintenance, or other 
allowable activities may not be charged against the unexpended balance. 
As an exception, the unexpended balance may be used for paying bills for 
procurements of past academic years that are submitted AFTER the cutoff 
date of the report required by paragraph (c)(2)(xii)(C).
    (A) The amount of unexpended uniform commutation funds an 
institution may retain from 1 academic year to the next for continued 
financing of the uniform program is the greater of $3500 or 20 percent 
of the uniform entitlement for the immediate past academic year.
    (B) Accumulated funds that exceed this limitation shall be returned 
to the Military Services.
    (C) As of July 1 of each year, a uniform commutation report DD Form 
2340, ``Annual Report on Uniform Commutation Fund'' shall be completed 
by the institution receiving commutation funds and submitted to the 
appropriate authority for each Military Service by July 31.
    (1) The uniform commutation report shall include a detailed list of 
expenditures, total funds available for the immediate past academic 
year, including the unexpended balance from the last report, an 
explanation of any monetary adjustments and errors, the balance of funds 
on hand, and the amount being refunded to the appropriate Military 
Service as the unexpended balance, if any. The report shall be 
coordinated with ROTC unit commanders and signed by the appropriate 
institutional official who maintains records of the receipt of funds.
    (2) All records on the receipt and expenditure of commutation funds 
shall be subject to periodic audit and inspection. Institution officials 
shall be responsive to recommendations made.
    (d) Inspection. Inspections shall be conducted when an ROTC unit is 
initially established at an institution that does not already host 
another Military Service ROTC unit. Inspections shall ensure that only 
those institutions that meet the requirements of paragraphs (a)(1) or 
(3), are awarded the MC or MJC classification and only those awarded MC, 
CC, and MJC classifications that meet the additional requirements of 
paragraph (b) shall be authorized the special rate of commutation 
instead of uniforms. Inspections of established units at MCs, CCs, and 
MJCs shall be conducted on an exception basis.

[[Page 510]]

    (1) The Secretaries of Military Departments shall prescribe specific 
inspection procedures applicable to ROTC units of their respective 
Military Services.
    (2) When discrepancies are noted at institutions, their 
classifications shall be subject to review for resolution or withdrawal 
by the Secretaries of the Military Department concerned. In the instance 
of withdrawal of classification, the appropriate Military Service's 
review of, and final notification to, the institution shall be within 30 
days of the date the discrepancy was noted.



Sec. 110.6  Information requirement.

    The reporting requirement for paragraph (c)(2)(xii)(C) is assigned 
OMB No. 0704-0200.



 Sec. Appendix A to Part 110--Climatic Zones Used To Determine Rates of 

                          Commutation Allowance

                                 Zone I

1. Alabama
2. Arizona, only 100 mile-wide belt along south border
3. Arkansas, southern two-thirds
4. California, except area north of 37[deg]
5. Florida
6. Georgia
7. Guam
8. Hawaii
9. Kentucky, southeastern one-third
10. Louisiana
11. Mississippi
12. New Mexico, only 100 mile-wide belt along south border
13. North Carolina
14. Oklahoma, only southeastern portion
15. Puerto Rico
16. South Carolina
17. Tennessee, except northwest corner
18. Texas, except area border of 34[deg] north

                                 Zone II

1. Alaska
2. Arizona, except 100 mile-wide belt along south border
3. Arkansas, northern one-third
4. California, area south of 37[deg] north
5. Colorado
6. Connecticut
7. Delaware
8. District of Columbia
9. Idaho
10. Illinois
11. Indiana
12. Iowa
13. Kansas
14. Kentucky, NW two-thirds
15. Maine
16. Maryland
17. Massachusetts
18. Michigan
19. Minnesota
20. Missouri
21. Montana
22. Nebraska
23. Nevada
24. New Hampshire
25. New Jersey
26. New Mexico, except a 100 mile-wide belt along south border
27. New York
28. North Dakota
29. Ohio
30. Oklahoma, except the southeast portion
31. Oregon
32. Pennsylvania
33. Rhode Island
34. South Dakota
35. Tennessee, only the northwest corner
36. Texas, only area north of 34[deg] north
37. Utah
38. Vermont
39. Virginia
40. Washington
41. West Virginia
42. Wisconsin
43. Wyoming

    The climate zones listed above are to be used as a guide to 
determine clothing requirements for a specific detachment. Wind chill 
equivalent temperatures can vary widely for areas within close proximity 
to each other due to variations in wind velocity and elevation. 
Detachment commanders may request a zone change by submitting evidence 
to the Major Command of the appropriate Military Service that the wind 
chill equivalent temperature for the coldest month has been within the 
limits of the requested zone classification for the past 3 consecutive 
years.

 Attachment to Appendix A to Part 110--Climatic Zones Used To Determine 
                Rates of Commutation Allowance (Formula)

    The Standard and special commutation rates are based on the latest 
approved items of clothing for each climatic zone. The zones are:

------------------------------------------------------------------------
                   Zone                          Temperature range
------------------------------------------------------------------------
1........................................  32 degrees Fahrenheit and
                                            above.
2........................................  Below 32 degrees Fahrenheit.
------------------------------------------------------------------------

    To determine the appropriate zone for each ROTC detachment, use the 
table below. Enter the appropriate dry bulb temperature at the top and 
read down. Find the wind velocity on the left and read across. The 
intersection of the two lines provides the equivalent temperature. For 
example, a combination of 20 degrees Fahrenheit and a 10 mile-per-hour 
wind has a wind chill equivalent

[[Page 511]]

temperature of 3 degrees Fahrenheit. The wind chill equivalent 
temperature is based on the average monthly temperature and wind of the 
coldest month for each of the past 3 consecutive years.



     Sec. Appendix B to Part 110--Formula For ROTC Commutation Rates

                 Basic Course (General Military Course)

Total Pkg. Cost of Auth. Items+10% Procurement Cost=Adjusted Pkg. Cost--
Amortized by: 2-Yr. Life Shoes & Socks; 2-Yr. Life Insignia; 5-Yr. Life 
Bal. of Pkg.
+15% Custodial Fees+$10.00 Uniform Alteration and Maint.=Net Rate Per 
Yr. (Rounded to nearest $)

             Advanced Course (Professional Officers Course)

Total Pkg. Cost of Auth. Items-\1/2\ Amt. of Insignia Cost (2-yr. 
Amortization)+5% Custodial Fees+$10.00 Uniform Alteration & Maint.=Net 
Rate 2-yr. period (Rounded to nearest $)

                      Summer Camp (Field Training)

Total Pkg. Cost of Auth. Items-Amortized by 2-yr. Life (Entire pkg., 
except shoes and socks)+5% Custodial Fees+$10.00 Uniform Alteration & 
Maint.=Net Rate 2-yr. period (Rounded to nearest $)



 Sec. Appendix C to Part 110--Application of Basic Course Formula (Male 

                      and Female Members) (Sample)

------------------------------------------------------------------------
                                                      Zone I    Zone II
------------------------------------------------------------------------
Total package cost (authorized items).............    $159.29    $180.62
Plus 10% procurement cost.........................      15.93      18.06
                                                   ---------------------
Adjusted package cost.............................     175.22     198.68
                                                   =====================
Amortization:
    2-years socks (50% of $1.28)..................        .64        .64
    2-years shoes (50% of 14.00)..................       7.00       7.00
    2-years insignia (50% of 15.00), if applicable       7.50       7.50
    5-years balance package (20% of $144.94, Zone       28.99      33.68
     I) (20% of $168.40, Zone II).................
                                                   ---------------------
      Amortized package cost......................      44.13      48.82
                                                   =====================
Add:
    15% custodial fees (15% of amortized package         6.62       7.32
     cost)........................................
    Uniform Alteration and Maintenance............      10.00      10.00
                                                   ---------------------
      Total.......................................      16.62      17.32
Net rate..........................................      60.75      66.14
Rounded for official standard rate (per year).....      61.00      66.00
Special commutation rate (per year) (three times       183.00     198.00
 standard rate)...................................
------------------------------------------------------------------------



  Sec. Appendix D to Part 110--Application of Advanced Course Formula 

                   (Male and Female Members) (Sample)

------------------------------------------------------------------------
                                                      Zone I    Zone II
------------------------------------------------------------------------
Total package cost (authorized items).............    $159.29    $180.62
Less insignia amortization (50% of $15.00), if           7.50       7.50
 applicable.......................................
                                                   ---------------------
Adjusted package cost.............................     151.79     173.12
                                                   =====================
Add:
    5% custodial fees (5% of adjusted package            7.59       8.66
     cost)........................................
    Uniform alteration and maintenance............      10.00      10.00
                                                   =====================
                                                        17.59      18.66
Net Rate..........................................     169.38     191.78
Rounded official standard rate (2 years)..........     169.00     192.00
Special commutation rate (2 years) (three times        507.00     576.00
 standard rate)...................................
------------------------------------------------------------------------



Sec. Appendix E to Part 110--Application of 4-Week Summer Field Training 

                            Formula (Sample)

------------------------------------------------------------------------
                                                      Zone I    Zone II
------------------------------------------------------------------------
Total package cost (authorized items).............     $36.56     $48.70
Amortization Schedule:
Total package less $12.75 (boots and socks) (not        23.81      35.95
 reissued)........................................
50% amortization (2-year life)....................      11.91      17.98
Boots and socks added.............................      12.75      12.75
Amortized package cost............................      24.66      30.73
Add:
5% custodial fees.................................       1.23       1.54
Uniform alteration and maintenance................      10.00      10.00
Net rate..........................................      35.89      42.27
Rounded for official rate.........................      36.00      42.00
------------------------------------------------------------------------



PART 112_INDEBTEDNESS OF MILITARY PERSONNEL--Table of Contents



Sec.
112.1 Purpose.
112.2 Applicability and scope.
112.3 Definitions.
112.4 Policy.
112.5 Processing of debt complaints.
112.6 Processing of involuntary allotments.
112.7 Responsibilities.

    Authority: 5 U.S.C. 5520a(k) and 10 U.S.C. 113(d).

    Source: 73 FR 59502, Oct. 9, 2008, unless otherwise noted.



Sec. 112.1  Purpose.

    This part:
    (a) Updates DoD policies and assigns responsibilities governing 
delinquent

[[Page 512]]

indebtedness of members of the Military Services and prescribes policy 
for processing involuntary allotments from the pay of military members 
to satisfy judgment indebtedness in accordance with 5 U.S.C. 5520a(k).
    (b) Establishes responsibility for procedures implementing 5 U.S.C. 
5520a(k), 15 U.S.C. 1601 note, 1601-1614, 1631-1646, 1661-1665a, 1666-
1666j, and 1667-1667e (``Truth in Lending Act''), and 15 U.S.C. 1601 
note, and 1692-1692o (``Fair Debt Collection Practices Act'').



Sec. 112.2  Applicability and scope.

    (a) This part applies to the Office of the Secretary of Defense, the 
Military Departments (including the Coast Guard when it is not operating 
as a Service in the Navy, under agreement with the Department of 
Homeland Security), the Chairman of the Joint Chiefs of Staff, the 
Combatant Commands, the Office of the Inspector General of the 
Department of Defense, the Defense Agencies, the DoD Field Activities, 
and all other organizational entities in the Department of Defense 
(hereafter referred to collectively as the ``DoD Components'').
    (b) This part does not apply to:
    (1) Indebtedness of a member of the Military Services to the Federal 
Government.
    (2) Processing of indebtedness claims to enforce judgments against 
military members for alimony or child support.
    (3) Claims by State or municipal governments under the processing 
guidelines for complaints, including tax collection actions.



Sec. 112.3  Definitions.

    (a) Absence. A member's lack of an ``appearance,'' at any stage of 
the judicial process, as evidenced by failing to physically attend court 
proceedings; failing to be represented at court proceedings by counsel 
of the member's choosing; or failing to timely respond to pleadings, 
orders, or motions.
    (b) Court. A court of competent jurisdiction within any State, 
territory, or possession of the United States.
    (c) Debt Collector. An agency or agent engaged in the collection of 
debts described under 15 U.S.C. 1601 note and 1692-1692o (``Fair Debt 
Collection Practices Act'').
    (d) Exigencies of Military Duty. A military assignment or mission-
essential duty that, because of its urgency, importance, duration, 
location, or isolation, necessitates the absence of a member of the 
Military Services from appearance at a judicial proceeding or prevents 
the member from being able to respond to a notice of application for an 
involuntary allotment. Exigency of military duty is normally presumed 
during periods of war, national emergency, or when the member is 
deployed.
    (e) Judgment. A final judgment must be a valid, enforceable order or 
decree, by a court from which no appeal may be taken, or from which no 
appeal has been taken within the time allowed, or from which an appeal 
has been taken and finally decided. The judgment must award a sum 
certain amount and specify that the amount is to be paid by an 
individual who, at the time of application for the involuntary 
allotment, is a member of the Military Services.
    (f) Just Financial Obligation. A legal debt acknowledged by the 
military member in which there is no reasonable dispute as to the facts 
or the law; or one reduced to judgment that conforms to Sections 501-591 
of title 50 Appendix, United States Code (The Servicemembers Civil 
Relief Act, as amended), if applicable.
    (g) Member of the Military Services. For the purposes of this part, 
any member of the Regular Army, Air Force, Navy, Marine Corps, or Coast 
Guard, and any member of a Reserve component of the Army, Air Force, 
Navy, Marine Corps, or Coast Guard (including the Army National Guard of 
the United States and the Air National Guard of the United States) on 
active duty pursuant to a call or order for a period in excess of 180 
days at the time an application for involuntary allotment is received by 
the Director, DFAS, or Commanding Officer, Coast Guard Pay and Personnel 
Center. The following shall not be considered members:
    (1) Retired personnel, including those placed on the temporary or 
permanent disabled retired list; and
    (2) Personnel in a prisoner of war or missing in action status, as 
determined

[[Page 513]]

by the Secretary of the Military Department concerned.



Sec. 112.4  Policy.

    (a) Members of the Military Services are expected to pay their just 
financial obligations in a proper and timely manner. A Service member's 
failure to pay a just financial obligation may result in disciplinary 
action under the Uniform Code of Military Justice (10 U.S.C. 801-940) or 
a claim pursuant to Article 139 of the Uniform Code of Military Justice. 
Except as stated in this section, and in paragraphs (a)(1) and (a)(2) of 
this section, the DoD Components have no legal authority to require 
members to pay a private debt or to divert any part of their pay for 
satisfaction of a private debt.
    (1) Legal process instituted in civil courts to enforce judgments 
against military personnel for the payment of alimony or child support 
shall be acted on pursuant to 42 U.S.C. 651-665, and Chapter 50, of 
Department of Defense Regulation 7000.14-R Volume 7A. \1\
---------------------------------------------------------------------------

    \1\ Copies may be obtained from the DoD Directives Web page at: 
http://www.dtic.mil/whs/directives.
---------------------------------------------------------------------------

    (2) Involuntary allotments under 5 U.S.C. 5520a(k) shall be 
established in accordance with this part.
    (b) Whenever possible, indebtedness disputes should be resolved 
through amicable means. Claimants may contact military members by having 
correspondence forwarded through the military locator services for an 
appropriate fee.



Sec. 112.5  Processing of debt complaints.

    (a) Debt complaints meeting the requirements of this part and 
procedures established by the Under Secretary of Defense for Personnel 
and Readiness, as required by Sec. 112.7(a)(1) shall receive prompt 
processing assistance from commanders.
    (b) Assistance in indebtedness matters shall not be extended to 
those creditors:
    (1) Who have not made a bona fide effort to collect the debt 
directly from the military member;
    (2) Whose claims are patently false and misleading; or
    (3) Whose claims are obviously exorbitant.
    (c) Some States have enacted laws prohibiting creditors from 
contacting a debtor's employer about indebtedness or communicating facts 
on indebtedness to an employer unless certain conditions are met. The 
conditions that must be met to remove this prohibition are generally 
such things as reduction of a debt to judgment or obtaining written 
permission of the debtor.
    (1) At DoD installations in States having such laws, the processing 
of debt complaints shall not be extended to those creditors who are in 
violation of the State law. Commanders may advise creditors that this 
rule has been established because it is the general policy of the 
Military Services to comply with State law when that law does not 
infringe upon significant military interests.
    (2) The rule in paragraph (c)(1) of this section shall govern even 
though a creditor is not licensed to do business in the State where the 
debtor is located. A similar practice shall be started in any State 
enacting a similar law regarding debt collection.
    (3) Pursuant to 15 U.S.C. 1601 note and 1692-1692o (``Fair Debt 
Collection Practices Act''), contact by a debt collector with third 
parties, such as commanding officers, for aiding debt collection is 
prohibited without a court order or the debtor's prior consent given 
directly to the debt collector. Creditors are generally exempt from this 
requirement, but only when they collect on their own behalf.



Sec. 112.6  Processing of involuntary allotments.

    Pursuant to 5 U.S.C. 5520a(k): (a) In those cases in which the 
indebtedness of a military member has been reduced to a judgment, an 
application for an involuntary allotment from the member's pay may be 
made under procedures prescribed by the Under Secretary of Defense 
(Comptroller). Such procedures shall provide the exclusive remedy 
available.
    (b) An involuntary allotment from a member's pay shall not be 
permitted in any indebtedness case in which:
    (1) Exigencies of military duty caused the absence of the member 
from

[[Page 514]]

the judicial proceeding at which the judgment was rendered; or
    (2) There has not been compliance with the procedural requirements 
of the Servicemembers Civil Relief Act 50, U.S.C. Appendix, sections 
501-591.



Sec. 112.7  Responsibilities.

    (a) The Under Secretary of Defense for Personnel and Readiness 
shall:
    (1) In consultation with the Under Secretary of Defense 
(Comptroller), establish procedures for the processing of debt 
complaints.
    (2) Have policy oversight on the assistance to be provided by 
military authorities to creditors of military personnel who have 
legitimate debt complaints.
    (b) The Under Secretary of Defense (Comptroller) shall:
    (1) In consultation with the Under Secretary of Defense for 
Personnel and Readiness establish procedures for processing debt 
complaints, and administer and process involuntary allotments from the 
pay of members of the Military Services. This includes the authority to 
promulgate forms necessary for the efficient administration and 
processing of involuntary allotments.
    (2) Ensure that the Director, Defense Finance and Accounting 
Service:
    (i) Implements procedures established by the Under Secretary of 
Defense for Personnel and Readiness and the Under Secretary of Defense 
(Comptroller).
    (ii) Considers whether Servicemembers Civil Relief Act 50 U.S.C. 
Appendix, sections 501-591 has been complied with pursuant to 5 U.S.C. 
5520a(k) prior to establishing an involuntary allotment against the pay 
of a member of the Military Services.
    (iii) Publishes, prints, stocks, redistributes, and revises DoD 
forms necessary to process involuntary allotments.
    (c) The Heads of the DoD Components shall urge military personnel to 
meet their just financial obligations, since failure to do so damages 
their credit reputation and affects the public image of all DoD 
personnel. See DoD Directive 5500.7. \2\
---------------------------------------------------------------------------

    \2\ See footnote 1 to Sec. 112.4(a)(1).
---------------------------------------------------------------------------

    (d) The Secretaries of the Military Departments shall:
    (1) Establish, as necessary, procedures to administer and process 
involuntary allotments from the pay of members of the Military Services. 
This includes designating those commanders, or other officials who may 
act in the absence of the commander, who shall be responsible for 
determining whether a member's absence from a judicial proceeding was 
caused by exigencies of military duty, and establishing appeal 
procedures regarding such determinations.
    (2) Require commanders to counsel members to pay their just debts, 
including complying, as appropriate, with court orders and judgments for 
the payments of alimony or child support.
    (3) Emphasize prompt command action to assist with the processing of 
involuntary allotment applications.
    (e) The Chief, Office of Personnel and Training, for the Coast Guard 
shall:
    (1) Establish, as necessary, procedures supplemental to those 
promulgated by the Under Secretary of Defense for Personnel and 
Readiness or the Under Secretary of Defense (Comptroller) to administer 
and process involuntary allotment from the pay of members of the 
Military Services; this includes the authority to promulgate forms 
necessary for the efficient administration and processing of involuntary 
allotments.
    (2) Ensure that the Commanding Officer, Coast Guard Pay and 
Personnel Center:
    (i) Implements procedures established by the Under Secretary of 
Defense for Personnel and Readiness, the Under Secretary of Defense 
(Comptroller), and Chief, Office of Personnel and Training.
    (ii) Considers whether the Servicemembers Civil Relief Act, as 
amended (50 U.S.C. Appendix, sections 501-591) has been complied with 
pursuant to 5 U.S.C. 5520a(k) prior to establishing an involuntary 
allotment against the pay of a member of the Military Services.
    (iii) Acts as the Coast Guard manager for forms necessary to process 
involuntary allotments.

[[Page 515]]



PART 113_INDEBTEDNESS PROCEDURES OF MILITARY PERSONNEL--Table of Contents



Sec.
113.1 Purpose.
113.2 Applicability.
113.3 Definitions.
113.4 Policy.
113.5 Responsibilities.
113.6 Procedures.

Appendix A to Part 113--Certificate of Compliance
Appendix B to Part 113--Standards of Fairness
Appendix C to Part 113--Sample DD Form 2653, ``Involuntary Allotment 
          Application''
Appendix D to Part 113--Sample DD Form 2654, ``Involuntary Allotment 
          Notice and Processing''

    Authority: 5 U.S.C. 5520a(k) and 10 U.S.C. 113(d).

    Source: 60 FR 1722, Jan. 5, 1995, unless otherwise noted.



Sec. 113.1  Purpose.

    This part implements policy, assigns responsibilities, and 
prescribes procedures under 32 CFR part 112 governing delinquent 
indebtedness of members of the Military Services.



Sec. 113.2  Applicability.

    This part applies to the Office of the Secretary of Defense, the 
Military Departments (including the Coast Guard when it is not operating 
as a Military Service in the Navy by agreement with the Department of 
Transportation), the Chairman of the Joint Chiefs of Staff, the Unified 
Combatant Commands, the Inspector General of the Department of Defense, 
the Defense Agencies, and the DoD Field Activities (hereafter referred 
to collectively as ``the DoD Components''). The term ``Military 
Services,'' as used herein, refers to the Army, the Navy, the Air Force, 
the Marine Corps, and the Coast Guard.



Sec. 113.3  Definitions.

    (a) Appearance. The presence and participation of a member of the 
Military Services, or an attorney of the member's choosing, throughout 
the judicial proceeding from which the judgment was issued that is the 
basis for a request for enforcement through involuntary allotment.
    (b) Applicant. The original judgment holder, a successor in 
interest, or attorney or agent thereof who requests an involuntary 
allotment from a member of the Military Services pursuant to DoD 
Directive 1344.9. \1\
---------------------------------------------------------------------------

    \1\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------

    (c) Pay subject to involuntary allotment. For purposes of complying 
with 32 CFR part 112 and 5 U.S.C. 5520a(k), pay subject to involuntary 
allotment shall be determined by:
    (1) Including:
    (i) Basic pay but excluding reduction for education for education 
benefits under section 38 U.S.C. 1411 (``New G.I. Bill'').
    (ii) Special pay (including enlistment and reenlistment bonuses).
    (iii) Incentive pay.
    (iv) Accrued leave payments (basic pay portion only).
    (v) Readjustment pay.
    (vi) Severance pay (including disability severance pay).
    (vii) Lump-sum Reserve bonus.
    (viii) Inactive duty training pay.
    (2) Excluding:
    (i) Retired pay (including) disability retired pay).
    (ii) Retainer pay.
    (iii) Separation pay, Voluntary Separation Incentive (VSI), and 
Special Separation Benefit (SSB).
    (iv) Allowances paid under titles 10 and 37 of the United States 
Code (e.g., Chapter 53 of title 10 and Chapter 7 of title 37, 
respectively) and other reimbursements for expenses incurred in 
connection with duty in the Military Service or allowances in lieu 
thereof.
    (v) Payments not specifically enumerated in Sec. 113.3(c)(1).
    (3) After including the items in Sec. 113.3(c)(1), subtracting the 
following pay items to compute the final earnings value of the pay 
subject to involuntary allotment:
    (i) Federal and State employment and income tax withholding (amount 
limited only to that which is necessary to fulfill member's tax 
liability).
    (ii) FICA tax.
    (iii) Amounts mandatorily withheld for the United States Soldiers' 
and Airmen's Home.

[[Page 516]]

    (iv) Deductions for the Servicemen's Group Life Insurance coverage.
    (v) Retired Serviceman's Family Protection Plan.
    (vi) Indebtedness to the United States.
    (vii) Fines and forfeitures ordered by a court-martial or a 
commanding officer.
    (viii) Amounts otherwise required by law to be deducted from a 
member's pay (except payments under 42 U.S.C. 659, 661, 662, and 665).
    (d) Preponderence of the evidence. A greater weight of evidence that 
is more credible and convincing to the mind. That which best accords 
with reason and probability. (See Black's Law Dictionary \2\)
---------------------------------------------------------------------------

    \2\ Black's Law Dictionary, Fourth Edition, West Publishing Company, 
Saint Paul, Minnesota (1952).
---------------------------------------------------------------------------

    (e) Proper and Timely Manner. A manner that under the circumstances 
does not reflect discredit on the Military Service.



Sec. 113.4  Policy.

    (a) It is DoD policy under 32 CFR part 112 that procedures be 
established for the processing of debt complaints against members of the 
Military Services and involuntary allotments from the pay of members of 
the Military Services.
    (b) An involuntary allotment shall not exceed the lesser of 25 
percent of a member's pay subject to involuntary allotment or the 
maximum percentage of pay subject to garnishment proceedings under the 
applicable State law.
    (c) The amount of an involuntary allotment under 32 CFR part 112 and 
this part when combined with deductions as a result of garnishments or 
statutory allotments for spousal support and child support under 42 
U.S.C. 659, 661, 662, or 665, may not exceed the lesser of 25 percent of 
a member's pay subject to involuntary allotment or the maximum 
percentage of pay subject to garnishment proceedings under applicable 
State law. In any case in which the maximum percentage would be 
exceeded, garnishments and involuntary allotments for spousal and child 
support shall take precedence over involuntary allotments authorized 
under 32 CFR part 112 and this part. Involuntary allotments established 
under 32 CFR part 112 and this part shall be reduced or stopped as 
necessary to avoid exceeding the maximum percentage allowed.
    (d) The Truth in Lending Act (15 U.S.C. 1601 note, 1601-1614, 1631-
1646, 1661-1666j, and 1667-1667e) prescribes the general disclosure 
requirements that must be met by those offering or extending consumer 
credit and Federal Reserve Board Regulation Z (12 CFR 226) prescribes 
the specific disclosure requirements for both open-end and installment 
credit transactions. In place of Federal Government requirements, State 
regulations apply to credit transactions when the Federal Reserve Board 
has determined that the State regulations impose substantially similar 
requirements and provide adequate enforcement measures. Commanding 
officers, with the assistance of judge advocates, should check 
regulations of the Federal Reserve Board to determine whether Federal or 
State laws and regulations govern.



Sec. 113.5  Responsibilities.

    (a) The Under Secretary of Defense for Personnel and Readiness shall 
monitor compliance with this part.
    (b) The Under Secretary of Defense (Comptroller) shall ensure 
Defense Finance and Accounting Service (DFAS) implementation of this 
part.
    (c) The Heads of the DoD Components shall ensure compliance with 
this part.



Sec. 113.6  Procedures.

    (a) The following procedures apply to the processing of debt 
complaints against members of the Military Services.
    (1) It is incumbent on those submitting indebtedness complaints to 
show that they have met the disclosure requirements of the Truth in 
Lending Act (15 U.S.C. 1601 note, 1601-1614, 1631-1646, 1661-1666j, and 
1667-1667e) and Federal Reserve Board Regulation Z (12 CFR 226), and 
that they complied with the Standards of Fairness (appendix B to this 
part).
    (2) Creditors subject to Federal Reserve Board Regulation Z (12 CFR 
226), and assignees claiming thereunder, shall submit with their debt 
complaint

[[Page 517]]

an executed copy of the Certificate of Compliance (appendix A to this 
part), and a true copy of the general and specific disclosures provided 
the member of the Military Service as required by the Truth in Lending 
Act (15 U.S.C. 1601 note, 1601-1614, 1631-1646, 1661-1666j, and 1667-
1667e). Debt complaints that request assistance but do not meet these 
requirements will be returned without action to the claimant.
    (3) A creditor not subject to Federal Reserve Board Regulation Z (12 
CFR 226), such as a public utility company, shall submit with the 
request a certificate that no interest, finance charge, or other fee is 
in excess of that permitted by the law of the State in which the 
obligation was incurred.
    (4) A foreign-owned company having debt complaints shall submit with 
its request a true copy of the terms of the debt (English translation) 
and shall certify that it has subscribed to the Standards of Fairness 
(appendix B to this part).
    (5) Debt complaints that meet the requirements of this part shall be 
processed by Department of Defense Components. ``Processed'' means that 
Heads of the Department of Defense Components, or designees, shall:
    (i) Review all available facts surrounding the transaction forming 
the basis of the complaint, including the member's legal rights and 
obligations, and any defenses or counterclaims the member may have.
    (ii) Advise the member concerned that:
    (A) Just financial obligations are expected to be paid in a proper 
and timely manner, and what the member should do to comply with that 
policy;
    (B) Financial and legal counseling services are available under DoD 
Directive 1344.7 \3\ in resolving indebtedness; and
---------------------------------------------------------------------------

    \3\ See footnote 1 to Sec. 113.3(b).
---------------------------------------------------------------------------

    (C) That a failure to pay a just debt may result in the creditor 
obtaining a judgment from a court that could form the basis for 
collection of pay from the member pursuant to an involuntary allotment.
    (iii) If a member acknowledges a debt as a result of creditor 
contact with a DoD Component, advise the member that assistance and 
counseling may be available from the on-base military banking office, 
the credit union serving the military field of membership, or other 
available military community service organizations.
    (iv) Direct the appropriate commander to advise the claimant that:
    (A) Those aspects of DoD policy prescribed in 32 CFR part 112.4, are 
pertinent to the particular claim in question; and
    (B) The member concerned has been advised of his or her obligations 
on the claim.
    (v) The commander's response to the claimant shall not undertake to 
arbitrate any disputed debt, or admit or deny the validity of the claim. 
Under no circumstances shall the response indicate whether any action 
has been taken, or will be taken, against the member as a result of the 
complaint.
    (b) The following procedures apply to the processing of involuntary 
allotments from the pay of members of the Military Services.
    (1) Involuntary allotment application. (i) Regardless of the Service 
Affiliation of the member involved, with the exception of members of the 
Coast Guard an application to establish an involuntary allotment from 
the pay of a member of the Military Services shall be made by sending a 
completed DD Form 2653, ``Involuntary Allotment Application'' (appendix 
C to this part) to the appropriate address listed below. Applications 
sent to any other address shall be returned without action to the 
applicant.

(For Army, Navy, Air Force, or Marine Corps)

Defense Finance and Accounting Service, Cleveland Center, Code L, P.O. 
Box 998002, Cleveland, OH 44199-8002

(For Coast Guard only)

Coast Guard Pay and Personnel Center (LGL), 444 S.E. Quincy Street, 
Topeka, KS 66683-3591

    (ii) Each application must include a copy of the final judgment 
certified by the clerk of court and such other documents as may be 
required by Sec. 113.6(b)(1)(iv).
    (iii) A garnishment summons or order is insufficient to satisfy the 
final judgment requirement of Sec. 113.6(b)(1)(ii)

[[Page 518]]

and is not required to apply for an involuntary allotment under this 
part.
    (iv) Involuntary allotment applications must contain the following 
information, certifications, and acknowledgment:
    (A) The full name, social security number, and branch of Service of 
the military member against whose pay an involuntary allotment is 
sought. Although not required, inclusion of the member's current duty 
station and duty address on the application form will facilitate 
processing of the application.
    (B) The applicant's full name and address. If the applicant is not a 
natural person, the application must be signed by an individual with the 
authority to act on behalf of such entity. If the allotment is to be in 
favor of a person other than the original judgment holder, proof of the 
right to succeed to the interest of the original judgment holder is 
required and must be attached to the application.
    (C) The dollar amount of the judgment. Additionally, if the judgment 
awarded interest, the total dollar amount of the interest on the 
judgment accrued to the date of application.
    (D) A certification that the judgment has not been amended, 
superseded, set aside, or satisfied; or, if the judgment has been 
satisfied in part, the extent to which the judgment remains unsatisfied.
    (E) A certification that the judgment was issued while the member 
was not on active duty (in appropriate cases). If the judgment was 
issued while the member was on active duty, a certification that the 
member was present or represented by an attorney of the member's 
choosing in the proceedings, or if the member was not present or 
represented by an attorney of the member's choosing, that the judgment 
complies with the Soldiers' and Sailors' Civil Relief Act of 1940, as 
amended (50 U.S.C. appendix sections 501-591).
    (F) A certification that the member's pay could be garnished under 
applicable State law and section 5520a(k) of the United States Code, if 
the member were a civilian employee.
    (G) A certification that, to the knowledge of the applicant, the 
debt has not been discharged in bankruptcy, nor has the member filed for 
protection from creditors under the bankruptcy laws of the United 
States.
    (H) A certification that if the judgment is satisfied prior to the 
collection of the total amount through the involuntary allotment 
process, the applicant will provide prompt notice that the involuntary 
allotment must be discontinued.
    (I) A certification that if the member overpays the amount owed on 
the judgment, the applicant shall refund the amount of overpayment to 
the member within 30 days of discovery or notice of the overpayment, 
whichever, is earlier, and that if the applicant fails to repay the 
member, the applicant understands he or she may be denied the right to 
collect by involuntary allotment on other debt reduced to judgments.
    (J) Acknowledgment that as a condition of application, the applicant 
agrees that neither the United States, nor any disbursing official or 
Federal employee whose duties include processing involuntary allotment 
applications and payments, shall be liable for any payment or failure to 
make payment from moneys due or payable by the United States to any 
person pursuant to any application made in accordance herewith.
    (v) The original and three copies of the application and supporting 
documents must be submitted by the applicant to DFAS.
    (vi) A complete ``application package'' (the DD Form 2653, 
supporting documentation, and three copies of the application and 
supporting documents), is required for processing of any request to 
establish an involuntary allotment pursuant to this part and 32 CFR part 
112.
    (vii) Applications that do not conform to the requirements of this 
part shall not be processed. If an application is ineligible for 
processing, the application package shall be returned to the applicant 
with an explanation of the deficiency. In cases involving repeated false 
certifications by an applicant, the designated DFAS official may refuse 
to accept or process additional applications by that applicant for such 
period

[[Page 519]]

of time as the official deems appropriate to deter against such 
violations in the future.
    (2) Processing of involuntary allotment applications. (i) Promptly 
upon receipt of DD Form 2653 (Appendix C to this part), the designated 
DFAS official shall review the ``application package'' to ensure 
compliance with the requirements of this part. If the application 
package is complete, the DFAS official shall:
    (A) Complete Section I of DD Form 2654, ``Involuntary Allotment 
Notice and Processing'' (Appendix D to this part), by inserting the 
name, social security number, rank, and branch of service of the 
military member against whom an application for involuntary allotment is 
being processed. Additionally, the DFAS official shall provide the due 
date for receipt of a response at DFAS. The due date shall be 90 days 
from the date DFAS mails the DD Form 2654 to the commander and member 
concerned as provided for in Sec. 113.6(b)(2)(i)(B).
    (B) Mail one copy of the application package to the member and two 
copies of the application package, along with DD Form 2654, to the 
commander of the military member or other official as designated by the 
Military Service concerned during times of war, national emergency, 
deployment, or other similar circumstances, who may act for the 
commander, provided the Military Service concerned has provided DFAS 
with the name or position of the official and the appropriate address 
(hereinafter, the meaning of the term ``commander'' includes such other 
official).
    (C) Within 60 days of mailing the copies of the application package 
and DD Form 2654, DFAS shall provide notice to the member and the 
member's commander that automatic processing of the involuntary 
allotment application shall occur if a response (including notice of an 
approved extension as authorized in Sec. 113.6(b)(2)(iii)(B) and (F), 
is not received by the due date specified in Section I of DD Form 2654. 
In the absence of a response, DFAS may automatically process the 
involuntary allotment application on the fifteenth calendar day after 
the date a response was due. When DFAS has received notice of an 
extension, automatice processing shall not begin until the fifteenth 
calendar day after the approved extension date.
    (D) Retain the original of the application package and DD Form 2654.
    (ii) Upon receipt of an application, the commander shall determine 
if the member identified in Section I of DD Form 2654 is assigned or 
attached to the commander's unit and available to respond to the 
involuntary allotment application. If the member is not assigned or 
attached, or not available to respond (e.g., retired, in a prisoner of 
war status, or in a missing in action status), the commander will 
promptly complete Section II of DD Form 2654 and attach appropriate 
documentation supporting the determination. The commander will then mail 
the application package and DD Form 2654 to DFAS. Section II shall also 
be used by the commander to notify DFAS of extensions beyond the due 
date for a response contained in Section I of DD Form 2654. When such 
extensions are authorized, the commander will complete Section II, make 
a copy of Sections I and II, and promptly mail the copy to DFAS.
    (iii) Within 5 days of receipt of an application package and DD Form 
2654 from the designated DFAS official, the commander shall notify the 
member of the receipt of the application, provide the member a copy of 
the entire application package, and counsel the member using and 
completing Section III of DD Form 2654 about the following:
    (A) That an application for the establishment of an involuntary 
allotment for the lesser of 25 percent of the member's pay subject to 
involuntary allotment or the maximum percentage of pay subject to 
garnishment proceedings under the applicable State law has been 
received.
    (B) That the member has 15 calendar days from the date of receipt of 
the commander's notice to complete Section IV of DD Form 2654. That for 
good cause shown, the commander may grant an extension of reasonable 
time (normally not exceeding 30 calendar days) to submit a response. 
That during times of deployment, war, national emergency, assignment 
outside the United States, hospitalization, or other

[[Page 520]]

similar situations that prevent the member from obtaining necessary 
evidence or from responding in a timely manner, extensions exceeding 30 
calendar days may be granted. That if the member fails to respond within 
the time allowed, the commander will note the member's failure to 
respond in Section V of DD Form 2654 and send the form to DFAS for 
appropriate action.
    (C) That the member's response will either consent to the 
involuntary allotment or contest it.
    (D) That the member may contest the application for any one of the 
following reasons:
    (1) There has not been compliance with the procedural requirements 
of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended (50 
U.S.C. appendix sections 501-591) during the judicial proceeding upon 
which the involuntary allotment application is sought.
    (2) ``Exigencies of military duty'' (as defined in 32 CFR part 
112.3(d)) caused the ``absence'' of the member from appearance in a 
judicial proceeding forming the basis for the judgment upon which the 
application is sought.
    (3) Information in the application is patently false or erroneous in 
material part.
    (4) The judgment has been fully satisfied, superseded, or set aside.
    (5) The judgment has been materially amended, or partially 
satisfied. When asserting this defense, the member shall include 
evidence of the amount of the judgment that has been satisfied.
    (6) There is a legal impediment to the establishment of the 
involuntary allotment (for example, the judgment debt has been 
discharged in bankruptcy, the judgment debtor has filed for protection 
from the creditors under the bankruptcy laws of the United States, the 
applicant is not the judgment holder nor a proper successor in interest 
to that holder, or the applicant has been enjoined by a Federal or state 
court from enforcing the judgment debt).
    (7) Or other appropriate reasons that must be clearly specified and 
explained by the member.
    (E) That, if the member contests the involuntary allotment, the 
member shall provide evidence (documentary or otherwise) in support 
thereof. Furthermore, that any evidence submitted by the member may be 
disclosed to the applicant for the involuntary allotment.
    (F) That the member may consult with a legal assistance attorney, if 
reasonably available, or a civilian attorney at no expense to the 
government. That if a legal assistance attorney is available, the member 
should immediately arrange for an appointment. That the member may 
request a reasonable delay from the commander to obtain legal assistance 
(in cases where an approved delay will cause DFAS to receive the 
member's response after the due date identified in Section I of DD Form 
2654, the commander must immediately notify the designated DFAS official 
of the delay, the date for an expected response, and the reason for the 
delay by completing Section II of DD Form 2654 and forwarding a copy of 
Sections I and II to DFAS). Additionally, that requests for extensions 
of time based on the need for legal assistance shall be denied to 
members who fail to exercise due diligence in seeking such assistance.
    (G) That if the member contests the involuntary allotment on the 
grounds that exigencies of military duty caused the absence of the 
member from the judicial proceeding at which the judgment was rendered, 
then the member's commander shall review and make the final 
determination on this contention, and notify the designated DFAS 
official of the commander's decision by completing Section V of DD Form 
2654 and forwarding the form to DFAS.
    (1) In determining whether exigencies of military duty caused the 
absence of the member, the commander at the level designated by the 
Service concerned shall consider the definition of ``exigencies of 
military duty'' (as defined in 32 CFR part 112.3(d)).
    (2) Additionally, consideration shall be given to whether the 
commander at the time determined the military duties in question to be 
of such paramount importance that they prevented making the member 
available to attend the judicial proceedings, or rendered the member 
unable to timely respond to process, motions, pleadings, or orders of 
the court.
    (H) That if the member contests the involuntary allotment on any 
basis other than exigencies of military duty,

[[Page 521]]

the application package and DD Form 2654 shall be returned to the 
commander who shall forward it to the designated DFAS official for 
appropriate action.
    (I) That if the member fails to respond to the commander within the 
time allowed under Sec. 113.6(b)(2)(iii)(B), the commander shall notify 
the designated DFAS official of the member's failure to respond by 
completing Section V of DD Form 2654, and forwarding the form to DFAS.
    (iv) After counseling the member in accordance with Sec. 
113.6(b)(2)(iii)(A)-(I), the commander shall:
    (A) Date and sign Section III of DD Form 2654.
    (B) Obtain the member's acknowledgment of counseling by having the 
member sign the appropriate space on Section III of DD Form 2654.
    (C) Determine if the member consents to the involuntary allotment or 
needs the time authorized under this part to review the application 
package and take appropriate action. If the member consents to the 
involuntary allotment, the commander shall direct the member to 
appropriately complete Section IV of DD Form 2654. The commander must 
then complete the appropriate item in Section V and promptly forward the 
completed DD Form 2654 to the designated DFAS official.
    (D) Complete the appropriate items in Section V of DD Form 2654 when 
the member fails to respond within the time authorized for a response, 
or asserts that exigencies of military duty caused the absence of the 
member from an appearance in the judicial proceeding upon which the 
Involuntary Allotment Application is sought.
    (1) In determining whether exigencies of military duty caused the 
absence of the member, the commander, at the level designated by the 
Service concerned, shall consider the definition of ``exigencies of 
military duty'' (as defined in 32 CFR part 112.3(d)), the evidence 
provided by the member, any other reasonably available evidence (e.g., a 
copy of the member's personnel record), and whether the commander at the 
time determined the military duties in question to be of such paramount 
importance that they prevented making the member available to attend the 
judicial proceedings, or rendered the member unable to timely respond to 
process, motions, pleadings, or orders of the court.
    (2) The evidentiary standard for a commander to determine whether 
existences of military duty caused the absence of the member from an 
appearance in the judicial proceeding upon which the Involuntary 
Allotment Application is sought is a ``preponderance of the evidence'' 
(as defined in Sec. 113.3(d) of this part).
    (3) If the commander has made a determination on exigencies of 
military duty, the commander must insert in Section V of DD Form 2654, 
the title and address of the appeal authority.
    (E) Promptly following the date the member's response is due to the 
commander as determined by Sec. 113.6(b)(2)(iii)(B), ensure that the DD 
Form 2654 is appropriately completed and mail the form, along with any 
response received from the member, to DFAS.
    (F) Provide the member a copy of the completed DD Form 2654 within 5 
days of mailing to the designated DFAS official.
    (v) Upon receipt of DD Form 2654 and any additional evidence 
submitted by the member, the designated DFAS official shall conduct a 
review of the entire application package, DD Form 2654, and any evidence 
submitted by the member, to determine whether the application for an 
involuntary allotment should be approved and established.
    (A) In those cases where the member's commander has completed 
Section V of DD Form 2654, and determined that exigencies of military 
duty caused the absence of the member from an appearance in a judicial 
proceeding upon which the involuntary allotment application is sought, 
the designated DFAS official shall deny the involuntary allotment 
application and provide the applicant written notice of the denial and 
the reason therefor. The designated DFAS official shall also advise the 
applicant that:
    (1) The responsibility for determining whether exigencies of 
military duty existed belonged to the member's commander and the 
Military Department concerned.

[[Page 522]]

    (2) The commander's decision may be appealed within 60 days of the 
date DFAS mailed the notice of the decision to the applicant.
    (3) An Appeal must be submitted to the appeal authority at the 
address provided by DFAS (as found in Section V of the DD Form 2654) in 
their written notice of denial, and that an appeal submitted to an 
appeal authority and address different from the one provided by DFAS may 
be returned without action.
    (4) An appeal must be submitted in writing and contain sufficient 
evidence to overcome the presumption that the commander's exigency 
determination was correct.
    (5) The appellate authority shall decide an appeal within 30 days of 
its receipt and promptly notify the applicant in writing of the 
decision. The 30 day decision period may be extended during times of 
deployment, war, national emergency, or other similar situations.
    (6) If an appeal is successful, the applicant must submit a written 
request, along with a copy of the appellate authority's decision, to 
DFAS within 15 days of receipt of the appellate authority's decision.
    (B) Upon receiving written notice that an applicant has successfully 
appealed a commander's determination on exigencies of military duty that 
resulted in denial of an involuntary allotment application, DFAS shall 
review the application in accordance with Sec. 113.6(b)(2)(v)(C), and 
determine whether the involuntary allotment should be approved and 
initiated.
    (C) In all cases, other than as described in Sec. 
113.6(b)(2)(v)(A), the designated DFAS official shall deny an 
involuntary allotment application, and give written notice to the 
applicant of the reason(s) for denial, if the designated DFAS official 
determines that:
    (1) There has not been compliance with the procedural requirements 
of the Soldier's and Sailor's Civil Relief Act of 1940, as amended (50 
U.S.C. appendix sections 501-591) during the judicial proceeding upon 
which the involuntary allotment application is sought.
    (2) Information in the application is patently false or erroneous in 
material part.
    (3) The judgment has been fully satisfied, superseded, or set aside.
    (4) The judgment has been materially amended, or partially 
satisfied. In such a case, the request for involuntary allotment may be 
approved only to satisfy that portion of the judgment that remains in 
effect and unsatisfied; the remainder of the request shall be denied.
    (5) There is a legal impediment to the establishment of the 
involuntary allotment (for example, the judgment debt has been 
discharged in bankruptcy, the judgment debtor has filed for protection 
from the creditors under the bankruptcy laws of the United States, the 
applicant is not the judgment creditor nor a proper successor in 
interest to that creditor, or the applicant has been enjoined by a 
Federal or State court from enforcing the judgment debt).
    (6) The member's pay is already subject to one or more involuntary 
allotments or garnishments that equal the lesser of 25 percent of the 
member's pay subject to involuntary allotment or the maximum percentage 
of pay subject to garnishment proceedings under the applicable State 
law.
    (7) The applicant has abused the processing privilege (e.g., an 
applicant, having been notified of the requirements of this part, 
repeatedly refuses or fails to comply therewith).
    (8) Or other appropriate reasons that must be clearly explained to 
the applicant.
    (D) In all cases other than as described in Sec. 113.6(b)(2)(v) (A) 
and (C), the designated DFAS official shall approve the involuntary 
allotment application and establish an involuntary allotment against the 
pay subject to involuntary allotment of the member.
    (vi) The designated DFAS official shall, at any time after 
establishing an involuntary allotment, cancel or suspend such allotment 
and notify the applicant of that cancellation if the member concerned, 
or someone acting on his or her behalf, submits legally sufficient 
proof, by affidavit or otherwise, that the allotment should not continue 
because of the existence of the factors enumerated in Sec. 
113.6(b)(2)(v)(A) and (C)(1)-(8).
    (3) Payments. (i) Payment of an approved involuntary allotment under 
32

[[Page 523]]

CFR part 112 and this part shall commence within 30 days after the 
designated DFAS official has approved the involuntary allotment.
    (ii) Payments under this part shall not be required more frequently 
than once each month, and the designated official shall not be required 
to vary normal pay and disbursement cycles.
    (iii) If the designated DFAS official receives several applications 
on the same member of a Military Service, payments shall be satisfied on 
a first-come, first-served basis.
    (iv) Payments shall continue until the judgment is satisfied or 
until canceled or suspended.
    (A) DFAS shall collect the total judgment, including interest when 
awarded by the judgment. Within 30 days following collection of the 
amount of the judgment, including interest as annotated by the applicant 
in Section I of DD Form 2654, the applicant may submit a final statement 
of interest that accrued during the pay-off period. This final statement 
of interest request must be accompanied by a statement of account 
showing how the applicant computed the interest amount. DFAS will 
collect this post-application interest provided it is an amount owed 
pursuant to the judgment. DFAS shall not accept any further interest 
requests.
    (B) Interest or other costs associated with the debt forming the 
basis for the judgment, but not included as an amount awarded by the 
judgment, shall not be paid to applicants for involuntary allotments.
    (v) If the member is found not to be entitled to money due from or 
payable by the Military Services, the designated official shall return 
the application and advise the applicant that no money is due from or 
payable by the Military Service to the member. When it appears that pay 
subject to an involuntary allotment is exhausted temporarily or 
otherwise unavailable, the applicant shall be told why and for how long 
that money is unavailable, if known. Involuntary allotments shall be 
canceled on or before the date a member retires, is discharged, or is 
released from active duty. The designated DFAS official shall notify the 
applicant of the reason for cancellation.
    (vi) Upon receiving notice from an applicant that a judgment upon 
which an involuntary allotment is based has been satisfied, vacated, 
modified, or set aside, the designated DFAS official shall promptly 
adjust or discontinue the involuntary allotment.
    (vii) The Under Secretary of Defense (Comptroller) may, in DoD 
7000.14-R \4\ Volume 7, Part A, designate the priority to be given to 
involuntary allotments pursuant to 32 CFR part 112 and this part, among 
the deductions and collections taken from a member's pay, except that 
they may not give precedence over deductions required to arrive at a 
member's disposable pay for garnishments or involuntary allotments 
authorized by statute for alimony and child support payments. In the 
absence of a contrary designation by the Comptroller, all other lawful 
deductions (except voluntary allotments by the member) and collections 
shall take precedence over these involuntary allotments.
---------------------------------------------------------------------------

    \4\ See footnote 1 to Sec. 113.3(b).
---------------------------------------------------------------------------



         Sec. Appendix A to Part 113--Certificate of Compliance

    I certify that the (Name of Creditor) upon extending credit

to______________________________________________________________________

on______________________________________________________________________
(Date)

complied with the full disclosure requirements of the Truth-in-Lending 
Act and Regulation Z, and the Fair Debt Collection Practices Act (or the 
laws and regulations of State of --------------------), and that the 
attached statement is a true copy of the general and specific 
disclosures provided the obligor as required by law.
    I further certify that the Standards of Fairness set forth in DoD 
Directive 1344.9 \1\ have been applied to the consumer credit 
transaction to which this form refers. (If the unpaid balance has been 
adjusted as a consequence, the specific adjustments in the finance 
charge and the annual percentage rate should be set forth below.)
---------------------------------------------------------------------------

    \1\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.

________________________________________________________________________
(Adjustments)

________________________________________________________________________
(Date of Certification)


[[Page 524]]


________________________________________________________________________
(Signature of Creditor or Authorized Representative)

________________________________________________________________________
(Street)

________________________________________________________________________
(City, State and Zip Code)



           Sec. Appendix B to Part 113--Standards of Fairness

    1. No finance charge contracted for, made, or received under any 
contract shall be in excess of the charge that could be made for such 
contract under the law of the place in which the contract is signed in 
the United States by the military member.
    a. In the event a contract is signed with a U.S. company in a 
foreign country, the lowest interest rate of the State or States in 
which the company is chartered or does business shall apply.
    b. However, interest rates and service charges applicable to 
overseas military banking facilities shall be as established by the 
Department of Defense.
    2. No contract or loan agreement shall provide for an attorney's fee 
in the event of default unless suit is filed, in which event the fee 
provided in the contract shall not exceed 20 percent of the obligation 
found due. No attorney fees shall be authorized if the attorney is a 
salaried employee of the holder.
    3. In loan transactions, defenses that the debtor may have against 
the original lender or its agent shall be good against any subsequent 
holder of the obligation. In credit transactions, defenses against the 
seller or its agent shall be good against any subsequent holder of the 
obligation, provided that the holder had actual knowledge of the defense 
or under conditions where reasonable inquiry would have apprised the 
holder of this fact.
    4. The military member shall have the right to remove any security 
for the obligation beyond State or national boundaries if the military 
member or family moves beyond such boundaries under military orders and 
notifies the creditor, in advance of the removal, of the new address 
where the security will be located. Removal of the security shall not 
accelerate payment of the obligation.
    5. No late charge shall be made in excess of 5 percent of the late 
payment, or $5.00, whichever is the lesser amount, or as provided by law 
or applicable regulatory agency determination. Only one late charge may 
be made for any tardy installment. Late charges shall not be levied 
where an allotment has been timely filed, but payment of the allotment 
has been delayed. Late charges by overseas banking facilities are a 
matter of contract with the Department of Defense.
    6. The obligation may be paid in full at any time or through 
accelerated payments of any amount. There shall be no penalty for 
prepayment. In the event of prepayment, that portion of the finance 
charges that has inured to the benefit of the seller or creditor shall 
be prorated on the basis of the charges that would have been ratably 
payable had finance charges been calculated and payable as equal 
periodic payments over the terms of the contract, and only the prorated 
amount to the date of prepayment shall be due. As an alternative, the 
``Rule of 78'' may be applied.
    7. If a charge is made for loan insurance protection, it must be 
evidenced by delivery of a policy or certificate of insurance to the 
military member within 30 days.
    8. If the loan or contract agreement provides for payments in 
installation, each payment, other than the down payment, shall be in 
equal or substantially equal amounts, and installments shall be 
successive and of equal or substantially equal duration.
    9. If the security for the debt is repossessed and sold in order to 
satisfy or reduce the debt, the repossession and resale shall be 
governed by the laws of the State in which the security is requested.
    10. A contract for personal goods and services may be terminated at 
any time before delivery of the goods or services without charge to the 
purchaser. However, if goods made to the special order of the purchaser 
result in preproduction costs, or require preparation for delivery, such 
additional costs shall be listed in the order form or contract.
    a. No termination charge shall be made in excess of this amount. 
Contracts for delivery at future intervals may be terminated as to the 
undelivered portion.
    b. The purchaser shall be chargeable only for that proportion of the 
total cost that the goods or services delivered bear to the total goods 
called for by the contract. (This is in addition to the right to rescind 
certain credit transactions involving a security interest in real estate 
provided by the Truth in Lending Act (15 U.S.C. 1601 note, 1601-1614, 
1631-1646, 1661-1665a, 1666-1666j, and 1667-1667e) and Federal Reserve 
Board Regulation Z (12 CFR 226)).

[[Page 525]]



    Sec. Appendix C to Part 113--Sample DD Form 2653, ``Involuntary 

                         Allotment Application''

[GRAPHIC] [TIFF OMITTED] TR05JA95.002


[[Page 526]]


[GRAPHIC] [TIFF OMITTED] TR05JA95.003


[[Page 527]]





    Sec. Appendix D to Part 113--Sample DD Form 2654, ``Involuntary 

                    Allotment Notice and Processing''

[GRAPHIC] [TIFF OMITTED] TR05JA95.004


[[Page 528]]


[GRAPHIC] [TIFF OMITTED] TR05JA95.005


[[Page 529]]


[GRAPHIC] [TIFF OMITTED] TR05JA95.006


[[Page 530]]


[GRAPHIC] [TIFF OMITTED] TR05JA95.007



PART 142_COPYRIGHTED SOUND AND VIDEO RECORDINGS--Table of Contents



Sec.
142.1 Purpose.
142.2 Applicability.
142.3 Policy.
142.4 Procedures.
142.5 Responsibilities.

    Authority: 10 U.S.C. 133.

[[Page 531]]


    Source: 49 FR 49452, Dec. 20, 1984, unless otherwise noted.



Sec. 142.1  Purpose.

    This part provides policy, prescribes procedures, and assigned 
responsibilities regarding the use of copyrighted sound and video 
recordings within the Department of Defense.



Sec. 142.2  Applicability.

    (a) The provisions of this part apply to the Office of the Secretary 
of Defense, the Military Departments, the Organization of the Joint 
Chiefs of Staff, the Unified and Specified commands, and the Defense 
Agencies (hereafter referred to collectively as ``DoD Components'').
    (b) This part does not regulate the procurement or use of 
copyrighted works for authorized official purposes.



Sec. 142.3  Policy.

    (a) It is DoD policy: (1) To recognize the rights to copyright 
owners by establishing specific guidelines for the use of copyrighted 
works by individuals within the DoD community, consistent with the 
Department's unique mission and worldwide commitments, and (2) Not to 
condone, facilitate, or permit unlicensed public performance or unlawful 
reproduction for private or personal use of copyrighted sound or video 
recordings, using government appropriated or nonappropriated-fund-owned 
or leased equipment or facilities.
    (b) Although the policy expressed in this Directive takes into 
account the copyright law of the United States, the application of that 
law to specific situations is a matter for interpretation by the U.S. 
Copyright Office and the Department of Justice.



Sec. 142.4  Procedures.

    (a) Permission or licenses from copyright owners shall be obtained 
for public performance of copyrighted sound and video recordings.
    (b) Component procedures established pursuant to Sec. 142.5, below 
provide guidance for determining whether a performance is ``public.'' 
These general principles will be observed:
    (1) A performance in a residential facility or a physical extension 
thereof is not considered a public performance.
    (2) A performance in an isolated area or deployed unit is not 
considered a public performance.
    (3) Any performance at which admission is charged normally would be 
considered a public performance.
    (c) Government audio and video duplicating equipment and 
appropriated funded playback equipment may not be used for reproduction 
of copyrighted sound or video recordings.



Sec. 142.5  Responsibilities.

    Heads of DoD Components shall establish procedures to comply with 
this Directive and shall provide necessary local guidance and legal 
interpretation.



PART 143_DOD POLICY ON ORGANIZATIONS THAT SEEK TO REPRESENT OR ORGANIZE 

MEMBERS OF THE ARMED FORCES IN NEGOTIATION OR COLLECTIVE BARGAINING--Table of 

Contents



Sec.
143.1 Purpose.
143.2 Applicability.
143.3 Definitions.
143.4 Policy.
143.5 Prohibited activity.
143.6 Activity not covered by this part.
143.7 Responsibilities.
143.8 Guidelines.

    Authority: 10 U.S.C. 801-940 and 10 U.S.C. 976.

    Source: 71 FR 76914, Dec. 22, 2006, unless otherwise noted.



Sec. 143.1  Purpose.

    This part provides DoD policies and procedures for organizations 
whose objective is to organize or represent members of the Armed Forces 
of the United States for purposes of negotiating or bargaining about 
terms or conditions of military service. The policies and procedures set 
forth herein are designed to promote the readiness of the Armed Forces 
to defend the United States. This part does not modify or diminish the 
existing authority of commanders to control access to, or maintain good 
order and discipline on,

[[Page 532]]

military installations; nor does it modify or diminish the obligations 
of commanders and supervisors under 5 U.S.C. 7101-7135 with respect to 
organizations representing DoD civilian employees.



Sec. 143.2  Applicability.

    (a) The provisions of this part apply to:
    (1) The Office of the Secretary of Defense, the Military 
Departments, the Chairman of the Joint Chiefs of Staff, the Combatant 
Commands, the Office of the Inspector General of the Department of 
Defense, the Defense Agencies, the DoD Field Activities, and all other 
organizational entities in the Department of Defense (hereafter referred 
collectively as the ``DoD Components'').
    (2) Individuals and groups entering, using, or seeking to enter or 
use military installations.
    (b) This part does not limit the application of the Uniform Code of 
Military Justice in 10 U.S.C. 901-940 or 10 U.S.C. 976 including the 
prohibitions and criminal penalties set forth therein with respect to 
matters that are the subject of this part or that are beyond its scope.



Sec. 143.3  Definitions.

    (a) Member of the Armed Forces. A member of the Armed Forces who is 
serving on active duty, or a member of a Reserve component while 
performing inactive duty training.
    (b) Military labor organization. Any organization that engages in or 
attempts to engage in:
    (1) Negotiating or bargaining with any civilian officer or employee, 
or with any member of the Armed Forces, on behalf of members of the 
Armed Forces, concerning the terms or conditions of military service of 
such members in the Armed Forces;
    (2) Representing individual members of the Armed Forces before any 
civilian officer or employee, or any member of the Armed Forces, in 
connection with any grievance or complaint of any such member arising 
out of the terms or conditions of military service of such member in the 
Armed Forces; or
    (3) Striking, picketing, marching, demonstrating, or any other 
similar form of concerted action which is directed against the 
Government of the United States and that is intended to induce any 
civilian officer or employee, or any member of the Armed Forces, to:
    (i) Negotiate or bargain with any person concerning the terms or 
conditions of military service of any member of the Armed Forces,
    (ii) Recognize any organization as a representative of individual 
members of the Armed Forces in connection with complaints and grievances 
of such members arising out of the terms or conditions of military 
service of such members in the Armed Forces, or
    (iii) Make any change with respect to the terms or conditions of 
military service of individual members of the Armed Forces.
    (c) Civilian officer or employee. An employee, as defined in 5 
U.S.C. 2105.
    (d) Military installations. Includes installations, reservations, 
facilities, vessels, aircraft, and other property controlled by the 
Department of Defense.
    (e) Negotiation or bargaining. A process whereby a commander or 
supervisor acting on behalf of the United States engages in discussions 
with a member or members of the Armed Forces (purporting to represent 
other such members), or with an individual, group, organization, or 
association purporting to represent such members, for the purpose of 
resolving bilaterally terms or conditions of military service.
    (f) Terms or conditions of military service. Terms or conditions of 
military compensation or duty including but not limited to wages, rates 
of pay, duty hours, assignments, grievances, or disputes.



Sec. 143.4  Policy.

    It is the policy of the United States under Public Law 95-610 that:
    (a) Members of the Armed Forces of the United States must be 
prepared to fight and, if necessary, to die to protect the welfare, 
security, and liberty of the United States and of their fellow citizens.
    (b) Discipline and prompt obedience to lawful orders of superior 
officers are essential and time-honored elements of the American 
military tradition and have been reinforced from the earliest articles 
of war by laws and regulations

[[Page 533]]

prohibiting conduct detrimental to the military chain of command and 
lawful military authority.
    (c) The processes of conventional collective bargaining and labor-
management negotiation cannot and should not be applied to the 
relationships between members of the Armed Forces and their military and 
civilian superiors.
    (d) Strikes, slowdowns, picketing, and other traditional forms of 
job action have no place in the Armed Forces.
    (e) Unionization of the Armed Forces would be incompatible with the 
military chain of command, would undermine the role, authority, and 
position of the commander, and would impair the morale and readiness of 
the Armed Forces.
    (f) The circumstances that could constitute a threat to the ability 
of the Armed Forces to perform their mission are not comparable to the 
circumstances that could constitute a threat to the ability of Federal 
civilian agencies to perform their functions and should be viewed in 
light of the need for effective performance of duty by each member of 
the Armed Forces.



Sec. 143.5  Prohibited activity.

    (a) Membership and enrollment. (1) A member of the Armed Forces, 
knowing of the activities or objectives of a particular military labor 
organization, may not:
    (i) Join or maintain membership in such organization; or
    (ii) Attempt to enroll any other member of the Armed Forces as a 
member of such organization.
    (2) No person on a military installation, and no member of the Armed 
Forces, may enroll in a military labor organization any member of the 
Armed Forces or solicit or accept dues or fees for such an organization 
from any member of the Armed Forces.
    (b) Negotiation or bargaining. (1) No person on a military 
installation, and no member of the Armed Forces, may negotiate or 
bargain, or attempt through any coercive act to negotiate or bargain, 
with any civilian officer or employee, or any member of the Armed 
Forces, on behalf of members of the Armed Forces, concerning the terms 
or conditions of service of such members.
    (2) No member of the Armed Forces, and no civilian officer or 
employee, may negotiate or bargain on behalf of the United States 
concerning the terms or conditions of military service of members of the 
Armed Forces with any person who represents or purports to represent 
members of the Armed Forces.
    (c) Strikes and other concerted activity. (1) No person on a 
military installation, and no member of the Armed Forces, may organize 
or attempt to organize, or participate in, any strike, picketing, march, 
demonstration, or other similar form of concerted action involving 
members of the Armed Forces that is directed against the Government of 
the United States and that is intended to induce any civilian officer or 
employee, or any member of the Armed Forces, to:
    (i) Negotiate or bargain with any person concerning the terms or 
conditions of service of any member of the Armed Forces,
    (ii) Recognize any military labor organization as a representative 
of individual members of the Armed Forces in connection with any 
complaint or grievance of any such member arising out of the terms or 
conditions of service of such member in the Armed Forces, or
    (iii) Make any change with respect to the terms or conditions of 
service in the Armed Forces of individual members of the Armed Forces.
    (2) No person may use any military installation for any meeting, 
march, picketing, demonstration, or other similar activity for the 
purpose of engaging in any activity prohibited by this part.
    (3) No member of the Armed Forces, and no civilian officer or 
employee, may permit or authorize the use of any military installation 
for any meeting, march, picketing, demonstration, or other similar 
activity that is for the purpose of engaging in any activity prohibited 
by this part.
    (d) Representation. A military labor organization may not represent, 
or attempt to represent, any member of the Armed Forces before any 
civilian officer or employee, or any member of the

[[Page 534]]

Armed Forces, in connection with any grievance or complaint of any such 
member arising out of the terms or conditions of service of such member 
in the Armed Forces.



Sec. 143.6  Activity not covered by this part.

    (a) This part does not limit the right of any member of the Armed 
Forces to:
    (1) Join or maintain membership in any lawful organization or 
association not constituting a ``military labor organization'' as 
defined in Sec. 146.3 of this part;
    (2) Present complaints or grievances concerning the terms or 
conditions of the service of such member in the Armed Forces in 
accordance with established military procedures;
    (3) Seek or receive information or counseling from any source;
    (4) Be represented by counsel in any legal or quasi-legal 
proceeding, in accordance with applicable laws and regulations;
    (5) Petition the Congress for redress of grievances; or
    (6) Take such other administrative action to seek such 
administrative or judicial relief, as is authorized by applicable laws 
and regulations.
    (b) This part does not prevent commanders or supervisors from giving 
consideration to the views of any member of the Armed Forces presented 
individually or as a result of participation on command-sponsored or 
authorized advisory councils, committees, or organizations.
    (c) This part does not prevent any civilian employed at a military 
installation from joining or being a member of an organization that 
engages in representational activities with respect to terms or 
conditions of civilian employment.



Sec. 143.7  Responsibilities.

    (a) The Heads of DoD Components shall:
    (1) Ensure compliance with this part and with the guidelines 
contained in Sec. 143.8 of this part.
    (2) Establish procedures to ensure that any action initiated under 
this part is reported immediately to the Head of the DoD Component 
concerned.
    (3) Report any action initiated under this part immediately to the 
Secretary of Defense.
    (b) The Deputy Under Secretary of Defense (Program Integration) 
shall serve as the administrative point of contact in the Office of the 
Secretary of Defense for all matters relating to this part.



Sec. 143.8  Guidelines.

    The guidelines for making certain factual determinations are as 
follows:
    (a) In determining whether an organization is a military labor 
organization, whether a person is a member of a military labor 
organization, or whether such person or organization is in violation of 
any provision of this part, the history and operation of the 
organization (including its constitution and bylaws, if any) or person 
in question may be evaluated, along with evidence on the conduct 
constituting a prohibited act.
    (b) In determining whether the commission of a prohibited act by a 
person can be imputed to the organization, examples of factors that may 
be considered include: The frequency of such act; the position in the 
organization of persons committing the act; whether the commission of 
such act was known by the leadership of the organization; whether the 
commission of the act was condemned or disavowed by the leadership of 
the organization.
    (c) Any information about persons and organizations not affiliated 
with the Department of Defense needed to make the determinations 
required by this part shall be gathered in strict compliance with the 
provisions of DoD Directive 5200.27 \1\ and shall not be acquired by 
counterintelligence or security investigative personnel. The 
organization itself shall be considered a primary source of information.
---------------------------------------------------------------------------

    \1\ Copies are available at http://www.dtic.mil/whs/directives.
---------------------------------------------------------------------------



PART 144_SERVICE BY MEMBERS OF THE ARMED FORCES ON STATE AND LOCAL JURIES--

Table of Contents



Sec.
144.1 Purpose.
144.2 Applicability.

[[Page 535]]

144.3 Definitions.
144.4 Policy.
144.5 Responsibilities.
144.6 Procedures.

    Authority: 10 U.S.C. 982.

    Source: 71 FR 76917, Dec. 22, 2006, unless otherwise noted.



Sec. 144.1  Purpose.

    This part implements 10 U.S.C. 982 to establish uniform DoD policies 
for jury service by members of the Armed Forces on active duty.



Sec. 144.2  Applicability.

    The provisions of this part apply to active-duty members of the 
Armed Forces.



Sec. 144.3  Definitions.

    (a) Armed Forces. The Army, the Navy, the Air Force, the Marine 
Corps.
    (b) State. Includes the 50 United States, U.S. Territories, District 
of Columbia, and the Commonwealth of Puerto Rico.
    (c) Active Duty. Full-time duty in the active Military Service of 
the United States; Includes full-time training duty, annual training 
duty, active duty for training, and attendance, while in the active 
Military Service, at a school designated as a Service school by law or 
by the Secretary of the Military Department concerned.
    (d) Operating Forces. Those forces whose primary missions are to 
participate in combat and the integral supporting elements thereof.



Sec. 144.4  Policy.

    It is DoD policy to permit members of the Armed Forces to maximally 
fulfill their civic responsibilities consistent with their military 
duties. For Service members stationed in the United States, serving on a 
State or local jury is one such civic obligation. Service members are 
exempt from jury duty, when it unreasonably would interfere with 
performance of their military duties or adversely affect the readiness 
of a unit, command, or activity.



Sec. 144.5  Responsibilities.

    The Secretaries of the Military Departments, or designees, in 
accordance with regulations prescribed by the Secretary concerned, shall 
determine whether Service members shall be exempt from jury duty. This 
authority may be delegated no lower than to commanders authorized to 
convene special courts-martial.



Sec. 144.6  Procedures.

    The Secretaries of the Military Departments shall publish procedures 
that provide the following:
    (a) When a Service member on active duty is summoned to perform 
State or local jury duty, the Secretary concerned, or the official to 
whom such authority has been delegated, shall decide if such jury duty 
would:
    (1) Interfere unreasonably with the performance of the Service 
members military duties.
    (2) Affect adversely the readiness of the unit, command, or activity 
to which the member is assigned.
    (b) If such jury service would interfere with the Service member's 
military duties or adversely affect readiness, the Service member shall 
be exempted from jury duty. The decision of the Secretary concerned, or 
the official to whom such authority has been delegated, shall be 
conclusive.
    (c) All general and flag officers, commanding officers, and all 
personnel assigned to the operating forces, in a training status, or 
stationed outside the United States are exempt from serving on a State 
or local jury. Such jury service necessarily would interfere 
unreasonably with the performance of military duties by these members 
and adversely affect the readiness of the unit, command, or activity to 
which they are assigned.
    (d) Service members who serve on State or local juries shall not be 
charged leave or lose any pay or entitlements during the period of 
service. All fees accrued to members for jury service are payable to the 
U.S. Treasury. Members are entitled to any reimbursement from the State 
or local jury authority for expenses incurred in the performance of jury 
duty, such as for transportation costs or parking fees.
    (e) Written notice of each exemption determination shall be provided 
to the responsible State or local official who summoned an exempt member 
for jury duty.

[[Page 536]]



PART 145_COOPERATION WITH THE OFFICE OF SPECIAL COUNSEL OF THE MERIT SYSTEMS 

PROTECTION BOARD--Table of Contents



Sec.
145.1 Purpose.
145.2 Applicability and scope.
145.3 Definitions.
145.4 Policy.
145.5 Responsibilities.
145.6 Procedures.

Appendix to Part 145--Legal Representation

    Authority: 5 U.S.C. 301; 10 U.S.C. 133.

    Source: 51 FR 17178, May 9, 1986, unless otherwise noted.



Sec. 145.1  Purpose.

    This part establishes policy, assigns responsibilities, and 
prescribes procedures for cooperation with the Office of Special Counsel 
(OSC) of the Merit Systems Protection Board (MSPB) in fulfilling the 
responsibilities of the Special Counsel under Pub. L. 95-454 and 5 CFR 
1201 and 1250 to conduct investigations of alleged prohibited personnel 
practices and to ensure the investigation of other allegations of 
improper or illegal conduct referred to the Department of Defense by the 
OSC. This part provides internal guidance to DoD officials, and does not 
establish an independent basis for any person or organization to assert 
a right, benefit, or privilege.



Sec. 145.2  Applicability and scope.

    (a) This part applies to the Office of the Secretary of Defense 
(OSD), the Military Departments, the Office of the Joint Chiefs of Staff 
(OJCS), the Inspector General, Department of Defense (IG, DoD) and the 
Defense Agencies (hereafter referred to collectively ``as DoD 
Components'').
    (b) The provisions of this part that relate to prohibited personnel 
practices do not apply to the Defense Intelligence Agency (DIA) or the 
National Security Agency (NSA), as prescribed by 5 U.S.C. 
2302(a)(2)(C)(ii.).
    (c) This part does not restrict the IG, DoD, in coordinating 
investigative efforts on individual cases with the OSC where concurrent 
jurisdiction exists.



Sec. 145.3  Definitions.

    Improper or illegal conduct. (a) A violation of any law, rule, or 
regulation in connection with Government misconduct; or
    (b) Mismanagement, a gross waste of funds, an abuse of authority, or 
a substantial and specific danger to public health or safety.
    Office of the Secretary of Defense (OSD). (a) The immediate offices 
of the Secretary, the Deputy Secretary, the Assistant Secretaries, 
Assistants to the Secretary, and other officials serving the Secretary 
of Defense directly.
    (b) The field activities of the Secretary of Defense.
    (c) The Organization of the Joint Chiefs of Staff.
    (d) The Unified and Specified Commands.
    Personnel action. (a) An appointment.
    (b) A promotion.
    (c) An adverse action under 5 U.S.C. 7501 et seq. or other 
disciplinary or corrective action.
    (d) A detail, transfer, or reassignment.
    (e) A reinstatement.
    (f) A restoration.
    (g) A reemployment.
    (h) A performance evaluation under 5 U.S.C. 4301 et seq.
    (i) A decision concerning pay, benefits, or awards, or concerning 
education or training if the education or training may reasonably be 
expected to lead to an appointment, promotion, performance evaluation, 
or other personnel action.
    (j) Any other significant change in duties or responsibilities that 
is inconsistent with the employee's salary or grade level.
    Prohibited personnel practice. Action taken by an employee who has 
authority to take, direct others to take, recommend, or approve any 
personnel action:
    (a) That discriminates for or against any employee or applicant for 
employment on the basis of race, color, religion, sex, national origin, 
age, handicapping condition, marital status, or political affiliation, 
as prohibited by certain specified laws (see 5 U.S.C. 2302(b)(1).
    (b) To solicit or consider any recommendation or statement, oral or

[[Page 537]]

written, with respect to any individual who requests, or is under 
consideration for, any personnel action, unless the recommendation or 
statement is based on the personal knowledge or records of the person 
furnishing it, and consists of an evaluation of the work performance, 
ability, aptitude, or general qualifications of the individual, or an 
evaluation of the character, loyalty, or suitability of such individual.
    (c) To coerce the political activity of any person (including the 
providing of any political contribution or service), or take any action 
against any employee or applicant for employment as a reprisal for the 
refusal of any person to engage in such political activity.
    (d) To deceive or willfully obstruct any person with respect to such 
person's right to compete for employment.
    (e) To influence any person to withdraw from competition for any 
position for the purpose of improving or injuring the prospects of any 
other person for employment.
    (f) To grant any preference or advantage not authorized by law, 
rule, or regulation to any employee or applicant for employment 
(including defining the scope or manner of competition or the 
requirements for any position) for the purpose of improving or injuring 
the prospects of any particular person for employment.
    (g) To appoint, employ, promote, advance, or advocate for 
appointment, employment, promotion, or advancement, in or to a civilian 
position any individual who is a relative (as defined in 5 U.S.C. 3110) 
of the employee if the position is in the agency in which the employee 
is serving as a public official (as defined in 5 U.S.C. 3110) or over 
which the employee exercises jurisdiction or control as an official.
    (h) To take or fail to take a personnel action with respect to any 
employee or applicant for employment as a reprisal for being a 
whistleblower. (See whistleblower)
    (i) To take or fail to take a personnel action against an employee 
or applicant for employment as a reprisal for the exercise of any appeal 
right granted by law, rule, or regulation.
    (j) To discriminate for or against any employee or applicant for 
employment on the basis of conduct that does not adversely affect the 
performance of the employee or applicant or the performance of others.
    (k) To take or fail to take any other personnel action if the taking 
of, or failure to take, such action violates any law, rule, or 
regulation implementing, or directly concerning, the merit system 
principles contained in 5 U.S.C. 2301.
    Whistleblower. A present or former Federal employee or applicant for 
Federal employment who discloses information he or she reasonably 
believes evidences:
    (a) A violation of any law, rule, or regulation.
    (b) Mismanagement, a gross waste of funds, or an abuse of authority.
    (c) A substantial or specific danger to public health or safety.
    (d) Such disclosure qualifies if it is not specifically prohibited 
by statute and if such information is not specifically required by 
Executive Order to be kept secret in the interest of national defense or 
the conduct of foreign affairs.
    (e) Where the information disclosed affects only the personal 
situation of the complaintant, it is generally to be regarded as an 
allegation of a prohibited personnel practice or violation of other 
civil service law, rule, or regulation, and the complainant will not be 
considered a whistleblower.



Sec. 145.4  Policy.

    It is DoD policy that:
    (a) Civilian personnel actions taken by DoD management officials, 
civilian and military, shall conform to laws and regulations 
implementing established merit system principles and must be free of any 
prohibited personnel practices, as described in 5 U.S.C. 2302 and Sec. 
145.3 of this part.
    (b) It is the responsibility of each DoD management official to take 
vigorous corrective action and, when appropriate, to initiate 
disciplinary measures when prohibited personnel practices occur.
    (c) DoD Components shall cooperate with the Office of Special 
Counsel by:
    (1) Promoting merit system principles in civilian employment 
programs within the Department of Defense.

[[Page 538]]

    (2) Investigating and reporting on allegations of improper or 
illegal conduct forwarded to the Component by the OSC pursuant to 5 
U.S.C. 1206(b) (2) or (3).
    (3) Facilitating orderly investigation by the OSC of alleged 
prohibited personnel practices and other matters assigned for 
investigation to the OSC by law, such as the Freedom of Information Act 
and the Hatch Act.
    (d) DoD Components shall cooperate with the OSC by providing 
appropriate assistance and information to its representatives during 
their investigations and by furnishing to the OSC investigators copies 
of releasable documents requested under the authority of the Civil 
Service Reform Act of 1978, 5 CFR 1250, the Privacy Act, and Civil 
Service Rule V.
    (e) Close coordination between DoD and OSC personnel during an OSC 
investigation is encouraged to eliminate duplication of effort, and to 
avoid unnecessary delay in initiating, when appropriate, corrective or 
disciplinary action. This coordination shall be conducted in full 
recognition of the independent statutory basis for the OSC, as provided 
in Pub. L. 95-454 and of the responsibilities of the Department of 
Defense.
    (f) OSC investigative requests involving classified information 
shall be accorded special attention and prompt consideration under 
existing administrative procedures.
    (g) When OSC and a DoD Component or an employee assigned DoD counsel 
are engaged in litigation, release of information shall be accomplished 
pursuant to MSPB rules of discovery (5 CFR 1201, subpart B.).



Sec. 145.5  Responsibilities.

    (a) The Secretaries of the Military Departments and the Director, 
Defense Logistics Agency (DLA), shall prescribe implementing documents 
to ensure that:
    (1) The policies, standards, and procedures set forth in this part 
are administered in a manner that encourages consistency in responding 
to investigations of alleged prohibited personnel practices.
    (2) Alleged illegal or improper conduct referred to a Military 
Department or the DLA by the OSC or by OSD is carefully investigated.
    (3) There is full cooperation with the IG, DoD, and the General 
Counsel, Department of Defense (GC, DoD), including assignment of 
military and civilian attorneys to represent employees suspected or 
accused by the OSC of committing a prohibited personnel practice or an 
otherwise illegal or improper act.
    (b) The General Counsel, Department of Defense (GC, DoD) shall 
provide overall legal guidance, whether by the issuance of regulations 
or otherwise, on all issues concerning cooperation with the OSC. This 
authority extends to:
    (1) Ensuring that DoD legal counsel is assigned upon request to 
represent a DoD employee suspected or accused by the OSC of committing a 
prohibited personnel practice or an illegal or improper act when the act 
complained of was within the scope of the employee's official 
responsibilities and such representation is in the interest of the 
Department of Defense; or, in unusual situations, that outside legal 
counsel is engaged where the use of DoD counsel would be inappropriate, 
and the same conditions are satisfied.
    (2) Providing DoD legal counsel to seek intervention for the purpose 
of representing the interests of OSD or a Defense agency (other than the 
DLA) in an MSPB hearing resulting from charges of misconduct against an 
employee of OSD or a Defense agency, under the authority of the Civil 
Service Reform Act of 1978.
    (3) Seeking the assistance of the Department of Justice in 
responding to requests by employees for legal representation in 
obtaining judicial review of an order by the MSPB, under 5 U.S.C. 1207.
    (4) Modifying Sec. 145.3 and Appendix to this part and issuing 
supplementary instructions concerning all aspects of DoD cooperation 
with the OSC, including instructions on OSC investigations of allegedly 
arbitrary and capricious withholding of information under the Freedom of 
Information Act or violations of the Hatch Act.
    (5) Reviewing for adequacy and legal sufficiency with the IG, DoD, 
each report of an investigation that must be personally reviewed by the 
Secretary

[[Page 539]]

or Deputy Secretary of Defense on action taken or to be taken in 
response to an OSC finding of reasonable cause to believe there has been 
a violation of law, rule, or regulation, not including a prohibited 
personnel practice or allegation referred to the Attorney General of the 
United States for appropriate action.
    (c) The Inspector General, Department of Defense (IG, DoD) shall:
    (1) Investigate, or cause to be investigated, as appropriate, any 
complaint referred to the Department of Defense by OSC.
    (2) Coordinate, where feasible, investigative efforts by DoD 
Components and the OSC, with particular emphasis on those conducted or 
initiated by action of the OSC.
    (3) Submit the results of any investigation conducted under this 
part to the appropriate General Counsel.
    (d) The Deputy Assistant Secretary of Defense (Administration) 
(DASD(A)) shall serve as the Senior Management Official, as described in 
Sec. 145.6(b) concerning allegations by the OSC of prohibited personnel 
practices or other illegal or improper acts in the OSD.
    (e) The General Counsels of the Military Departments and the General 
Counsel of the Defense Logistics Agency shall have the same authority 
for their respective Components as given to the General Counsel, DoD, 
under paragraphs (b) (1) and (2) of this section.



Sec. 145.6  Procedures.

    (a) Allegations of improper or illegal conduct received from the OSC 
under 5 U.S.C. 1206(b)(2), (3), or (c)(3). (1) Allegations of improper 
or illegal conduct referred by the OSC to the Secretary of Defense or to 
a Defense agency (other than the DLA) shall be forwarded to the IG, DoD.
    (2) Allegations of improper or illegal conduct referred to a 
Military Department or to the DLA by the OSC shall be forwarded to the 
General Counsel of that Component.
    (3) Upon receipt of a referral under paragraph (a) (1) or (2) of 
this section IG, DoD, or the GC of the Component concerned, as 
appropriate, shall ensure compliance with the Civil Service Reform Act 
of 1978 by obtaining a suitable investigation of an allegation, 
including compliance with time limits for reporting results of the 
investigation and personal review of the report by the head of the 
Component when required.
    (4) Copies of each allegation referred under paragraph (a)(2) shall 
be forwarded by the General Counsel concerned to the IG, DoD.
    (b) OSC Investigations of Prohibited Personnel Practices. (1) The 
head of each DoD Component shall designate a Senior Management Official 
to:
    (i) Serve as a point of contact in providing assistance to the OSC 
in conducting investigations of alleged prohibited activities before any 
designation of an attorney of record for the Component or individual 
respondent for matters in litigation.
    (ii) Monitor those investigations.
    (iii) Ensure that appropriate Component personnel are fully apprised 
of the nature and basis for an OSC investigation, as well as the rights 
and duties of Component personnel in regard to such investigations.
    (iv) Ensure that any corrective or disciplinary action considered 
appropriate because of facts disclosed by such an investigation is 
accomplished under paragraph (b)(2), in a timely manner.
    (2) The designated Senior Management Official shall have authority 
to:
    (i) Refer to responsible officials recommendations by the OSC for 
corrective action.
    (ii) Seek OSC approval of proposed disciplinary action against an 
employee for an alleged prohibited personnel practice or illegal or 
improper act under investigation by the OSC when it is determined that 
such discipline is warranted.
    (iii) Ensure that disciplinary action against an employee adjudged 
at fault following completion of an OSC investigation has been 
considered to avoid the need for a proceeding before the MSPB.
    (iv) Ensure that information concerning members of the Armed Forces 
who are found by the Component to have committed a prohibited personnel 
practice or other violation of this Directive in the exercise of 
authority over civilian personnel is referred to appropriate military 
authority.

[[Page 540]]

    (3) The Senior Management Official shall:
    (i) Establish a system under which an employee is identified to 
serve as the Liaison Officer for any OSC investigator who may initiate 
an investigation at a facility, base, or installation for which the 
employee is assigned liaison duties. It shall be the responsibility of 
the Liaison Officer to:
    (A) Assist the OSC investigator.
    (B) Ensure that all OSC requests for documents are in writing.
    (C) Process such requests, as well as all requests for interviews.
    (ii) Determine, to the extent practicable, whether an investigation 
is being, or has been, conducted that replicates in whole or in part the 
proposed or incomplete investigation by the OSC, and convey that 
information to the OSC whenever this might avoid redundant investigative 
effort.
    (iii) Inform the General Counsel of the Component concerned of any 
OSC investigation and consult with the General Counsel on any legal 
issue related to an OSC investigation.
    (iv) Ensure that Component personnel involved are given timely legal 
and policy advice, through arrangements effected by the Liaison Officer, 
on the nature and basis for an OSC investigation, the authority of the 
OSC, and the rights and duties of Component personnel, including those 
set forth in Appendix.
    (v) Inform the IG, DoD, of any OSC investigation of an alleged 
prohibited personnel practice that is identified as having resulted from 
a whistleblower complaint or involves an allegation of otherwise illegal 
or improper conduct.



             Sec. Appendix to Part 145--Legal Representation

    1. An employee or member of the Armed Forces asked to provide 
information (testimonial or documentary) to the OSC in the course of an 
investigation by that office may obtain legal advice from DoD attorneys, 
both civilian and military, on that employee's or members's rights and 
obligations. This includes assistance at any interviews with OSC 
investigators. However, the attorney-client relationship shall not be 
established unless the employee is suspected or accused by the OSC of 
committing a prohibited personnel practice or other illegal or improper 
act and has been assigned DoD counsel.
    2. An employee who believes that he or she is suspected or has been 
accused by the OSC of committing a prohibited personnel practice or 
other illegal or improper act may obtain legal representation from the 
Department of Defense under the conditions prescribed in Sec. 145(b)(1) 
of this part, except as provided in section 7, below. The attorney 
assigned shall be a military member or employee from another Component 
whenever an attorney from the same Component is likely to face a 
conflict between his or her ethical obligation to the employee client 
and to the Component employer, and in any case where the suspected or 
accused employee has requested representation from another Component. 
Outside legal counsel may be retained by the Component on behalf of the 
employee only under unusual circumstances and only with the personal 
approval of the General Counsel of the Department of Defense.
    3. The General Counsel responsible for authorizing representation 
shall determine whether a conflict is liable to occur if an attorney 
from the same Component is assigned to represent the employee and, in 
that case or in a case in which the suspected or accused employee has 
requested representation from another Component, shall seek the 
assistance of another General Counsel in obtaining representation from 
outside the Component. The General Counsels of the Military Departments 
and the DLA shall ensure the availability of appropriately trained 
counsel for assignment to such cases.
    4. To obtain legal representation the employee:
    a. Must request legal representation, in writing, together with all 
process and pleadings served, and explain the circumstances that justify 
DoD legal assistance.
    b. Indicate whether he or she has retained legal counsel from 
outside the Department of Defense.
    c. Obtain a written certification from his or her supervisor that 
the employee was acting within the scope of his of her official duties, 
and that no adverse or disciplinary personnel action against the 
employee for the conduct being investigated by the OSC has been 
initiated by the Component.
    5. Employee requests for legal representation must be approved by 
the General Counsel, DoD, for employees of OSD or a Defense Agency 
(other than the DLA), or by the General Counsel of a Military Department 
or the General Counsel of the DLA for employees of those Components.
    6. The conditions of legal representation must be explained to the 
accused employee in writing and accepted in writing by that employee.
    7. DoD resources may not be used to provide legal representation for 
an employee with respect to a DoD disciplinary action against the 
employee for committing or participating in a prohibited personnel 
practice

[[Page 541]]

or for engaging in illegal or improper conduct, regardless of whether 
that participation or conduct is also the basis for disciplinary action 
proposed by the OSC.
    8. After approval of an employee's request, under section 4, above, 
a DoD attorney shall be assigned (or, in unusual circumstances, outside 
counsel retained) as the employee's representative in matters pending 
before the OSC or MSPB. This approval may be limited to representing the 
employee only with respect to some of the pending matters if other 
specific matters of concern to the OSC or MSPB do not satisfy the 
requirements of his Directive.
    9. An attorney-client relationship shall be established and 
continued between the suspected or accused employee and assigned DoD 
counsel.
    10. In representing a DoD employee under this part, a DoD attorney 
designated counsel for the employee shall act as a vigorous advocate of 
the employee's individual legal interests before the OSC or MSPB; the 
attorney's professional responsibility to the Department of Defense and 
his or her employing Component will be satisfied by fulfilling this 
responsibility to the employee. Legal representation may be terminated 
only with the approval of the General Counsel who authorized 
representation, and normally only on the basis of information not 
available at the time the attorney was assigned.
    11. The attorney-client relationship may be terminated if the 
assigned DoD counsel for the employee determines, with the approval of 
the General Counsel who authorizes representation, that:
    a. The employee was acting outside the scope of his or her official 
duties when engaging in the conduct that is the basis for the OSC 
investigation or charge.
    b. Termination of the professional representation is not in 
violation of the rules of professional conduct applicable to the 
assigned counsel.
    12. The DoD attorney designated counsel may request relief from the 
duties of representation or counseling without being required to furnish 
explanatory information that might compromise the assurance to the 
client of confidentiality.
    13. This part authorizes cognizant DoD officials to approve a 
represented employee's request for travel, per diem, witness 
appearances, or other departmental support necessary to ensure effective 
legal representation of the employee by the designated counsel.
    14. An employee's participation in OSC investigations, MSPB 
hearings, and other related proceedings shall be considered official 
departmental business for time and attendance requirements and similar 
purposes.
    15. The following advice to employees questioned during the course 
of an OSC investigation may be appropriate in response to the most 
frequent inquiries:
    a. An employee may decline to provide a ``yes'' or ``no'' answer in 
favor of a more qualified answer when this is necessary to ensure 
accuracy in responding to an OSC interviewer's questions.
    b. Requests for clarification of both questions and answers are 
appropriate to avoid misinterpretation.
    c. Means to ensure verification of an interview by OSC investigators 
are appropriate, whether the employee is or is not accompanied by a 
legal representative. Tape recorders may only be used for this purpose 
when:
    (1) The recorder is used in full view.
    (2) All attendees are informed.
    (3) The OSC interrogator agrees to the tape recording of the 
proceeding.
    d. Any errors that appear in a written summary of an interview 
prepared by the interviewer should be corrected before the employee 
signs the statement. The employee is not required to sign any written 
summary that is not completely accurate. An employee may make a copy of 
the summary for his or her own use as a condition of signing.



PART 147_ADJUDICATIVE GUIDELINES FOR DETERMINING ELIGIBILITY FOR ACCESS TO 

CLASSIFIED INFORMATION--Table of Contents



                    Subpart A_Adjudicative Guidelines

Sec.
147.1 Introduction.
147.2 Adjudicative process.
147.3 Guideline A--Allegiance to the United States.
147.4 Guideline B--Foreign influence.
147.5 Guideline C--Foreign preference.
147.6 Guideline D--Sexual behavior.
147.7 Guideline E--Personal conduct.
147.8 Guideline F--Financial considerations.
147.9 Guideline G--Alcohol consumption.
147.10 Guideline H--Drug involvement.
147.11 Guideline I--Emotional, mental, and personality disorders.
147.12 Guideline J--Criminal conduct.
147.13 Guideline K--Security violations.
147.14 Guideline L--Outside activities.
147.15 Guideline M--Misuse of information technology systems.

                    Subpart B_Investigative Standards

147.18 Introduction.
147.19 The three standards.
147.20 Exception to periods of coverage.
147.21 Expanding investigations.
147.22 Transferability.
147.23 Breaks in service.
147.24 The national agency check.

[[Page 542]]


Attachment A to Subpart B--Standard A--National Agency Check With Local 
          Agency Checks and Credit Check (NACLC)
Attachment B to Subpart B--Standard B--Single Scope Background 
          Investigation (SSBI)
Attachment C to Subpart B--Standard C--Single Scope Background 
          Investigation Periodic Reinvestigation (SSBI-PR)
Attachment D to Subpart B--Decision Tables

                Subpart C_Guidelines for Temporary Access

147.28 Introduction.
147.29 Temporary eligibility for access.
147.30 Temporary eligibility for access at the CONFIDENTIAL AND SECRET 
          levels and temporary eligibility for ``L'' access 
          authorization.
147.31 Temporary eligibility for access at the TOP SECRET levels and 
          temporary eligibility for ``Q'' access authorization. For 
          someone who is the subject of a favorable investigation not 
          meeting the investigative standards for access at those 
          levels.
147.32 Temporary eligibility for access at the TOP SECRET and SCI levels 
          and temporary eligibility for ``Q'' access authorization: For 
          someone who is not the subject of a current, favorable 
          personnel or personnel-security investigation of any kind.
147.33 Additional requirements by agencies.

    Authority: E.O. 12968 (60 FR 40245, 3 CFR 1995 Comp., p 391).

    Source: 63 FR 4573, Jan. 30, 1998, unless otherwise noted.



                         Subpart A_Adjudication



Sec. 147.1  Introduction.

    The following adjudicative guidelines are established for all United 
States Government civilian and military personnel, consultants, 
contractors, employees of contractors, licensees, certificate holders or 
grantees and their employees and other individuals who require access to 
classified information. They apply to persons being considered for 
initial or continued eligibility for access to classified information, 
to include sensitive compartmented information and special access 
programs and are to be used by government departments and agencies in 
all final clearance determinations.



Sec. 147.2  Adjudicative process.

    (a) The adjudicative process is an examination of a sufficient 
period of a person's life to make an affirmative determination that the 
person is eligible for a security clearance. Eligibility for access to 
classified information is predicated upon the individual meeting these 
personnel security guidelines. The adjudicative process is the careful 
weighing of a number of variables known as the whole person concept. 
Available, reliable information about the person, past and present, 
favorable and unfavorable, should be considered in reaching a 
determination. In evaluating the relevance of an individual's conduct, 
the adjudicator should consider the following actors:
    (1) The nature, extent, and seriousness of the conduct;
    (2) The circumstances surrounding the conduct, to include 
knowledgeable participation;
    (3) The frequency and recency of the conduct;
    (4) The individual's age and maturity at the time of the conduct;
    (5) The voluntariness of participation;
    (6) The presence or absence of rehabilitation and other pertinent 
behavioral changes;
    (7) The motivation for the conduct;
    (8) The potential for pressure, coercion, exploitation, or duress;
    (9) The likelihood of continuation of recurrence.
    (b) Each case must be judged on its own merits, and final 
determination remains the responsibility of the specific department or 
agency. Any doubt as to whether access to classified information is 
clearly consistent with national security will be resolved in favor of 
the national security.
    (c) The ultimate determination of whether the granting or continuing 
of eligibility for a security clearance is clearly consistent with the 
interests of national security must be an overall common sense 
determination based upon careful consideration of the following, each of 
which is to be evaluated in the context of the whole person, as 
explained further below:
    (1) Guideline A: Allegiance to the United States.
    (2) Guideline B: Foreign influence.

[[Page 543]]

    (3) Guideline C: Foreign preference.
    (4) Guideline D: Sexual behavior.
    (5) Guideline E: Personal conduct.
    (6) Guideline F: Financial considerations.
    (7) Guideline G: Alcohol consumption.
    (8) Guideline H: Drug involvement.
    (9) Guideline I: Emotional, mental, and personality disorders.
    (10) Guideline J: Criminal conduct.
    (11) Guideline K: Security violations.
    (12) Guideline L: Outside activities.
    (13) Guideline M: Misuse of Information Technology Systems.
    (d) Although adverse information concerning a single criterion may 
not be sufficient for an unfavorable determination, the individual may 
be disqualified if available information reflects a recent or recurring 
pattern of questionable judgment, irresponsibility, or emotionally 
unstable behavior. Notwithstanding, the whole person concept, pursuit of 
further investigations may be terminated by an appropriate adjudicative 
agency in the face of reliable, significant, disqualifying, adverse 
information.
    (e) When information of security concern becomes known about an 
individual who is currently eligible for access to classified 
information, the adjudicator should consider whether the person:
    (1) Voluntarily reported the information;
    (2) Was truthful and complete in responding to questions;
    (3) Sought assistance and followed professional guidance, where 
appropriate;
    (4) Resolved or appears likely to favorably resolve the security 
concern;
    (5) Has demonstrated positive changes in behavior and employment;
    (6) Should have his or her access temporarily suspended pending 
final adjudication of the information.
    (f) If after evaluating information of security concern, the 
adjudicator decides that the information is not serious enough to 
warrant a recommendation of disapproval or revocation of the security 
clearance, it may be appropriate to recommend approval with a warning 
that future incidents of a similar nature may result in revocation of 
access.



Sec. 147.3  Guideline A--Allegiance to the United States.

    (a) The concern. An individual must be of unquestioned allegiance to 
the United States. The willingness to safeguard classified information 
is in doubt if there is any reason to suspect an individual's allegiance 
to the Untied States.
    (b) Conditions that could raise a security concern and may be 
disqualifying include: (1) Involvement in any act of sabotage, 
espionage, treason, terrorism, sedition, or other act whose aim is to 
overthrow the Government of the United States or alter the form of 
government by unconstitutional means;
    (2) Association or sympathy with persons who are attempting to 
commit, or who are committing, any of the above acts;
    (3) Association or sympathy with persons or organizations that 
advocate the overthrow of the United States Government, or any state or 
subdivision, by force or violence or by other unconstitutional means;
    (4) Involvement in activities which unlawfully advocate or practice 
the commission of acts of force or violence to prevent others from 
exercising their rights under the Constitution or laws of the United 
States or of any state.
    (c) Conditions that could mitigate security concerns include: (1) 
The individual was unaware of the unlawful aims of the individual or 
organization and severed ties upon learning of these;
    (2) The individual's involvement was only with the lawful or 
humanitarian aspects of such an organization;
    (3) Involvement in the above activities occurred for only a short 
period of time and was attributable to curiosity or academic interest;
    (4) The person has had no recent involvement or association with 
such activities.



Sec. 147.4  Guideline B--Foreign influence.

    (a) The concern. A security risk may exist when an individual's 
immediate family, including cohabitants and other persons to whom he or 
she may be bound by affection, influence, or obligation are not citizens 
of the Untied States or may be subject to duress.

[[Page 544]]

These situations could create the potential for foreign influence that 
could result in the compromise of classified information. Contacts with 
citizens of other countries or financial interests in other countries 
are also relevant to security determinations if they make an individual 
potentially vulnerable to coercion, exploitation, or pressure.
    (b) Conditions that could raise a security concern and may be 
disqualifying include: (1) An immediate family member, or a person to 
whom the individual has close ties of affection or obligation, is a 
citizen of, or resident or present in, a foreign country;
    (2) Sharing living quarters with a person or persons, regardless of 
their citizenship status, if the potential for adverse foreign influence 
or duress exists;
    (3) Relatives, cohabitants, or associates who are connected with any 
foreign government;
    (4) Failing to report, where required, associations with foreign 
nationals;
    (5) Unauthorized association with a suspected or known collaborator 
or employee of a foreign intelligence service;
    (6) Conduct which may make the individual vulnerable to coercion, 
exploitation, or pressure by a foreign government;
    (7) Indications that representatives or nationals from a foreign 
country are acting to increase the vulnerability of the individual to 
possible future exploitation, coercion or pressure;
    (8) A substantial financial interest in a country, or in any foreign 
owned or operated business that could make the individual vulnerable to 
foreign influence.
    (c) Conditions that could mitigate security concerns include: (1) A 
determination that the immediate family member(s) (spouse, father, 
mother, sons, daughters, brothers, sisters), cohabitant, or associate(s) 
in question are not agents of a foreign power or in a position to be 
exploited by a foreign power in a way that could force the individual to 
choose between loyalty to the person(s) involved and the United States;
    (2) Contacts with foreign citizens are the result of official United 
States Government business;
    (3) Contact and correspondence with foreign citizens are casual and 
infrequent;
    (4) The individual has promptly complied with existing agency 
requirements regarding the reporting of contacts, requests, or threats 
from persons or organizations from a foreign country;
    (5) Foreign financial interests are minimal and not sufficient to 
affect the individual's security responsibilities.



Sec. 147.5  Guideline C--Foreign preference.

    (a) The concern. When an individual acts in such a way as to 
indicate a preference for a foreign country over the United States, then 
he or she may be prone to provide information or make decisions that are 
harmful to the interests of the United States.
    (b) Conditions that could raise a security concern and may be 
disqualifying include:
    (1) The exercise of dual citizenship;
    (2) Possession and/or use of a foreign passport;
    (3) Military service or a willingness to bear arms for a foreign 
country;
    (4) Accepting educational, medical, or other benefits, such as 
retirement and social welfare, from a foreign country;
    (5) Residence in a foreign country to meet citizenship requirements;
    (6) Using foreign citizenship to protect financial or business 
interests in another country;
    (7) Seeking or holding political office in the foreign country;
    (8) Voting in foreign elections;
    (9) Performing or attempting to perform duties, or otherwise acting, 
so as to serve the interests of another government in preference to the 
interests of the United States.
    (c) Conditions that could mitigate security concerns include: (1) 
Dual citizenship is based solely on parents' citizenship or birth in a 
foreign country;
    (2) Indicators of possible foreign preference (e.g., foreign 
military service) occurred before obtaining United States citizenship;
    (3) Activity is sanctioned by the United States;

[[Page 545]]

    (4) Individual has expressed a willingness to renounce dual 
citizenship.



Sec. 147.6  Guidance D--Sexual behavior.

    (a) The concern. Sexual behavior is a security concern if it 
involves a criminal offense, indicates a personality or emotional 
disorder, may subject the individual to coercion, exploitation, or 
duress, or reflects lack of judgment or discretion. \1\ Sexual 
orientation or preference may not be used as a basis for or a 
disqualifying factor in determining a person's eligibility for a 
security clearance.
---------------------------------------------------------------------------

    \1\ The adjudicator should also consider guidelines pertaining to 
criminal conduct (Guideline J) and emotional, mental and personality 
disorders (Guideline I) in determining how to resolve the security 
concerns raised by sexual behavior.
---------------------------------------------------------------------------

    (b) Conditions that could raise a security concern and may be 
disqualifying include: (1) Sexual behavior of a criminal nature, whether 
or not the individual has been prosecuted;
    (2) Compulsive or addictive sexual behavior when the person is 
unable to stop a pattern or self-destructive or high-risk behavior or 
that which is symptomatic of a personally disorder;
    (3) Sexual behavior that causes an individual to be vulnerable to 
coercion, exploitation, or duress;
    (4) Sexual behavior of a public nature and/or that which reflects 
lack of discretion or judgment.
    (c) Conditions that could mitigate security concerns include: (1) 
The behavior occurred during or prior to adolescence and there is no 
evidence of subsequent conduct of a similar nature;
    (2) The behavior was not recent and there is no evidence of 
subsequent conduct of a similar nature;
    (3) There is no other evidence of questionable judgment, 
irresponsibility, or emotional instability;
    (4) The behavior no longer serves as a basis for coercion, 
exploitation, or duress.



Sec. 147.7  Guideline E--Personal conduct.

    (a) The concern. Conduct involving questionable judgment, 
untrustworthiness, unreliability, lack of candor, dishonesty, or 
unwillingness to comply with rules and regulations could indicate that 
the person may not properly safeguard classified information. The 
following will normally result in an unfavorable clearance action or 
administrative termination of further processing for clearance 
eligibility:
    (1) Refusal to undergo or cooperate with required security 
processing, including medical and psychological testing;
    (2) Refusal to complete required security forms, releases, or 
provide full, frank and truthful answers to lawful questions of 
investigators, security officials or other representatives in connection 
with a personnel security or trustworthiness determination.
    (b) Conditions that could raise a security concern and may be 
disqualifying also include: (1) Reliable, unfavorable information 
provided by associates, employers, coworkers, neighbors, and other 
acquaintances;
    (2) The deliberate omission, concealment, or falsification of 
relevant and material facts from any personnel security questionnaire, 
personal history statement, or similar form used to conduct 
investigations, determine employment qualifications, award benefits or 
status, determine security clearance eligibility or trustworthiness, or 
award fiduciary responsibilities;
    (3) Deliberately providing false or misleading information 
concerning relevant and material matters to an investigator, security 
official, competent medical authority, or other representative in 
connection with a personnel security or trustworthiness determination;
    (4) Personal conduct or concealment of information that may increase 
an individual's vulnerability to coercion, exploitation, or duties, such 
as engaging in activities which, if known, may affect the person's 
personal, professional, or community standing or render the person 
susceptible to blackmail;
    (5) A pattern of dishonesty or rule violations, including violation 
of any written or recorded agreement made between the individual and the 
agency;
    (6) Association with persons involved in criminal activity.

[[Page 546]]

    (c) Conditions that could mitigate security concerns include: (1) 
The information was unsubstantiated or not pertinent to a determination 
of judgment, trustworthiness, or reliability;
    (2) The falsification was an isolated incident, was not recent, and 
the individual has subsequently provided correct information 
voluntarily;
    (3) The individual made prompt, good faith efforts to correct the 
falsification before being confronted with the facts;
    (4) Omission of material facts was caused or significantly 
contributed to by improper or inadequate advice of authorized personnel, 
and the previously omitted information was promptly and fully provided;
    (5) The individual has taken positive steps to significantly reduce 
or eliminate vulnerability to coercion, exploitation, or duress;
    (6) A refusal to cooperate was based on advice from legal counsel or 
other officials that the individual was not required to comply with 
security processing requirements and, upon being made aware of the 
requirement, fully and truthfully provided the requested information;
    (7) Association with persons involved in criminal activities has 
ceased.



Sec. 147.8  Guideline F--Financial considerations.

    (a) The concern. An individual who is financially overextended is at 
risk of having to engage in illegal acts to generate funds. Unexplained 
affluence is often linked to proceeds from financially profitable 
criminal acts.
    (b) Conditions that could raise a security concern and may be 
disqualifying include: (1) A history of not meeting financial 
obligations;
    (2) Deceptive or illegal financial practices such as embezzlement, 
employee theft, check fraud, income tax evasion, expense account fraud, 
filing deceptive loan statements, and other intentional financial 
breaches of trust;
    (3) Inability or unwillingness to satisfy debts;
    (4) Unexplained affluence;
    (5) Financial problems that are linked to gambling, drug abuse, 
alcoholism, or other issues of security concern.
    (c) Conditions that could mitigate security concerns include: (1) 
The behavior was not recent;
    (2) It was an isolated incident;
    (3) The conditions that resulted in the behavior were largely beyond 
the person's control (e.g., loss of employment, a business downtrun, 
unexpected medical emergency, or a death, divorce or separation);
    (4) The person has received or is receiving counseling for the 
problem and there are clear indications that the problem is being 
resolved or is under control;
    (5) The affluence resulted from a legal source;
    (6) The individual initiated a good-faith effort to repay overdue 
creditors or otherwise resolve debts.



Sec. 147.9  Guideline G--Alcohol consumption.

    (a) The concern. Excessive alcohol consumption often leads to the 
exercise of questionable judgment, unreliability, failure to control 
impulses, and increases the risk of unauthorized disclosure of 
classified information due to carelessness.
    (b) Conditions that could raise a security concern and may be 
disqualifying include: (1) Alcohol-related incidents away from work, 
such as driving while under the influence, fighting, child or spouse 
abuse, or other criminal incidents related to alcohol use;
    (2) Alcohol-related incidents at work, such as reporting for work or 
duty in an intoxicated or impaired condition, or drinking on the job;
    (3) Diagnosis by a credentialed medical professional (e.g., 
physician, clinical psychologist, or psychiatrist) of alcohol abuse or 
alcohol dependence;
    (4) Evaluation of alcohol abuse or alcohol dependence by a licensed 
clinical social worker who is a staff member of a recognized alcohol 
treatment program;
    (5) Habitual or binge consumption of alcohol to the point of 
impaired judgment;
    (6) Consumption of alcohol, subsequent to a diagnosis of alcoholism 
by a credentialed medical professional and following completion of an 
alcohol rehabilitation program.

[[Page 547]]

    (c) Conditions that could mitigate security concerns include: (1) 
The alcohol related incidents do not indicate a pattern;
    (2) The problem occurred a number of years ago and there is no 
indication of a recent problem;
    (3) Positive changes in behavior supportive of sobriety;
    (4) Following diagnosis of alcohol abuse or alcohol dependence, the 
individual has successfully completed impatient or outpatient 
rehabilitation along with aftercare requirements, participates 
frequently in meetings of Alcoholics Anonymous or a similar 
organization, has abstained from alcohol for a period of at least 12 
months, and received a favorable prognosis by a credentialed medical 
professional or a licensed clinical social worker who is a staff member 
of a recognized alcohol treatment program.



Sec. 147.10  Guideline H--Drug involvement.

    (a) The concern. (1) Improper or illegal involvement with drugs 
raises questions regarding an individual's willingness or ability to 
protect classified information. Drug abuse or dependence may impair 
social or occupational functioning, increasing the risk of an 
unauthorized disclosure of classified information.
    (2) Drugs are defined as mood and behavior altering substances, and 
include:
    (i) Drugs, materials, and other chemical compounds identified and 
listed in the Controlled Substances Act of 1970, as amended (e.g., 
marijuana or cannabis, depressants, narcotics, stimulants, and 
hallucinogens),
    (ii) Inhalants and other similar substances.
    (3) Drug abuse is the illegal use of a drug or use of a legal drug 
in a manner that deviates from approved medical direction.
    (b) Conditions that could raise a security concern and may be 
disqualifying include: (1) Any drug abuse (see above definition);
    (2) Illegal drug possession, including cultivation, processing, 
manufacture, purchase, sale, or distribution;
    (3) Diagnosis by a credentialed medical professional (e.g., 
physician, clinical psychologist, or psychiatrist) of drug abuse or drug 
dependence;
    (4) Evaluation of drug abuse or drug dependence by a licensed 
clinical social worker who is a staff member of a recognized drug 
treatment program;
    (5) Failure to successfully complete a drug treatment program 
prescribed by a credentialed medical professional. Recent drug 
involvement, especially following the granting of a security clearance, 
or an expressed intent not to discontinue use, will almost invariably 
result in an unfavorable determination.
    (c) Conditions that could mitigate security concerns include: (1) 
The drug involvement was not recent;
    (2) The drug involvement was an isolated or aberration event;
    (3) A demonstrated intent not to abuse any drugs in the future;
    (4) Satisfactory completion of a prescribed drug treatment program, 
including rehabilitation and aftercare requirements, without recurrence 
of abuse, and a favorable prognosis by a credentialed medical 
professional.



Sec. 147.11  Guideline I--Emotional, mental, and personality disorders.

    (a) The concern: Emotional, mental, and personality disorders can 
cause a significant deficit in an individual's psychological, social and 
occupation functioning. These disorders are of security concern because 
they may indicate a defect in judgment, reliability, or stability. A 
credentialed mental health professional (e.g., clinical psychologist or 
psychiatrist), employed by, acceptable to or approved by the government, 
should be utilized in evaluating potentially disqualifying and 
mitigating information fully and properly, and particularly for 
consultation with the individual's mental health care provider.
    (b) Conditions that could raise a security concern and may be 
disqualifying include: (1) An opinion by a credentialed mental health 
professional that the individual has a condition or treatment that may 
indicate a defect in judgment, reliability, or stability;
    (2) Information that suggests that an individual has failed to 
follow appropriate medical advice relating to treatment of a condition, 
e.g., failure to take prescribed medication;

[[Page 548]]

    (3) A pattern of high-risk, irresponsible, aggressive, anti-social 
or emotionally unstable behavior;
    (4) Information that suggests that the individual's current behavior 
indicates a defect in his or her judgment or reliability.
    (c) Conditions that could mitigate security concerns include: (1) 
There is no indication of a current problem;
    (2) Recent opinion by a credentialed mental health professional that 
an individual's previous emotional, mental, or personality disorder is 
cured, under control or in remission and has a low probability of 
recurrence or exacerbation;
    (3) The past emotional instability was a temporary condition (e.g., 
one caused by a death, illness, or marital breakup), the situation has 
been resolved, and the individual is no longer emotionally unstable.



Sec. 147.12  Guideline J--Criminal conduct.

    (a) The concern. A history or pattern of criminal activity creates 
doubt about a person's judgment, reliability and trustworthiness.
    (b) Conditions that could raise a security concern and may be 
disqualifying include: (1) Allegations or admissions of criminal 
conduct, regardless of whether the person was formally charged;
    (2) A single serious crime or multiple lesser offenses.
    (c) Conditions that could mitigate security concerns include: (1) 
The criminal behavior was not recent;
    (2) The crime was an isolated incident;
    (3) The person was pressured or coerced into committing the act and 
those pressures are no longer present in that person's life;
    (4) The person did not voluntarily commit the act and/or the factors 
leading to the violation are not likely to recur;
    (5) Acquittal;
    (6) There is clear evidence of successful rehabilitation.



Sec. 147.13  Guideline K--Security violations.

    (a) The concern. Noncompliance with security regulations raises 
doubt about an individual's trustworthiness, willingness, and ability to 
safeguard classified information.
    (b) Conditions that could raise a security concern and may be 
disqualifying include. (1) Unauthorized disclosure of classified 
information;
    (2) Violations that are deliberate or multiple or due to negligence.
    (c) Conditions that could mitigate security concerns include actions 
that: (1) Were inadvertent;
    (2) Were isolated or infrequent;
    (3) Were due to improper or inadequate training;
    (4) Demonstrate a positive attitude towards the discharge of 
security responsibilities.



Sec. 147.14  Guideline L--Outside activities.

    (a) The concern. Involvement in certain types of outside employment 
or activities is of security concern if it poses a conflict with an 
individual's security responsibilities and could create an increased 
risk of unauthorized disclosure of classified information.
    (b) Conditions that could raise a security concern and may be 
disqualifying include any service, whether compensated, volunteer, or 
employment with: (1) A foreign country;
    (2) Any foreign national;
    (3) A representative of any foreign interest;
    (4) Any foreign, domestic, or international organization or person 
engaged in analysis, discussion, or publication of material on 
intelligence, defense, foreign affairs, or protected technology.
    (c) Conditions that could mitigate security concerns include: (1) 
Evaluation of the outside employment or activity indicates that it does 
not pose a conflict with an individual's security responsibilities;
    (2) The individual terminates the employment or discontinues the 
activity upon being notified that it is in conflict with his or her 
security responsibilities.

[[Page 549]]



Sec. 147.15  Guideline M--Misuse of Information technology systems.

    (a) The concern. Noncompliance with rules, procedures, guidelines, 
or regulations pertaining to information technology systems may raise 
security concerns about an individual's trustworthiness, willingness, 
and ability to properly protect classified systems, networks, and 
information. Information Technology Systems include all related 
equipment used for the communication, transmission, processing, 
manipulation, and storage of classified or sensitive information.
    (b) Conditions that could raise a security concern and may be 
disqualifying include: (1) Illegal or unauthorized entry into any 
information technology system;
    (2) Illegal or unauthorized modification, destruction, manipulation 
or denial of access to information residing on an information technology 
system;
    (3) Removal (or use) of hardware, software, or media from any 
information technology system without authorization, when specifically 
prohibited by rules, procedures, guidelines or regulations;
    (4) Introduction of hardware, software, or media into any 
information technology system without authorization, when specifically 
prohibited by rules, procedures, guidelines or regulations.
    (c) Conditions that could mitigate security concerns include: (1) 
The misuse was not recent or significant;
    (2) The conduct was unintentional or inadvertent;
    (3) The introduction or removal of media was authorized;
    (4) The misuse was an isolated event;
    (5) The misuse was followed by a prompt, good faith effort to 
correct the situation.



                    Subpart B_Investigative Standards



Sec. 147.18  Introduction.

    The following investigative standards are established for all United 
States Government civilian and military personnel, consultants, 
contractors, employees of contractors, licensees, certificate holders or 
grantees and their employees and other individuals who require access to 
classified information, to include Sensitive Compartmented Information 
and Special Access Programs, and are to be used by government 
departments and agencies as the investigative basis for final clearance 
determinations. However, nothing in these standards prohibits an agency 
from using any lawful investigative procedures in addition to these 
requirements in order to resolve any issue identified in the course of a 
background investigation or reinvestigation.



Sec. 147.19  The three standards.

    There are three standards (Attachment D to this subpart part 
summarizes when to use each one):
    (a) The investigation and reinvestigation standards for ``L'' access 
authorizations and for access to confidential and secret (including all 
secret-level Special Access Programs not specifically approved for 
enhanced investigative requirements by an official authorized to 
establish Special Access Programs by section in 4.4 of Executive Order 
12958) (60 FR 19825, 3 CFR 1995 Comp., p. 33);
    (b) The investigation standard for``Q'' access authorizations and 
for access to top secret (including top secret Special Access Programs) 
and Sensitive Compartmented Information;
    (c) The reinvestigation standard for continued access to the levels 
listed in paragraph (b) of this section.



Sec. 147.20  Exception to periods of coverage.

    Some elements of standards specify a period of coverage (e.g. seven 
years). Where appropriate, such coverage may be shortened to the period 
from the subject's eighteenth birthday to the present or to two years, 
whichever is longer.



Sec. 147.21  Expanding investigations.

    Investigations and reinvestigations may be expanded under the 
provisions of Executive Order 12968 (60 FR 40245, 3 CFR 1995 Comp., p. 
391) and other applicable statutes and Executive Orders.

[[Page 550]]



Sec. 147.22  Transferability.

    Investigations that satisfy the requirements of a given standard and 
are current meet the investigative requirements for all levels specified 
for the standard. They shall be mutually and reciprocally accepted by 
all agencies.



Sec. 147.23  Breaks in service.

    If a person who requires access has been retired or separated from 
U.S. government employment for less than two years and is the subject of 
an investigation that is otherwise current, the agency regranting the 
access will, as a minimum, review an updated Standard Form 86 and 
applicable records. A reinvestigation is not required unless the review 
indicates the person may no longer satisfy the standards of Executive 
Order 12968 (60 FR 40245, 3 CFR 1995 Comp., p. 391); (Attachment D to 
this subpart, Table 2).



Sec. 147.24  The national agency check.

    The National Agency Check is a part of all investigations and 
reinvestigations. It consists of a review of;
    (a) Investigative and criminal history files of the FBI, including a 
technical fingerprint search;
    (b) OPM's Security/Suitability Investigations Index;
    (c) DoD's Defense Clearance and Investigations Index;
    (d) Such other national agencies (e.g., CIA, INS) as appropriate to 
the individual's background.



Sec. Attachment A to Subpart B of Part 147--Standard A--National Agency 

         Check With Local Agency Checks and Credit Check (NACLC)

    (a) Applicability. Standard A applies to investigations and 
reinvestigations for;
    (1) Access to CONFIDENTIAL and SECRET (including all SECRET-level 
Special Access Programs not specifically approved for enhanced 
investigative requirements by an official authorized to establish 
Special Access Programs by sect. 4.4 of Executive Order 12958) (60 FR 
19825, 3 CFR 1995 Comp., p. 333);
    (2) ``L'' access authorizations.
    (b) For Reinvestigation: When to Reinvestigate. The reinvestigation 
may be initiated at any time following completion of, but not later than 
ten years (fifteen years for CONFIDENTIAL) from the date of, the 
previous investigation or reinvestigation. (Attachment D to this 
subpart, Table 2, reflects the specific requirements for when to request 
a reinvestigation, including when there has been a break in service.)
    (c) Investigative Requirements. Investigative requirements are as 
follows:
    (1) Completion of Forms: Completion of Standard Form 86, including 
applicable releases and supporting documentation.
    (2) National Agency Check: Completion of a National Agency Check.
    (3) Financial Review: Verification of the subject's financial 
status, including credit bureau checks covering all locations where the 
subject has resided, been employed, or attended school for six months or 
more for the past seven years.
    (4) Date and Place of Birth: Corroboration of date and place of 
birth through a check of appropriate documentation, if not completed in 
any previous investigation; a check of Bureau of Vital Statistics 
records when any discrepancy is found to exist.
    (5) Local Agency Checks: As a minimum, all investigations will 
include checks of law enforcement agencies having jurisdiction where the 
subject has lived, worked, and/or attended school within the last five 
years, and, if applicable, of the appropriate agency for any identified 
arrests.
    (d) Expanding the Investigation: The investigation may be expanded 
if necessary to determine if access is clearly consistent with the 
national security.



  Sec. Attachment B to Subpart B of Part 147--Standard B--Single Scope 

                     Background Investigation (SSBI)

    (a) Applicability. Standard B applies to initial investigations for;
    (1) Access to TOP SECRET (including TOP SECRET Special Access 
Programs) and Sensitive Compartment Information;
    (2) ``Q'' access authorizations.
    (b) Investigative Requirements. Investigative requirements are as 
follows:
    (1) Completion of Forms: Completion of Standard Form 86, including 
applicable releases and supporting documentation.
    (2) National Agency Check: Completion of a National Agency Check.
    (3) National Agency Check for the Spouse or Cohabitant (if 
applicable): Completion of a National Agency Check, without fingerprint 
cards, for the spouse or cohabitant.
    (4) Date and Place of Birth: Corroboration of date and place of 
birth through a check of appropriate documentation; a check of Bureau of 
Vital Statistics records when any discrepancy is found to exist.
    (5) Citizenship: For individuals born outside the United States, 
verification of US citizenship directly from the appropriate 
registration authority; verification of US citizenship or legal status 
of foreign-born immediate

[[Page 551]]

family members (spouse, cohabitant, father, mother, sons, daughters, 
brothers, sisters).
    (6) Education: Corroboration of most recent or most significant 
claimed attendance, degree, or diploma. Interviews of appropriate 
educational sources if education is a primary activity of the subject 
during the most recent three years.
    (7) Employment: Verification of all employments for the past seven 
years; personal interviews of sources (supervisors, coworkers, or both) 
for each employment of six months or more; corroboration through records 
or sources of all periods of unemployment exceeding sixty days; 
verification of all prior federal and military service, including 
discharge type. For military members, all service within one branch of 
the armed forces will be considered as one employment, regardless of 
assignments.
    (8) References: Four references, of whom at least two are developed; 
to the extent practicable, all should have social knowledge of the 
subject and collectively span at least the last seven years.
    (9) Former Spouse: An interview of any former spouse divorced within 
the last ten years.
    (10) Neighborhoods: Confirmation of all residences for the last 
three years through appropriate interviews with neighbors and through 
records reviews.
    (11) Financial Review: Verification of the subject's financial 
status, including credit bureau checks covering all locations where 
subject has resided, been employed, and/or attended school for six 
months or more for the last seven years.
    (12) Local Agency Checks: A check of appropriate criminal history 
records covering all locations where, for the last ten years, the 
subject has resided, been employed, and/or attended school for six 
months or more, including current residence regardless of duration.

    Note: If no residence, employment, or education exceeds six months, 
local agency checks should be performed as deemed appropriate.

    (13) Public Records: Verification of divorces, bankruptcies, and 
other court actions, whether civil or criminal, involving the subject.
    (14) Subject Interview: A subject interview, conducted by trained 
security, investigative, or counterintelligence personnel. During the 
investigation, additional subject interviews may be conducted to collect 
relevant information, to resolve significant inconsistencies, or both. 
Sworn statements and unsworn declarations may be taken whenever 
appropriate.
    (15) Polygraph (only in agencies with approved personnel security 
polygraph programs): In departments or agencies with policies 
sanctioning the use of the polygraph for personnel security purposes, 
the investigation may include a polygraph examination, conducted by a 
qualified polygraph examiner.
    (c) Expanding the Investigation. The investigation may be expanded 
as necessary. As appropriate, interviews with anyone able to provide 
information or to resolve issues, including but not limited to 
cohabitants, relatives, psychiatrists, psychologists, other medical 
professionals, and law enforcement professionals may be conducted.



  Sec. Attachment C to Subpart B of Part 147--Standard C--Single Scope 

       Background Investigation Periodic Reinvestigation (SSBI-PR)

    (a) Applicability. Standard C applies to reinvestigation for;
    (1) Access to TOP SECRET (including TOP SECRET Special Access 
Programs) and Sensitive Compartmented Information;
    (2) ``Q'' access authorizations.
    (b) When to Reinvestigate. The reinvestigation may be initiated at 
any time following completion of, but not later than five years from the 
date of, the previous investigation (see Attachment D to this subpart, 
Table 2).
    (c) Reinvestigative Requirements. Reinvestigative requirements are 
as follows:
    (1) Completion of Forms: Completion of Standard Form 86, including 
applicable releases and supporting documentation.
    (2) National Agency Check: Completion of a National Agency Check 
(fingerprint cards are required only if there has not been a previous 
valid technical check of the FBI).
    (3) National Agency Check for the Spouse or Cohabitant (if 
applicable): Completion of a National Agency Check, without fingerprint 
cards, for the spouse or cohabitant. The National Agency Check for the 
spouse or cohabitant is not required if already completed in conjunction 
with a previous investigation or reinvestigation.
    (4) Employment: Verification of all employments since the last 
investigation. Attempts to interview a sufficient number of sources 
(supervisors, coworkers, or both) at all employments of six months or 
more. For military members, all services within one branch of the armed 
forces will be considered as one employment, regardless of assignments.
    (5) References: Interviews with two character references who are 
knowledgeable of the subject; at least one will be a developed 
reference. To the extent practical, both should have social knowledge of 
the subject and collectively span the entire period of the 
reinvestigation. As appropriate, additional interviews may be conducted, 
including with cohabitants and relatives.
    (6) Neighborhoods: Interviews of two neighbors in the vicinity of 
the subject's most recent residence of six months or more. Confirmation 
of current residence regardless of length.

[[Page 552]]

    (7) Financial Review--Financial Status: Verification of the 
subject's financial status, including credit bureau checks covering all 
locations where subject has resided, been employed, and/or attended 
school for six months or more for the period covered by the 
reinvestigation;
    (ii) Check of Treasury's Financial Data Base: Agencies may request 
the Department of the Treasury, under terms and conditions prescribed by 
the Secretary of the Treasury, to search automated data bases consisting 
of reports of currency transactions by financial institutions, 
international transportation of currency or monetary instruments, 
foreign bank and financial accounts, and transactions under $10,000 that 
are reported as possible money laundering violations.
    (8) Local Agency Checks: A check of appropriate criminal history 
records covering all locations where, during the period covered by the 
reinvestigation, the subject has resided, been employed, and/or attended 
school for six months or more, including current residence regardless of 
duration. (Note: If no residence, employment, or education exceeds six 
months, local agency checks should be performed as deemed appropriate.)
    (9) Former Spouse: An interview with any former spouse unless the 
divorce took place before the date of the last investigation or 
reinvestigation.
    (10) Public Records: Verification of divorces, bankruptcies, and 
other court actions, whether civil or criminal, involving the subject 
since the date of the last investigation.
    (11) Subject Interview: A subject interview, conducted by trained 
security, investigative, or counterintelligence personnel. During the 
reinvestigation, additional subject interviews may be conducted to 
collect relevant information, to resolve significant inconsistencies, or 
both. Sworn statements and unsworn declarations may be taken whenever 
appropriate.
    (d) Expanding the Reinvestigation: The reinvestigation may be 
expanded as necessary. As appropriate, interviews with anyone able to 
provide information or to resolve issues, including but not limited to 
cohabitants, relatives, psychiatrists, psychologists, other medical 
professionals, and law enforcement professionals may be conducted.

         Attachment D to Subpart B of Part 147--Decision Tables

                                     Table 1--Which Investigation to Request
----------------------------------------------------------------------------------------------------------------
                                 And the person has     Based on this    Then the investigation
   If the requirement is for         this access        investigation          required is        Using standard
----------------------------------------------------------------------------------------------------------------
Confidental Secret; ``L''......  None..............  None..............  NACLC.................  A
                                                     Out of date NACLC
                                                      or SSBI.
                                 Conf, Sec; ``L''
Top Secret, SCI; ``Q''.........  None..............  None..............  SSBI..................  B
                                 None; Conf, Sec;    Current or out of
                                  ``L''.              date NACLC
                                                     Out of date SSBI
                                 TS, SCI; ``Q''....                      SSBI-PR...............  C
----------------------------------------------------------------------------------------------------------------


                                      Table 2--Reinvestigation Requirements
----------------------------------------------------------------------------------------------------------------
                                                                     Type required if there has been a break in
                                           And the age of the                        service of
      If the requirement is for             investigation is       ---------------------------------------------
                                                                          0-23 months         24 month's or more
----------------------------------------------------------------------------------------------------------------
Confidential........................  0 to 14 years. 11 mos.......  None (note 1)..........  NACLC
                                      15 yrs. or more.............  NACLC..................
Secret; ``L''.......................  0 to 9 yrs 11 mos...........  None (note 1)..........
                                      10 yrs. or more.............  NACLC
Top Secret, SCI; ``Q''..............  0 to 4 yrs. 11 mos..........  None (note 1)..........  SSBI
                                      5 yrs or more...............  SSBI-PR................
----------------------------------------------------------------------------------------------------------------
Note: As a minimum, review an updated Standard Form 84 and applicable records. A reinvestigation (NACLC or SSBI-
  PR) is not required unless the review indicates the person may no longer satisfy the standards of Executive
  Order 12968.


[[Page 553]]

                Subpart C_Guidelines for Temporary Access

Sec. 147.28  Introduction.

    The following minimum investigative standards, implementing section 
3.3 of Executive Order 12968, Access to Classified Information, are 
established for all United States Government and military personnel, 
consultants, contractors, subcontractors, employees of contractors, 
licensees, certificate holders or grantees and their employees and other 
individuals who require access to classified information before the 
appropriate investigation can be completed and a final determination 
made.

Sec. 147.29  Temporary eligibility for access.

    Based on a justified need meeting the requirements of section 3.3 of 
Executive Order 12968, temporary eligibility for access may be granted 
before investigations are complete and favorably adjudicated, where 
official functions must be performed prior to completion of the 
investigation and adjudication process. The temporary eligibility will 
be valid until completion of the investigation and adjudication; 
however, the agency granting it may revoke it at any time based on 
unfavorable information identified in the course of the investigation.

Sec. 147.30  Temporary eligibility for access at the confidential and 
          secret levels and temporary eligibility for ``L'' access 
          authorization.

    As a minimum, such temporary eligibility requires completion of the 
Standard Form 86, including any applicable supporting documentation, 
favorable review of the form by the appropriate adjudicating authority, 
and submission of a request for an expedited National Agency Check with 
Local Agency Checks and Credit (NACLC).

Sec. 147.31  Temporary eligibility for access at the top secret levels 
          and temporary eligibility for ``Q'' access authorization: For 
          someone who is the subject of a favorable investigation not 
          meeting the investigative standards for access at those 
          levels.

    As a minimum, such temporary eligibility requires completion of the 
Standard Form 86, including any applicable supporting documentation, 
favorable review of the form by the appropriate adjudicating authority, 
and expedited submission of a request for a Single Scope Background 
Investigation (SSBI).

Sec. 147.32  Temporary eligibility for access at the top secret and SCI 
          levels and temporary eligibility for ``Q'' access 
          authorization: For someone who is not the subject of a 
          current, favorable personnel or personnel-security 
          investigation of any kind.

    As a minimum, such temporary eligibility requires completion of the 
Standard Form 86, including any applicable supporting documentation, 
favorable review of the form by the appropriate adjudicating authority, 
immediate submission of a request for an expedited Single Scope 
Background Investigation (SSBI), and completion and favorable review by 
the appropriate adjudicating authority of relevant criminal history and 
investigative records of the Federal Bureau of Investigation and of 
information in the Security/Suitability Investigations Index (SII) and 
the Defense Clearance and Investigations Index (DCII).

Sec. 147.33  Additional requirements by agencies.

    Temporary eligibility for access must satisfy these minimum 
investigative standards, but agency heads may establish additional 
requirements based on the sensitivity of the particular, identified 
categories of classified information necessary to perform the lawful and 
authorized functions that are the basis for granting temporary 
eligibility for access. However, no additional requirements shall exceed 
the common standards for background investigations developed under 
section 3.2(b) of Executive Order 12968. Temporary eligibility for 
access is valid only at the agency granting it and at other agencies who 
expressly agree to accept it and acknowledge understanding of its 
investigative basis. It is further subject to limitations specified in 
sections 2.4(d) and 3.3 of Executive Order 12968, Access to Classified 
Information.

[[Page 554]]



PART 148_NATIONAL POLICY AND IMPLEMENTATION OF RECIPROCITY OF FACILITIES

   Subpart A_National Policy on Reciprocity of Use and Inspections of 
                               Facilities

Sec.
148.1 Interagency reciprocal acceptance.
148.2 Classified programs.
148.3 Security review.
148.4 Policy documentation.
148.5 Identification of the security policy board.
148.6 Agency review.

Subpart B_Guidelines for the Implementation and Oversight of the Policy 
           on Reciprocity of Use and Inspections of Facilities

148.10 General.
148.11 Policy.
148.12 Definitions.
148.13 Responsibilities.
148.14 Procedures.

    Authority: E.O. 12968 (60 FR 40245, 3 CFR 1995 Comp., p. 391.)

    Source: 63 FR 4580, Jan. 30, 1998, unless otherwise noted.



   Subpart A_National Policy on Reciprocity of Use and Inspections of 

                               Facilities



Sec. 148.1  Intergency reciprocal acceptance .

    Interagency reciprocal acceptance of security policies and 
procedures for approving, accrediting, and maintaining the secure 
posture of shared facilities will reduce aggregate costs, promote 
interoperability of agency security systems, preserve vitality of the 
U.S. industrial base, and advance national security objectives.



Sec. 148.2  Classified programs.

    Once a facility is authorized, approved, certified, or accredited, 
all U.S. Government organizations desiring to conduct classified 
programs at the facility at the same security level shall accept the 
authorization, approval, certification, or accreditation without change, 
enhancements, or upgrades. Executive Order, Safeguarding Directives, 
National Industrial Security Program Operating Manual (NISPOM), the 
NISPOM Supplement, the Director of Central Intelligence Directives, 
interagency agreements, successor documents, or other mutually agreed 
upon methods shall be the basis for such acceptance.



Sec. 148.3  Security review.

    After initial security authorization, approval, certification, or 
accreditation, subsequent security reviews shall normally be conducted 
no more frequently than annually.
    Additionally, such reviews shall be aperiodic or random, and be 
based upon risk management principles. Security reviews may be conducted 
``for cause'', to follow up on previous findings, or to accomplish 
close-out actions. Visits may be made to a facility to conduct security 
support actions, administrative inquiries, program reviews, and 
approvals as deemed appropriate by the cognizant security authority or 
agency.



Sec. 148.4  Policy documentation.

    Agency heads shall ensure that any policy documents their agency 
issues setting out facilities security policies and procedures 
incorporate the policy set out herein, and that such policies are 
reasonable, effective, efficient, and enable and promote interagency 
reciprocity.



Sec. 148.5  Idenfification of the security policy board.

    Agencies which authorize, approve, certify, or accredit facilities 
shall provide to the Security Policy Board Staff a points of contact 
list to include names and telephone numbers of personnel to be contacted 
for verification of authorized, approved, certified, or accredited 
facility status. The Security Policy Board Staff will publish a 
comprehensive directory of points of contact.



Sec. 148.6  Agency review.

    Agencies will continue to review and assess the potential value 
added to the process of co-use of facilities by development of 
electronic data retrieval across government. As this review continues, 
agencies creating or modifying facilities databases will do so in a 
manner which facilitates community data

[[Page 555]]

sharing, interest of national defense or foreign policy.



Subpart B_Guidelines for the Implementation and Oversight of the Policy 

           on Reciprocity of use and Inspections of Facilities



Sec. 148.10  General.

    (a) Redundant, overlapping, and duplicative policies and practices 
that govern the co-use of facilities for classified purposes have 
resulted in excessive protection and unnecessary expenditure of funds. 
Lack of reciprocity has also impeded achievement of national security 
objectives and adversely affected economic and technological interest.
    (b) Interagency reciprocal acceptance of security policies and 
procedures for approving, accrediting, and maintaining the secure 
posture of shared facilities will reduce the aggregate costs, promote 
interoperability of agency security systems, preserve the vitality of 
the U.S. industrial base, and advance national security objectives.
    (c) Agency heads, or their designee, are encouraged to periodically 
issue written affirmations in support of the policies and procedures 
prescribed herein and in the Security Policy Board (SPB) policy, 
entitled ``Reciprocity of Use and Inspections of Facilities.''
    (d) The policies and procedures prescribed herein shall be 
applicable to all agencies. This document does not supersede the 
authority of the Secretary of Defense under Executive Order 12829 (58 FR 
3479, 3 CFR 1993 Comp., p. 570); the Secretary of Energy or the Chairman 
of the Nuclear Regulatory Commission under the Atomic Energy Act of 
1954, as amended; the Secretary of State under the Omnibus Diplomatic 
Security and Anti-Terrorism Act of 1986; the Secretaries of the military 
departments and military department installation Commanders under the 
Internal Security Act of 1950; the Director of Central Intelligence 
under the National Security Act of 1947, as amended, or Executive Order 
12333; the Director of the Information Security Oversight Office under 
Executive Order 12829 or Executive Order 12958 (60 FR 19825, 3 CFR 1995 
Comp., p. 333); or substantially similar authority instruments assigned 
to any other agency head.



Sec. 148.11  Policy.

    (a) Agency heads, or their designee, shall ensure that security 
policies and procedures for which they are responsible are reasonable, 
effective, and efficient, and that those policies and procedures enable 
and promote interagency reciprocity.
    (b) To the extent reasonable and practical, and consistent with US 
law, Presidential decree, and bilateral and international obligations of 
the United States, the security requirements, restrictions, and 
safeguards applicable to industry shall be equivalent to those 
applicable within the Executive Branch of government.
    (c) Once a facility is authorized approved, certified, or 
accredited, all government organizations desiring to conduct classified 
programs at the facility at the same security level shall accept the 
authorization, approval, certification, or accreditation without change, 
enhancements, or upgrades.



Sec. 148.12  Definitions.

    Agency. Any ``executive agency,'' as defined in 5 U.S.C. 105; any 
``Military department'' as defined in 5 U.S.C. 102; and any other entity 
within the Executive Branch that comes into possession of classified 
information.
    Classified Information. All information that requires protection 
under Executive Order 12958, or any of its antecedent orders, and the 
Atomic Energy Act of 1954, as amended.
    Cognizant Security Agency (CSA). Those agencies that have been 
authorized by Executive Order 12829 to establish an industrial security 
program for the purpose of safeguarding classified information disclosed 
or released to industry.
    Cognizant Security Office (CSO). The office or offices delegated by 
the head of a CSA to administer industrial security in a contractor's 
facility on behalf of the CSA.

[[Page 556]]

    Facility. An activity of a government agency or cleared contractor 
authorized by appropriate authority to conduct classified operations or 
to perform classified work.
    Industry. Contractors, licensees, grantees, and certificate holders 
obligated by contract or other written agreement to protect classified 
information under the National Industrial Security Program.
    National Security. The national defense and foreign relations of the 
United States.
    Senior Agency Official. Those officials, pursuant to Executive Order 
12958, designated by the agency head who are assigned the responsibility 
to direct and administer the agency's information security program.



Sec. 148.13  Responsibilities.

    (a) Each Senior Agency Official shall ensure that adequate 
reciprocity provisions are incorporated within his or her regulatory 
issuances that prescribe agency safeguards for protecting classified 
information.
    (b) Each Senior Agency Official shall develop, implement, and 
oversee a program that ensures agency personnel adhere to the policies 
and procedures prescribed herein and the reciprocity provisions of the 
National Industrial Security Program Operating Manual (NISPOM).
    (c) Each Senior Agency Official must ensure that implementation 
encourages reporting of instances of non-compliance, without fear of 
reprisal, and each reported instance is aggressively acted upon.
    (d) The Director, Information Security Oversight Office (ISOO), 
consistent with his assigned responsibilities under Executive Order 
12829, serves as the central point of contact within Government to 
consider and take action on complaints and suggestions from industry 
concerning alleged violations of the reciprocity provisions of the 
NISPOM.
    (e) The Director, Security Policy Board Staff (D/SPBS) or his/her 
designee, shall serve as the central point of contact within Government 
to receive from Federal Government employees alleged violations of the 
reciprocity provisions prescribed herein and the policy ``Reciprocity of 
Use and Inspections of Facilities'' of the SPB.



Sec. 148.14  Procedures.

    (a) Agencies that authorize, approve, certify, or accredit 
facilities shall provide to the SPB Staff a points of contact list to 
include names and telephone numbers of personnel to be contacted for 
verification of the status of facilities. The SPB Staff will publish a 
comprehensive directory of agency points of contact.
    (b) After initial security authorization, approval, certification, 
or accreditation, subsequent reviews shall normally be conducted no more 
frequently than annually. Additionally, such reviews shall be aperiodic 
or random, and be based upon risk-management principles. Security 
Reviews may be conducted ``for cause'', to follow up on previous 
findings, or to accomplish close-out actions.
    (c) The procedures employed to maximize interagency reciprocity 
shall be based primarily upon existing organizational reporting 
channels. These channels should be used to address alleged departures 
from established reciprocity requirements and should resolve all, 
including the most egregious instances of non-compliance.
    (d) Two complementary mechanisms are hereby established to augment 
existing organizational channels: (1) An accessible and responsive venue 
for reporting and resolving complaints/reported instances of non-
compliance. Government and industry reporting channels shall be as 
follows:
    (1) Governnment. (A) Agency employees are encouraged to bring 
suspected departures from applicable reciprocity requirements to the 
attention of the appropriate security authority in accordance with 
established agency procedures.
    (B) Should the matter remain unresolved, the complainant (employee, 
Security Officer, Special Security Officer, or similar official) is 
encouraged to report the matter formally to the Senior Agency Official 
for resolution.
    (C) Should the Senior Agency Official response be determined 
inadequate by the complainant, the matter should be reported formally to 
the Director, Security Policy Board Staff (D/SPBS).

[[Page 557]]

The D/SPBS, may revisit the matter with the Senior Agency Official or 
refer the matter to the Security Policy Forum as deemed appropriate.
    (D) Should the matter remain unresolved, the Security Policy Forum 
may consider referral to the SPB, the agency head, or the National 
Security Council as deemed appropriate.
    (ii) Industry. (A) Contractor employees are encouraged to bring 
suspected departures from the reciprocity provisions of the NISPOM to 
the attention to their Facility Security Officer (FSO) or Contractor 
Special Security Officer (CSSO), as appropriate, for resolution.
    (B) Should the matter remain unresolved, the complainant (employee, 
FSO, or CSSO) is encouraged to report the matter formally to the 
Cognizant Security Office (CSO) for resolution.
    (C) Should the CSO responses be determined inadequate by the 
complainant, the matter should be reported formally to the Senior Agency 
Official within the Cognizant Security Agency (CSA) for resolution.
    (D) Should the Senior Agency Official response be determined 
inadequately by the complainant, the matter should be reported formally 
to the Director, information Security Oversight Office (ISOO) for 
resolution.
    (E) The Director, ISOO, may revisit the matter with the Senior 
Agency Official or refer the matter to the agency head or the National 
Security Council as deemed appropriate.
    (2) An annual survey administered to a representative sampling of 
agency and private sector facilities to assess overall effectiveness of 
agency adherence to applicable reciprocity requirements.
    (i) In coordination with the D/SPBS, the Director, ISOO, as Chairman 
of the NISP Policy Advisory Committee (NISPPAC), shall develop and 
administer an annual survey to a representative number of cleared 
contractor activities/employees to assess the effectiveness of 
interagency reciprocity implementation. Administration of the survey 
shall be coordinated fully with each affected Senior Agency Official.
    (ii) In coordination with the NISPPAC, the D/SPBS shall develop and 
administer an annual survey to a representative number of agency 
activities/personnel to assess the effectiveness of interagency 
reciprocity implementation. Administration of the survey shall be 
coordinated fully with each affected Senior Agency Official.
    (iii) The goal of annual surveys should not be punitive but 
educational. All agencies and departments have participated in the 
crafting of these facilities policies, therefore, non-compliance is a 
matter of internal education and direction.
    (e) Agencies will continue to review and assess the potential value 
added to the process of co-use of facilities by development of 
electronic data retrieval across government.



PART 149_POLICY ON TECHNICAL SURVEILLANCE COUNTERMEASURES--Table of Contents



Sec.
149.1 Policy.
149.2 Responsibilities.
149.3 Definitions.

    Authority: E.O. 12968 (60 FR 40245, 3 CFR 1995 Comp., p. 391.)

    Source: 63 FR 4583, Jan. 30, 1998, unless otherwise noted.



Sec. 149.1  Policy.

    (a) Heads of federal departments and agencies which process, 
discuss, and/or store classified national security information, 
restricted data, and sensitive but unclassified information, shall, in 
response to specific threat data and based on risk management 
principles, determine the need for Technical Surveillance 
Countermeasures (TSCM).
    To obtain maximum effectiveness by the most economical means in the 
various TSCM programs, departments and agencies shall exchange technical 
information freely; coordinate programs; practice reciprocity; and 
participate in consolidated programs, when appropriate.



Sec. 149.2  Responsibilities.

    (a) Heads of U.S. Government departments and agencies which plan, 
implement, and manage TSCM programs shall:
    (1) Provide TSCM support consisting of procedures and 
countermeasures determined to be appropriate for the facility, 
consistent with risk management principles.

[[Page 558]]

    (2) Report to the Security Policy Board, attention: Chair, 
Facilities Protection Committee (FPC), for appropriate dissemination, 
all-source intelligence that concerns technical surveillance threats, 
devices, techniques, and unreported hazards, regardless of the source or 
target, domestic or foreign.
    (3) Train a professional cadre of personnel in TSCM techniques.
    (4) Ensure that the FPC and Training and Professional Development 
Committee are kept apprised of their TSCM program activities as well as 
training and research and development requirements.
    (5) Assist other departments and agencies, in accordance with 
federal law, with TSCM services of common concern.
    (6) Coordinate, through the FPC, proposed foreign disclosure of TSCM 
equipment and techniques.
    (b) The FPC shall advise and assist the Security Policy Board in the 
development and review of TSCM policy, including guidelines, procedures, 
and instructions. The FPC shall:
    (1) Coordinate TSCM professional training, research, development, 
test, and evaluation programs.
    (2) Promote and foster joint procurement of TSCM equipment.
    (3) Evaluate the impact on the national security of foreign 
disclosure of TSCM equipment or techniques and recommend policy changes 
as needed.
    (4) Develop guidance for use in obtaining intelligence information 
on the plans, capabilities and actions of organizations hostile to the 
U.S. Government concerning technical penetrations and countermeasures 
against them.
    (5) Biennially, review, update and disseminate the national strategy 
for TSCM.



Sec. 149.3  Definitions.

    Classified National Security Information (CNSI). Information that 
has been determined pursuant to Executive Order 12958 (60 FR 19825, 3 
CFR 1995 Comp., p. 333) or any predecessor order to require protection 
against unauthorized disclosure and is marked to indicate its classified 
status when in documentary form.
    Restricted Data (RD). All data concerning design, manufacture or 
utilization of atomic weapons; the production of special nuclear 
material; or the use of special nuclear material in the production of 
energy, but shall not include data declassified or removed from the RD 
category pursuant to section 102 of the Atomic Energy Act of 1954, as 
amended.
    Sensitive but Unclassified. Any information, the loss, misuse, or 
unauthorized access to or modification of which could adversely affect 
the national interest or the conduct of federal programs, or the privacy 
to which individuals are entitled under 5 U.S.C. 552a, but which has not 
been specifically authorized under criteria established by an Executive 
Order or an Act of Congress to be kept secret in the interest of 
national defense or foreign policy.
    Technical Surveillance Countermeasures (TSCM). Techniques and 
measures to detect and nullify a wide variety of technologies that are 
used to obtain unauthorized access to classified national security 
information, restricted data, and/or sensitive but unclassified 
information.

[[Page 559]]



         SUBCHAPTER E_REGULATIONS PERTAINING TO MILITARY JUSTICE



PART 150_COURTS OF CRIMINAL APPEALS RULES OF PRACTICE AND PROCEDURE--Table of 

Contents



Sec.
150.1 Name and seal.
150.2 Jurisdiction.
150.3 Scope of review.
150.4 Quorum.
150.5 Place for filing papers.
150.6 Signing of papers.
150.7 Computation of time.
150.8 Qualification of counsel.
150.9 Conduct of counsel.
150.10 Request for appellate defense counsel.
150.11 Assignment of counsel.
150.12 Retention of civilian counsel.
150.13 Notice of appearance of counsel.
150.14 Waiver or withdrawal of appellate review.
150.15 Assignments of error and briefs.
150.16 Oral arguments.
150.17 En banc proceedings.
150.18 Orders and decisions of the Court.
150.19 Reconsideration.
150.20 Petitions for extraordinary relief, answer, and reply.
150.21 Appeals by the United States.
150.22 Petitions for new trial.
150.23 Motions.
150.24 Continuances and interlocutory matters.
150.25 Suspension of rules.
150.26 Internal rules.
150.27 Recording, photographing, broadcasting, or telecasting of 
          hearings.
150.28 Amendments.

Appendix A to Part 150--Format for Direction for Review in a Court of 
          Criminal Appeals
Appendix B to Part 150--Format for Assignment of Errors and Brief on 
          Behalf of Accused (Sec. 150.15)

    Authority: Article 66(f), Uniform Code of Military Justice (10 
U.S.C. Sec. 866(f) (1994)).

    Source: 62 FR 2017, Jan. 15, 1997, unless otherwise noted.



Sec. 150.1  Name and seal.

    (a) The titles of the Courts of Criminal Appeals of the respective 
services are:
    (1) ``United States Army Court of Criminal Appeals.''
    (2) ``United States Navy-Marine Corps Court of Criminal Appeals.''
    (3) ``United States Air Force Court of Criminal Appeals.''
    (4) ``United States Coast Guard Court of Criminal Appeals.''
    (b) Each Court is authorized a seal in the discretion of the Judge 
Advocate General concerned. The design of such seal shall include the 
title of the Court.



Sec. 150.2  Jurisdiction.

    (a) The jurisdiction of the Court is as follows:
    (1) Review under Article 66. All cases of trial by court-martial in 
which the sentence as approved extends to:
    (i) Death; or
    (ii) Dismissal of a commissioned officer, cadet or midshipman, 
dishonorable or bad-conduct discharge, or confinement for 1 year or 
longer; and in which the accused has not waived or withdrawn appellate 
review.
    (2) Review upon direction of the Judge Advocate General under 
Article 69. All cases of trial by court-martial in which there has been 
a finding of guilty and a sentence:
    (i) For which Article 66 does not otherwise provide appellate 
review, and
    (ii) Which the Judge Advocate General forwards to the Court for 
review pursuant to Article 69(d), and
    (iii) In which the accused has not waived or withdrawn appellate 
review.
    (3) Review under Article 62. All cases of trial by court-martial in 
which a punitive discharge may be adjudged and a military judge 
presides, and in which the government appeals an order or ruling of the 
military judge that terminates the proceedings with respect to a charge 
or specification or excludes evidence that is substantial proof of a 
fact material to the proceedings, or directs the disclosure of 
classified information, imposes sanctions for nondisclosure of 
classified information, or refuses to issue or enforce a protective 
order sought by the United States to prevent the disclosure of 
classified information.
    (4) Review under Article 73. All petitions for a new trial in cases 
of trial by court-martial which are referred to the Court by the Judge 
Advocate General.

[[Page 560]]

    (b) Extraordinary writs. The Court may, in its discretion, entertain 
petitions for extraordinary relief including, but not limited to, writs 
of mandamus, writs of prohibition, writs of habeas corpus, and writs of 
error coram nobis.
    (c) Effect of rules on jurisdiction. Nothing in this part shall be 
construed to extend or limit the jurisdiction of the Courts of Criminal 
Appeals as established by law.



Sec. 150.3  Scope of review.

    In cases referred to it for review pursuant to Article 66, the Court 
may act only with respect to the findings and sentence as approved by 
the convening authority. In reviewing a case or action under Article 
69(d) or in determining an appeal under Article 62, the Court may act 
only with respect to matters of law. The Court may, in addition, review 
such other matters and take such other action as it determines to be 
proper under substantive law.e



Sec. 150.4  Quorum.

    (a) In panel. When sitting in panel, a majority of the judges 
assigned to that panel constitutes a quorum for the purpose of hearing 
or determining any matter referred to the panel. The determination of 
any matter referred to the panel shall be according to the opinion of a 
majority of the judges participating in the decision. However, any judge 
present for duty may issue all necessary orders concerning any 
proceedings pending on panel and any judge present for duty, or a clerk 
of court or commissioner to whom the Court has delegated authority, may 
act on uncontested motions, provided such action does not finally 
dispose of a petition, appeal, or case before the Court.
    (b) En banc. When sitting as a whole, a majority of the judges of 
the Court constitutes a quorum for the purpose of hearing and 
determining any matter before the Court. The determination of any matter 
before the Court shall be according to the opinion of a majority of the 
judge participating in the decision. In the absence of a quorum, any 
judge present for duty may issue all necessary orders concerning any 
proceedings pending in the Court preparatory to hearing or decision 
thereof.



Sec. 150.5  Place for filing papers.

    When the filing of a notice of appearance, brief, or other paper in 
the office of a Judge Advocate General is required by this part, such 
papers shall be filed in the office of the Judge Advocate General of the 
appropriate armed force or in such other place as the Judge Advocate 
General or rule promulgated pursuant to Sec. 150.26 may designate. If 
transmitted by mail or other means, they are not filed until received in 
such office.



Sec. 150.6  Signing of papers.

    All formal papers shall be signed and shall show, typewritten or 
printed, the signer's name, address, military grade (if any), and the 
capacity in which the paper is signed. Such signature constitutes a 
certification that the statements made therein are true and correct to 
the best of the knowledge, information, and belief of the persons 
signing the paper and that the paper is filed in good faith and not for 
purposes of unnecessary delay.



Sec. 150.7  Computation of time.

    In computing any period of time prescribed or allowed by this part, 
by order of the Court, or by any applicable statute, the day of the act, 
event or default after which the designated period of time begins to run 
is not to be included. The last day of the period so computed is to be 
included, unless it is a Saturday, Sunday, or legal holiday, or, when 
the act to be done is the filing of a paper in court, a day on which the 
office of the Clerk of the Court is closed due to weather or other 
conditions or by order of the Chief Judge, in which event the period 
runs until the end of the next day which is neither a Saturday, Sunday, 
nor a holiday.



Sec. 150.8  Qualification of counsel.

    (a) All counsel. Counsel in any case before the Court shall be a 
member in good standing of the bar of a Federal Court, the highest court 
of a State or another recognized bar.
    (b) Military counsel. Assigned appellate defense and appellate 
government counsel shall, in addition, be qualified in accordance with 
Articles 27(b)(1) and

[[Page 561]]

70(a), Uniform Code of Military Justice.
    (c) Admission. Each Court may license counsel to appear before it. 
Otherwise, upon entering an appearance, counsel shall be deemed admitted 
pro hac vice, subject to filing a certificate setting forth required 
qualifications if directed by the Court.
    (d) Suspension. No counsel may appear in any proceeding before the 
Court while suspended from practice by the Judge Advocate General of the 
service concerned.



Sec. 150.9  Conduct of counsel.

    The conduct of counsel appearing before the Court shall be in 
accordance with rules of conduct prescribed pursuant to Rule for Courts-
Martial 109 by the Judge Advocate General of the service concerned. 
However, the Court may exercise its inherent power to regulate counsel 
appearing before it, including the power to remove counsel from a 
particular case for misconduct in relation to that case. Conduct deemed 
by the Court to warrant consideration of suspension from practice or 
other professional discipline shall be reported by the Court to the 
Judge Advocate General concerned.



Sec. 150.10  Request for appellate defense counsel.

    An accused may be represented before the Court by appellate counsel 
detailed pursuant to Article 70(a) or by civilian counsel provided by 
the accused, or both. An accused who does not waive appellate review 
pursuant to Rule for Courts-Martial 1110 shall, within 10 days after 
service of a copy of the convening authority's action under Rule for 
Courts-Martial 1107(h), forward to the convening authority or the Judge 
Advocate General:
    (a) A request for representation by military appellate defense 
counsel, or
    (b) Notice that civilian counsel has been retained or that action 
has been taken to retain civilian counsel (must include name and address 
of civilian counsel), or
    (c) Both a request for representation by military appellate defense 
counsel under paragraph (a) for this section and notice regarding 
civilian counsel under paragraph (b) of this section, or
    (d) A waiver of representation by counsel.



Sec. 150.11  Assignment of counsel.

    (a) When a record of trial is referred to the court--
    (1) If the accused has requested representation by appellate defense 
counsel, pursuant to Article 70(c)(1), counsel detailed pursuant to 
Article 70(a) will be assigned to represented the accused; or
    (2) If the accused gives notice that he or she has retained or has 
taken action to retain civilian counsel, appellate defense counsel shall 
be assigned to represent the interests of the accused pending appearance 
of civilian counsel. Assigned defense counsel will continue to assist 
after appearance by civilian counsel unless excused by the accused; or
    (3) If the accused has neither requested appellate counsel nor given 
notice of action to retain civilian counsel, but has not waived 
representation by counsel, appellate defense counsel will be assigned to 
represent the accused, subject to excusal by the accused or by direction 
of the Court.
    (b) In any case--
    (1) The Court may request counsel when counsel have not been 
assigned.
    (2) Pursuant to Article 70(c)(2), and subject to paragraph (a)(2) of 
this section, appellate defense counsel will represent the accused when 
the United States is represented by counsel before the Court.



Sec. 150.12  Retention of civilian counsel.

    When civilian counsel represents an accused before the Court, the 
Court will notify counsel when the record of trial is received. If both 
civilian and assigned appellate defense counsel represent the accused, 
the Court will regard civilian counsel as primary counsel unless 
notified otherwise. Ordinarily, civilian counsel will use the accused's 
copy of the record. Civilian counsel may reproduce, at no expense to the 
government, appellate defense counsel's copy of the record.

[[Page 562]]



Sec. 150.13  Notice of appearance of counsel.

    Military and civilian appellate counsel shall file a written notice 
of appearance with the Court. The filing of any pleading relative to a 
case which contains the signature of counsel constitutes notice of 
appearance of such counsel.



Sec. 150.14  Waiver or withdrawal of appellate review.

    Withdrawals from appellate review, and waivers of appellate review 
filed after expiration of the period prescribed by the Rule for Courts-
Martial 1110(f)(1), will be referred to the Court for consideration. At 
its discretion, the Court may require the filing of a motion for 
withdrawal, issue a show cause order, or grant the withdrawal without 
further action, as may be appropriate. The Court will return the record 
of trial, in a case withdrawn from appellate review, to the Judge 
Advocate General for action pursuant to Rule for Courts-Martial 1112.



Sec. 150.15  Assignments of error and briefs.

    (a) General provisions. Appellate counsel for the accused may file 
an assignment of error if any are to be alleged, setting forth 
separately each error asserted. The assignment of errors should be 
included in a brief for the accused in the format set forth in Appendix 
B to this part. An original of all assignments of error and briefs, and 
as many additional copies as shall be prescribed by the Court, shall be 
submitted. Briefs and assignments of errors shall be typed or printed, 
double-spaced on white paper, and securely fastened at the top. All 
references to matters contained in the record shall show record page 
numbers and any exhibit designations. A brief on behalf of the 
government shall be of like character as that prescribed for the 
accused.
    (b) Time for filing and number of briefs. Any brief for an accused 
shall be filed within 60 days after appellate counsel has been notified 
of the receipt of the record in the Office of the Judge Advocate 
General. If the Judge Advocate General has directed appellate government 
counsel to represent the United States, such counsel shall file an 
answer on behalf of the government within 30 days after any brief and 
assignment of errors has been filed on behalf of an accused. Appellate 
counsel for an accused may file a reply brief no later than 7 days after 
the filing of a response brief on behalf of the government. If no brief 
is filed on behalf of an accused, a brief on behalf of the government 
may be filed within 30 days after expiration of the time allowed for the 
filing of a brief on behalf of the accused.
    (c) Appendix. The brief of either party may include an appendix. If 
an unpublished opinion is cited in the brief, a copy shall be attached 
in an appendix. The appendix may also include extracts of statutes, 
rules, or regulations. A motion must be filed under Sec. 150.23, infra, 
to attach any other matter.



Sec. 150.16  Oral arguments.

    Oral arguments may be heard in the discretion of the Court upon 
motion by either party or when otherwise ordered by the Court. The 
motion of a party for oral argument shall be made no later than 7 days 
after the filing of an answer to an appellant's brief. Such motion shall 
identify the issue(s) upon which counsel seek argument. The Court may, 
on its own motion, identify the issue(s) upon which it wishes argument.



Sec. 150.17  En banc proceedings.

    (a)(1) A party may suggest the appropriateness of consideration or 
reconsideration by the Court as a whole. Such consideration or 
reconsideration ordinarily will not be ordered except:
    (i) When consideration by the full Court is necessary to secure or 
maintain uniformity of decision, or
    (ii) When the proceedings involve a question of exceptional 
importance, or
    (iii) When a sentence being reviewed pursuant to Article 66 extends 
to death.
    (2) In cases being reviewed pursuant to Article 66, a party's 
suggestion that a matter be considered initially by the Court as a whole 
must be filed with the Court within 7 days after the government files 
its answer to the assignment of errors, or the appellant files a reply 
under Sec. 150.15(b). In other proceedings, the suggestion must be 
filed with the party's initial petition or other initial

[[Page 563]]

pleading, or within 7 days after the response thereto is filed. A 
suggestion for reconsideration by the Court as a whole must be made 
within the time prescribed by Sec. 150.19 for filing a motion for 
reconsideration. No response to a suggestion for consideration or 
reconsideration by the Court as a whole may be filed unless the Court 
shall so order.
    (b) The suggestion of a party for consideration or reconsideration 
by the Court as a whole shall be transmitted to each judge of the Court 
who is present for duty, but a vote need not be taken to determine 
whether the cause shall be considered or reconsidered by the Court as a 
whole on such a suggestion made by a party unless a judge requests a 
vote.
    (c) A majority of the judges present for duty may order that any 
appeal or other proceeding be considered or reconsidered by the Court 
sitting as a whole. However, en banc reconsideration of an en banc 
decision will not be held unless at least one member of the original 
majority concurs in a vote for reconsideration.
    (d) This rule does not affect the power of the Court sua sponte to 
consider or reconsider any case sitting as a whole.



Sec. 150.18  Orders and decisions of the Court.

    The Court shall give notice of its orders and decisions by 
immediately serving them, when rendered, on appellate defense counsel, 
including civilian counsel, if any, government counsel and the Judge 
Advocate General, or designee, as appropriate.



Sec. 150.19  Reconsideration.

    (a) The Court may, in its discretion and on its own motion, enter an 
order announcing its intent to reconsider its decision or order in any 
case not later than 30 days after service of such decision or order on 
appellate defense counsel or on the appellant, if the appellant is not 
represented by counsel, provided a petition for grant of review or 
certificate for review has not been filed with the United States Court 
of Appeals for the Armed Forces, or a record of trial for review under 
Article 67(b) has not been received by that Court. No briefs or 
arguments shall be received unless the order so directs.
    (b) Provided a petition for grant of review or certificate for 
review has not been filed with the United States Court of Appeals for 
the Armed Forces, or a record of trial for review under Article 67(b) or 
writ appeal has not been received by the United States Court of Appeals 
for the Armed Forces, the Court may, in its discretion, reconsider its 
decision or order in any case upon motion filed either:
    (1) By appellate defense counsel within 30 days after receipt by 
counsel, or by the appellant if the appellant is not represented by 
counsel, of a decision or order, or
    (2) By appellate government counsel within 30 days after the 
decision or order is received by counsel.
    (c) A motion for reconsideration shall briefly and directly state 
the grounds for reconsideration, including a statement of facts showing 
jurisdiction in the Court. A reply to the motion for reconsideration 
will be received by the Court only if filed within 7 days of receipt of 
a copy of the motion. Oral arguments shall not be heard on a motion for 
reconsideration unless ordered by the Court. The original of the motion 
filed with the Court shall indicate the date of receipt of a copy of the 
same by opposing counsel.
    (d) The time limitations prescribed by this part shall not be 
extended under the authority of Sec. Sec. 150.24 or 150.25 beyond the 
expiration of the time for filing a petition for review or writ appeal 
with the United States Court of Appeals for the Armed Forces, except 
that the time for filing briefs by either party may be extended for good 
cause.



Sec. 150.20  Petitions for extraordinary relief, answer, and reply.

    (a) Petition for extraordinary relief. A petition for extraordinary 
relief in the number of copies required by the Court shall be 
accompanied by proof of service on each party respondent and will 
contain:
    (1) A previous history of the case including whether prior actions 
have been filed or are pending for the same relief in this or any other 
court and the disposition or status of such actions;

[[Page 564]]

    (2) A concise and objective statement of all facts relevant to the 
issue presented and of any pertinent opinion, order or ruling;
    (3) A copy of any pertinent parts of the record and all exhibits 
related to the petition if reasonably available and transmittable at or 
near the time the petition is filed;
    (4) A statement of the issue;
    (5) The specific relief sought;
    (6) Reasons for granting the writ;
    (7) The jurisdictional basis for relief sought and the reasons why 
the relief sought cannot be obtained during the ordinary course of 
appellate review;
    (8) If desired, a request for appointment of appellate counsel.
    (b) Format. The title of the petition shall include the name, 
military grade and service number of each named party and, where 
appropriate, the official military or civilian title of any named party 
acting in an official capacity as an officer or agent of the United 
States. When an accused has not been named as a party, the accused shall 
be identified by name, military grade and service number by the 
petitioner and shall be designated as the real party in interest.
    (c) Electronic petitions. The Court will docket petitions for 
extraordinary relief submitted by electronic means. A petition submitted 
by electronic means will conclude with the full name and address of 
petitioner's counsel, if any, and will state when the written petition 
and brief, when required, were forwarded to the Court and to all named 
respondents, and by what means they were forwarded.
    (d) Notice to the Judge Advocate General. Immediately upon receipt 
of any petition, the clerk shall forward a copy of the petition to the 
appropriate Judge Advocate General or designee.
    (e) Briefs. Each petition for extraordinary relief must be 
accompanied by a brief in support of the petition unless it is filed in 
propria persona. The Court may issue a show cause order in which event 
the respondent shall file an answer within 10 days of the receipt of the 
show cause order. The petitioner may file a reply to the answer within 7 
days of receipt of the answer.
    (f) Initial action by the Court. The Court may dismiss or deny the 
petition, order the respondent to show cause and file an answer within 
the time specified, or take whatever other action it deems appropriate.
    (g) Oral argument and final action. The Court may set the matter for 
oral argument. However, on the basis of the pleading alone, the Court 
may grant or deny the relief sought or make such other order in the case 
as the circumstances may require. This includes referring the matter to 
a special master, who need not be a military judge, to further 
investigate; to take evidence; and to make such recommendations as the 
Court deems appropriate.



Sec. 150.21  Appeals by the United States.

    (a) Restricted filing. Only a representative of the government 
designated by the Judge Advocate General of the respective service may 
file an appeal by the United States under Article 62.
    (b) Counsel. Counsel must be qualified and appointed, and give 
notice of appearance in accordance with this part and those of the Judge 
Advocate General concerned.
    (c) Form of appeal. The appeal must include those documents 
specified by Rule for Courts-Martial 908 and by applicable regulations 
of the Secretary concerned. A certificate of the Notice of Appeal 
described in Rule for Courts-Martial 908(b)(3) must be included. The 
certificate of service must reflect the date and time of the military 
judge's ruling or order from which the appeal is taken, and the time and 
date of service upon the military judge.
    (d) Time for filing. All procedural Rules of the Court shall apply 
except as noted in this paragraph:
    (1) The representative of the government designated by the Judge 
Advocate General shall decide whether to file the appeal with the Court. 
The trial counsel shall have 20 days from the date written notice to 
appeal is filed with the trial court to forward the appeal, including an 
original and two copies of the record of trial, to the representative of 
the government designated by the Judge Advocate General. The person 
designated by the Judge Advocate General shall promptly file the 
original record with the Clerk of the Court and forward one copy to

[[Page 565]]

opposing counsel. Appellate government counsel shall have 20 days (or 
more upon a showing of good cause made by motion for enlargement within 
the 20 days) from the date the record is filed with the Court to file 
the appeal with supporting brief with the Court. Should the government 
decide to withdraw the appeal after the record is received by the Court, 
appellate government counsel shall notify the Court in writing. 
Appellate brief(s) shall be prepared in the manner prescribed by Sec. 
150.15.
    (2) Appellee shall prepare an answer in the manner prescribed by 
Sec. 150.15 and shall file such answer within 20 days after any filing 
of the government brief.
    (e) The government shall diligently prosecute all appeals by the 
United States and the Court will give such appeals priority over all 
other proceedings where practicable.



Sec. 150.22  Petitions for new trial.

    (a) Whether submitted to the Judge Advocate General by the accused 
in propria persona or by counsel for the accused, a petition for new 
trial submitted while the accused's case is undergoing review by a Court 
of Criminal Appeals shall be filed with an original and two copies and 
shall comply with the requirements of Rule for Courts-Martial 1210(c).
    (b) Upon receipt of a petition for new trial submitted by other than 
appellate defense counsel, the Court will notify all counsel of record 
of such fact.
    (c) A brief in support of a petition for new trial, unless expressly 
incorporated in or filed with the petition, will be filed substantially 
in the format specified by Sec. 150.15 no later than 30 days after the 
filing of the petition or receipt of the notice required by paragraph 
(b) of this section, whichever is later. An appellate's answer shall be 
filed no later than 30 days after the filing of an appellant's brief. A 
reply may be filed no later than 10 days after the filing of the 
appellee's answer.



Sec. 150.23  Motions.

    (a) Content. All motions, unless made during the course of a 
hearing, shall state with particularity the relief sought and the 
grounds therefor. Motions, pleading, and other papers desired to be 
filed with the Court may be combined in the same document, with the 
heading indicating, for example ``MOTION TO FILE (SUPPLEMENTAL 
ASSIGNMENT OF ERRORS) (CERTIFICATE OF CORRECTION) (SUPPLEMENTAL 
PLEADING)''; or ``ASSIGNMENT OF ERRORS AND MOTION TO FILE ATTACHED 
REPORT OF MEDICAL BOARD''.
    (b) Motions to attach documents. If a party desires to attach a 
statement of a person to the record for consideration by the Court on 
any matter, such statement shall be made either as an affidavit or as an 
unsworn declaration under penalty of perjury pursuant to 28 U.S.C. 1746. 
All documents containing language other than English shall have, 
attached, a certified English translation.
    (c) Opposition. Any opposition to a motion shall be filed within 7 
days after receipt by the opposing party of service of the motion.
    (d) Leave to file. Any pleading not authorized or required by this 
part, shall be accompanied by a motion for leave to file such pleading.
    (e) Oral argument. Oral argument shall not normally be permitted on 
motions.



Sec. 150.24  Continuances and interlocutory matters.

    Except as otherwise provided in Sec. 150.19(d), the Court, in its 
discretion, may extend any time limits prescribed and may dispose of any 
interlocutory or other appropriate matter not specifically covered by 
this part, in such manner as may appear to be required for a full, fair, 
and expeditious consideration of the case. See Sec. 150.4.



Sec. 150.25  Suspension of rules.

    For good cause shown, the Court acting as a whole or in panel may 
suspend the requirements or provisions of any of this part in a 
particular case on petition of a party or on its own motion and may 
order proceedings in accordance with its direction.



Sec. 150.26  Internal rules.

    The Chief Judge of the Court has the authority to prescribe internal 
rules for the Court.

[[Page 566]]



Sec. 150.27  Recording, photographing, broadcasting, or telecasting of 

hearings.

    The recording, photographing, broadcasting, or televising of any 
session of the Court or other activity relating thereto is prohibited 
unless specifically authorized by the Court.



Sec. 150.28  Amendments.

    Proposed amendments to this part may be submitted to the Chief Judge 
of any Court named in Sec. 150.1 or to a Judge Advocate General. Before 
acting on any proposed amendments not received from the Chief Judges, 
the Judge Advocates General shall refer them to the Chief Judges of the 
Courts for comment. The Chief Judges shall confer on any proposed 
changes, and shall report to the Judge Advocates General as to the 
suitability of proposed changes and their impact on the operation of the 
Courts and on appellate justice.



Sec. Appendix A to Part 150--Format for Direction for Review in a Court 

                           of Criminal Appeals

     In the United States ------------ \1\ Court of Criminal Appeals

United States v.________________________________________________________
(Full typed name, rank, service, & service number of accused)
---------------------------------------------------------------------------

    \1\ Use ``Army,'' ``Navy-Marine Corps,'' ``Air Force,'' or ``Coast 
Guard,'' as applicable.
---------------------------------------------------------------------------

Direction for Review Case No. --------

Tried at (location), on (date(s)) before a (type in court-martial) 
appointed by (convening authority)

To the Honorable, the Judges of the United States ------------ Court of 
                            Criminal Appeals

    1. Pursuant to Article 69 of the Uniform Code of Military Justice, 
10 U.S.C. Sec. 869 (1994) and the Rules of Practice and Procedure for 
Courts of Criminal Appeals, Rule 2(b), the record of trial in the above-
entitled case is forwarded for review.
    2. The accused was found guilty by a (type of court-martial) of a 
violation of Article(s) -------- of the Uniform Code of Military 
Justice, and was sentenced to (include entire adjudged sentence) on 
(insert trial date). The convening authority (approved the sentence as 
adjudged) (approved the following findings and sentence: ------------). 
The officer exercising general court-martial jurisdiction (where 
applicable) took the following action: ------------. The case was 
received for review pursuant to Article 69 on (date).
    3. In review, pursuant to Uniform Code of Military Justice, Article 
66, it is requested that action be taken with respect to the following 
issues:

[set out issues here]
________________________________________________________________________
The Judge Advocate General
    Received a copy of the foregoing Direction for Review this --------
---- (date).
________________________________________________________________________
Appellate Government Counsel

________________________________________________________________________
Address and telephone number

________________________________________________________________________
Appellate Defense Counsel

________________________________________________________________________
Address and telephone number



 Sec. Appendix B to Part 150--Format for Assignment of Errors and Brief 

                   on Behalf of Accused (Sec. 150.15)

     In the United States ------------ \2\ Court of Criminal Appeals

United States v.________________________________________________________
(Full typed name, rank, service, & service number of accused), Appellant
---------------------------------------------------------------------------

    \2\ Use ``Army,'' ``Navy-Marine Corps,'' ``Air Force,'' or ``Coast 
Guard,'' as applicable.
---------------------------------------------------------------------------

Assignment of Errors and Brief on Behalf of Accused Case No. --------

Tried at (location), on (date(s)) before a (type of court-martial) 
appointed by (convening authority)

To the Honorable, the Judges of the United States ------------ Court of 
                            Criminal Appeals

                          Statement of the Case

    [Set forth a concise summary of the chronology of the case, 
including the general nature of the charges, the pleas of the accused, 
the findings and sentence at trial, the action by the convening 
authority, and any other pertinent information regarding the 
proceedings.]

                           Statement of Facts

    [Set forth those facts necessary to a disposition of the assigned 
errors, including specific page references and exhibit numbers. Answers 
may adopt appellant's or petitioner's statement of facts if there is no 
dispute, may state additional facts, or, if there is a dispute, may 
restate the facts as they appear from appellee's or respondent's 
viewpoint. The repetition of uncontroverted matters is not desired.]

[[Page 567]]

                           Errors and Argument

    [Set forth each error alleged in upper case letters, followed by 
separate arguments for each error. Arguments shall discuss briefly the 
question presented, citing and quoting such authorities as are deemed 
pertinent. Each argument shall include a statement of the applicable 
standard of review, and shall be followed by a specific prayer for the 
relief requested.]

                                Appendix

    [The brief of either party may include an appendix containing copies 
of unpublished opinions cited in the brief, and extracts of statutes, 
rules or regulations pertinent to the assigned errors.]

________________________________________________________________________
(Signature of counsel)

________________________________________________________________________
Name (and rank) of counsel, address and telephone number

                    Certificate of Filing and Service

    I certify that a copy of the foregoing was mailed or delivered to 
the Court and opposing counsel on (date).

________________________________________________________________________
Name (rank) (and signature)

________________________________________________________________________
Address and telephone number

-------------------- (Date)



PART 151_STATUS OF FORCES POLICIES AND INFORMATION--Table of Contents



Sec.
151.1 Reissuance and purpose.
151.2 Applicability.
151.3 Policy.
151.4 Procedures and responsibilities.
151.5 Reports on the exercise of foreign criminal jurisdiction.
151.6 Resolution of ratification, with reservations, as agreed to by the 
          Senate on July 15, 1953.
151.7 Fair trial guarantees.

    Authority: 1 U.S.C. 133, 75 Stat. 517.

    Source: 45 FR 20465, Mar. 28, 1980, unless otherwise noted.



Sec. 151.1  Reissuance and purpose.

    This part is reissued to update established DoD policy and 
procedures on trial by foreign courts and treatment in foreign prisons 
of U.S. military personnel, nationals of the U.S. serving with, employed 
by, or accompaning the Armed Forces of the United States, and the 
dependents of both (hereafter referred to as U.S. personnel); and 
provides uniform reporting on the exercise of foreign criminal 
jurisdiction.



Sec. 151.2  Applicability.

    The provisions of this part apply to the Office of the Secretary of 
Defense, the Military Departments, and the Unified and Specified 
Commands. As used herein, the term ``Military Services'' refers to the 
Army, Navy, Air Force, and Marine Corps.



Sec. 151.3  Policy.

    It is the policy of the Department of Defense to protect, to the 
maximum extent possible, the rights of U.S. personnel who may be subject 
to criminal trial by foreign courts and imprisonment in foreign prisons.



Sec. 151.4  Procedures and responsibilities.

    (a) Application of Senate resolution on status of forces. This 
directive implements the Senate Resolution accompanying the Senate's 
consent to ratification of the North Atlantic Treaty (NATO) Status of 
Forces Agreement (Sec. 151.6). Although the Senate Resolution applies 
only to countries where the NATO Status of Forces Agreement is in 
effect, the same procedures for safeguarding the interests of U.S. 
personnel subject to foreign jurisdiction shall be applied insofar as 
practicable in overseas areas where U.S. forces are regularly stationed.
    (b) Orientation of personnel. The Military Services shall issue 
uniform regulations establishing an information and education policy on 
the laws and customs of the host country for personnel assigned to 
foreign areas.
    (c) Designated commanding officer. Formal invocation of the Senate 
Resolution procedure shall be the responsibility of a single military 
commander in each foreign country where United States forces are 
stationed. Attache personnel and other military personnel serving under 
a chief of a diplomatic mission shall not be considered U.S. forces in 
this part.
    (1) In the geographical areas for which a unified command exists, 
the commander shall designate within each country the ``Commanding 
Officer'' referred to in the Senate Resolution (Sec. 151.6).

[[Page 568]]

    (2) In areas where a unified command does not exist, a commanding 
officer in each country shall be nominated by the Military Departments. 
These recommendations shall be forwarded by the Judge Advocate General 
of the Army to the Secretary of Defense, for implementation through the 
Office of the Assistant Secretary of Defense (International Security 
Affairs). In designating the commanding officer to act for all the 
Military Departments, consideration must be given to the availability of 
legal officers and readiness of access to the seat of the foreign 
government. Such an officer may also be appointed by the Military 
Departments for countries where no U.S. forces are regularly stationed.
    (d) Country law studies. (1) For each foreign country where U.S. 
forces are subject to the criminal jurisdiction of foreign authorities, 
the designated commanding officer for such country shall make and 
maintain a current study of the laws and legal procedures in effect. 
Studies of the laws of other countries shall be made when directed. This 
study shall be a general examination of the substantive and procedural 
criminal law of the foreign country, and shall contain a comparison 
thereof with the procedural safeguards of a fair trial in the State 
courts of the United States.
    (2) Copies of these studies shall be forwarded by the designated 
commanding officer to each of the Judge Advocates General of the 
Military Services. Principal emphasis is to be placed on those 
safeguards that are of such a fundamental nature as to be guaranteed by 
the Constitution of the United States in all criminal trials in State 
courts of the United States. See Sec. 151.7 for enumeration of 
safeguards considered important. These country law studies shall be 
subject to a continuing review. Whenever there is a significant change 
in any country's criminal law, the change shall be forwarded by the 
designated commanding officer to each of the Military Service's Judge 
Advocates General.
    (e) Waivers of local jurisdiction--military personnel. (1) In cases 
where it appears probable that release of jurisdiction over U.S. 
military personnel will not be obtained and the accused may not obtain a 
fair trial, the commander exercising general court-martial jurisdiction 
over the accused shall communicate directly with the designated 
commanding officer, report the full facts of the case, and supply a 
recommendation.
    (2) The designated commanding officer shall determine, in the light 
of legal procedures in effect in that country, whether there is danger 
that the accused will not receive a fair trial. A trial shall not be 
considered unfair merely because it is not identical with trials held in 
the United States. Due regard, however, should be given to those United 
States trial rights listed in Sec. 151.7 that are relevant to the facts 
and circumstances of the trial in question.
    (3) If the designated commanding officer determines there is risk of 
an unfair trial, the commanding officer shall decide, after consultation 
with the chief of the diplomatic mission, whether to press a request for 
waiver of jurisdiction through diplomatic channels. If the commanding 
officer so decides, the recommendation shall be submitted through the 
unified commander, if any, and The Judge Advocate General of the 
accused's service, to the Office of the Secretary of Defense. The 
objective in each case is to see that U.S. military personnel obtain a 
fair trial in the receiving state under all circumstances.
    (f) Request to foreign authorities not to exercise their criminal 
jurisdiction over civilians and dependents. The following procedures 
shall be followed when it appears that foreign authorities may assume 
criminal jurisdiction over dependents of U.S. military personnel, 
civilian personnel, and their dependents:
    (1) When the designated commanding officer determines, after a 
careful consideration of all the circumstances, that suitable corrective 
action can be taken under existing administrative regulations, the 
commanding officer may request the local foreign authorities to refrain 
from exercising their criminal jurisdiction.
    (2) When it appears possible that release of jurisdiction will not 
be obtained and that the accused may not obtain a fair trial, the 
commander exercising general court-martial jurisdiction over the command 
in which such

[[Page 569]]

personnel are located shall communicate directly with the designated 
commanding officer, reporting the full facts of the case and supplying a 
recommendation.
    (3) The designated commanding officer shall then determine, in the 
light of legal procedures in effect in that country, whether there is 
danger that the accused will not receive a fair trial.
    (4) If it is determined that there is such danger, the designated 
commanding officer shall decide, after consultation with the chief of 
the diplomatic mission, whether a request should be submitted through 
diplomatic channels to foreign authorities seeking their assurances of a 
fair trial for the accused or, in appropriate circumstances, that they 
forego their right to exercise jurisdiction over the accused. If the 
designated commanding officer so decides, a recommendation shall be 
submitted through the unified commander, if any, and The Judge Advocate 
General of the Military Service concerned, to the Office of the 
Secretary of Defense.
    (g) Trial observers and trial observer report. (1) The designated 
commanding officer shall submit to the chief of the diplomatic mission a 
list of persons qualified to serve as U.S. observers at trials before 
courts of the receiving state. Nominees shall be lawyers, and shall be 
selected for maturity of judgment. The list shall include, where 
possible, representatives of all Military Services whose personnel are 
stationed in that country to enable the chief of the diplomatic mission 
to appoint an observer from the same Military Service as the accused. 
The requirement that nominees shall be lawyers may be waived in cases of 
minor offenses. Incidents that result in serious personal injury or that 
would normally result in sentences to confinement, whether or not 
suspended, shall not be considered minor offenses.
    (2) Trial observers shall attend and prepare formal reports in all 
cases of trials of U.S. personnel by foreign courts or tribunals, except 
for minor offenses. In cases of minor offenses, the observer shall 
attend the trial at the discretion of the designated commanding officer, 
but shall not be required to make a formal report. These reports need 
not be classified, but shall be treated as For Official Use Only 
documents. They shall be forwarded intact to the designated commanding 
officer through such agencies as the designated commanding officer may 
prescribe for transmission to the Judge Advocate General of the 
accused's service, with any comments of the appropriate Military Service 
commander. These reports shall be forwarded immediately upon the 
completion of the trial in the lower court, and shall not be delayed 
because of the possibility of a new trial, rehearing or appeal, reports 
of which shall be forwarded in the same manner. Copies shall also be 
forwarded to the unified commander, if any, and to the chief of the 
diplomatic mission.
    (3) The trial observer report shall contain a factual description or 
summary of the trial proceedings. It should enable an informed judgment 
to be made regarding: (i) Whether there was any failure to comply with 
the procedural safeguards secured by a pertinent status of forces 
agreement, and (ii) whether the accused received a fair trial under all 
the circumstances. The report shall specify the conclusions of the trial 
observer with respect to paragraph (g)(3)(i) of this section, and shall 
state in detail the basis for the conclusions. Unless the designated 
commanding officer directs otherwise, the report shall not contain 
conclusions with respect to paragraph (g)(3)(ii) of this section.
    (4) The designated commanding officer, upon receipt of a trial 
observer report, shall be responsible for determining: (i) Whether there 
was any failure to comply with the procedural safeguards secured by the 
pertinent status of forces agreement, and (ii) whether the accused 
received a fair trial under all the circumstances. Due regard should be 
given to those fair trial rights listed in Sec. 151.7 that are relevant 
to the particular facts and circumstances of the trial. However, a trial 
shall not be found unfair merely because it is not identical with trials 
held in the United States. If the designated commanding officer is of 
the opinion that the procedural safeguards specified in pertinent 
agreements were denied or that the trial was otherwise

[[Page 570]]

unjust, the commanding officer shall submit to the Office of the 
Secretary of Defense, through the unified commander and the Judge 
Advocate General of the Military Service concerned, a recommendation as 
to appropriate action to rectify the trial deficiencies and otherwise to 
protect the rights or interests of the accused. This shall include a 
statement of efforts taken or to be taken at the local level to protect 
the right of the accused. An information copy of the recommendation of 
the designated commanding officer shall be forwarded to the diplomatic 
or consular mission in the country concerned.
    (h) Counsel fees and related assistance. When the Secretary of the 
Military Department concerned or designee considers such action to be in 
the best interests of the United States, representation by civilian 
counsel and other assistance described under 10 U.S.C. 1037 may be 
furnished at Government expense to U.S. personnel tried in foreign 
countries.
    (i) Treatment of U.S. personnel confined in foreign penal 
institutions. (1) Insofar as practicable and subject to the laws and 
regulations of the country concerned and the provisions of any agreement 
therewith, the Department of Defense seeks to ensure that U.S. military 
personnel: (i) When in the custody of foreign authorities are fairly 
treated at all times and (ii) when confined (pretrial and post-trial) in 
foreign penal institutions are accorded the treatment and are entitled 
to all the rights, privileges, and protections of personnel confined in 
U.S. military facilities. Such rights, privileges, and protections are 
enunciated in present Military Service directives and regulations, and 
include, but are not limited to, legal assistance, visitation, medical 
attention, food, bedding, clothing, and other health and comfort 
supplies.
    (2) In consonance with this policy, U.S. military personnel confined 
in foreign penal institutions shall be visited at least every 30 days, 
at which time the conditions of confinement and other matters relating 
to their health and welfare shall be observed. The Military Services 
shall maintain, on a current basis, records of these visits as reports 
by their respective commands. Records of each visit should contain the 
following information:
    (i) Names of personnel conducting visit and date of visit.
    (ii) Name of each prisoner visited, serial number, and sentence.
    (iii) Name and location of prison.
    (iv) Treatment of the individual prisoner by prison warden and other 
personnel (include a short description of the rehabilitation program, if 
any, as applied to the prisoner).
    (v) Conditions existing in the prison, such as light, heat, 
sanitation, food, recreation, and religious activities.
    (vi) Change in status of prisoner, conditions of confinement or 
transfer to another institution.
    (vii) Condition of prisoner, physical and mental.
    (viii) Assistance given to prisoner, such as legal, medical, food, 
bedding, clothing, and health and comfort supplies.
    (ix) Action taken to have any deficiencies corrected, either by the 
local commander or through diplomatic or consular mission.
    (x) Designation of command responsible for prisoner's welfare and 
reporting of visits.
    (xi) Information as to discharge of a prisoner from the Military 
Service or termination of confinement.
    (3) When it is impracticable for the individual's commanding officer 
or representative to make visits, the designated commanding officer 
should be requested to arrange that another unit be responsible for such 
visits or to request that the appropriate diplomatic or consular mission 
assume responsibility therefor. When necessary, a medical officer should 
participate in the visits and record the results of medical 
examinations. If reasonable requests for permission to visit U.S. 
military personnel are arbitrarily denied, or it is ascertained that the 
individual is being mistreated or that the conditions of custody or 
confinement are substandard, the case should be referred to the 
diplomatic or consular mission concerned for appropriate action.
    (4) To the extent possible, military commanders should seek to 
conclude local arrangements whereby U.S. military authorities may be 
permitted to

[[Page 571]]

accord U.S. military personnel confined in foreign institutions the 
treatment, rights, privileges, and protection similar to those accorded 
such personnel confined in U.S. military facilities. The details of such 
arrangements should be submitted to the Judge Advocates General of the 
Military Services.
    (5) The military commanders shall make appropriate arrangements with 
foreign authorities whereby custody of individuals who are members of 
the Armed Forces of the United States shall, when they are released from 
confinement by foreign authorities, be turned over to U.S. military 
authorities. In appropriate cases, diplomatic or consular officers 
should be requested to keep the military authorities advised as to the 
anticipated date of the release of such persons by the foreign 
authorities.
    (6) In cooperation with the appropriate diplomatic or consular 
mission, military commanders shall, insofar as possible, ensure that 
dependents of U.S. military personnel, nationals of the United States 
serving with, employed by or accompanying the armed forces, and 
dependents of such nationals when in the custody of foreign authorities, 
or when confined (pretrial and post-trial) in foreign penal institutions 
receive the same treatment, rights, and support as would be extended to 
U.S. military personnel in comparable situations pursuant to the 
provisions of Sec. 151.4(i).
    (j) Discharge. U.S. military personnel confined in foreign prisons 
shall not be discharged from military service until the completion of 
the term of imprisonment and the return of the accused to the United 
States, except that in unusual cases such discharges may be accomplished 
upon prior authorization of the Secretary of the Military Department 
concerned.
    (k) Information policy. It is the basic policy of the Department of 
Defense that the general public and the Congress must be provided 
promptly with the maximum information concerning status of forces 
matters that are consistent with the national interest. Information 
shall be coordinated and furnished to the public and the Congress in 
accordance with established procedures, including DoD Directive 5122.5, 
\1\ ``Assistant Secretary of Defense (Public Affairs),'' July 10, 1961, 
and parts 286 and 286a of this title.
---------------------------------------------------------------------------

    \1\ Copies may be obtained, if needed, from the U.S. Naval 
Publications and Forms Center, 5801 Tabor Avenue, Philadelphia, PA 
19120, Attention: Code 301.
---------------------------------------------------------------------------



Sec. 151.5  Reports on the exercise of foreign criminal jurisdiction.

    The following reporting system, which has been implemented by the 
Military Departments, shall be continued after revision in accordance 
with the provisions herein. The Department of the Army is designated as 
executive agent within the Department of Defense for maintaining and 
collating information received on the basis of the reports submitted.
    (a) Annual reports. Annual reports, based on information furnished 
by the Military Departments covering the period December 1 through 
November 30 shall be prepared by the Department of the Army and 
submitted within such time as may be required but not later than 120 
days after the close of the reporting period. The reports shall be 
submitted in one reproducible copy to the Office of the General Counsel, 
DoD, in accordance with departmental implementation of this part. The 
reporting content of this requirement shall be as follows:
    (1) A statistical summary (DD Form 838) by country and type of 
offense of all cases involving U.S. personnel.
    (2) A report signed by the appropriate Military Service commander in 
each country for which DD Form 838 is prepared, concerning the 
commander's personal evaluation of the impact, if any, the local 
jurisdictional arrangements have had upon accomplishment of the mission 
and upon the discipline and morale of the forces, together with specific 
facts or other information, where appropriate, substantiating the 
commanders' opinion.
    (3) A report of the results of visits made and particular actions 
taken by appropriate military commanders under Sec. 151.4(i).
    (4) A report of the implementation of 10 U.S.C. 1037 showing by 
country and Military Service:

[[Page 572]]

    (i) The total number of cases in which funds were expended and
    (ii) Total expenditures in each of the following categories:
    (A) Payment of counsel fees,
    (B) Provision of bail,
    (C) Court costs and other expenses.
    (b) Quarterly reports. (1) Quarterly reports for the periods ending 
November 30, February 28, May 31, and August 31, consisting of lists of 
U.S. personnel imprisoned and released, shall be submitted, in 
accordance with departmental implementation of this part to the 
Department of the Army and by the Department of the Army, as executive 
agent, to the Director, Washington Headquarters Services, in four 
copies, on or before the 15th day following the report quarter as 
follows:
    (i) An alphabetical list of U.S. personnel who were imprisoned 
during the reporting period under sentence of confinement imposed by a 
foreign country, indicating the individual's home address, grade, and 
serial number (where applicable), offense of which found guilty, date 
and place of confinement, length of sentence to confinement imposed, and 
estimated date of release from confinement.
    (ii) A similar list of the names of prisoners released during the 
reporting period.
    (2) An information copy of these lists shall be furnished by the 
appropriate Military Service commander to the diplomatic or consular 
mission in the country concerned.
    (c) Other reports. (1) Each Military Department shall maintain, on a 
current basis, and submit monthly to the Director, Washington 
Headquarters Service, in four copies, a list of the most important cases 
pending, with a brief summary of the salient facts in each case. 
Selection of the cases to be included shall be left to the judgment of 
the appropriate officials of each Military Department. Instances of 
deficiency in the treatment or conditions of confinement in foreign 
penal institutions or arbitrary denial of permission to visit such 
personnel shall be considered important cases. Lists covering the 
previous month shall be submitted on the 6th day of the month following.
    (2) Important new cases or important developments in pending cases 
shall be reported informally and immediately to the Office of the 
General Counsel, DoD.



Sec. 151.6  Resolution of ratification, with reservations, as agreed to by the 

Senate on July 15, 1953.

    Resolved (two-thirds of the Senators present concurring therein), 
That the Senate advise and consent to the ratification of Executive T, 
Eighty-second Congress, second session, an agreement between the parties 
to the North Atlantic Treaty Regarding the Status of their Forces, 
signed at London on June 19, 1951. It is the understanding of the 
Senate, which understanding inheres in its advise and consent to the 
ratification of the Agreement, that nothing in the Agreement diminishes, 
abridges, or alters the right of the United States of America to 
safeguard its own security by excluding or removing persons whose 
presence in the United States is deemed prejudicial to its safety or 
security, and that no person whose presence in the United States is 
deemed prejudicial to its safety or security shall be permitted to enter 
or remain in the United States. In giving its advise and consent to 
ratification, it is the sense of the Senate that:
    (a) The criminal jurisdiction provisions of Article VII do not 
constitute a precedent for future agreements;
    (b) Where a person subject to the military jurisdiction of the 
United States is to be tried by the authorities of a receiving state, 
under the treaty the Commanding Officer of the armed forces of the 
United States in such state shall examine the laws of such state with 
particular reference to the procedural safeguards contained in the 
Constitution of the United States;
    (c) If, in the opinion of such Commanding Officer, under all the 
circumstances of the case, there is danger that the accused will not be 
protected becase of the absence or denial of constitutional rights the 
accused would enjoy in the United States, the Commanding Officer shall 
request the authorities of the receiving State to waive jurisdiction in 
accordance with the provisions of paragraph 3(c) of Article VII (which 
requires the receiving

[[Page 573]]

State to give ``sympathetic consideration'' to such request) and if such 
authorities refuse to waive jurisdiction, the commanding officer shall 
request the Department of State to press such request through diplomatic 
channels and notification shall be given by the Executive Branch to the 
Armed Services Committees of the Senate and House of Representatives;
    (d) A representative of the United States to be appointed by the 
Chief of Diplomatic Mission with the advice of the senior U.S. military 
representative in the receiving State will attend the trial of any such 
person by the authorities of a receiving State under the agreement, and 
any failure to comply with the provisions of paragraph 9 of Article VII 
of the Agreement shall be reported to the commanding officer of the 
Armed Forces of the United States in such State who shall then request 
the Department of State to take appropriate action to protect the rights 
of the accused, and notification shall be given by the Executive Branch 
to the Armed Services Committees of the Senate and House of 
Representatives.



Sec. 151.7  Fair trial guarantees.

    The following is a listing of ``fair trial'' safeguards or 
guarantees that are considered to be applicable to U.S. State court 
criminal proceedings, by virtue of the 14th Amendment as interpreted by 
the Supreme Court of the United States. The list is intended as a guide 
for the preparation of country law studies prescribed by Sec. 151.4 and 
for the determinations made by the designated commanding officer under 
Sec. 151.4(e) through Sec. 151.4(g). Designated commanding officers 
should also consider other factors that could result in a violation of 
due process of law in State court proceedings in the United States.
    (a) Criminal statute alleged to be violated must set forth specific 
and definite standards of guilt.
    (b) Accused shall not be prosecuted under an ex post facto law.
    (c) Accused shall not be punished by bills of attainder.
    (d) Accused must be informed of the nature and cause of the 
accusation and have a reasonable time to prepare a defense.
    (e) Accused is entitled to have the assistance of defense counsel.
    (f) Accused is entitled to be present at the trial.
    (g) Accused is entitled to be confronted with hostile witnesses.
    (h) Accused is entitled to have compulsory process for obtaining 
favorable witnesses.
    (i) Use of evidence against the accused obtained through 
unreasonable search or seizure or other illegal means is prohibited.
    (j) Burden of proof is on the Government in all criminal trials.
    (k) Accused is entitled to be tried by an impartial court.
    (l) Accused may not be compelled to be a witness against him or 
herself; and shall be protected from the use of a confession obtained by 
torture, threats, violence, or the exertion of any improper influence.
    (m) Accused shall not be subjected to cruel and unusual punishment.
    (n) Accused is entitled to be tried without unreasonable 
(prejudicial) delay.
    (o) Accused is entitled to a competent interpreter when the accused 
does not understand the language in which the trial is conducted and 
does not have counsel proficient in the language both of the court and 
of the accused.
    (p) Accused is entitled to a public trial.
    (q) Accused may not be subjected to consecutive trials for the same 
offense that are so vexatious as to indicate fundamental unfairness.



PART 152_REVIEW OF THE MANUAL FOR COURTS-MARTIAL--Table of Contents



Sec.
152.1 Purpose.
152.2 Applicability.
152.3 Policy.
152.4 Responsibilities.
152.5 Implementation.

Appendix A to Part 152--Guidance to the Joint Service Committee (JSC)

    Authority: E.O. 12473; 10 U.S.C. 47.

    Source: 68 FR 36916, June 20, 2003, unless otherwise noted.



Sec. 152.1  Purpose.

    This part:

[[Page 574]]

    (a) Implements the requirement established by the President in 
Executive Order 12473 that the Manual for Courts-Martial (MCM), United 
States, 1984, and subsequent editions, be reviewed annually.
    (b) Formalizes the Joint Service Committee (JSC) and defines the 
roles, responsibilities, and procedures of the JSC in reviewing and 
proposing changes to the MCM and proposing legislation to amend the 
Uniform Code of Military Justice (UCMJ) (10 U.S.C., Chapter 47).
    (c) Provides for the designation of a Secretary of a Military 
Department to serve as the Executive Agent for the JSC.



Sec. 152.2  Applicability.

    This part applies to the Office of the Secretary of Defense, the 
Military Departments (including the Coast Guard by agreement with the 
Department of Homeland Security when it is not operating as a Service of 
the Department of the Navy), the Chairman of the Joint Chiefs of Staff, 
the Combatant Commands, the Inspector General of the Department of 
Defense, the Defense Agencies, the DoD Field Activities, and all other 
organizational entities in the Department of Defense (hereafter 
collectively referred to as ``the DoD Components'').



Sec. 152.3  Policy.

    To assist the President in fulfilling his responsibilities under the 
UCMJ, and to satisfy the requirements of Executive Order 12473, the 
Department of Defense shall review the Manual for Courts-Martial 
annually, and, as appropriate, propose legislation amending the UCMJ to 
ensure that the MCM and the UCMJ fulfill their fundamental purpose as a 
comprehensive body of military criminal law and procedure. The role of 
the JSC furthers these responsibilities. Under the direction of the 
General Counsel of the Department of Defense, the JSC is responsible for 
reviewing the MCM and proposing amendments to it and, as necessary, to 
the UCMJ.



Sec. 152.4  Responsibilities.

    (a) The General Counsel to the Department of Defense shall:
    (1) Administer this part, to include coordination on and approval of 
legislative proposals to amend the UCMJ, approval of the annual review 
of the MEM, and coordination of any proposed changes to the MCM under 
OMB Circular A-19. \1\
---------------------------------------------------------------------------

    \1\ Available at http://www.whitehouse.gov/omb/circulars/index.html.
---------------------------------------------------------------------------

    (2) Designate the Secretary of a Military Department to serve as the 
joint Service provider for the JSC. The joint Service provider shall act 
on behalf of the JSC for maintaining the JSC's files and historical 
records, and for publication of the updated editions of the MCM to be 
distributed throughout the Department of Defense, as appropriate.
    (3) Invite the Secretary of Homeland Security to appoint 
representatives to the JSC.
    (4) Invite the Chief Judge of the United States Court of Appeals for 
the Armed Forces to provide a staff member to serve as an advisor to the 
JSC.
    (5) Invite the Chairman of the Joint Chiefs of Staff to provide a 
staff member from the Chairman's Office of Legal Counsel to serve as an 
advisor to the JSC.
    (6) Ensure that the Associate Deputy General Counsel (Military 
Justice and Personnel Policy), Office of the General Counsel, Department 
of Defense, shall serve as the General Counsel's representative to the 
JSC in a non-voting capacity. In addition, the United States Court of 
Appeals for the Armed Forces (USCAAF) and the Legal Counsel to the 
Chairman of the Joint Chiefs of Staff shall be invited to provide a 
staff member to serve as an advisor to the JSC in a non-voting capacity.
    (b) The Secretaries of the Military Departments shall ensure that 
the Judge Advocates General of the Military Departments and the Staff 
Judge Advocate to the Commandant of the Marine Corps appoint 
representatives to the JSC.
    (c) The JSC shall further the DoD policy established in section 3 of 
this part and perform additional studies or other duties related to the 
administration of military justice, as the General Counsel of the 
Department of Defense may direct. (See DoD Directive 5105.18,

[[Page 575]]

``DoD Committee Management Program''. \2\) The membership of the JSC 
shall consist of one representative of each of the following, who shall 
comprise the JSC Voting Group:
---------------------------------------------------------------------------

    \2\ Available at http://www.dtic.mil/whs/directives.
---------------------------------------------------------------------------

    (1) The Judge Advocate General of the Army.
    (2) The Judge Advocate General of the Navy.
    (3) The Judge Advocate General of the Air Force.
    (4) The Staff Judge Advocate to the Commandant of the Marine Corps; 
and
    (5) By agreement with the Department of Homeland Security, the Chief 
Counsel, United States Coast Guard.
    (d) The JSC Working Group (WG) shall assist the JSC Voting Group in 
fulfilling its responsibilities under this part. The WG consists of non-
voting representatives from each of the Services and may include the 
representatives from the USCAAF, and the Office of the Legal Counsel to 
the Chairman of the Joint Chiefs of Staff.
    (e) The JSC chairmanship rotates biennially among the Services in 
the following order: The Army, the Air Force, the Marine Corps, the 
Navy, and the Coast Guard. Due to its size and manning constraints, a 
Coast Guard's request not to be considered for JSC chairmanship shall be 
honored. The Military Service of the JSC Chairman shall provide an 
Executive Secretary for the JSC.



Sec. 152.5  Implementation.

    The foregoing policies and procedures providing guidelines for 
implementation of this part, as well as those contained in the appendix, 
are intended exclusively for the guidance of military personnel and 
civilian employees of the Department of Defense, and the United States 
Coast Guard by agreement of the Department of Homeland Security. These 
guidelines are intended to improve the internal management of the 
Federal Government and are not intended to create any right, privilege, 
or benefit, substantive of procedural, to any person or enforceable at 
law by any party against the United States, its agencies, its officers, 
or any person.



  Sec. Appendix A to Part 152--Guidance to the Joint Service Committee 

                                 (JSCA)

    (a) Review the Manual for Courts-Martial. (1) The Joint Service 
Committee (JSC) shall conduct an annual review of the Manual for Courts-
Martial (MCM), in light of judicial and legislative developments in 
military and civilian practice, to ensure:
    (i) The MCM implements the Uniform Code of Military Justice (UCMJ) 
and reflects current military practice and judicial precedent.
    (ii) The rules and procedures of the MCM are uniform insofar as 
practicable.
    (iii) The MCM applies, to the extent practicable, the principles of 
law and the rules of evidence generally recognized in the trial of 
criminal cases in United States district courts, but which are not 
contrary to or inconsistent with the UCMJ.
    (iv) The MCM is workable throughout the worldwide jurisdiction of 
the UCMJ; and,
    (v) The MCM is workable across the spectrum of circumstances in 
which courts-martial are conducted, including combat conditions.
    (2) During this review, any JSC voting member may propose for the 
Voting Group's consideration an amendment to the MCM. Proposed 
amendments to the MCM shall ordinarily be referred to the JSC Working 
Group (WG) for study. The WG assists the JSC in staffing various 
proposals, conducting studies of proposals and other military justice 
related topics at the JSC's direction, and making reports to the JSC. 
Any proposed amendment to the MCM, if approved by a majority of the JSC 
voting members, becomes a part of the annual review.
    (3) The JSC shall prepare a draft of the annual review of the MCM 
and forward it to the General Counsel of the Department of Defense, on 
or about December 31st. The General Counsel of the Department of Defense 
may submit the draft of the annual review to the Code Committee 
established by Article 146 of the UCMJ, with an invitation to submit 
comments.
    (4) The draft of the annual review shall set forth any specific 
recommendations for changes to the MCM, including, if not adequately 
addressed in the accompanying discussion or analysis, a concise 
statement of the basis and purpose of any proposed change. If no changes 
are recommended, the draft review shall so state. If the JSC recommends 
changes to the MCM, the draft review shall so state. If the JSC 
recommends changes to the MCM, the public notice procedures of paragraph 
(d)(3) of this appendix are applicable.
    (b) Changes to the Manual for Courts-Martial. (1) By January 1st of 
each year, the JSC voting members shall ensure that a solicitation for 
proposed changes to the MCM is sent

[[Page 576]]

to appropriate agencies within their respective Services that includes, 
but is not limited to, the judiciary, the trial counsel and defense 
counsel organizations, and the judge advocate general schools.
    (2) The Federal Register announcement of each year's annual review 
of proposed changes to the MCM shall also invite members of the public 
to submit any new proposals for JSC consideration during subsequent JSC 
annual reviews.
    (3) When the JSC receives proposed changes to the MCM either by 
solicitation or Federal Register notice, the JSC shall determine whether 
the proposal should be considered under paragraph (a)(2) of this 
appendix by determining if one or more of the JSC voting member(s) 
intends to sponsor the proposed change. The JSC shall determine when 
such sponsored proposals should be considered under the annual review 
process, taking into account any other proposals under consideration and 
any other reviews or studies directed by the General Counsel of the 
Department of Defense.
    (4) Changes to the MCM shall be proposed as part of the annual 
review conducted under paragraph (a) of this appendix. When earlier 
implementation is required, the JSC may send proposed changes to the 
General Counsel of the Department of Defense, for coordination under DoD 
Directive 5500.1. \3\
---------------------------------------------------------------------------

    \3\ Available at http://www.dtic.mil/whs/directives.
---------------------------------------------------------------------------

    (c) Proposals to Amend the Uniform Code of Military Justice. The JSC 
may determine that the efficient administration of military justice 
within the Armed Services requires amendments to the UCMJ, or that a 
desired amendment to the MCM makes necessary an amendment to the UCMJ. 
In such cases, the JSC shall forward to the General Counsel of the 
Department of Defense, a legislative proposal to change the UCMJ. The 
General Counsel of the Department of Defense may direct that the JSC 
forward any such legislative proposal to the Code Committee for its 
consideration under Article 146, UCMJ.
    (d) Public Notice and Meeting. (1) Proposals to amend the UCMJ are 
not governed by the procedures set out in this paragraph. (See DoD 
Directive 5105. 18. This paragraph applies only to the JSC 
recommendations to amend the MCM.)
    (2) It is DoD policy to encourage public participation in the JSC's 
review of the MCM. Notice that the Department of Defense, through the 
JSC, intends to propose changes to the MCM normally shall be published 
in the Federal Register before submission of such changes to the 
President. This notice is not required when the Secretary of Defense in 
his sole and unreviewable discretion proposes that the President issue 
the change without such notice on the basis that public notice 
procedures, as set forth in this part, are unnecessary or contrary to 
the sound administration of military justice, or a MCM change 
corresponding to legislation is expeditiously required to keep the MCM 
current and consistent with changes in applicable law.
    (3) The Office of General Counsel of the Department of Defense shall 
facilitate publishing the Federal Register notice required under this 
paragraph.
    (4) The notice under this paragraph shall consist of the publication 
of the full text of the proposed changes, including discussion and 
analysis, unless the General Counsel of the Department of Defense 
determines that such publication in full would unduly burden the Federal 
Register, the time and place where a copy of the proposed change may be 
examined, and the procedure for obtaining access to or a copy of the 
proposed change.
    (5) A period of not fewer than 60 days after publication of notice 
normally shall be allowed for public comment, but a shorter period may 
be authorized when the General Counsel of the Department of Defense 
determines that a 60-day period is unnecessary or is contrary to the 
sound administration of military justice. The Federal Register notice 
shall normally indicate that public comments shall be submitted to the 
Executive Secretary of the JSC.
    (6) The JSC shall provide notice in the Federal Register and hold a 
public meeting during the public comments period, where interested 
persons shall be given a reasonable opportunity to submit views on any 
of the proposed changes contained in the annual review. Public proposals 
and comments to the JSC should include a reference to the specific 
provision to be changed, a rational for the proposed change, and 
specific and detailed proposed language to replace the current language. 
Incomplete submissions might be insufficient to receive the 
consideration desired. The JSC shall seek to consider all views 
presented at the public meeting as well as any written comments 
submitted during the 60-day period when determining the final form of 
any proposed amendments to the MCM.
    (E) Internal Rules and Record-Keeping. (1) In furthering DoD policy, 
studying issues, or performing other duties relating to the 
administration of military justice, the JSC may establish internal rules 
governing its operation.
    (2) The JSC shall create a file system and maintain appropriate JSC 
records.

[[Page 577]]



PART 153_CRIMINAL JURISDICTION OVER CIVILIANS EMPLOYED BY OR ACCOMPANYING THE 

ARMED FORCES OUTSIDE THE UNITED STATES, CERTAIN SERVICE MEMBERS, AND FORMER 

SERVICE MEMBERS--Table of Contents



Sec.
153.1 Purpose.
153.2 Applicability and scope.
153.3 Definitions.
153.4 Responsibilities.
153.5 Procedures.

Appendix A to Part 153--Guidelines
Appendix B to Part 153--Acknowledgement of Limited Legal Representation 
          (Sample)

    Authority: 10 U.S.C. 301.

    Source: 71 FR 8947, Feb. 22, 2006, unless otherwise noted.



Sec. 153.1  Purpose.

    This part:
    (a) Implements policies and procedures, and assigns responsibilities 
under the Military Extraterritorial Jurisdiction Act of 2000, as amended 
by section 1088 of the ``Ronald W. Reagan National Defense Authorization 
Act for Fiscal Year 2005,'' October 28, 2004 (hereinafter referred to as 
``the Act'') for exercising extraterritorial criminal jurisdiction over 
certain military personnel, former service members of the United States 
Armed Forces, and over civilians employed by or accompanying the Armed 
Forces outside the United States (U.S.).
    (b) Implements section 3266 of the Act.



Sec. 153.2  Applicability and scope.

    (a) This part applies to the Office of the Secretary of Defense, the 
Military Departments (including the Coast Guard by agreement with the 
Department of Homeland Security when it is not operating as a Service of 
the Department of the Navy), the Chairman of the Joint Chiefs of Staff, 
the Combatant Commands, the Inspector General of the Department of 
Defense, the Defense Agencies, the DoD Field Activities, and all other 
organizational entities within the Department of Defense (hereafter 
referred to collectively as ``the DoD Components''). The term ``Military 
Services,'' as used herein, refers to the Army, the Navy, the Air Force, 
and the Marine Corps.
    (b) Coast Guard. The Coast Guard ordinarily operates as a separate 
branch of the Armed Forces in the Department of Homeland Security (DHS). 
However, upon Presidential Directive, the Coast Guard operates as a 
Service within the Department of the Navy and becomes part of the 
Department of Defense. By agreement with the Secretary of the Department 
of Homeland Security, when the Coast Guard is operating as a separate 
Service within the DHS, this part shall apply to the Coast Guard to the 
extent permitted by the Act. Whether a provision of this Instruction 
applies to a Coast Guard case is determined by whether the Coast Guard 
is operating as a Service in the DHS or as a Service within the 
Department of the Navy.
    (c) While some Federal criminal statutes are expressly or implicitly 
extraterritorial, many acts described therein are criminal only if they 
are committed within ``the special maritime and territorial jurisdiction 
of the United States'' or if they affect interstate or foreign commerce. 
Therefore, in most instances, Federal criminal jurisdiction ends at the 
nation's borders. State criminal jurisdiction, likewise, normally ends 
at the boundaries of each State. Because of these limitations, acts 
committed by military personnel, former service members, and civilians 
employed by or accompanying the Armed Forces in foreign countries, which 
would be crimes if committed in the U.S., often do not violate either 
Federal or State criminal law. Similarly, civilians are generally not 
subject to prosecution under the Uniform Code of Military Justice 
(UCMJ), unless Congress had declared a ``time of war'' when the acts 
were committed. As a result, these acts are crimes, and therefore 
criminally punishable, only under the law of the foreign country in 
which they occurred. See section 2 of Report Accompanying the Act 
(Report to Accompany H.R. 3380, House of Representatives Report 106-778, 
July 20, 2000 hereafter referred to as ``the Report Accompanying the 
Act''). While the U.S. could impose administrative discipline for such 
actions, the Act and

[[Page 578]]

this part are intended to address the jurisdictional gap with respect to 
criminal sanctions.
    (d) Nothing in this part may be construed to deprive a court-
martial, military commission, provost court, or other military tribunal 
of concurrent jurisdiction with respect to offenders or offenses that by 
statute or the law of war may be tried by court-martial, military 
commission, provost court, or other military tribunal (Section 3261(c) 
of title 18). In some cases, conduct that violates section 3261(a) of 
the Act may also violate the UCMJ, or the law of war generally. 
Therefore, for military personnel, military authorities would have 
concurrent jurisdiction with a U.S. District Court to try the offense. 
The Act was not intended to divest the military of jurisdiction and 
recognizes the predominant interest of the military in disciplining its 
service members, while still allowing for the prosecution of members of 
the Armed Forces with non-military co-defendants in a U.S. District 
Court under section 3261(d) of the Act.
    (e) This part, including its enclosures, is intended exclusively for 
the guidance of military personnel and civilian employees of the 
Department of Defense, and of the United States Coast Guard by agreement 
with the Department of Homeland Security. Nothing contained herein 
creates or extends any right, privilege, or benefit to any person or 
entity. See United States v. Caceres, 440 U.S. 741 (1979).



Sec. 153.3  Definitions.

    Accompanying the Armed Forces Outside the United States. As defined 
in section 3267 of the Act, the dependent of:
    (1) A member of the Armed Forces; or
    (2) A civilian employee of the Department of Defense (including a 
non-appropriated fund instrumentality of the Department); or
    (3) A DoD contractor (including a subcontractor at any tier); or
    (4) An employee of a DoD contractor (including a subcontractor at 
any tier); and
    (5) Residing with such member, civilian employee, contractor, or 
contractor employee outside the United States; and
    (6) Not a national of or ordinarily resident in the host nation.
    Active Duty. Full-time duty in the active military service of the 
United States. It includes full-time training duty, annual training 
duty, and attendance, while in the active military service, at a school 
designated as a service school by law or by the Secretary of the 
Military Department concerned. See section 101(d)(1) of title 10, United 
States Code.
    Armed Forces. The Army, the Navy, the Air Force, the Marine Corps, 
and the Coast Guard. See section 101(a)(4) of title 10, United States 
Code.
    Arrest. To be taken into physical custody by law enforcement 
officials.
    Charged. As used in the Act and this part, this term is defined as 
an indictment or the filing of information against a person under the 
Federal Rules of Criminal Procedure. See the analysis to Section 3264 of 
the Report Accompanying the Act.
    Civilian Component. A person or persons employed by the Armed Forces 
outside the United States, as defined in this section and section 
3267(a)(1), as amended, of the Act. A term used in Status of Forces 
Agreements.
    Dependent. A person for whom a member of the Armed Forces, civilian 
employee, contractor (or subcontractor at any tier) has legal 
responsibility while that person is residing outside the United States 
with or accompanying that member of the Armed Forces, civilian employee, 
contractor (or subcontractor at any tier), and while that responsible 
person is so assigned, employed or obligated to perform a contractual 
obligation to the Department of Defense. For purposes of this part, a 
person's ``command sponsorship'' status while outside the United States 
is not to be considered in determining whether the person is a dependent 
within the meaning of this part, except that there shall be a rebuttable 
presumption that a command-sponsored individual is a dependent.
    Designated Commanding Officer (DCO). A single military commander in 
each foreign country where U.S. Forces are stationed and as contemplated 
by DoD Directive 5525.1, Status of Forces Policy and Information.

[[Page 579]]

    Detention. To be taken into custody by law enforcement officials and 
placed under physical restraint.
    District. A District Court of the United States.
    Employed by the Armed Forces Outside the United States. Any person 
employed as:
    (1) A civilian employee of the Department of Defense (including a 
non-appropriated fund instrumentality of the Department); or
    (2) A civilian employee of any other Federal agency, or any 
provisional authority, to the extent such employment relates to 
supporting the mission of the Department of Defense overseas; or
    (3) A contractor (including a subcontractor at any tier) of the 
Department of Defense (including a non-appropriated fund instrumentality 
of the Department of Defense); or
    (4) A contractor (including a subcontractor at any tier) of any 
other Federal agency, or any provisional authority, to the extent such 
employment relates to supporting the mission of the Department of 
Defense overseas; or
    (5) An employee of a contractor (including a subcontractor at any 
tier) of the Department of Defense (including a non-appropriated fund 
instrumentality of the Department of Defense); or
    (6) An employee of a contractor (including a subcontractor at any 
tier) of any other Federal agency, or any provisional authority, to the 
extent such employment relates to supporting the mission of the 
Department of Defense overseas; and, when the person:
    (i) Is present or resides outside the United States in connection 
with such employment; and
    (ii) Is not a national of or ordinarily resident in the host nation.
    Federal Magistrate Judge. As used in the Act and this part, this 
term includes both Judges of the United States and U.S. Magistrate 
Judges, titles that, in general, should be given their respective 
meanings found in the Federal Rules of Criminal Procedure. (See footnote 
32 of the Report Accompanying the Act) The term does not include 
Military Magistrates or Military Judges, as prescribed by the UCMJ, or 
regulations of the Military Departments or the Department of Defense.
    Felony Offense. Conduct that is an offense punishable by 
imprisonment for more than one year if the conduct had been engaged in 
the special maritime and territorial jurisdiction of the United States. 
See sections 3261 of the Act and 18 U.S.C. 7. Although the Act, uses the 
conditional phrase ``if committed within the special maritime and 
territorial jurisdiction of the United States,'' acts that would be a 
Federal crime regardless of where they are committed in the U.S., such 
as drug crimes contained in chapter 13 of title 21, United States Code, 
also fall within the scope of section 3261(a) of the Act. See the 
analysis to section 3261 of the Report Accompanying the Act.
    Host Country National. A person who is not a citizen of the United 
States, but who is a citizen of the foreign country in which that person 
is located.
    Inactive Duty Training. Duty prescribed for Reservists by the 
Secretary of the Military Department concerned under section 206 of 
title 37, United States Code, or any other provision of law; and special 
additional duties authorized for Reservists by an authority designated 
by the Secretary of the Military Department concerned and performed by 
them on a voluntary basis in connection with the prescribed training or 
maintenance activities of the units to which they are assigned. Inactive 
Duty Training includes those duties performed by Reservists in their 
status as members of the National Guard while in Federal service. See 
section 101(d)(7) of title 10, United States Code.
    Juvenile. A person who has not attained his or her eighteenth 
birthday, as defined in section 5031 of title 18, United States Code.
    Military Department. The Department of the Army, the Department of 
the Navy, and the Department of the Air Force. See section 101(a)(8) of 
title 10, United States Code.
    National of the United States. As defined in section 1101(a)(22), of 
title 8, United States Code.
    Outside the United States. Those places that are not within the 
definition of ``United States'' below and, with the exception of 
subparagraph

[[Page 580]]

7(9), those geographical areas and locations that are not within the 
special maritime and territorial jurisdiction of the United States, as 
defined in sections 7 of title 18, United States Code. The locations 
defined in subparagraph 7(9) of title 18, United States Code are to be 
considered ``Outside the United States'' for the purposes of this part. 
See 3261-3267 of title 18, United States Code.
    Qualified Military Counsel. Judge advocates assigned to or employed 
by the Military Services and designated by the respective Judge Advocate 
General, or a designee, to be professionally qualified and trained to 
perform defense counsel responsibilities under the Act.
    Staff Judge Advocate. A judge advocate so designated in the Army, 
the Air Force, the Marine Corps, or the Coast Guard; the principal legal 
advisor of a command in the Navy who is a judge advocate, regardless of 
job title. See Rule for Courts-Martial 103(17), Manual for Courts-
Martial, United States (2002 Edition).
    Third Country National. A person whose citizenship is that of a 
country other than the U.S. and the foreign country in which the person 
is located.
    United States. As defined in section 5 of title 18, United States 
Code, this term, as used in a territorial sense, includes all places and 
waters, continental or insular, subject to the jurisdiction of the 
United States, except for the Panama Canal Zone.



Sec. 153.4  Responsibilities.

    (a) The General Counsel of the Department of Defense shall provide 
initial coordination and liaison with the Departments of Justice and 
State, on behalf of the Military Departments, regarding a case for which 
investigation and/or Federal criminal prosecution under the Act is 
contemplated. This responsibility may be delegated entirely, or 
delegated for categories of cases, or delegated for individual cases. 
The General Counsel, or designee, shall advise the Domestic Security 
Section of the Criminal Division, Department of Justice (DSS/DOJ), as 
soon as practicable, when DoD officials intend to recommend that the DOJ 
consider the prosecution of a person subject to the Act for offenses 
committed outside the United States. The Assistant Attorney General, 
Criminal Division, Department of Justice, has designated the Domestic 
Security Section (DSS/DOJ) as the Section responsible for the Act.
    (b) The Inspector General of the Department of Defense shall:
    (1) Pursuant to Section 4(d) of the Inspector General Act of 1978, 
as amended (5 U.S.C. App. 3), ``report expeditiously to the Attorney 
General whenever the Inspector General has reasonable grounds to believe 
there has been a violation of Federal criminal law.'' This statutory 
responsibility is generally satisfied once an official/special agent of 
the Office of the Inspector General of the Department of Defense 
notifies either the cognizant Department of Justice representative or 
the Assistant Attorney General (Criminal Division) of the ``reasonable 
grounds.''
    (2) Pursuant to Section 8(c)(5) of the Inspector General Act of 
1978, as amended (5 U.S.C. App. 3), and 10 U.S.C. 141(b), ensure the 
responsibilities described in DoD Directive 5525.7, ``Implementation of 
the Memorandum of Understanding Between the Department of Justice and 
the Department of Defense Relating to the Investigation and Prosecution 
of Certain Crimes,'' January 22, 1985, \1\ to ``implement the 
investigative policies [,m]onitor compliance by DoD criminal 
investigative organizations [, and p]rovide specific guidance regarding 
investigative matters, as appropriate'' are satisfied relative to 
violations of the Military Extraterritorial Jurisdiction Act of 2000.
---------------------------------------------------------------------------

    \1\ Available from Internet site http://www.dtic.mil/whs/directives.
---------------------------------------------------------------------------

    (c) The Heads of Military Law Enforcement Organizations and Military 
Criminal Investigative Organizations, or their Designees, shall:
    (1) Advise the Commander and Staff Judge Advocate (or Legal Advisor) 
of the Combatant Command concerned, or designees, of an investigation of 
an alleged violation of the Act. Such notice shall be provided as soon 
as practicable. In turn, the General Counsel of the Department of 
Defense, or designee, shall be advised so as to ensure notification of 
and consultation with

[[Page 581]]

the Departments of Justice and State regarding information about the 
potential case, including the host nation's position regarding the case. 
At the discretion of the General Counsel of the Department of Defense, 
other agencies and organizations (such as the Legal Counsel to the 
Chairman of the Joint Chiefs of Staff and Secretary of the Military 
Department that sponsored the person into the foreign country) shall be 
informed, as appropriate. Effective investigations lead to successful 
prosecutions and, therefore, these cases warrant close coordination and 
cooperation between the Departments of Defense, Justice, and State.
    (2) Provide briefings to, and coordinate with, appropriate local law 
enforcement authorities in advance or, if not possible, as soon 
thereafter as is practicable, of investigations or arrests in specific 
cases brought under the Act. If not previously provided to local law 
enforcement authorities, such briefings about the case shall, at a 
minimum, describe the Host Nation's position regarding the exercise of 
jurisdiction under the Act that followed from any briefings conducted 
pursuant to appendix A of this part.
    (d) The Domestic Security Section, Criminal Division, Department of 
Justice (DSS/DOJ) has agreed to:
    (1) Provide preliminary liaison with the Department of Defense, 
coordinate initial notifications with other entities of the Department 
of Justice and Federal law enforcement organizations; make preliminary 
decisions regarding proper venue; designate the appropriate U.S. 
Attorney's Office; and coordinate the further assignment of DOJ 
responsibilities.
    (2) Coordinate with the designated U.S. Attorney's office 
arrangements for a Federal Magistrate Judge to preside over the initial 
proceedings required by the Act. Although the assignment of a particular 
Federal Magistrate Judge shall ordinarily be governed by the 
jurisdiction where a prosecution is likely to occur, such an assignment 
does not determine the ultimate venue of any prosecution that may be 
undertaken. Appropriate venue is determined in accordance with the 
requirements of section 3238 of title 18, United States Code.
    (3) Coordinate the assistance to be provided the Department of 
Defense with the U.S. Attorney's office in the district where venue for 
the case shall presumptively lie.
    (4) Continue to serve as the primary point of contact for DoD 
personnel regarding all investigations that may lead to criminal 
prosecutions and all associated pretrial matters, until such time as 
DSS/DOJ advises that the case has become the responsibility of a 
specific U.S. Attorney's Office.
    (e) The Commanders of the Combatant Commands shall:
    (1) Assist the DSS/DOJ on specific cases occurring within the 
Commander's area of responsibility. These responsibilities include 
providing available information and other support essential to an 
appropriate and successful prosecution under the Act with the assistance 
of the Commanders' respective Staff Judge Advocates (or Legal Advisors), 
or their designees, to the maximum extent allowed and practicable.
    (2) Ensure command representatives are made available, as necessary, 
to participate in briefings of appropriate host nation authorities 
concerning the operation of this Act and the implementing provisions of 
this part.
    (3) Determine when military necessity in the overseas theater 
requires a waiver of the limitations on removal in section 3264(a) of 
the Act and when the person arrested or charged with a violation of the 
Act shall be moved to the nearest U.S. military installation outside the 
United States that is adequate to detain the person and facilitate the 
initial proceedings prescribed in section 3265(a) of the Act and this 
part. Among the factors to be considered are the nature and scope of 
military operations in the area, the nature of any hostilities or 
presence of hostile forces, and the limitations of logistical support, 
available resources, appropriate personnel, or the communications 
infrastructure necessary to comply with the requirements of section 3265 
of the Act governing initial proceedings.
    (4) Annually report to the General Counsel of the Department of 
Defense, by the last day of February for the immediately preceding 
calendar year, all cases involving the arrest of persons

[[Page 582]]

for violations of the Act; persons placed in temporary detention for 
violations of the Act; the number of requests for Federal prosecution 
under the Act, and the decisions made regarding such requests.
    (5) Determine the suitability of the locations and conditions for 
the temporary detention of juveniles who commit violations of the Act 
within the Commander's area of responsibility. The conditions of such 
detention must, at a minimum, meet the following requirements: Juveniles 
alleged to be delinquent shall not be detained or confined in any 
institution or facility in which the juvenile has regular contact with 
adult persons convicted of a crime or awaiting trial on criminal 
charges; insofar as possible, alleged juvenile delinquents shall be kept 
separate from adjudicated delinquents; and every juvenile in custody 
shall be provided adequate food, heat, light, sanitary facilities, 
bedding, clothing, recreation, and medical care, including necessary 
psychiatric, psychological, or other care and treatment.
    (6) As appropriate, promulgate regulations consistent with and 
implementing this part. The Combatant Commander's duties and 
responsibilities pursuant to this part may be delegated.
    (f) The Secretaries of the Military Departments shall:
    (1) Consistent with the provisions of paragraph (c) of this section, 
make provision for defense counsel representation at initial proceedings 
conducted outside the United States pursuant to the Act for those 
persons arrested or charged with violations of section 3261(a) of the 
Act.
    (2) Issue regulations establishing procedures that, to the maximum 
extent practicable, provide notice to all persons covered by the Act who 
are not nationals of the United States but who are employed by or 
accompanying the Armed Forces outside the United States, with the 
exception of individuals who are nationals of or ordinarily resident in 
the host nation, that they are potentially subject to the criminal 
jurisdiction of the United States under the Act. At a minimum, such 
regulations shall require that employees and persons accompanying the 
Armed Forces outside the United States, who are not nationals of the 
United States, be informed of the jurisdiction of the Act at the time 
that they are hired for overseas employment, or upon sponsorship into 
the overseas command, whichever event is earlier applicable. Such notice 
shall also be provided during employee training and any initial 
briefings required for these persons when they first arrive in the 
foreign country. For employees and persons accompanying the Armed Forces 
outside the United States who are not nationals of the United States, 
but who have already been hired or are present in the overseas command 
at the time this part becomes effective, such notice shall be provided 
within 60 days of the effective date of this part.
    (3) Ensure orientation training, as described in paragraph (f)(2) of 
this section, is also provided for all U.S. nationals who are, or who 
are scheduled to be, employed by or accompanying the Armed Forces 
outside the United States, including their dependents, and include 
information that such persons are potentially subject to the criminal 
jurisdiction of the United States under the Act.
    (i) For members of the Armed Forces, civilian employees of the 
Department of Defense and civilians accompanying the Armed Forces 
overseas, notice and briefings on the applicability of the Act shall, at 
a minimum, be provided to them and their dependents when travel orders 
are issued and, again, upon their arrival at command military 
installations or place of duty outside the United States.
    (ii) For civilian employees, contractors (including subcontractors 
at any tier), and employees of contractors (including subcontractors at 
any tier) of any other Federal agency, or any provisional authority, 
permit such persons to attend the above-referenced briefings on a 
voluntary basis. In addition, to the maximum extent practicable, make 
available to representatives of such other Federal agencies or 
provisional authorities such notice and briefing materials as is 
provided to civilian employees, contractors, and contractor employees of 
the Department of Defense overseas.

[[Page 583]]

    (4) Failure to provide notice or orientation training pursuant to 
paragraphs (f)(2) and (f)(3) of this section shall not create any rights 
or privileges in the persons referenced and shall not operate to defeat 
the jurisdiction of a court of the United States or provide a defense or 
other remedy in any proceeding arising under the Act or this part.
    (5) Provide training to personnel who are authorized under the Act 
and designated pursuant to this part to make arrests outside the United 
States of persons who allegedly committed a violation of section 3261(a) 
of the Act. The training, at a minimum, shall include the rights of 
individuals subject to arrest.



Sec. 153.5  Procedures.

    (a) Applicability--(1) Offenses and Punishments. Section 3261(a) of 
the Act establishes a separate Federal offense under 18 U.S.C. for an 
act committed outside the United States that would be a felony crime as 
if such act had been committed within the special maritime and 
territorial jurisdiction of the United States, as defined in section 7 
of 18 U.S.C. Charged as a violation of section 3261(a) of the Act, the 
elements of the offense and maximum punishment are the same as the crime 
committed within the geographical limits of section 7 of 18 U.S.C., but 
without the requirement that the conduct be committed within such 
geographical limits. See section 1 of the Section-By-Section Analysis 
and Discussion to section 3261 in the Report Accompanying the Act.
    (2) Persons subject to this part. This part applies to certain 
military personnel, former military service members, and persons 
employed by or accompanying the Armed Forces outside the United States, 
and their dependents, as those terms are defined in section 153.3 of 
this part, alleged to have committed an offense under the Act while 
outside the United States. For purposes of the Act and this part, 
persons employed by or accompanying the Armed Forces outside the U.S. 
are subject to the ``military law'' of the U.S., but only to the extent 
to which this term has been used and its meaning and scope have been 
understood within the context of a SOFA or any other similar form of 
international agreement.
    (3) Military Service Members. Military service members subject to 
the Act's jurisdiction are:
    (i) Only those active duty service members who, by Federal 
indictment or information, are charged with committing an offense with 
one or more defendants, at least one of whom is not subject to the UCMJ. 
See section 3261(d)(2) of the Act.
    (ii) Members of a Reserve component with respect to an offense 
committed while the member was not on active duty or inactive duty for 
training (in the case of members of the Army National Guard of the 
United States or the Air National Guard of the United States, only when 
in Federal service), are not subject to UCMJ jurisdiction for that 
offense and, as such, are amenable to the Act's jurisdiction without 
regard to the limitation of section 3261(d)(2) of the Act.
    (4) Former Military Service Members. Former military service members 
subject to the Act's jurisdiction are:
    (i) Former service members who were subject to the UCMJ at the time 
the alleged offenses were committed, but are no longer subject to the 
UCMJ with respect to the offense due to their release or separation from 
active duty.
    (ii) Former service members, having been released or separated from 
active duty, who thereafter allegedly commit an offense while in another 
qualifying status, such as while a civilian employed by or accompanying 
the Armed Forces outside the United States, or while the dependent of 
either or of a person subject to the UCMJ.
    (5) Civilians Employed by the Armed Forces. Civilian employees 
employed by the U.S. Armed Forces outside the United States (as defined 
in section 153.3), who commit an offense under the Act while present or 
residing outside the U.S. in connection with such employment, are 
subject to the Act and the provisions of this part. Such civilian 
employees include:
    (i) Persons employed by the Department of Defense (including a non-
appropriated fund instrumentality of the Department of Defense).

[[Page 584]]

    (ii) Persons employed as a DoD contractor (including a subcontractor 
at any tier).
    (iii) Employees of a DoD contractor (including a subcontractor at 
any tier).
    (iv) Civilian employees, contractors (including subcontractors at 
any tier), and civilian employees of a contractor (or subcontractor at 
any tier) of any other Federal agency, or any provisional authority, to 
the extent such employment relates to supporting the mission of the 
Department of Defense overseas.
    (6) Civilians Accompanying the Armed Forces. Subject to the 
requirements of paragraph (a)(6)(ii) of this section, the following 
persons are civilians accompanying the Armed Forces outside the United 
States who are covered by the Act and the provisions of this part:
    (i) Dependents of:
    (A) An active duty service member.
    (B) A member of the reserve component while the member was on active 
duty or inactive duty for training, but in the case of members of the 
Army National Guard of the United States or the Air National Guard of 
the United States, only when in Federal service.
    (C) A former service member who is employed by or is accompanying 
the Armed Forces outside the United States.
    (D) A civilian employee of the Department of Defense (including non-
appropriated fund instrumentalities of the Department of Defense).
    (E) A contractor (including a subcontractor at any tier) of the 
Department of Defense.
    (F) An employee of a contractor (including a subcontractor at any 
tier) of the Department of Defense.
    (ii) In addition to the person being the dependent of a person who 
is listed in paragraph (a)(6)(i) of this section, jurisdiction under the 
Act requires that the dependent also:
    (A) Reside with one of the persons listed in paragraph (a)(6)(i) of 
this section.
    (B) Allegedly commit the offense while outside the United States; 
and
    (C) Not be a national of, or ordinarily resident in, the host nation 
where the offense is committed.
    (iii) Command sponsorship of the dependent is not required for the 
Act and this part to apply.
    (iv) If the dependent is a juvenile, as defined in section 153.3, 
who engaged in conduct that is subject to prosecution under section 
3261(a) of the Act, then the provisions of chapter 403 of title 18, 
United States Code would apply to U.S. District Court prosecutions.
    (7) Persons NOT Subject to the Act or the Procedures of this part. 
(i) Persons who are the nationals of, or ordinarily resident in, the 
host nation where the offense is committed, regardless of their 
employment or dependent status.
    (ii) Persons, including citizens of the United States, whose 
presence outside the United States at the time the offense is committed, 
is not then as a member of the Armed Forces, a civilian employed by the 
Armed Forces outside the United States, or accompanying the Armed Forces 
outside the United States.
    (A) Persons (including members of a Reserve component) whose 
presence outside the United States at the time the offense is committed, 
is solely that of a tourist, a student, or a civilian employee or 
civilian accompanying any other non-federal agency, organization, 
business, or entity (and thereby can not be said to be employed by or 
accompanying the Armed Forces within the definitions of those terms as 
established by the Act, as modified) are not subject to the Act. 
Civilian employees of an agency, organization, business, or entity 
accompanying the Armed Forces outside the U.S. may, by virtue of the 
agency, organization, business, or entity relationship with the Armed 
Forces, be subject to the Act and this part.
    (B) Persons who are subject to the Act and this part remain so while 
present, on official business or otherwise (e.g., performing temporary 
duty or while in leave status), in a foreign country other than the 
foreign country to which the person is regularly assigned, employed, or 
accompanying the Armed Forces outside the United States.
    (iii) Persons who have recognized dual citizenship with the United 
States and who are the nationals of, or ordinarily resident in, the host 
nation where the alleged conduct took place

[[Page 585]]

are not persons ``accompanying the Armed Forces outside the United 
States'' within the meaning of the Act and this part.
    (iv) Juveniles whose ages are below the minimum ages authorized for 
the prosecution of juveniles in U.S. District Court under the provisions 
of chapter 403 of title 18, United States Code.
    (v) Persons subject to the UCMJ (See sections 802 and 803 of title 
10, United States Code) are not subject to prosecution under the Act 
unless, pursuant to section 3261(d) of the Act, the member ceases to be 
subject to the UCMJ or an indictment or information charges that the 
member committed the offense with one or more other defendants, at least 
one of whom is not subject to the UCMJ. A member of a Reserve component 
who is subject to the UCMJ at the time the UCMJ offense was committed is 
not relieved from amenability to UCMJ jurisdiction for that offense. 
Such reserve component members are not subject to the Act unless section 
3261(d)(2) of the Act applies. Retired members of a regular component 
who are entitled to pay remain subject to the UCMJ after retiring from 
active duty. Such retired members are not subject to prosecution under 
the Act unless section 3261(d)(2) of the Act applies.
    (vi) Whether Coast Guard members and civilians employed by or 
accompanying the Coast Guard outside the United States, and their 
dependents, are subject to the Act and this part depends on whether at 
the time of the offense the Coast Guard was operating as a separate 
Service in the Department of Homeland Security or as a Service in the 
Department of the Navy.
    (8) Persons Having a Tenuous Nexus to the United States. Third 
Country Nationals who are not ordinarily resident in the host nation, 
and who meet the definition of ``a person accompanying the Armed Forces 
outside the United States,'' may have a nexus to the United States that 
is so tenuous that it places into question whether the Act's 
jurisdiction should be applied and whether such persons should be 
subject to arrest, detention, and prosecution by U.S. authorities. 
Depending on the facts and circumstances involved, and the relationship 
or connection of the foreign national with the U.S. Armed Forces, it may 
be advisable to consult first with the DSS/DOJ before taking action with 
a view toward prosecution. In addition, to facilitate consultation with 
the government of the nation of which the Third Country National is a 
citizen, the State Department should be notified of any potential 
investigation or arrest of a Third Country National.
    (b) Investigation, Arrest, Detention, And Delivery Of Persons To 
Host Nation Authorities--(1) Investigation. (i) Investigations of 
conduct reasonably believed to constitute a violation of the Act 
committed outside the United States must respect the sovereignty of the 
foreign nation in which the investigation is conducted. Such 
investigations shall be conducted in accordance with recognized 
practices with host nation authorities and applicable international law, 
SOFA and other international agreements. After general coordination with 
appropriate host nation authorities, as referenced in Appendix A of this 
part, specific investigations shall, to the extent practicable, be 
coordinated with appropriate local law enforcement authorities, unless 
not required by agreement with host nation authorities.
    (ii) When a Military Criminal Investigative Organization is the lead 
investigative organization, the criminal investigator, in order to 
assist DSS/DOJ and the designated U.S. Attorney representative in making 
a preliminary determination of whether the case warrants prosecution 
under the Act, shall provide a copy of the Investigative Report, or a 
summary thereof, to the Office of the Staff Judge Advocate of the 
Designated Commanding Officer (DCO) at the location where the offense 
was committed for review and transmittal, through the Combatant 
Commander, to the DSS/DOJ and the designated U.S. Attorney 
representative. The Office of the Staff Judge Advocate shall also 
furnish the DSS/DOJ and the designated U.S. Attorney representative an 
affidavit or declaration from the criminal investigator or other 
appropriate law enforcement official that sets forth the probable cause 
basis for believing that a violation of the Act

[[Page 586]]

has occurred and that the person identified in the affidavit or 
declaration has committed the violation.
    (iii) When the Defense Criminal Investigative Service (DCIS) is the 
lead investigative organization, the criminal investigator, in order to 
assist the DSS/DOJ and the designated U.S. Attorney representative in 
making a preliminary determination of whether the case warrants 
prosecution under the Act, shall provide a copy of the Investigative 
Report, or a summary thereof, to the DSS/DOJ and the designated U.S. 
Attorney representative. The criminal investigator shall also furnish 
the DSS/DOJ and the designated U.S. Attorney representative, an 
affidavit or declaration that sets forth the probable cause basis for 
believing that a violation of the Act has occurred and that the person 
identified in the affidavit or declaration has committed the violation. 
Within the parameters of 10 U.S.C. Chapter 47, the Inspector General may 
also notify the General Counsel of the Department of Defense and the 
DCO's Office of the Staff Judge Advocate at the location where the 
offense was committed, as appropriate.
    (2) Residence Information. To the extent that it can be determined 
from an individual's personnel records, travel orders into the overseas 
theater, passport, or other records, or by questioning upon arrest or 
detention, as part of the routine ``booking'' information obtained, an 
individual's last known residence in the United States shall be 
determined and forwarded promptly to the DSS/DOJ and the designated U.S. 
Attorney representative. See Pennsylvania v. Muniz, 496 U.S. 582, at 601 
(1990) and United States v. D'Anjou, 16 F. 3d 604 (4th Cir. 1993). The 
information is necessary to assist in determining what law enforcement 
authorities and providers of pretrial services, including those who 
issue probation reports, shall ultimately have responsibility for any 
case that may develop. Determination of the individual's ``last known 
address'' in the United States is also important in determining what 
Federal district would be responsible for any possible future criminal 
proceedings.
    (i) Due to the venue provisions of section 3238 of 18 U.S.C. Chapter 
212, Sections 3261-3267, the DSS/DOJ and the designated U.S. Attorney 
representative shall be consulted prior to removal of persons arrested 
or charged with a violation of the Act by U.S. law enforcement 
officials. The venue for Federal criminal jurisdiction over offenses 
committed on the high seas or elsewhere beyond the jurisdiction of a 
particular State or District (as would be required under the Act), is in 
the Federal district in which the offender is arrested or first brought. 
However, if the individual is not so arrested in or brought into any 
Federal district in the United States (i.e., is to be indicted, or 
information obtained, prior to the individual's return to the United 
States), then an indictment or information may be sought in the district 
of the person's last known residence. If no such residence is known, the 
indictment or information may be filed in the District of Columbia.
    (ii) ``First brought'' connotes the location within the U.S. to 
which the person is returned in a custodial status.
    (iii) ``Last known residence'' refers to that U.S. location where 
the person lived or resided. It is not necessarily the same as the 
person's legal domicile or home of record.
    (iv) Prompt transmittal of venue information to the DSS/DOJ and the 
designated U.S. Attorney representative in the United States may prove 
helpful in determining whether a particular case may be prosecuted, and 
may ultimately be a pivotal factor in determining whether the host 
nation or the U.S. shall exercise its jurisdiction over the matter.
    (v) The Investigative Report, and any affidavit or declaration, as 
well as all other documents associated with a case shall be transmitted 
promptly by the command Staff Judge Advocate to the DSS/DOJ and the 
designated U.S. Attorney representative. This may be accomplished 
through the use of facsimile or other means of electronic communication.
    (3) Notice of Complaint or Indictment. Upon receipt of information 
from command authorities or Defense Criminal Investigation Organizations 
(the Defense Criminal Investigation Service, the Army's Criminal 
Investigation

[[Page 587]]

Command, the Naval Criminal Investigative Service, and the Air Force 
Office of Special Investigations) that a person subject to jurisdiction 
under this Act has violated section 3261(a), the U.S. Attorney for the 
District in which there would be venue for a prosecution may, if 
satisfied that probable cause exists to believe that a crime has been 
committed and that the person identified has committed this crime, file 
a complaint under Federal Rule of Criminal Procedure 3. As an 
alternative, the U.S. Attorney may seek the indictment of the person 
identified. In either case, a copy of the complaint or indictment shall 
be provided to the Office of the Staff Judge Advocate of the overseas 
command that reported the offense. The DSS/DOJ and the designated U.S. 
Attorney representative will ordinarily be the source from which the 
command's Staff Judge Advocate is able to obtain a copy of any complaint 
or indictment against a person outside the United States who is subject 
to the jurisdiction under the Act. This may be accomplished through the 
use of facsimile or other means of electronic communication.
    (4) Arrest. (i) Federal Rule of Criminal Procedure 4 takes the 
jurisdiction of the Act into consideration in stating where arrest 
warrants may be executed: ``Location. A warrant may be executed, or a 
summons served, within the jurisdiction of the United States or anywhere 
else a federal statute authorizes an arrest.'' The Advisory Committee 
Note explains that the new language reflects the enactment of the 
Military Extraterritorial Jurisdiction Act permitting arrests of certain 
military and Department of Defense personnel overseas.
    (ii) The Act specifically authorizes persons in DoD law enforcement 
positions, as designated by the Secretary of Defense, to make arrests 
outside the United States, upon probable cause and in accordance with 
recognized practices with host nation authorities and applicable 
international agreements, those persons subject to the Act who violate 
section 3261(a) of the Act. Section 3262(a) of the Act constitutes 
authorization by law to conduct such functions pursuant to 10 U.S.C. 
801-946 and therefore avoids possible restrictions of the Posse 
Comitatus Act regarding military personnel supporting civilian law 
enforcement agencies.
    (iii) When the host nation has interposed no objections after 
becoming aware of the Act, arrests in specific cases shall, to the 
extent practicable, be first coordinated with appropriate local law 
enforcement authorities, unless not required by agreement with host 
nation authorities.
    (iv) Military and civilian special agents assigned to the Defense 
Criminal Investigative Organizations are hereby authorized by the 
Secretary of Defense to make an arrest, outside the United States, of a 
person who has committed an offense under section 3261(a) of the Act. 
Civilian special agents assigned to Defense Criminal Investigative 
Organizations while performing duties outside the U.S. shall make 
arrests consistent with the standardized guidelines established for such 
agents, as approved in accordance with sections 1585a, 4027, 7480, and 
9027 of title 10, United States Code.
    (v) Military personnel and DoD civilian employees (including local 
nationals, either direct hire or indirect hire) assigned to security 
forces, military police, shore patrol, or provost offices at military 
installations and other facilities located outside the United States are 
also authorized to make an arrest, outside the United States, of a 
person who has committed an offense under section 3261(a) of the Act. 
This authority includes similarly-assigned members of the Coast Guard 
law enforcement community, but only when the Coast Guard is operating at 
such locations as a Service of the Department of the Navy.
    (vi) Law enforcement personnel thus designated and authorized by the 
Secretary of Defense in this part may arrest a person, outside the 
United States, who is suspected of committing a felony offense in 
violation of section 3261(a) of the Act, when the arrest is based on 
probable cause to believe that such person violated section 3261(a) of 
the Act, and when made in accordance with applicable international 
agreements. Because the location of the offense and offender is outside 
the United States, it is not normally expected that the arrest would be 
based on a

[[Page 588]]

previously-issued Federal arrest warrant. Law enforcement personnel 
authorized to make arrests shall follow the Secretaries of the Military 
Departments' guidelines for making arrests without a warrant, as 
prescribed by 10 U.S.C. 1585a, 4027, 7480, and 9027. Authorizations 
issued by military magistrates under the UCMJ may not be used as a 
substitute for Federal arrest warrant requirements.
    (vii) The foregoing authorization to DoD law enforcement personnel 
to arrest persons subject to Chapter 212 of title 18, United States 
Code, for violations of the Act is not intended as a limitation upon the 
authority of other Federal law enforcement officers to effect arrests 
when authorized to do so. (E.g., see 18 U.S.C. 3052 authorizing agents 
of the Federal Bureau of Investigation to make arrests ``for any felony 
cognizable under the laws of the United States, 21 U.S.C. 878(a)(3) for 
the same authority for Drug Enforcement Administration agents, and 18 
U.S.C. 3053 for the same authority for U.S. Marshals and their 
deputies.)
    (5) Temporary Detention. (i) The Commander of a Combatant Command, 
or designee, may order the temporary detention of a person, within the 
Commander's area of responsibility outside the United States, who is 
arrested or charged with a violation of the Act. The Commander of the 
Combatant Command, or designee, may determine that a person arrested 
need not be held in custody pending the commencement of the initial 
proceedings required by section 3265 of the Act and paragraph (d) of 
this section. The Commander of the Combatant Command may designate those 
component commanders or DCO commanders who are also authorized to order 
the temporary detention of a person, within the commanding officer's 
area of responsibility outside the United States, who is arrested or 
charged with a violation of the Act.
    (ii) A person arrested may be temporarily detained in military 
detention facilities for a reasonable period, in accordance with 
regulations of the Military Departments and subject to the following:
    (A) Temporary detention should be ordered only when a serious risk 
is believed to exist that the person shall flee and not appear, as 
required, for any pretrial investigation, pretrial hearing or trial 
proceedings, or the person may engage in serious criminal misconduct 
(e.g., the intimidation of witnesses or other obstructions of justice, 
causing injury to others, or committing other offenses that pose a 
threat to the safety of the community or to the national security of the 
United States). The decision as to whether temporary detention is 
appropriate shall be made on a case-by-case basis. Section 3142 of title 
18, United States Code provides additional guidance regarding conditions 
on release and factors to be considered.
    (B) A person arrested or charged with a violation of the Act who is 
to be detained temporarily shall, to the extent practicable, be detained 
in areas that separate them from sentenced military prisoners and 
members of the Armed Forces who are in pretrial confinement pending 
trial by courts-martial.
    (C) Separate temporary detention areas shall be used for male and 
female detainees.
    (D) Generally, juveniles should not be ordered into temporary 
detention. However, should circumstances warrant temporary detention, 
the conditions of such temporary detention must, at a minimum, meet the 
following requirements: juveniles alleged to be delinquent shall not be 
detained or confined in any institution or facility in which the 
juvenile has regular contact with adult persons convicted of a crime or 
awaiting trial on criminal charges; insofar as possible, alleged 
juvenile delinquents shall be kept separate from adjudicated 
delinquents; and every juvenile in custody shall be provided with 
adequate food, heat, light, sanitary facilities, bedding, clothing, 
recreation, and medical care, including necessary psychiatric, 
psychological, or other care and treatment. Appointment of a guardian ad 
litem may be required under 18 U.S.C. 5034 to represent the interests of 
the juvenile when the juvenile's parents are not present or when the 
parents' interests may be adverse to that of the juvenile.
    (iii) Persons arrested or charged with a violation of the Act, upon 
being ordered into temporary detention and

[[Page 589]]

processed into the detention facility, shall, as part of the processing 
procedures, be required to provide the location address of their last 
U.S. residence as part of the routine booking questions securing 
``biographical data necessary to complete booking or pretrial 
services.'' See United States v. D'Anjou, 16 F. 3d 604 (4th Cir.1993). 
This information shall be recorded in the detention documents and made 
available to the DCO's Office of the Staff Judge Advocate. This 
information shall be forwarded with other case file information, 
including affidavits in support of probable cause supporting the arrest 
and detention, to the DSS/DOJ. The information is provided so that the 
DSS/DOJ may make appropriate preliminary decisions about venue. See 
paragraph (b)(2) of this section.
    (A) Notice of the temporary detention of any person for a violation 
of the Act shall be forwarded through command channels, without 
unnecessary delay, to the Combatant Commander, who shall advise the 
General Counsel of the Department of Defense, as the representative of 
the Secretary of Defense, of all such detentions. At the discretion of 
the General Counsel of the Department of Defense, other agencies and 
organizations (such as the Legal Counsel to the Chairman of the Joint 
Chiefs of Staff and Secretary of the Military Department that sponsored 
the person into the foreign country) shall be informed, as appropriate.
    (B) Such notice shall include a summary of the charges, facts and 
circumstances surrounding the offenses, information regarding any 
applicable SOFA or other international agreements affecting jurisdiction 
in the case, and the reasons warranting temporary detention.
    (iv) If military command authorities at the military installation 
outside the United States intend to request a person's detention by 
order of the Federal Magistrate Judge, the military representative 
assigned to the case shall gather the necessary information setting 
forth the reasons in support of a motion to be brought by the attorney 
representing the government at the initial proceeding conducted pursuant 
to section 3265 of the Act.
    (v) This part is not intended to eliminate or reduce existing 
obligations or authorities to detain persons in foreign countries as 
required or permitted by agreements with host countries. See generally, 
United States v. Murphy, 18 M.J. 220 (CMA 1984).
    (6) Custody and Transport of Persons While in Temporary Detention. 
(i) The Department of Defense may only take custody of and transport the 
person as specifically set forth in the Act. This is limited to delivery 
as soon as practicable to the custody of U.S. civilian law enforcement 
authorities for removal to the United States for judicial proceedings; 
delivery to appropriate authorities of the foreign country in which the 
person is alleged to have committed the violation of section 3261(a) of 
the Act in accordance with section 3263; or, upon a determination by the 
Secretary of Defense, or the Secretary's designee, that military 
necessity requires it, removal to the nearest U.S. military installation 
outside the United States adequate to detain the person and to 
facilitate the initial appearance described in 3265(a) of the Act.
    (ii) Responsibility for a detained person's local transportation, 
escort, and custody requirements remains with the command that placed 
the person in temporary detention for a violation of section 3261(a) of 
the Act. This responsibility includes:
    (A) Attendance at official proceedings and other required health and 
welfare appointments (e.g., appointments with counsel, medical and 
dental appointments, etc.).
    (B) Delivery to host nation officials under section 3263 of the Act.
    (C) Attendance at Initial Proceedings conducted under section 3265 
of the Act.
    (D) Delivery under the Act to the custody of U.S. civilian law 
enforcement authorities for removal to the United States.
    (iii) A person who requires the continued exercise of custody and 
transportation to appointments and locations away from the detention 
facility, including delivery of the person to host nation officials 
under section 3263 of the Act, may be transferred under the custody of 
command authorities or

[[Page 590]]

those law enforcement officers authorized to make arrests in paragraphs 
(b)(4)(iv) and (b)(4)(v) of this section. Transportation of a detainee 
outside an installation shall be coordinated with the host nation's 
local law enforcement, as appropriate and in accordance with recognized 
practices.
    (iv) Military authorities retain responsibility for the custody and 
transportation of a person arrested or charged with a violation of the 
Act who is to be removed from one military installation outside the 
United States to another military installation outside the United 
States, including when the person is transferred under the provisions of 
section 3264(b)(5) of the Act. Unless otherwise agreed to between the 
sending and receiving commands, it shall be the responsibility of the 
sending command to make arrangements for the person's transportation and 
custody during the transport or transfer to the receiving command.
    (v) In coordination with appropriate host nation authorities, U.S. 
civilian law enforcement authorities shall be responsible for taking 
custody of a person arrested or charged with a violation of the Act and 
for the removal of that person to the United States for any pretrial or 
trial proceedings. DoD officials shall consult with the DSS/DOJ to 
determine which civilian law enforcement authority (i.e., U.S. Marshals 
Service, Federal Bureau of Investigations, Drug Enforcement Agency, or 
other Federal agency) shall dispatch an officer to the overseas' 
detention facility to assume custody of the person for removal to the 
United States. Until custody of the person is delivered to such U.S. 
civilian law enforcement authorities, military authorities retain 
responsibility for the custody and transportation of the person arrested 
or charged with a violation of the Act, to include transportation within 
the host nation to help facilitate the removal of the person to the 
United States under the Act.
    (7) Release From Temporary Detention. When a person subject to the 
Act has been placed in temporary detention, in the absence of a Criminal 
Complaint or Indictment pursuant to the Federal Rules of Criminal 
Procedure, only the Commander who initially ordered detention, or a 
superior Commander, or a Federal Magistrate Judge, may order the release 
of the detained person. If a Criminal Complaint or Indictment exists, or 
if a Federal Magistrate Judge orders the person detained, only a Federal 
Magistrate Judge may order the release of the person detained. If a 
Federal Magistrate Judge orders the person temporarily detained to be 
released from detention, the Commander who ordered detention, or a 
superior Commander, shall cause the person to be released. When a person 
is released from detention under this provision, the Commander shall 
implement, to the extent practicable within the commander's authority, 
any conditions on liberty directed in the Federal Magistrate Judge's 
order. When the commander who independently ordered the person's 
temporary detention without reliance on a Federal Magistrate Judge's 
order, or a superior commander, orders a person's release before a 
Federal Magistrate Judge is assigned to review the matter, the commander 
may, within the commander's authority, place reasonable conditions upon 
the person's release from detention.
    (i) A person's failure to obey the conditions placed on his or her 
release from detention, in addition to subjecting that person to the 
commander's, or Federal Magistrate Judge's order to be returned to 
detention, may consistent with the commander's authority and applicable 
policy, laws, and regulations, subject the person to potential criminal 
sanctions, or to administrative procedures leading to a loss of command 
sponsorship to the foreign country, as well as the possibility of 
additional disciplinary or adverse action.
    (ii) A copy of all orders issued by a Federal Magistrate Judge 
concerning initial proceedings, detention, conditions on liberty, and 
removal to the United States shall promptly be provided to the Commander 
of the Combatant Command concerned and the Commander of the detention 
facility at which the person is being held in temporary detention.
    (8) Delivery of Persons to Host Nation Authorities. (i) Persons 
arrested may be

[[Page 591]]

delivered to the appropriate authorities of the foreign country in which 
the person is alleged to have violated section 3261(a) of the Act, when:
    (A) Authorities of a foreign country request that the person be 
delivered for trial because the conduct is also a violation of that 
foreign country's laws, and
    (B) Delivery of the person is authorized or required by treaty or 
another international agreement to which the United States is a party.
    (ii) Coast Guard personnel authorized to make arrests pursuant to 
paragraph (b)(4)(v) of this section are also authorized to deliver 
persons to foreign country authorities, as provided in section 3263 of 
the Act.
    (iii) Section 3263(b) of the Act calls upon the Secretary of 
Defense, in consultation with the Secretary of State, to determine which 
officials of a foreign country constitute appropriate authorities to 
which persons subject to the Act may be delivered. For purposes of the 
Act, those authorities are the same foreign country law enforcement 
authorities as are customarily involved in matters involving foreign 
criminal jurisdiction under an applicable SOFA or other international 
agreement or arrangement between the United States and the foreign 
country.
    (iv) No action may be taken under this part with a view toward the 
prosecution of a person for a violation of the Act if a foreign 
government, in accordance with jurisdiction recognized by the United 
States, has prosecuted or is prosecuting such person for the conduct 
constituting such offense(s), except upon the approval of the Attorney 
General or the Deputy Attorney General (or a person acting in either 
such capacity). See section 3261(b) of the Act. Requests for an 
exception shall be written and forwarded to the Combatant Commander. The 
Combatant Commander shall forward the request to the General Counsel of 
the Department of Defense, as representative for the Secretary of 
Defense, for review and transmittal to the Attorney General of the 
United States. At the discretion of the General Counsel of the 
Department of Defense, other agencies and organizations (such as the 
Legal Counsel to the Chairman of the Joint Chiefs of Staff and the 
Secretary of the Military Department that sponsored the person into the 
foreign country) shall be informed, as appropriate.
    (v) Except for persons to be delivered to a foreign country, and 
subject to the limitations of section 3264 of the Act and paragraph 
(e)(5) of this section, persons arrested for conduct in violation of the 
Act shall, upon the issuance of a removal order by a Federal Magistrate 
Judge under section 3264(b) of the Act, be delivered, as soon as 
practicable, to the custody of U.S. civilian law enforcement 
authorities. See paragraph (b)(6)(iv) of this section.
    (c) Representation. (1) Civilian Defense Counsel. (i) Civilian 
defense counsel representation shall not be at the expense of the 
Department of Defense or the Military Departments.
    (ii) The Act contemplates that a person arrested or charged with a 
violation of the Act shall be represented by a civilian attorney 
licensed to practice law in the United States. However, it is also 
recognized that in several host nations where there has been a long-
standing military presence, qualified civilian attorneys (including 
lawyers who are U.S. citizens) have established law practices in these 
host nations to assist assigned U.S. personnel and to represent service 
members in courts-martial, or before host nation courts. With the 
consent of the person arrested or charged with a violation of the Act 
who wishes to remain in the foreign country, these lawyers can provide 
adequate representation for the limited purpose of any initial 
proceedings required by the Act. When the person entitled to an attorney 
or requests counsel, staff judge advocates at such locations should 
assemble a list of local civilian attorneys for the person's 
consideration. The list shall contain a disclaimer stating that no 
endorsement by the United States government or the command is expressed 
or implied by the presence of an attorney's name on the list.
    (A) To the extent practicable, military authorities shall establish 
procedures by which persons arrested or charged with a violation of the 
Act may seek the assistance of civilian defense counsel by telephone. 
Consultation with such civilian counsel shall be

[[Page 592]]

in private and protected by the attorney-client privilege.
    (B) Civilian defense counsel, at no expense to the Department of 
Defense, shall be afforded the opportunity to participate personally in 
any initial proceedings required by the Act that are conducted outside 
the United States. When civilian defense counsel cannot reasonably 
arrange to be personally present for such representation, alternative 
arrangements shall be made for counsel's participation by telephone or 
by such other means that enables voice communication among the 
participants.
    (C) When at least one participant cannot arrange to meet at the 
location outside the United States where initial proceedings required by 
the Act are to be conducted, whenever possible arrangements should be 
made to conduct the proceedings by video teleconference or similar 
means. Command video teleconference communication systems should be used 
for this purpose, if resources permit, and if such systems are not 
otherwise unavailable due to military mission requirements. When these 
capabilities are not reasonably available, the proceedings shall be 
conducted by telephone or such other means that enables voice 
communication among the participants. See section 3265 of the Act.
    (D) The above provisions regarding the use of teleconference 
communication systems apply to any detention proceedings that are 
conducted outside the United States under section 3265(b) of the Act.
    (E) Civilian defense counsel practicing in host nations do not gain 
Department of Defense sponsorship, nor any diplomatic status, as a 
result of their role as defense counsel. To the extent practicable, 
notice to this effect shall be provided to the civilian defense counsel 
when the civilian defense counsel's identity is made known to 
appropriate military authorities.
    (2) Qualified Military Counsel. (i) Counsel representation also 
includes qualified military counsel that the Judge Advocate General of 
the Military Department concerned determines is reasonably available for 
the purpose of providing limited representation at initial proceedings 
required by the Act and conducted outside the United States. By 
agreement with the Department of Homeland Security, Coast Guard commands 
and activities located outside the United States shall seek to establish 
local agreements with military commands for qualified military counsel 
from the Military Departments to provide similar limited representation 
in cases arising within the Coast Guard. The Secretaries of the Military 
Departments shall establish regulations governing representation by 
qualified military counsel. These regulations, at a minimum, shall 
require that the command's Staff Judge Advocate:
    (ii) Prepare, update as necessary, and make available to a Federal 
Magistrate Judge upon request, a list of qualified military counsel who 
are determined to be available for the purpose of providing limited 
representation at initial proceedings.
    (iii) Ensure that the person arrested or charged under the Act is 
informed that any qualified military counsel shall be made available 
only for the limited purpose of representing that person in any initial 
proceedings that are to be conducted outside the United States, and that 
such representation does not extend to further legal proceedings that 
may occur either in a foreign country or the United States. The person 
arrested or charged shall also be required, in writing, to acknowledge 
the limited scope of qualified military counsel's representation and 
therein waive that military counsel's further representation in any 
subsequent legal proceedings conducted within a foreign country or the 
United States. The ``Acknowledgement of Limited Representation,'' at 
appendix B of this part, may be used for this purpose. A copy of the 
``Acknowledgement of Limited Representation'' shall be provided to the 
person arrested or charged under the Act, as well as to the qualified 
military counsel. The original acknowledgment shall be kept on file in 
the DCO's Office of the Staff Judge Advocate.
    (iv) Provide available information that would assist the Federal 
Magistrate Judge make a determination that qualified civilian counsel 
are unavailable, and that the person arrested

[[Page 593]]

or charged under the Act is unable financially to retain civilian 
defense counsel, before a qualified military counsel who has been made 
available is assigned to provide limited representation. See Analysis 
and Discussion of Section 3265 (c), Report Accompanying the Act.
    (3) Union Representation. Agency law enforcement officials shall 
comply with applicable Federal civilian employee rights and 
entitlements, if any, regarding collective bargaining unit 
representation under Chapter 71 of title 5, United States Code, during 
pretrial questioning and temporary detention procedures under this part.
    (4) Military Representative. (i) To assist law enforcement officers 
and the U.S. Attorney's representative assigned to a case, a judge 
advocate, legal officer, or civilian attorney-advisor may be appointed 
as a military representative to represent the interests of the United 
States. As appropriate, the military representative may be appointed as 
a Special Assistant U.S. Attorney. The military representative shall be 
responsible for assisting the command, law enforcement, and U.S. 
Attorney representatives during pretrial matters, initial proceedings, 
and other procedures required by the Act and this part. These 
responsibilities include assisting the U.S. Attorney representative 
determine whether continued detention is warranted, and to provide 
information to the presiding Federal Magistrate Judge considering the 
following:
    (ii) If there is probable cause to believe that a violation of the 
Act has been committed and that the person arrested or charged has 
committed it,
    (iii) If the person being temporarily detained should be kept in 
detention or released from detention, and, if released, whether any 
conditions practicable and reasonable under the circumstances, should be 
imposed.
    (d) Initial Proceedings. (1) A person arrested for or charged with a 
violation of the Act may be entitled to an initial appearance before a 
judge and/or a detention hearing (collectively, the ``initial 
proceedings''). The initial proceedings are intended to meet the 
requirements of the Federal Rules of Criminal Procedure. The initial 
proceedings are not required when the person under investigation for 
violating the Act has not been arrested or temporarily detained by U.S. 
military authorities, or the person's arrest or temporary detention by 
U.S. law enforcement authorities occurs after the person ceases to 
accompany or be employed by the Armed Forces outside the United States, 
or the arrest or detention takes place within the United States.
    (2) The initial proceedings to be conducted pursuant to the Act and 
this part shall not be initiated for a person delivered to foreign 
country authorities and against whom the foreign country is prosecuting 
or has prosecuted the person for the conduct constituting such offense, 
except when the Attorney General or Deputy Attorney General (or a person 
acting in either such capacity) has approved an exception that would 
allow for prosecution in the United States may initial proceedings under 
the Act be conducted, under these circumstances. Requests for approval 
of such an exception shall be forwarded through the Commander of the 
Combatant Command to the General Counsel of the Department of Defense, 
in accordance with paragraph (b)(8)(iv) of this section.
    (3) Initial proceedings required by the Act and this part shall be 
conducted, without unnecessary delay. In accordance with the U.S. 
Supreme Court decision in County of Riverside v. McLaughlin, 500 U.S. 44 
(1991), the initial appearance shall be conducted within 48 hours of the 
arrest. The initial proceedings required by the Act shall be conducted 
when:
    (i) The person arrested has not been delivered to foreign country 
authorities under the provisions of section 3263 of the Act; or
    (ii) The foreign country authorities having custody of the person 
delivers the person to U.S. military authorities without first 
prosecuting the person for such conduct as an offense under the laws of 
that foreign country.
    (4) A Federal Magistrate Judge shall preside over the initial 
proceedings that are required by the Act and this part. The proceedings 
should be conducted from the United States using

[[Page 594]]

video teleconference methods, if practicable, and with all parties to 
the proceedings participating. In the event that there is no video 
teleconference capability, or the video teleconference capability is 
unavailable due to military requirements or operations, the parties to 
the proceeding shall, at a minimum, be placed in contact by telephone.
    (5) Initial proceedings conducted pursuant to the Act and this part 
shall include the requirement for the person's initial appearance under 
the Federal Rules of Criminal Procedure. The Federal Magistrate Judge 
shall determine whether probable cause exists to believe that an offense 
under section 3261(a) of the Act has been committed and that the 
identified person committed it. This determination is intended to meet 
the due process requirements to which the person is entitled, as 
determined by the U.S. Supreme Court in Gerstein v. Pugh, 420 U.S. 103 
(1975).
    (6) Initial proceedings shall also include a detention hearing where 
required under 18 U.S.C. 3142 and the Federal Rules of Criminal 
Procedure. A detention hearing may be required when:
    (i) The person arrested or charged with a violation of the Act has 
been placed in temporary detention and the intent is to request 
continued detention; or
    (ii) The United States seeks to detain a person arrested or charged 
with a violation of the Act who has not previously been detained.
    (7) A detention hearing shall be conducted by a Federal Magistrate 
Judge. When the person arrested or charged requests, the detention 
hearing be conducted while the person remains outside the United States, 
detention hearing shall be conducted by the same Federal Magistrate 
Judge presiding over the initial proceeding and shall be conducted by 
telephone or other means that allow for voice communication among the 
participants, including the person's defense counsel. If the person does 
not so request, or if the Federal Magistrate Judge so orders, the 
detention hearing shall be held in the United States after the removal 
of the person to the United States.
    (8) In the event that the Federal Magistrate Judge orders the 
person's release prior to trial, and further directs the person's 
presence in the district in which the trial is to take place, the U.S. 
Attorney Office's representative responsible for prosecuting the case 
shall inform the military representative and the DCO's Office of the 
Staff Judge Advocate.
    (9) Under circumstances where the person suspected of committing an 
offense in violation of the Act has never been detained or an initial 
proceeding conducted, the presumption is that a trial date shall be 
established at which the defendant would be ordered to appear. Such an 
order would constitute an order under section 3264(b)(4) of the Act that 
``otherwise orders the person to be removed.'' The person's failure to 
appear as ordered shall be addressed by the Court as with any other 
failure to comply with a valid court order.
    (10) The DCO's Office of the Staff Judge Advocate shall assist in 
arranging for the conduct of initial proceedings required by the Act and 
this part, and shall provide a military representative to assist the 
U.S. Attorney's Office representative in presenting the information for 
the Federal Magistrate Judge's review. The military representative shall 
also provide any administrative assistance the Federal Magistrate Judge 
requires at the location outside the United States where the proceedings 
shall be conducted.
    (e) Removal Of Persons To The United States Or Other Countries. (1) 
In accordance with the limitation established by section 3264 of the 
Act, military authorities shall not remove, to the United States or any 
other foreign country, a person suspected of violating section 3261(a) 
of the Act, except when:
    (i) The person's removal is to another foreign country in which the 
person is believed to have committed a violation of section 3261(a) of 
the Act; or
    (ii) The person is to be delivered, upon request, to authorities of 
a foreign country under section 3263 of the Act and paragraph (b)(8) of 
this section; or

[[Page 595]]

    (iii) The person is arrested or charged with a violation of the Act 
and the person is entitled to, and does not waive, a preliminary 
examination under Federal Rule of Criminal Procedure 5.1, in which case 
the person shall be removed to the U.S. for such examination; or
    (iv) The person's removal is ordered by a Federal Magistrate Judge. 
See paragraph (e)(2) of this section; or
    (v) The Secretary of Defense, or the Secretary's designee, directs 
the person be removed, as provided in section 3264(b)(5) of the Act and 
paragraph (e)(3) of this section.
    (2) Removal By Order Of A Federal Magistrate Judge. Military 
authorities may remove a person suspected of violating section 3261(a) 
of the Act to the United States, when:
    (i) A Federal Magistrate Judge orders that the person be removed to 
the United States to be present at a detention hearing; or
    (ii) A Federal Magistrate Judge orders the detention of the person 
prior to trial (See 18 U.S.C. 3142(e)) in which case the person shall be 
promptly removed to the United States for such detention; or
    (iii) A Federal Magistrate Judge otherwise orders the person be 
removed to the United States.
    (3) Removal By Direction of the Secretary of Defense or Designee. 
The Secretary of Defense, or designee, may order a person's removal from 
a foreign country within the Combatant Command's geographic area of 
responsibility when, in his sole discretion, such removal is required by 
military necessity. See section 3264(b)(5) of the Act. Removal based on 
military necessity may be authorized in order to take into account any 
limiting factors that may result from military operations, as well as 
the capabilities and conditions associated with a specific location.
    (i) When the Secretary of Defense, or designee, determines that a 
person arrested or charged with a violation of the Act should be removed 
from a foreign country, the person shall be removed to the nearest U.S. 
military installation outside the United States where the limiting 
conditions requiring such a removal no longer apply, and where there are 
available facilities and adequate resources to temporarily detain the 
person and conduct the initial proceedings required by the Act and this 
part.
    (ii) The relocation of a person under this paragraph does not 
authorize the further removal of the person to the United States, unless 
that further removal is authorized by an order issued by a Federal 
Magistrate Judge under paragraph (e)(2) of this section.
    (iii) Delegation. The Commander of a Combatant Command, and the 
Commander's principal assistant, are delegated authority to make the 
determination, based on the criteria stated in paragraph (e)(3) of this 
section, that a person arrested or charged with a violation of the Act 
shall be removed from a foreign country under section 3264(b)(5) of the 
Act and this part. Further delegation is authorized, but the delegation 
of authority is limited to a subordinate commander within the command 
who is designated as a general court-martial convening authority under 
the UCMJ.
    (4) A person who is removed to the United States under the 
provisions of the Act and this part and who is thereafter released from 
detention, and otherwise at liberty to return to the location outside 
the United States from which he or she was were removed, shall be 
subject to any requirements imposed by a Federal District Court of 
competent jurisdiction.
    (5) Where a person has been removed to the United States for a 
detention hearing or other judicial proceeding and a Federal Magistrate 
Judge orders the person's release and permits the person to return to 
the overseas location, the Department of Defense (including the Military 
Department originally sponsoring the person to be employed or to 
accompany the Armed Forces outside the United States) shall not be 
responsible for the expenses associated with the return of the person to 
the overseas location, or the person's subsequent return travel to the 
United States for further court proceedings that may be required.



                 Sec. Appendix A to Part 153--Guidelines

    (a) Civilians employed by the Armed Forces outside the United States 
who commit felony offenses while outside the U.S. are subject to U.S. 
criminal jurisdiction

[[Page 596]]

under the Act, and shall be held accountable for their actions, as 
appropriate.
    (b) Civilians accompanying the Armed Forces outside the United 
States who commit felony offenses while outside the U.S. are subject to 
U.S. criminal jurisdiction under the Act, and shall be held accountable 
for their actions, as appropriate.
    (c) Former members of the Armed Forces who commit felony offenses 
while serving as a member of the Armed Forces outside the U.S., but who 
ceased to be subject to UCMJ court-martial jurisdiction without having 
been tried by court-martial for such offenses, are subject to U.S. 
criminal jurisdiction under the Act and shall be held accountable for 
their actions, as appropriate.
    (d) The procedures of this part and DoD actions to implement the Act 
shall comply with applicable Status of Forces Agreements, and other 
international agreements affecting relationships and activities between 
the respective host nation countries and the U.S. Armed Forces. These 
procedures may be employed outside the United States only if the foreign 
country concerned has been briefed or is otherwise aware of the Act and 
has not interposed an objection to the application of these procedures. 
Such awareness may come in various forms, including but not limited to 
Status of Forces Agreements containing relevant language, Diplomatic 
Notes or other acknowledgements of briefings, or case-by-case 
arrangements, agreements, or understandings with appropriate host nation 
officials.
    (e) Consistent with the long-standing policy of maximizing U.S. 
jurisdiction over its citizens, the Act and this part provide a 
mechanism for furthering this objective by closing a jurisdictional gap 
in U.S. law and thereby permitting the criminal prosecution of covered 
persons for offenses committed outside the United States. In so doing, 
the Act and this part provide, in appropriate cases, an alternative to a 
host nation's exercise of its criminal jurisdiction should the conduct 
that violates U.S. law also violate the law of the host nation, as well 
as a means of prosecuting covered persons for crimes committed in areas 
in which there is no effective host nation criminal justice system.
    (f) In addition to the limitations imposed upon prosecutions by 
section 3261(b) of the Act, the Act and these procedures should be 
reserved generally for serious misconduct for which administrative or 
disciplinary remedies are determined to be inadequate or inappropriate. 
Because of the practical constraints and limitations on the resources 
available to bring these cases to successful prosecution in the United 
States, initiation of action under this part would not generally be 
warranted unless serious misconduct were involved.
    (g) The procedures set out in the Act and this part do not apply to 
cases in which the return of fugitive offenders is sought through 
extradition and similar proceedings, nor are extradition procedures 
applicable to cases under the Act.



      Sec. Appendix B to Part 153--Acknowledgment of Limited Legal 

                         Representation (Sample)

    1. I, ------------, have been named as a suspect or defendant in a 
matter to which I have been advised is subject to the jurisdiction of 
the Military Extraterritorial Jurisdiction Act of 2000 (section 3261, et 
seq., of title 18, United States Code.); hereinafter referred to as 
``the Act''). I have also been informed that certain initial proceedings 
under 18 U.S.C. 3265 may be required under this Act, for which I am 
entitled to be represented by legal counsel.
    2. I acknowledge and understand that the appointment of military 
counsel for the limited purpose of legal representation in proceedings 
conducted pursuant to the Act is dependent upon my being unable to 
retain civilian defense counsel representation for such proceedings, due 
to my indigent status, and that qualified military defense counsel has 
been made available.
    3. Pursuant to the Act, ------------, a Federal Magistrate Judge, 
has issued the attached Order and has directed that that military 
counsel be made available:

---- For the limited purpose of representing me at an initial proceeding 
to be conducted outside the United States pursuant to 18 U.S.C. 3265,
---- For the limited purpose of representing me in an initial detention 
hearing to be conducted outside the United States pursuant to 18 U.S.C. 
3265(b),

    4. ------------, military counsel, has been made available in 
accordance with Department of Defense Instruction 5525.bb, and as 
directed by the attached Order of a Federal Magistrate Judge.
    5. I (do) (do not) wish to be represented by ------------, military 
counsel ---- (initials).
    6. I understand that the legal representation of ------------, 
military counsel, is limited to:
    a. Representation at the initial proceedings conducted outside the 
United States pursuant to 18 U.S.C. 3265.

---- (Initials)

    b. The initial detention hearing to be conducted outside the United 
States pursuant to the Military Extraterritorial Jurisdiction Act of 
2000 (18 U.S.C. 3261, et seq.).

---- (Initials)

    c. Other proceedings (Specify):

------------. ---- (Initials)

________________________________________________________________________

[[Page 597]]

Signature of Person To Be Represented By Military Counsel

________________________________________________________________________
Signature of Witness*

Attachment:

Federal Magistrate Judge Order

(*Note: The witness must be a person other than the defense counsel to 
be made available for this limited legal representation.)

[[Page 598]]



                          SUBCHAPTER F_SECURITY



PART 154_DEPARTMENT OF DEFENSE PERSONNEL SECURITY PROGRAM REGULATION--Table of 

Contents



                      Subpart A_General Provisions

Sec.
154.1 Purpose.
154.2 Applicability.
154.3 Definitions.

                           Subpart B_Policies

154.6 Standards for access to classified information or assignment to 
          sensitive duties.
154.7 Criteria for application of security standards.
154.8 Types and scope of personnel security investigations.
154.9 Authorized personnel security investigative agencies.
154.10 Limitations and restrictions.

         Subpart C_Personnel Security Investigative Requirements

154.13 Sensitive positions.
154.14 Civilian employment.
154.15 Military appointment, enlistment, and induction.
154.16 Security clearance.
154.17 Special access programs.
154.18 Certain positions not necessarily requiring access to classified 
          information.
154.19 Reinvestigation.
154.20 Authority to waive investigative requirements.

 Subpart D_Reciprocal Acceptance of Prior Investigations and Personnel 
                         Security Determinations

154.23 General.
154.24 Prior investigations conducted by DoD investigative 
          organizations.
154.25 Prior personnel security determinations made by DoD authorities.
154.26 Investigations conducted and clearances granted by other agencies 
          of the Federal government.

         Subpart E_Requesting Personnel Security Investigations

154.30 General.
154.31 Authorized requesters.
154.32 Criteria for requesting investigations.
154.33 Request procedures.
154.34 Priority requests.
154.35 Personal data provided by the subject of the investigation.

                         Subpart F_Adjudication

154.40 General.
154.41 Central adjudication.
154.42 Evaluation of personnel security information.
154.43 Adjudicative record.

             Subpart G_Issuing Clearance and Granting Access

154.47 General.
154.48 Issuing clearance.
154.49 Granting access.
154.50 Administrative withdrawal.

              Subpart H_Unfavorable Administrative Actions

154.55 Requirements.
154.56 Procedures.
154.57 Reinstatement of civilian employees.

             Subpart I_Continuing Security Responsibilities

154.60 Evaluating continued security eligibility.
154.61 Security education.

     Subpart J_Safeguarding Personnel Security Investigative Records

154.65 General.
154.66 Responsibilities.
154.67 Access restrictions.
154.68 Safeguarding procedures.
154.69 Records disposition.
154.70 Foreign source information.

                      Subpart K_Program Management

154.75 General.
154.76 Responsibilities.
154.77 Reporting requirements.
154.78 Inspections.

Appendix A to Part 154--Investigative Scope
Appendix B to Part 154--Request Procedures
Appendix C to Part 154--Tables for Requesting Investigations
Appendix D to Part 154--Reporting of Nonderogatory Cases
Appendix E to Part 154--Personnel Security Determination Authorities
Appendix F to Part 154--Guidelines for Conducting Prenomination Personal 
          Interviews
Appendix G to Part 154 [Reserved]
Appendix H to Part 154--Adjudicative Guidelines for Determining 
          Eligibility for Access to Classified Information

[[Page 599]]

Appendix I to Part 154--Overseas Investigations
Appendix J to Part 154--ADP Position Categories and Criteria for 
          Designating Positions

    Authority: E.O. 10450, 18 FR 2489, 3 CFR, 1949-1953 Comp., p. 936; 
E.O. 12356, 47 FR 14874 and 15557, 3 CFR, 1982 Comp., p. 166; E.O. 
10865, 25 FR 1583, 3 CFR, 1959-1963 Comp., p. 398; E.O. 12333, 46 FR 
59941, 3 CFR, 1981 Comp., p. 200.

    Source: 52 FR 11219, Apr. 8, 1987, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 154.1  Purpose.

    (a) To establish policies and procedures to ensure that acceptance 
and retention of personnel in the Armed Forces, acceptance and retention 
of civilian employees in the Department of Defense (DoD), and granting 
members of the Armed Forces, DoD civilian employees, DoD contractors, 
and other affiliated persons access to classified information are 
clearly consistent with the interests of national security.
    (b) This part: (1) Establishes DoD personnel security policies and 
procedures;
    (2) Sets forth the standards, criteria and guidelines upon which 
personnel security determinations shall be based;
    (3) Prescribes the kinds and scopes of personnel security 
investigations required;
    (4) Details the evaluation and adverse action procedures by which 
personnel security determinations shall be made; and
    (5) Assigns overall program management responsibilities.



Sec. 154.2  Applicability.

    (a) This part implements the Department of Defense Personnel 
Security Program and takes precedence over all other departmental 
issuances affecting that program.
    (b) All provisions of this part apply to DoD civilian personnel, 
members of the Armed Forces, excluding the Coast Guard in peacetime, 
contractor personnel and other personnel who are affiliated with the 
Department of Defense except that the unfavorable administrative action 
procedures pertaining to contractor personnel requiring access to 
classified information are contained in DoD 5220.22-R and in 32 CFR part 
155.
    (c) The policies and procedures which govern the National Security 
Agency are prescribed by Public Laws 88-290 and 86-36, Executive Orders 
10450 and 12333, DoD Directive 5210.45 \1\, Director of Central 
Intelligence Directive (DCID) 1/14 \2\ and regulations of the National 
Security Agency.
---------------------------------------------------------------------------

    \1\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
    \2\ Copies may be obtained, if needed from Central Intelligence 
Agency (CCISCMS/ICS), 1225 Ames Building, Washington, DC 20505.
---------------------------------------------------------------------------

    (d) Under combat conditions or other military exigencies, an 
authority in paragraph A, Appendix E, may waive such provisions of this 
part as the circumstances warrant.

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61024, Nov. 19, 1993]



Sec. 154.3  Definitions.

    (a) Access. The ability and opportunity to obtain knowledge of 
classified information. An individual, in fact, may have access to 
classified information by being in a place where such information is 
kept, if the security measures that are in force do not prevent him from 
gaining knowledge of such information.
    (b) Adverse action. A removal from employment, suspension from 
employment of more than 14 days, reduction in grade, reduction in pay, 
or furlough of 30 days or less.
    (c) Background Investigation (BI). A personnel security 
investigation consisting of both record reviews and interviews with 
sources of information as prescribed in paragraph 3, Appendix A, this 
part, covering the most recent 5 years of an individual's life or since 
the 18th birthday, whichever is shorter, provided that at least the last 
2 years are covered and that no investigation will be conducted prior to 
an individual's 16th birthday.
    (d) Classified information. Official information or material that 
requires protection in the interests of national security and that is 
classified for such

[[Page 600]]

purpose by appropriate classifying authority in accordance with the 
provisions of Executive Order 12356.
    (e) Defense Clearance and Investigative Index (DCII). The DCII is 
the single, automated, central DoD repository which identifies 
investigations conducted by DoD investigative agencies, and personnel 
security determinations made by DoD adjudicative authorities.
    (f) DoD component. Includes the Office of the Secretary of Defense; 
the Military Departments; Chairman of the Joint Chiefs of Staff; 
Directors of Defense Agencies and the Unified and Specified Commands.
    (g) Entrance National Agency Check (ENTNAC). A personnel security 
investigation scoped and conducted in the same manner as a National 
Agency Check except that a technical fingerprint search of the files of 
the Federal Bureau of Investigation is not conducted.
    (h) Head of DoD component. The Secretary of Defense; the Secretaries 
of the Military Departments; the Chairman of Joint Chiefs of Staff; and 
the Commanders of Unified and Specified Commands; and the Directors of 
Defense Agencies.
    (i) Immigrant alien. Any alien lawfully admitted into the United 
States under an immigration visa for permanent residence.
    (j) Interim security clearance. A security clearance based on the 
completion of minimum investigative requirements, which is granted on a 
temporary basis, pending the completion of the full investigative 
requirements.
    (k) Limited access authorization. Authorization for access to 
Confidential or Secret information granted to non-US. citizens and 
immigrant aliens, which is limited to only that information necessary to 
the successful accomplishment of their assigned duties and based on a 
background investigation scoped for 10 years (paragraph 3, Appendix A).
    (l) Minor derogatory information. Information that, by itself, is 
not of sufficient importance or magnitude to justify an unfavorable 
administrative action in a personnel security determination.
    (m) National Agency check (NAC). A personnel security investigation 
consisting of a records review of certain national agencies as 
prescribed in paragraph 1, Appendix A, this part, including a technical 
fingerprint search of the files of the Federal Bureau of Investigation 
(FBI).
    (n) National Agency Check Plus Written Inquiries (NACI). A personnel 
security investigation conducted by the Office of Personnel Management, 
combining a NAC and written inquiries to law enforcement agencies, 
former employers and supervisors, references and schools.
    (o) National security. National security means the national defense 
and foreign relations of the United States.
    (p) Need-to-know. A determination made by a possessor of classified 
information that a prospective recipient, in the interest of national 
security, has a requirement for access to, knowledge, or possession of 
the classified information in order to perform tasks or services 
essential to the fulfillment of an official U.S. Government program. 
Knowledge, possession of, or access to, classified information shall not 
be afforded to any individual solely by virtue of the individual's 
office, position, or security clearance.
    (q) Periodic Reinvestigation (PR). An investigation conducted every 
five years for the purpose of updating a previously completed background 
investigation, special background investigation, single scope background 
investigation or PR on persons occupying positions referred to in Sec. 
154.19. Investigative requirements are as prescribed in appendix A to 
part 154, section 5. The period of investigation will not normally 
exceed the most recent 5-year period.
    (r) Personnel Security Investigation (PSI). Any investigation 
required for the purpose of determining the eligibility of DoD military 
and civilian personnel, contractor employees, consultants, and other 
persons affiliated with the Department of Defense, for access to 
classified information, acceptance or retention in the Armed Forces, 
assignment or retention in sensitive duties, or other designated duties 
requiring such investigation. PSIs include investigations of 
affiliations with subversive organizations, suitability information, or 
hostage situations (see Sec. 154.9(d)) conducted for the purpose of

[[Page 601]]

making personnel security determinations. They also include 
investigations of allegations that arise subsequent to adjudicative 
action and require resolution to determine an individual's current 
eligibility for access to classified information or assignment or 
retention in a sensitive position.
    (s) Scope. The time period to be covered and the sources of 
information to be contacted during the prescribed course of a PSI.
    (t) Security clearance. A determination that a person is eligible 
under the standards of this part for access to classified information.
    (u) Senior Officer of the Intelligence Community (SOIC). The DoD 
Senior Officers of the Intelligence Community include: the Director, 
National Security Agency/Central Security Service; Director, Defense 
Intelligence Agency; Assistant Chief of Staff for Intelligence, U.S. 
Army; Assistant Chief of Staff for Intelligence, U.S. Air Force; and the 
Director of Naval Intelligence, U.S. Navy.
    (v) Sensitive position. Any position so designated within the 
Department of Defense, the occupant of which could bring about, by 
virtue of the nature of the position, a materially adverse effect on the 
national security. All civilian positions are either critical-sensitive, 
noncritical-sensitive, or nonsensitive as described in Sec. 154.13(b).
    (w) Significant derogatory information. Information that could, in 
itself, justify an unfavorable administrative action, or prompt an 
adjudicator to seek additional investigation or clarification.
    (x) Special access program. Any program imposing ``need-to-know'' or 
access controls beyond those normally provided for access to 
Confidential, Secret, or Top Secret information. Such a program may 
include, but not be limited to, special clearance, adjudication, 
investigative requirements, material dissemination restrictions, or 
special lists of persons determined to have a need-to-know.
    (y) Special Background Investigation (SBI). A personnel security 
investigation consisting of all of the components of a BI plus certain 
additional investigative requirements as prescribed in paragraph 4, 
Appendix B, this part. The period of investigation for an SBI is the 
last 15 years or since the 18th birthday, whichever is shorter, provided 
that the last 2 full years are covered and that no investigation will be 
conducted prior to an individual's 16th birthday.
    (z) Special Investigative Inquiry (SII). A supplemental personnel 
security investigation of limited scope conducted to prove or disprove 
relevant allegations that have arisen concerning a person upon whom a 
personnel security determination has been previously made and who, at 
the time of the allegation, holds a security clearance or otherwise 
occupies a position that requires a personnel security determination 
under the provisions of this part.
    (aa) Service. Honorable active duty (including attendance at the 
military academies), membership in ROTC Scholarship Program, Army and 
Air Force National Guard, Military Reserve Force (including active 
status and ready reserve), civilian employment in Government service, or 
civilian employment with a DoD contractor or as a consultant involving 
access under the DoD Industrial Security Program. Continuity of service 
is maintained with change from one status to another as long as there is 
no single break in service greater than 12 months.
    (bb) Unfavorable administrative action. Adverse action taken as the 
result of personnel security determinations and unfavorable personnel 
security determinations as defined in this part.
    (cc) Unfavorable personnel security determination. A denial or 
revocation of clearance for access to classified information; denial or 
revocation of access to classified information; denial or revocation of 
a Special Access authorization (including access to SCI); nonappointment 
to or nonselection for appointment to a sensitive position; 
nonappointment to or nonselection for any other position requiring a 
trustworthiness determination under this part; reassignment to a 
position of lesser sensitivity or to a nonsensitive position; and 
nonacceptance for or discharge from the Armed Forces when any of the 
foregoing actions are based on derogatory information of personnel 
security significance.

[[Page 602]]

    (dd) United States Citizen (Native Born). A person born in one of 
the 50 United States, Puerto Rico, Guam, American Samoa, Northern 
Mariana Islands, U.S. Virgin Islands; or Panama Canal Zone (if the 
father or mother (or both) was or is, a citizen of the United States).

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61024, Nov. 19, 1993]



                           Subpart B_Policies



Sec. 154.6  Standards for access to classified information or assignment to 

sensitive duties.

    (a) General. Only U.S. citizens shall be granted a personnel 
security clearance, assigned to sensitive duties, or granted access to 
classified information unless an authority designated in Appendix E has 
determined that, based on all available information, there are 
compelling reasons in furtherance of the Department of Defense mission, 
including, special expertise, to assign an individual who is not a 
citizen to sensitive duties or grant a Limited Access Authorization to 
classified information. Non-U.S. citizens may be employed in the 
competitive service in sensitive civilian positions only when 
specifically approved by the Office of Personnel Management, pursuant to 
E.O. 11935. Exceptions to these requirements shall be permitted only for 
compelling national security reasons.
    (b) Clearance and sensitive position standard. The personnel 
security standard that must be applied to determine whether a person is 
eligible for access to classified information or assignment to sensitive 
duties is whether, based on all available information, the person's 
loyalty, reliability, and trustworthiness are such that entrusting the 
person with classified information or assigning the person to sensitive 
duties is clearly consistent with the interests of national security.
    (c) Military service standard. The personnel security standard that 
must be applied in determining whether a person is suitable under 
national security criteria for appointment, enlistment, induction, or 
retention in the Armed Forces is that, based on all available 
information, there is no reasonable basis for doubting the person's 
loyalty to the Government of the United States.



Sec. 154.7  Criteria for application of security standards.

    The ultimate decision in applying either of the security standards 
set forth in Sec. 154.6 (b) and (c) must be an overall common sense 
determination based upon all available facts. The criteria for 
determining eligibility for a clearance under the security standard 
shall include, but not be limited to the following:
    (a) Commission of any act of sabotage, espionage, treason, 
terrorism, anarchy, sedition, or attempts thereat or preparation 
therefor, or conspiring with or aiding or abetting another to commit or 
attempt to commit any such act.
    (b) Establishing or continuing a sympathetic association with a 
saboteur, spy, traitor, seditionist, anarchist, terrorist, 
revolutionist, or with an espionage or other secret agent or similar 
representative of a foreign nation whose interests may be inimical to 
the interests of the United States, or with any person who advocates the 
use of force or violence to overthrow the Government of the United 
States or to alter the form of Government of the United States by 
unconstitutional means.
    (c) Advocacy or use of force or violence to overthrow the Government 
of the United States or to alter the form of Government of the United 
States by unconstitutional means.
    (d) Knowing membership with the specific intent of furthering the 
aims of, or adherence to and active participation in any foreign or 
domestic organization, association, movement, group or combination of 
persons (hereafter referred to as organizations) which unlawfully 
advocates or practices the commission of acts of force or violence to 
prevent others from exercising their rights under the Constitution or 
laws of the U.S. or of any State or which seeks to overthrow the 
Government of the U.S. or any State or subdivision thereof by unlawful 
means.
    (e) Unauthorized disclosure to any person of classified information, 
or of other information, disclosure of which

[[Page 603]]

is prohibited by statute, Executive Order or regulation.
    (f) Performing or attempting to perform one's duties, acceptance and 
active maintenance of dual citizenship, or other acts conducted in a 
manner which serve or which could be expected to serve the interests of 
another government in preference to the interests of the United States.
    (g) Disregard of public law, statutes, Executive Orders or 
regulations including violation of security regulations or practices.
    (h) Criminal or dishonest conduct.
    (i) Acts of omission or commission that indicate poor judgment, 
unreliability or untrustworthiness.
    (j) Any behavior or illness, including any mental condition, which, 
in the opinion of competent medical authority, may cause a defect in 
judgment or reliability with due regard to the transient or continuing 
effect of the illness and the medical findings in such case.
    (k) Vulnerability to coercion, influence, or pressure that may cause 
conduct contrary to the national interest. This may be
    (1) The presence of immediate family members or other persons to 
whom the applicant is bonded by affection or obligation in a nation (or 
areas under its domination) whose interests may be inimical to those of 
the United States, or
    (2) Any other circumstances that could cause the applicant to be 
vulnerable.
    (l) Excessive indebtedness, recurring financial difficulties, or 
unexplained affluence.
    (m) Habitual or episodic use of intoxicants to excess.
    (n) Illegal or improper use, possession, transfer, sale or addiction 
to any controlled or psychoactive substance, narcotic, cannabis or other 
dangerous drug.
    (o) Any knowing and willful falsification, coverup, concealment, 
misrepresentation, or omission of a material fact from any written or 
oral statement, document, form or other representation or device used by 
the Department of Defense or any other Federal agency.
    (p) Failing or refusing to answer or to authorize others to answer 
questions or provide information required by a congressional committee, 
court, or agency in the course of an official inquiry whenever such 
answers or information concern relevant and material matters pertinent 
to an evaluation of the individual's trustworthiness, reliability, and 
judgment.
    (q) Acts of sexual misconduct or perversion indicative of moral 
turpitude, poor judgment, or lack of regard for the laws of society.



Sec. 154.8  Types and scope of personnel security investigations.

    (a) General. The types of personnel security investigations 
authorized below vary in scope of investigative effort required to meet 
the purpose of the particular investigation. No other types are 
authorized. The scope of a PSI may be neither raised nor lowered without 
the approval of the Deputy Under Secretary of Defense for Policy.
    (b) National Agency Check. Essentially, a NAC is a records check of 
designated agencies of the Federal Government that maintain record 
systems containing information relevant to making a personnel security 
determination. An ENTNAC is a NAC (scope as outlined in paragraph 1, 
Appendix A) conducted on inductees and first-term enlistees, but lacking 
a technical fingerprint search. A NAC is also an integral part of each 
BI, SBI, and Periodic Reinvestigation (PR). Subpart C prescribes when an 
NAC is required.
    (c) National Agency Check plus written inquiries. The Office of 
Personnel Management (OPM) conducts a NAC plus Written Inquiries (NACIs) 
on civilian employees for all departments and agencies of the Federal 
Government, pursuant to E.O. 10450. NACIs are considered to meet the 
investigative requirements of this regulation for a nonsensitive or 
noncritical sensitive position and/or up to a Secret clearance and, in 
addition to the NAC, include coverage of law enforcement agencies, 
former employers and supervisors, references, and schools covering the 
last 5 years.
    (d) DoD National Agency check plus written inquiries. DIS will 
conduct a DNACI, consisting of the scope contained in paragraph 2, 
Appendix A, for DoD military and contractor personnel

[[Page 604]]

for access to Secret information. Subpart C prescribes when a DNACI is 
required.
    (e) Background investigation. The BI is the principal type of 
investigation conducted when an individual requires Top Secret clearance 
or is to be assigned to a critical sensitive position. The BI normally 
covers a 5-year period and consists of a subject interview, NAC, LACs, 
credit checks, developed character references (3), employment records 
checks, employment references (3), and select scoping as required to 
resolve unfavorable or questionable information. (See paragraph 3, 
Appendix A). Subpart C prescribes when a BI is required.
    (f) Special background investigation. (1) An SBI is essentially a BI 
providing additional coverage both in period of time as well as sources 
of information, scoped in accordance with the provisions of DCID 1/14 
but without the personal interview. While the kind of coverage provided 
for by the SBI determines eligibility for access to SCI, DoD has adopted 
this coverage for certain other Special Access programs. Subpart C 
prescribes when an SBI is required.
    (2) The OPM, FBI, Central Intelligence Agency (CIA), Secret Service, 
and the Department of State conduct specially scoped BIs under the 
provisions of DCID 1/14. Any investigation conducted by one of the 
above-cited agencies under DCID 1/14 standards is considered to meet the 
SBI investigative requirements of this part.
    (3) The detailed scope of an SBI is set forth in paragraph 4, 
Appendix A.
    (g) Special investigative inquiry. (1) A Special Investigative 
Inquiry is a personnel security investigation conducted to prove or 
disprove allegations relating to the criteria outlined in Sec. 154.7(a) 
of this part except current criminal activities (see Sec. 154.9(c)(4)), 
that have arisen concerning an individual upon whom a personnel security 
determination has been previously made and who, at the time of the 
allegation, holds a security clearance or otherwise occupies a position 
that requires a trustworthiness determination.
    (2) Special Investigative Inquiries are scoped as necessary to 
address the specific matters requiring resolution in the case concerned 
and generally consist of record checks and/or interviews with 
potentially knowledgeable persons. An SII may include an interview with 
the subject of the investigation when necessary to resolve conflicting 
information and/or to provide an opportunity to refute or mitigate 
adverse information.
    (3) In those cases when there is a disagreement between Defense 
Investigative Service (DIS) and the requester as to the appropriate 
scope of the investigation, the matter may be referred to the Deputy 
Under Secretary of Defense for Policy for resolution.
    (h) Periodic reinvestigation. As referred to in Sec. 154.19(a) and 
other national directives, certain categories of duties, clearance, and 
access require the conduct of a PR every five years according to the 
scope outlined in paragraph 5, Appendix A. The PR scope applies to 
military, civilian, contractor, and foreign national personnel.
    (i) Personal interview. Investigative experience over the years has 
demonstrated that, given normal circumstances, the subject of a 
personnel security investigation is the best source of accurate and 
relevant information concerning the matters under consideration. 
Further, restrictions imposed by the Privacy Act of 1974 dictate that 
Federal investigative agencies collect information to the greatest 
extent practicable directly from the subject when the information may 
result in adverse determinations about an individual's rights, benefits, 
and privileges under Federal programs. Accordingly, personal interviews 
are an integral part of the DoD personnel security program and shall be 
conducted in accordance with the requirements set forth in the following 
paragraphs of this section.
    (1) BI/PR. A personal interview shall be conducted by a trained DIS 
agent as part of each BI and PR.
    (2) Resolving adverse information. A personal interview of the 
subject shall be conducted by a DIS agent (or, when authorized, by 
investigative personnel of other DoD investigative organizations 
designated in this Regulation to conduct personnel security 
investigations), when necessary, as part of each

[[Page 605]]

Special Investigative Inquiry, as well as during the course of initial 
or expanded investigations, to resolve or clarify any information which 
may impugn the subject's moral character, threaten the subject's future 
Federal employment, raise the question of subject's security 
clearability, or be otherwise stigmatizing.
    (3) Hostage situation. A personal interview shall be conducted by a 
DIS agent (or, when authorized, by investigative personnel of other DoD 
investigative organizations designated in this Regulation to conduct 
personnel security investigations) in those instances in which an 
individual has immediate family members or other persons bound by ties 
of affection or obligation who reside in a nation whose interests are 
inimical to the interests of the United States. (See Sec. 154.9(d).
    (4) Applicants/potential nominees for DoD military or civilian 
positions requiring access to SCI or other positions requiring an SBI. A 
personal interview of the individual concerned shall be conducted, to 
the extent feasible, as part of the selection process for applicants/
potential nominees for positions requiring access to SCI or completion 
of an SBI. The interview shall be conducted by a designee of the 
Component to which the applicant or potential nominee is assigned. 
Clerical personnel are not authorized to conduct these interviews. Such 
interviews shall be conducted utilizing resources in the order of 
priority indicated below:
    (i) Existing personnel security screening systems (e.g., Air Force 
Assessment Screening Program, Naval Security Group Personnel Security 
Interview Program, U.S. Army Personnel Security Screening Program); or
    (ii) Commander of the nominating organization or such official as he 
or she has designated in writing (e.g., Deputy Commander, Executive 
Officer, Security Officer, Security Manager, S-2, Counterintelligence 
Specialist, Personnel Security Specialist, or Personnel Officer); or
    (iii) Agents of investigative agencies in direct support of the 
Component concerned.
    (5) Administrative procedures. (i) The personal interview required 
by paragraph (i)(4) of this section shall be conducted in accordance 
with Appendix F.
    (ii) For those investigations requested subsequent to the personal 
interview requirements of paragraph (i)(4) of this section the following 
procedures apply:
    (A) The DD Form 1879 (Request for Personnel Security Investigation) 
shall be annotated under Item 20 (Remarks) with the statement ``Personal 
Interview Conducted by (cite the duty assignment of the designated 
official (e.g., Commander, Security Officer, Personnel Security 
Specialist, etc.))'' in all cases in which an SBI is subsequently 
requested.
    (B) Unfavorable information developed through the personal interview 
required by paragraph (i)(4) of this section, will be detailed in a 
written report attached to the DD Form 1879 to include full 
identification of the interviewer. Failure to provide such information 
may result in conduct of an incomplete investigation by DIS.
    (C) Whenever it is determined that it is not feasible to conduct the 
personal interview required by paragraph (i)(4) of this section prior to 
requesting the SBI, the DD Form 1879 shall be annotated under Item 20 
citing the reason for not conducting the interview.
    (j) Expanded investigation. If adverse or questionable information 
relevant to a security determination is developed during the conduct of 
a personnel security investigation, regardless of type, the 
investigation shall be expanded, consistent with the restrictions in 
Sec. 154.10(e) to the extent necessary to substantiate or disprove the 
adverse or questionable information.



Sec. 154.9  Authorized personnel security investigative agencies.

    (a) General. The DIS provides a single centrally directed personnel 
security investigative service to conduct personnel security 
investigations within the 50 States, District of Columbia, and 
Commonwealth of Puerto Rico for DoD Components, except as provided for 
in DoD Directive 5100.23. \1\ DIS will request the Military Departments 
or other appropriate Federal Agencies to

[[Page 606]]

accomplish DoD investigative requirements in other geographic areas 
beyond their jurisdiction. No other DoD Component shall conduct 
personnel security investigations unless specifically authorized by the 
Deputy Under Secretary of Defense for Policy. In certain instances 
provided for below, the DIS shall refer an investigation to other 
investigative agencies.
---------------------------------------------------------------------------

    \1\ See footnote 1 to Sec. 154.2(c).
---------------------------------------------------------------------------

    (b) Subversive affiliations--(1) General. In the context of DoD 
investigative policy, subversion refers only to such conduct as is 
forbidden by the laws of the United States. Specifically, this is 
limited to information concerning the activities of individuals or 
groups that involve or will involve the violation of Federal law, for 
the purpose of:
    (i) Overthrowing the Government of the United States or the 
government of a State;
    (ii) Substantially impairing for the purpose of influencing U.S. 
Government policies or decisions:
    (A) The functions of the Government of the United States, or
    (B) The functions of the government of a State;
    (iii) Depriving persons of their civil rights under the Constitution 
or laws of the United States.
    (2) Military Department/FBI jurisdiction. Allegations of activities 
covered by Sec. 154.7 (a) through (f) are in the exclusive 
investigative domain of either the counterintelligence agencies of the 
Military Departments or the FBI, depending on the circumstances of the 
case and the provisions of the Agreement Governing the Conduct of 
Defense Department Counterintelligence Activities in Conjunction with 
the FBI. Whenever allegations of this nature are developed, whether 
before or after a security clearance has been issued or during the 
course of a personnel security investigation conducted by DIS, they 
shall be referred immediately to either the FBI or to a military 
department counterintelligence agency, as appropriate.
    (3) DIS jurisdiction. Allegations of activities limited to those set 
forth in Sec. 154.7 (g) through (j) of this part shall be investigated 
by DIS.
    (c) Suitability information--(1) General. Most derogatory 
information developed through personnel security investigations of DoD 
military or civilian personnel is so-called suitability information, 
that is, information pertaining to activities or situations covered by 
Sec. 154.7 (g) through (q). Almost all unfavorable personnel security 
determinations made by DoD authorities are based on derogatory 
suitability information, although such information is often used as a 
basis for unfavorable administrative actions not of a security nature, 
such as action under the Uniform Code of Military Justice or removal 
from Federal employment under OPM regulations.
    (2) Pre-clearance investigation. Derogatory suitability information, 
except that covered in paragraph (c)(4) of this section, developed 
during the course of a personnel security investigation, prior to the 
issuance of an individual's personnel security clearance, shall be 
investigated by DIS to the extent necessary to confirm or refute its 
applicability to Sec. 154.7 (g) through (q).
    (3) Postadjudication investigation. Derogatory suitability 
allegations, except those covered by paragraph (c)(4) of this section 
arising subsequent to clearance requiring investigation to resolve and 
to determine the individual's eligibility for continued access to 
classified information, reinstatement of clearance/access, or retention 
in a sensitive position shall be referred to DIS to conduct a Special 
Investigative Inquiry. Reinvestigation of individuals for adjudicative 
reconsideration due to the passage of time or evidence of favorable 
behavior shall also be referred to DIS for investigation. In such cases, 
completion of the appropriate statement of personal history by the 
individual constitutes consent to be investigated. Individual consent or 
completion of a statement of personal history is not required when Sec. 
154.19(b) applies. Postadjudication investigation of allegations of a 
suitability nature required to support other types of unfavorable 
personnel security determinations or disciplinary procedures independent 
of a personnel security determination shall be handled in accordance 
with applicable Component administrative regulations. These latter 
categories of allegations lie outside the DoD personnel security program 
and are not a

[[Page 607]]

proper investigative function for departmental counterintelligence 
organizations, Component personnel security authorities, or DIS.
    (4) Allegations of criminal activity. Any allegations of conduct of 
a nature indicating possible criminal conduct, including any arising 
during the course of a personnel security investigation, shall be 
referred to the appropriate DoD, military department or civilian 
criminal investigative agency. Military department investigative 
agencies have primary investigative jurisdiction in cases where there is 
probable cause to believe that the alleged conduct will be the basis for 
prosecution under the Uniform Code of Military Justice.
    (d) Hostage situations--(1) General. A hostage situation exists when 
a member of an individual's immediate family or such other person to 
whom the individual is bound by obligation or affection resides in a 
country whose interests are inimical to the interests of the United 
States. The rationale underlying this category of investigation is based 
on the possibility that an individual in such a situation might be 
coerced, influenced, or pressured to act contrary to the best interests 
of national security.
    (2) DIS jurisdiction. In the absence of evidence of any coercion, 
influence or pressure, hostage investigations are exclusively a 
personnel security matter, rather than counterintelligence, and all such 
investigations shall be conducted by DIS.
    (3) Military Department and/or FBI jurisdiction. Should indications 
be developed that hostile intelligence is taking any action specifically 
directed against the individual concerned--or should there exist any 
other evidence that the individual is actually being coerced, 
influenced, or pressured by an element inimical to the interests of 
national security--then the case becomes a counterintelligence matter 
(outside of investigative jurisdiction of DIS) to be referred to the 
appropriate military department or the FBI for investigation.
    (e) Overseas personnel security investigations. Personnel security 
investigations requiring investigation overseas shall be conducted under 
the direction and control of DIS by the appropriate military department 
investigative organization. Only postadjudication investigations 
involving an overseas subject may be referred by the requester directly 
to the military department investigative organization having 
investigative responsibility in the overseas area concerned (see 
Appendix I) with a copy of the investigative request sent to DIS. In 
such cases, the military department investigative agency will complete 
the investigation, forward the completed report of investigation 
directly to DIS, with a copy to the requester.



Sec. 154.10  Limitations and restrictions.

    (a) Authorized requesters and personnel security determination 
authorities. Personnel security investigations may be requested and 
personnel security clearances (including Special Access authorizations 
as indicated) granted only by those authorities designated in Sec. 
154.31 and Appendix E.
    (b) Limit investigations and access. The number of persons cleared 
for access to classified information shall be kept to a minimum, 
consistent with the requirements of operations. Special attention shall 
be given to eliminating unnecessary clearances and requests for 
personnel security investigations.
    (c) Collection of investigative data. To the greatest extent 
practicable, personal information relevant to security determinations 
shall be obtained directly from the subject of a personnel security 
investigation. Such additional information required to make the 
necessary personnel security determination shall be obtained as 
appropriate from knowledgeable personal sources, particularly the 
subject's peers, and through checks of relevant records including 
school, employment, credit, medical, and law enforcement records.
    (d) Privacy Act notification. Whenever personal information is 
solicited from an individual preparatory to the initiation of a 
personnel security investigation, the individual must be informed of--
    (1) The authority (statute or Executive order that authorized 
solicitation);
    (2) The principal purpose or purposes for which the information is 
to be used;
    (3) The routine uses to be made of the information;

[[Page 608]]

    (4) Whether furnishing such information is mandatory or voluntary;
    (5) The effect on the individual, if any, of not providing the 
information and
    (6) That subsequent use of the data may be employed as part of an 
aperiodic, random process to screen and evaluate continued eligibility 
for access to classified information.
    (e) Restrictions on investigators. Investigation shall be carried 
out insofar as possible to collect only as much information as is 
relevant and necessary for a proper personnel security determination. 
Questions concerning personal and domestic affairs, national origin, 
financial matters, and the status of physical health thus should be 
avoided unless the question is relevant to the criteria of Sec. 154.7. 
Similarly, the probing of a person's thoughts or beliefs and questions 
about conduct that have no personnel security implications are 
unwarranted. When conducting investigations under the provisions of this 
part, investigators shall:
    (1) Investigate only cases or persons assigned within their official 
duties.
    (2) Interview sources only where the interview can take place in 
reasonably private surroundings.
    (3) Always present credentials and inform sources of the reasons for 
the investigation. Inform sources of the subject's accessibility to the 
information to be provided and to the identity of the sources providing 
the information. Restrictions on investigators relating to Privacy Act 
advisements to subjects of personnel security investigations are 
outlined in paragraph (d) of this section.
    (4) Furnish only necessary identity data to a source, and refrain 
from asking questions in such a manner as to indicate that the 
investigator is in possession of derogatory information concerning the 
subject of the investigation.
    (5) Refrain from using, under any circumstances, covert or 
surreptitious investigative methods, devices, or techniques including 
mail covers, physical or photographic surveillance, voice analyzers, 
inspection of trash, paid informants, wiretap, or eavesdropping devices.
    (6) Refrain from accepting any case in which the investigator knows 
of circumstances that might adversely affect his fairness, impartiality, 
or objectivity.
    (7) Refrain, under any circumstances, from conducting physical 
searches of the subject or his property.
    (8) Refrain from attempting to evaluate material contained in 
medical files. Medical files shall be evaluated for personnel security 
program purposes only by such personnel as are designated by DoD medical 
authorities. However, review and collection of medical record 
information may be accomplished by authorized investigative personnel.
    (f) Polygraph restrictions. The polygraph may be used as a personnel 
security screening measure only in those limited instances authorized by 
the Secretary of Defense in DoD Directive 5210.48. \1\
---------------------------------------------------------------------------

    \1\ See footnote 1 to Sec. 154.2(c).
---------------------------------------------------------------------------



         Subpart C_Personnel Security Investigative Requirements



Sec. 154.13  Sensitive positions.

    (a) Designation of sensitive positions. Certain civilian positions 
within the Department of Defense entail duties of such a sensitive 
nature, including access to classified information, that the misconduct, 
malfeasance, or nonfeasance of an incumbent in any such position could 
result in an unacceptably adverse impact upon the national security. 
These positions are referred to in this part as sensitive positions. It 
is vital to the national security that great care be exercised in the 
selection of individuals to fill such positions. Similarly, it is 
important that only positions which truly meet one or more of the 
criteria set forth in paragraph (b) of this section be designated as 
sensitive.
    (b) Criteria for security designation of positions. Each civilian 
position within the Department of Defense shall be categorized, with 
respect to security sensitivity, as either nonsensitive, noncritical-
sensitive, or critical-sensitive.
    (1) The criteria to be applied in designating a position as 
sensitive are:
    (i) Critical-sensitive.

[[Page 609]]

    (A) Access to Top Secret information.
    (B) Development or approval of plans, policies, or programs that 
affect the overall operations of the Department of Defense or of a DoD 
Component.
    (C) Development or approval of war plans, plans or particulars of 
future major or special operations of war, or critical and extremely 
important items of war.
    (D) Investigative and certain investigative support duties, the 
issuance of personnel security clearances or access authorizations, or 
the making of personnel security determinations.
    (E) Fiduciary, public contact, or other duties demanding the highest 
degree of public trust.
    (F) Duties falling under Special Access programs.
    (G) Category I automated data processing (ADP) positions.
    (H) Any other position so designated by the head of the Component or 
designee.
    (ii) Noncritical-sensitive.
    (A) Access to Secret or Confidential information.
    (B) Security police/provost marshal-type duties involving the 
enforcement of law and security duties involving the protection and 
safeguarding of DoD personnel and property.
    (C) Category II automated data processing positions.
    (D) Duties involving education and orientation of DoD personnel.
    (E) Duties involving the design, operation, or maintenance of 
intrusion detection systems deployed to safeguard DoD personnel and 
property.
    (F) Any other position so designated by the head of the Component or 
designee.
    (2) All other positions shall be designated as nonsensitive.
    (c) Authority to designate sensitive positions. The authority to 
designate sensitive positions is limited to those authorities designated 
in paragraph G, Appendix E. These authorities shall designate each 
position within their jurisdiction as to its security sensitivity and 
maintain these designations current vis-a-vis the specific duties of 
each position.
    (d) Limitation of sensitive positions. It is the responsibility of 
those authorities authorized to designate sensitive positions to insure 
that only those positions are designated as sensitive that meet the 
criteria of paragraph (b) and (c) of this section that the designation 
of sensitive positions is held to a minimum consistent with mission 
requirements. Designating authorities shall maintain an accounting of 
the number of sensitive positions by category, i.e., critical or non-
critical sensitive. Such information will be included in annual report 
required in subpart K.
    (e) Billet control system for Top Secret. (1) To standardize and 
control the issuance of Top Secret clearances within the Department of 
Defense, a specific designated billet must be established and maintained 
for all DoD military and civilian positions requiring access to Top 
Secret information. Only persons occupying these billet positions will 
be authorized a Top Secret clearance. If an individual departs from a 
Top Secret billet to a billet/position involving a lower level 
clearance, the Top Secret clearance will be administratively rescinded. 
This Top Secret billet requirement is in addition to the existing billet 
structure maintained for SCI access.
    (2) Each request to DIS for a BI or SBI that involves access to Top 
Secret or SCI information will require inclusion of the appropriate 
billet reference, on the request for investigation. Each Component head 
should in corporate, to the extent feasible, the Top Secret billet 
structure into the component Manpower Unit Manning Document. Such a 
procedure should minimize the time and effort required to maintain such 
a billet structure.
    (3) A report on the number of established Top Secret billets will be 
submitted each year to the DUSD(P) as part of the annual clearance 
report referred to in subpart K.



Sec. 154.14  Civilian employment.

    (a) General. The appointment of each civilian employee in any DoD 
Component is subject to investigation, except for reappointment when the 
break in employment is less than 12 months. The type of investigation 
required is set forth in this section according to position sensitivity.

[[Page 610]]

    (b) Nonsensitive positions. In accordance with the OPM Federal 
Personnel Manual, a NACI shall be requested not later than 3 working 
days after a person is appointed to a nonsensitive position. Although 
there is normally no investigation requirement for per diem, 
intermittent, temporary or seasonal employees in nonsensitive positions 
provided such employment does not exceed an aggregate of 120 days in 
either a single continuous or series of appointments, a NAC may be 
requested of DIS where deemed appropriate by the employing activity.
    (c) Noncritical-sensitive positions. (1) An NACI shall be requested 
and the NAC portion favorably completed before a person is appointed to 
a noncritical-sensitive position (for exceptions see paragraph (e) (1) 
and (2) of this section). An ENTNAC, NAC or DNACI conducted during 
military or contractor employment may also be used for appointment 
provided a NACI has been requested from OPM and there is no more than 12 
months break in service since completion of the investigation.
    (2) Seasonal employees (including summer hires) normally do not 
require access to classified information. For those requiring access to 
classified information the appropriate investigation is required. The 
request for the NAC (or NACI) should be submitted to DIS by entering 
``SH'' (summer hire) in red letters approximately one inch high on the 
DD Form 398-2, Personnel Security Questionnaire (National Agency 
Checklist). Additionally, to ensure expedited processing by DIS, summer 
hire requests should be assembled and forwarded to DIS in bundles, when 
appropriate.
    (d) Critical-sensitive positions. A BI shall be favorably completed 
prior to appointment to critical-sensitive positions (for exceptions see 
paragraph (e) (1) and (2) of this section. Certain critical-sensitive 
positions require a preappointment SBI in accordance with Sec. 154.17. 
Preappointment BIs and SBIs will be conducted by DIS.
    (e) Exceptions--(1) Noncritical-sensitive. In an emergency, a 
noncritical-sensitive position may be occupied pending the completion of 
the NACI if the head of the requesting organization finds that the delay 
in appointment would be harmful to the national security and such 
finding is reduced to writing and made part of the record. In such 
instances, the position may be filled only after the NACI has been 
requested.
    (2) Critical-sensitive. In an emergency, a critical-sensitive 
position may be occupied pending completion of the BI (or SBI, as 
appropriate) if the head of the requesting organization finds that the 
delay in appointment would be harmful to the national security and such 
finding is reduced to writing and made a part of the record. In such 
instances, the position may be filled only when the NAC portion of the 
BI (or SBI) or a previous valid NACI, NAC or ENTNAC has been completed 
and favorably adjudicated.
    (f) Mobilization of DoD civilian retirees. The requirements 
contained in paragraph (a) of this section, regarding the type of 
investigation required by position sensitivity for DoD civilian retirees 
temporary appointment when the break in employment is greater than 12 
months, should either be expedited or waived for the purposes of 
mobilizing selected reemployed annuitants under the provisions of title 
5, United States Code, depending upon the degree of sensitivity of the 
position to which assigned. Particular priority should be afforded to 
newly assigned personnel assigned to the defense intelligence and 
security agencies with respect to granting security clearances in an 
expeditious manner under paragraph (a) of this section.



Sec. 154.15  Military appointment, enlistment, and induction.

    (a) General. The appointment, enlistment, and induction of each 
member of the Armed Forces or their Reserve Components shall be subject 
to the favorable completion of a personnel security investigation. The 
types of investigation required are set forth in this section.
    (b) Entrance investigation. (1) An ENTNAC shall be conducted on each 
enlisted member of the Armed Forces at the time of initial entry into 
the service. A DNACI shall be conducted on each commissioned officer, 
except as

[[Page 611]]

permitted by paragraph (d) of this section, warrant officer, cadet, 
midshipman, and Reserve Officers Training Candidate, at the time of 
appointment. A full NAC shall be conducted upon reentry of any of the 
above when there has been a break in service greater than 12 months.
    (2) If an officer or warrant officer candidate has been the subject 
of a favorable NAC or ENTNAC and there has not been a break in service 
of more than 12 months, a new NAC is not authorized. This includes ROTC 
graduates who delay entry onto active duty pending completion of their 
studies.
    (3) All derogatory information revealed during the enlistment or 
appointment process that results in a moral waiver will be fully 
explained on a written summary attached to the DD Form 398-2.
    (c) Reserve Components and National Guard. Reserve Component and 
National Guard personnel not on active duty are subject to the 
investigative requirements of this section.
    (d) Exceptions for certain commissioned officers of Reserve 
Components. The requirements for entrance investigation shall be rigidly 
adhered to except as follows. Health professionals, chaplains, and 
attorneys may be commissioned in the Reserve Components prior to 
completion of a DNACI provided that:
    (1) A DNACI is initiated at the time an application for a commission 
is received; and
    (2) The applying health professional, chaplain, or attorney agrees 
in writing that, if the results of the investigation are unfavorable, he 
or she will be subject to discharge if found to be ineligible to hold a 
commission. Under this exception, commissions in Reserve Components 
other than the National Guard may be tendered to immigrant alien health 
professionals, chaplains, and attorneys.
    (e) Mobilization of military retirees. The requirements contained in 
paragraph (c) of this section, regarding a full NAC upon reentry to 
active duty of any officer or enlisted regular/reserve military retiree 
or Individual Ready Reserve who has been separated from service for a 
period of greater than 12 months, should be waived for the purposes of 
partial or full mobilization under provisions of title 10, (title 14, 
pertaining to the U.S. Coast Guard as an element of the Navy) U.S. Code, 
to include the period of prescribed service refresher training. 
Particular priority should be afforded to military retirees mobilized 
and assigned to the defense intelligence and security agencies 
communities.



Sec. 154.16  Security clearance.

    (a) General. (1) The authorities designated in paragraph A, Appendix 
E are the only authorities authorized to grant, deny or revoke DoD 
personnel security clearances. The granting of such clearances shall be 
limited to only those persons who require access to classified 
information for mission accomplishment.
    (2) Military, DoD civilian, and contractor personnel who are 
employed by or serving in a consultant capacity to the DoD, may be 
considered for access to classified information only when such access is 
required in connection with official duties. Such individuals may be 
granted either a final or interim personnel security clearance provided 
the investigative requirements set forth below are complied with, and 
provided further that all available information has been adjudicated and 
a finding made that such clearance would be clearly consistent with the 
interests of national security.
    (b) Investigative requirements for clearance--(1) Top Secret. (i) 
Final Clearance:
    (A) BI.
    (B) Established billet per Sec. 154.13(e) (1) through (3) (except 
contractors).
    (ii) Interim Clearance:
    (A) Favorable NAC, ENTNAC, DNACI, or NACI completed
    (B) Favorable review of DD Form 398/SF-86/SF-171/DD Form 49
    (C) BI or SBI has been initiated
    (D) Favorable review of local personnel, base/military police, 
medical, and other security records as appropriate.
    (E) Established billet per Sec. 154.13(e) (1) through (3) (except 
contractors)
    (F) Provisions of paragraph Sec. 154.14(e) (1) and (2) have been 
met regarding civilian personnel.
    (2) Secret. (i) Final Clearance:

[[Page 612]]

    (A) DNACI: Military (except first-term enlistees) and contractor 
employees
    (B) NACI: Civilian employees
    (C) ENTNAC: First-term enlistees
    (ii) Interim Clearance:
    (A) When a valid need to access Secret information is established, 
an interim Secret clearance may be issued in every case, provided that 
the steps outlined in paragraphs (b)(2)(ii) (B) through (E) of this 
section have been complied with.
    (B) Favorable review of DD Form 398-2/SF-85/SF-171/DD Form 48.
    (C) NACI, DNACI, or ENTNAC initiated.
    (D) Favorable review of local personnel, base military police, 
medical, and security records as appropriate.
    (E) Provisions of Sec. 154.14(e) have been complied with regarding 
civilian personnel.
    (3) Confidential. (i) Final Clearance:
    (A) NAC or ENTNAC: Military and contractor employees (except for 
Philippine national members of the United States Navy on whom a BI shall 
be favorably completed.)
    (B) NACI: Civilian employees (except for summer hires who may be 
granted a final clearance on the basis of a NAC).
    (ii) Interim Clearance:
    (A) Favorable review of DD Form 398-2/SF 85/SF 171/ DD Form 48.
    (B) NAC, ENTNAC or NACI initiated.
    (C) Favorable review of local personnel, base military police, 
medical, and security records as appropriate.
    (D) Provisions of Sec. 154.14(e) (1) and (2) have been complied 
with regarding civilian personnel.
    (4) Validity of previously granted clearances. Clearances granted 
under less stringent investigative requirements retain their validity; 
however, if a higher degree of clearance is required, investigative 
requirements of this directive will be followed.
    (c) Access to classified information by non-U.S. citizens. (1) Only 
U.S. citizens are eligible for a security clearance. Therefore, every 
effort shall be made to ensure that non-United States citizens are not 
employed in duties that may require access to classified information. 
However, when there are compelling reasons to grant access to classified 
information to an immigrant alien or a foreign national in furtherance 
of the mission of the Department of Defense, such individuals may be 
granted a ``Limited Access Authorization'' (LAA) under the following 
conditions:
    (i) LAAs will be limited to Secret and Confidential level only; LAAs 
for Top Secret are prohibited.
    (ii) Access to classified information is not inconsistent with that 
determined releasable by designated disclosure authorities, in 
accordance with DoD Directive 5230.11 \1\ to the country of which the 
individual is a citizen.
---------------------------------------------------------------------------

    \1\ See footnote 1 to Sec. 154.2(c).
---------------------------------------------------------------------------

    (iii) Access to classified information must be limited to 
information relating to a specific program or project.
    (iv) Favorable completion of an BI (scoped for 10 years); where the 
full investigative coverage cannot be completed, a counterintelligence 
scope polygraph examination will be required in accordance with the 
provisions of DoD Directive 5210.48.
    (v) Security clearances previously issued to immigrant aliens will 
be reissued as LAAs.
    (vi) The Limited Access Authorization determination shall be made 
only by an authority designated in paragraph B, Appendix E.
    (vii) LAAs issued by the Unified and Specified Commands shall be 
reported to the central adjudicative facility of the appropriate 
military department in accordance with the assigned responsibilities in 
DoD Directive 5100.3 \1\ for inclusion in the Defense Central Index of 
Investigation (DCII).
    (2) In each case of granting a Limited Access Authorization, a 
record shall be maintained as to:
    (i) The identity (including current citizenship) of the individual 
to whom the Limited Access Authorization is granted, to include name and 
date and place of birth;
    (ii) Date and type of most recent investigation to include the 
identity of the investigating agency;
    (iii) The nature of the specific program material(s) to which access 
is authorized (delineated as precisely as possible);

[[Page 613]]

    (iv) The classification level to which access is authorized; and
    (v) The compelling reasons for granting access to the materials 
cited in (iii).
    (vi) Status of the individual (i.e., immigrant alien or foreign 
national).
    (3) Individuals granted LAAs under the foregoing provisions shall be 
the subject of a 5-year periodic reinvestigation as set forth in 
paragraph 5, Appendix A.
    (4) Foreign nationals who are LAA candidates must agree to submit to 
a counterintelligence-scope polygraph examination prior to being granted 
access in accordance with DoD Directive 5210.48.
    (5) If geographical and political situations prevent the full 
completion of the BI (and/or counterintelligence-scope polygraph) 
issuance of an LAA shall not be authorized; exceptions to the policy may 
only be authorized by the DUSD(P).
    (6) A report on all LAAs in effect, including the data required in 
paragraphs (d)(2) (i) through (vi) of this section shall be furnished to 
the Deputy Under Secretary of Defense for Policy within 60 days after 
the end of each fiscal year. (See Sec. 154.77).
    (d) Access by persons outside the Executive Branch. (1) Access to 
classified information by persons outside the Executive Branch shall be 
accomplished in accordance with 32 CFR part 159. The investigative 
requirement shall be the same as for the appropriate level of security 
clearance, except as indicated below.
    (2) Members of the U.S. Senate and House of Representatives do not 
require personnel security clearances. They may be granted access to DoD 
classified information which relates to matters under the jurisdiction 
of the respective Committees to which they are assigned and is needed to 
perform their duties in connection with such assignments.
    (3) Congressional staff members requiring access to DoD classified 
information shall be processed for a security clearance in accordance 
with 32 CFR part 353 and the provisions of this part. The Director, 
Washington Headquarters Services (WHS) will initiate the required 
investigation (initial or reinvestigation) to DIS, adjudicate the 
results and grant, deny or revoke the security clearance, as 
appropriate. The Assistant Secretary of Defense (Legislative Affairs) 
will be notified by WHS of the completed clearance action.
    (4) State governors do not require personnel security clearances. 
They may be granted access to specifically designated classified 
information, on a ``need-to-know'' basis, based upon affirmation by the 
Secretary of Defense or the head of a DoD Component or single designee, 
that access, under the circumstances, serves the national interest. 
Staff personnel of a governor's office requiring access to classified 
information shall be investigated and cleared in accordance with the 
prescribed procedures of this part when the head of a DoD Component, or 
single designee, affirms that such clearance serves the national 
interest. Access shall also be limited to specifically designated 
classified information on a ``need-to-know'' basis.
    (5) Members of the U.S. Supreme Court, the Federal judiciary and the 
Supreme Courts of the individual States do not require personnel 
security clearances. They may be granted access to DoD classified 
information to the extent necessary to adjudicate cases being heard 
before these individual courts.
    (6) Attorneys representing DoD military, civilian or contractor 
personnel, requiring access to DoD classified information to properly 
represent their clients, shall normally be investigated by DIS and 
cleared in accordance with the prescribed procedures in paragraph (b) of 
this section. This shall be done upon certification of the General 
Counsel of the DoD Component involved in the litigation that access to 
specified classified information, on the part of the attorney concerned, 
is necessary to adequately represent his or her client. In exceptional 
instances, when the exigencies of a given situation do not permit timely 
compliance with the provisions of Sec. 154.16(b), access may be granted 
with the written approval of an authority designated in Appendix E 
provided that as a minimum: a favorable name check of the FBI and the 
DCII has been completed, and a DoD Non-

[[Page 614]]

Disclosure Agreement has been executed. In post-indictment cases, after 
a judge has invoked the security procedures of the Classified 
Information Procedures Act (CIPA) the Department of Justice may elect to 
conduct the necessary background investigation and issue the required 
security clearance, in coordination with the affected DoD Component.
    (e) Restrictions on issuance of personnel security clearances. 
Personnel security clearances must be kept to the absolute minimum 
necessary to meet mission requirements. Personnel security clearances 
shall not be issued:
    (1) To persons in nonsensitive positions.
    (2) To persons whose regular duties do not require authorized access 
to classified information.
    (3) For ease of movement of persons within a restricted, controlled, 
or industrial area, whose duties do not require access to classified 
information.
    (4) To persons who may only have inadvertent access to sensitive 
information or areas, such as guards, emergency service personnel, 
firemen, doctors, nurses, police, ambulance drivers, or similar 
personnel.
    (5) To persons working in shipyards whose duties do not require 
access to classified information.
    (6) To persons who can be prevented from accessing classified 
information by being escorted by cleared personnel.
    (7) To food service personnel, vendors and similar commercial sales 
or service personnel whose duties do not require access to classified 
information.
    (8) To maintenance or cleaning personnel who may only have 
inadvertent access to classified information unless such access cannot 
be reasonably prevented.
    (9) To persons who perform maintenance on office equipment, 
computers, typewriters, and similar equipment who can be denied 
classified access by physical security measures.
    (10) To perimeter security personnel who have no access to 
classified information.
    (11) To drivers, chauffeurs and food service personnel.
    (f) Dual citizenship. Persons claiming both U.S. and foreign 
citizenship shall be processed under Sec. 154.16(b) and adjudicated in 
accordance with the ``Foreign Preference'' standard in Appendix I.
    (g) One-time access. Circumstances may arise where an urgent 
operational or contractual exigency exists for cleared DoD personnel to 
have one-time or short duration access to classified information at a 
higher level than is authorized by the existing security clearance. In 
many instances, the processing time required to upgrade the clearance 
would preclude timely access to the information. In such situations, and 
only for compelling reasons in furtherance of the DoD mission, an 
authority referred to in paragraph (h)(1) of this section, may grant 
higher level access on a temporary basis subject to the terms and 
conditions prescribed below. This special authority may be revoked for 
abuse, inadequate record keeping, or inadequate security oversight. 
These procedures do not apply when circumstances exist which would 
permit the routine processing of an individual for the higher level 
clearance. Procedures and conditions for effecting emergency one-time 
access to the next higher classification level are as follows:
    (1) Authorization for such one-time access shall be granted by a 
flag or general officer, a general court-martial convening authority or 
equivalent Senior Executive Service member, after coordination with 
appropriate security officials.
    (2) The recipient of the one-time access authorization must be a 
U.S. citizen, possess a current DoD security clearance, and the access 
required shall be limited to classified information one level higher 
than the current clearance.
    (3) Such access, once granted, shall be cancelled promptly when no 
longer required, at the conclusion of the authorized period of access, 
or upon notification from the granting authority.
    (4) The employee to be afforded the higher level access shall have 
been continuously employed by a DoD Component or a cleared DoD 
contractor for the preceding 24-month period. Higher level access is not 
authorized for part-time employees.

[[Page 615]]

    (5) Pertinent local records concerning the employee concerned shall 
be reviewed with favorable results.
    (6) Whenever possible, access shall be confined to a single instance 
or at most, a few occasions. The approval for access shall automatically 
expire 30 calendar days from date access commenced. If the need for 
access is expected to continue for a period in excess of 30 days, 
written approval of the granting authority is required. At such time as 
it is determined that the need for access is expected to extend beyond 
90 days, the individual concerned shall be promptly processed for the 
level of clearance required. When extended access has been approved, 
such access shall be cancelled at or before 90 days from original date 
of access.
    (7) Access at the higher level shall be limited to information under 
the control and custody of the authorizing official and shall be 
afforded under the general supervision of a properly cleared employee. 
The employee charged with providing such supervision shall be 
responsible for:
    (i) Recording the higher-level information actually revealed,
    (ii) The date(s) such access is afforded; and
    (iii) The daily retrieval of the material accessed.
    (8) Access at the next higher level shall not be authorized for 
COMSEC, SCI, NATO, or foreign government information.
    (9) The exercise of this provision shall be used sparingly and 
repeat use within any 12 month period on behalf of the same individual 
is prohibited. The approving authority shall maintain a record 
containing the following data with respect to each such access approved:
    (i) The name, and SSN of the employee afforded higher level access.
    (ii) The level of access authorized.
    (iii) Justification for the access, to include an explanation of the 
compelling reason to grant the higher level access and specifically how 
the DoD mission would be furthered.
    (iv) An unclassified description of the specific information to 
which access was authorized and the duration of access along with the 
date(s) access was afforded.
    (v) A listing of the local records reviewed and a statement that no 
significant adverse information concerning the employee is known to 
exist.
    (vi) The approving authority's signature certifying (h)(9) (i) 
through (v) of this section.
    (vii) Copies of any pertinent briefing/debriefings administered to 
the employee.
    (h) Access by retired flag/general officers. (1) Upon determination 
by an active duty flag/general officer that there are compelling 
reasons, in furtherance of the Department of Defense mission, to grant a 
retired flag/general officer access to classified information in 
connection with a specific DoD program or mission, for a period not 
greater than 90 days, the investigative requirements of this part may be 
waived. The access shall be limited to classified information at a level 
commensurate with the security clearance held at the time of 
retirement--not including access to SCI.
    (2) The flag/general officer approving issuance of the clearance 
shall, provide the appropriate DoD Component central clearance facility 
a written record to be incorporated into the DCII detailing:
    (i) Full identifying data pertaining to the cleared subject;
    (ii) The classification of the information to which access was 
authorized.
    (3) Such access may be granted only after the compelling reason and 
the specific aspect of the DoD mission which is served by granting such 
access has been detailed and under the condition that the classified 
materials involved are not removed from the confines of a government 
installation or other area approved for storage of DoD classified 
information.

[52 FR 11219, Apr. 8, 1987, as amended at 55 FR 3223, Jan. 31, 1990]



Sec. 154.17  Special access programs.

    (a) General. It is the policy of the Department of Defense to 
establish, to the extent possible, uniform and consistent personnel 
security investigative requirements. Accordingly, investigations 
exceeding established requirements are authorized only when mandated by 
statute, national regulations, or international agreement. In this

[[Page 616]]

connection, there are certain Special Access programs originating at the 
national or international level that require personnel security 
investigations and procedures of a special nature. These programs and 
the special investigative requirements imposed by them are described in 
this section. A Special Access program is any program designed to 
control access, distribution, and protection of particularly sensitive 
information established pursuant to section 4-2 of Executive Order 12356 
and prior Orders. Title 32 CFR part 159 governs the establishment of 
Departmental Special Access Programs.
    (b) Sensitive Compartmented Information (SCI). (1) The investigative 
requirements for access to SCI is an SBI (See paragraph 4, appendix A) 
including a NAC on the individual's spouse or cohabitant. When 
conditions indicate, additional investigation shall be conducted on the 
spouse of the individual and members of the immediate family (or other 
persons to whom the individual is bound by affection or obligation) to 
the extent necessary to permit a determination by the adjudication 
agency that the Personnel Security standards of DCID 1/14 are met.
    (2) A previous investigation conducted within the past five years 
which substantially meets the investigative requirements prescribed by 
this section may serve as a basis for granting access approval provided 
that there has been no break in the individual's military service, DoD 
civilian employment, or access to classified information under the 
Industrial Security Program greater than 12 months. The individual shall 
submit one copy of an updated PSQ covering the period since the 
completion of the last SBI.
    (c) Single Integrated Operation Plan--Extremely Sensitive 
Information (SIOP-ESI). The investigative requirement for access to 
SIOP-ESI is an SBI, including a NAC on the spouse and the individual's 
immediate family who are 18 years of age or over and who are U.S. 
citizens other than by birth or who are resident aliens.
    (d) Presidential support activities. (1) DoD Directive 5210.55 \1\ 
prescribes the policies and procedures for the nomination, screening, 
selection, and continued evaluation of DoD military and civilian 
personnel and contractor employees assigned to or utilized in 
Presidential Support activities. The type of investigation of 
individuals assigned to Presidential Support activities varies according 
to whether the person investigated qualifies for Category One or 
Category Two as indicated below:
---------------------------------------------------------------------------

    \1\ See footnote 1 to Sec. 154.2(c).
---------------------------------------------------------------------------

    (i) Category one. (A) Personnel assigned on a permanent or full-time 
basis to duties in direct support of the President (including the office 
staff of the Director, White House Military Office, and all individuals 
under his control):
    (1) Presidential aircrew and associated maintenance and security 
personnel.
    (2) Personnel assigned to the White House communications activities 
and the Presidential retreat.
    (3) White House transportation personnel.
    (4) Presidential mess attendants and medical personnel.
    (5) Other individuals filling administrative positions at the White 
House.
    (B) Personnel assigned on a temporary or part-time basis to duties 
supporting the President:
    (1) Military Social Aides.
    (2) Selected security, transportation, flight-line safety, and 
baggage personnel.
    (3) Others with similar duties.
    (C) Personnel assigned to the Office of the Military Aide to the 
Vice President.
    (ii) Category two. (A) Personnel assigned to honor guards, 
ceremonial units, and military bands who perform at Presidential 
functions and facilities.
    (B) Employees of contractors who provide services or contractors 
employees who require unescorted access to Presidential Support areas, 
activities, or equipment--including maintenance of the Presidential 
retreat, communications, and aircraft.
    (C) Individuals in designated units requiring a lesser degree of 
access to the President or Presidential Support activities.
    (2) Personnel nominated for Category One duties must have been the 
subject of an SBI, including a NAC on the

[[Page 617]]

spouse and all members of the individual's immediate family of 18 years 
of age or over who are U.S. citizens other than by birth or who are 
resident aliens. The SBI must have been completed within the 12 months 
preceding selection for Presidential Support duties. If such an 
individual marries subsequent to the completion of the SBI, the required 
spouse check shall be made at that time.
    (3) Personnel nominated for Category Two duties must have been the 
subject of a BI, including a NAC on the spouse and all members of the 
individual's immediate family of 18 years of age or over who are U.S. 
citizens other than by birth or who are resident aliens. The BI must 
have been completed within the 12 months preceding selection for 
Presidential Support duties. It should be noted that duties (separate 
and distinct from their Presidential Support responsibilities) of some 
Category Two personnel may make it necessary for them to have special 
access clearances which require an SBI.
    (4) The U.S. citizenship of foreign-born immediate family members of 
all Presidential Support nominees must be verified by investigation.
    (5) A limited number of Category One personnel having especially 
sensitive duties have been designated by the Director, White House 
Military Office as ``Category A.'' These personnel shall be investigated 
under special scoping in accordance with the requirements of the 
Memorandum of Understanding between the Director, White House Military 
Office and the Special Assistant to the Secretary and Deputy Secretary 
of Defense, July 30, 1980.
    (e) Nuclear Weapon Personnel Reliability Program (PRP). (1) DoD 
Directive 5210.42 \1\ sets forth the standards of individual reliability 
required for personnel performing duties associated with nuclear weapons 
and nuclear components. The investigative requirement for personnel 
performing such duties is:
---------------------------------------------------------------------------

    \1\ See footnote 1 to Sec. 154.2(c).
---------------------------------------------------------------------------

    (i) Critical position: BI. In the event that it becomes necessary to 
consider an individual for a critical position and the required BI has 
not been completed, interim certification may be made under carefully 
controlled conditions as set forth below.
    (A) The individual has had a favorable DNACI, NAC (or ENTNAC) within 
the past 5 years without a break in service or employment in excess of 1 
year.
    (B) The BI has been requested.
    (C) All other requirements of the PRP screening process have been 
fulfilled.
    (D) The individual is identified to supervisory personnel as being 
certified on an interim basis.
    (E) The individual is not used in a two-man team with another such 
individual.
    (F) Justification of the need for interim certification is 
documented by the certifying official.
    (G) Should the BI not be completed within 150 days from the date of 
the request, the certifying official shall query the Component clearance 
authority, who shall ascertain from DIS the status of the investigation. 
On the basis of such information, the certifying official shall 
determine whether to continue or to withdraw the interim certification.
    (ii) Controlled position: DNACI/NACI. (A) An ENTNAC completed for 
the purpose of first term enlistment or induction into the Armed Forces 
does not satisfy this requirement.
    (B) Interim certification is authorized for an individual who has 
not had a DNACI/NACI completed within the past 5 years, subject to the 
following conditions:
    (1) The individual has had a favorable ENTNAC/NAC, or higher 
investigation, that is more than 5 years old and has not had a break in 
service or employment in excess of 1 year.
    (2) A DNACI/NACI has been requested at the time of interim 
certification.
    (3) All other requirements of the PRP screening process have been 
fulfilled.
    (4) Should the DNACI/NACI not be completed within 90 days from the 
date of the request, the procedures set forth in paragraph (e)(1)(i)(G) 
of this section for ascertaining the delay of the investigation in the 
case of a critical position shall apply.

[[Page 618]]

    (iii) Additional requirements apply. (A) The investigation upon 
which certification is based must have been completed within the last 5 
years from the date of initial assignment to a PRP position and there 
must not have been a break in service or employment in excess of 1 year 
between completion of the investigation and initial assignment.
    (B) In those cases in which the investigation was completed more 
than 5 years prior to initial assignment or in which there has been a 
break in service or employment in excess of 1 year subsequent to 
completion of the investigation, a reinvestigation is required.
    (C) Subsequent to initial assignment to the PRP, reinvestigation is 
not required so long as the individual remains in the PRP.
    (D) A medical evaluation of the individual as set forth in DoD 
Directive 5210.42.
    (E) Review of the individual's personnel file and other official 
records and information locally available concerning behavior or conduct 
which is relevant to PRP standards.
    (F) A personal interview with the individual for the purpose of 
informing him of the significance of the assignment, reliability 
standards, the need for reliable performance, and of ascertaining his 
attitude with respect to the PRP.
    (G) Service in the Army, Navy and Air Force Reserve does not 
constitute active service for PRP purposes.
    (f) Access to North Atlantic Treaty Organization (NATO) classified 
information. (1) Personnel assigned to a NATO staff position requiring 
access to NATO Cosmic (Top Secret), Secret, or Confidential information 
shall have been the subject of a favorably adjudicated BI (10 year 
scope), DNACI/NACI or NAC/ENTNAC, current within five years prior to the 
assignment, in accordance with USSAN Instruction 1-69 and Sec. 
154.19(f).
    (2) Personnel not assigned to a NATO staff position, but requiring 
access to NATO Cosmic, Secret or Confidential information in the normal 
course of their duties, must possess the equivalent final U.S. security 
clearance based upon the appropriate personnel security investigation 
(appendix A) required by Sec. Sec. 154.16(b) and 154.19(j) of this 
part.
    (g) Other special access programs. Special investigative 
requirements for Special Access programs not provided for in this 
paragraph may not be established without the written approval of the 
Deputy Under Secretary of Defense for Policy.



Sec. 154.18  Certain positions not necessarily requiring access to classified 

information.

    (a) General. DoD Directive 5200.8 \1\ outlines the authority of 
military commanders under the Internal Security Act of 1950 to issue 
orders and regulations for the protection of property or places under 
their command. Essential to carrying out this responsibility is a 
commander's need to protect the command against the action of 
untrustworthy persons. Normally, the investigative requirements 
prescribed in this part should suffice to enable a commander to 
determine the trustworthiness of individuals whose duties require access 
to classified information or appointment to positions that are sensitive 
and do not involve such access. However, there are certain categories of 
positions or duties which, although not requiring access to classified 
information, if performed by untrustworthy persons, could enable them to 
jeopardize the security of the command or otherwise endanger the 
national security. The investigative requirements for such positions or 
duties are detailed in this section.
---------------------------------------------------------------------------

    \1\ See footnote 1 to Sec. 154.2(c).
---------------------------------------------------------------------------

    (b) Access to restricted areas, sensitive information or equipment 
not involving access to classified information. (1) Access to restricted 
areas, sensitive information or equipment by DoD military, civilian or 
contractor personnel shall be limited to those individuals who have been 
determined trustworthy as a result of the favorable completion of a NAC 
(or ENTNAC) or who are under the escort of appropriately cleared 
personnel. Where escorting such persons is not feasible, a NAC shall be 
conducted and favorably reviewed by the appropriate component agency or 
activity prior to permitting such access. DoD Components shall not 
request, and

[[Page 619]]

shall not direct or permit their contractors to request, security 
clearances to permit access to areas when access to classified 
information is not required in the normal course of duties or which 
should be precluded by appropriate security measures. In determining 
trustworthiness under this paragraph, the provisions of Sec. 154.7 and 
appendix H will be utilized.
    (2) In meeting the requirements of this paragraph, approval shall be 
obtained from one of the authorities designated in paragraph A, appendix 
E of this part, for authority to request NACs on DoD military, civilian 
or contractor employees. A justification shall accompany each request 
which shall detail the reasons why escorted access would not better 
serve the national security. Requests for investigative requirements 
beyond a NAC shall be forwarded to the Deputy Under Secretary of Defense 
for Policy for approval.
    (3) NAC requests shall--
    (i) Be forwarded to DIS in accordance with the provisions of 
paragraph B, appendix C,
    (ii) Contain a reference to this paragraph on the DD Form 398-2, and
    (iii) List the authority in appendix E who approved the request.
    (4) Determinations to deny access under the provisions of this 
paragraph must not be exercised in an arbitrary, capricious, or 
discriminatory manner and shall be the responsibility of the military or 
installation commander as provided for in DoD Directive 5200.8.
    (c) Nonappropriated fund employees. Each Nonappropriated Fund 
employee who is employed in a position of trust as designated by an 
official authorized in paragraph H, appendix E, shall have been the 
subject of a NAC completed no longer than 12 months prior to employment 
or a prior personnel security investigation with no break in Federal 
service or employment greater than 12 months in accordance with DoD 
Manual 1401.1-M. An individual who does not meet established suitability 
requirements may not be employed without prior approval of the 
authorizing official. Issuance of a Confidential or Secret clearance 
will be based on a DNACI or NACI in accordance with Sec. 154.16(b).
    (d) Customs inspectors. DoD employees appointed as customs 
inspectors, under waivers approved in accordance with DoD 5030.49-R 
shall have undergone a favorably adjudicated NAC completed within the 
past 5 years unless there has been a break in DoD employment greater 
than 1 year in which case a current NAC is required.
    (e) Red Cross/United Service Organizations personnel. A favorably 
adjudicated NAC shall be accomplished on Red Cross or United Service 
Organizations personnel as prerequisite for assignment with the Armed 
Forces overseas (32 CFR part 253).
    (f) Officials authorized to issue security clearances. Any person 
authorized to adjudicate personnel security clearances shall have been 
the subject of a favorably adjudicated BI.
    (g) Personnel security clearance adjudication officials. Any person 
selected to serve with a board, committee, or other group responsible 
for adjudicating personnel security cases shall have been the subject of 
a favorably adjudicated BI.
    (h) Persons requiring DoD building passes. Pursuant to DoD Directive 
5210.46 \1\ each person determined by the designated authorities of the 
Components concerned as having an official need for access to DoD 
buildings in the National Capital Region shall be the subject of a 
favorably, adjudicated NAC prior to issuance of a DoD building pass. 
Conduct of a BI for this purpose is prohibited unless approved in 
advance by ODUSD(P).
---------------------------------------------------------------------------

    \1\ See footnote 1 to Sec. 154.2(c).
---------------------------------------------------------------------------

    (i) Foreign national employees overseas not requiring access to 
classified information. Foreign nationals employed by DoD organizations 
overseas, whose duties do not require access to classified information, 
shall be the subject of the following record checks, initiated by the 
appropriate military department investigative organization consistent 
with Sec. 154.9(e) prior to employment:
    (1) Host government law enforcement and security agency checks at 
the city, state (province), and national level, whenever permissible by 
the laws of the host government; and
    (2) DCII.

[[Page 620]]

    (3) FBI-HQ/ID. (Where information exists regarding residence by the 
foreign national in the United States for one year or more since age 
18).
    (j) Special agents and investigative support personnel. Special 
agents and those noninvestigative personnel assigned to investigative 
agencies whose official duties require continuous access to complete 
investigative files and material require an SBI.
    (k) Persons requiring access to chemical agents. Personnel whose 
duties involve access to or security of chemical agents shall be 
screened initially for suitability and reliability and shall be 
evaluated on a continuing basis at the supervisory level to ensure that 
they continue to meet the high standards required. At a minimum, all 
such personnel shall have had a favorably adjudicated NAC completed 
within the last 5 years prior to assignment in accordance with the 
provisions of DoD Directive 5210.65. \1\
---------------------------------------------------------------------------

    \1\ See footnote 1 to Sec. 154.2(c).
---------------------------------------------------------------------------

    (l) Education and orientation personnel. Persons selected for duties 
in connection with programs involving the education and orientation of 
military personnel shall have been the subject of a favorably 
adjudicated NAC prior to such assignment. This does not include 
teachers/administrators associated with university extension courses 
conducted on military installations in the United States. Non-US 
citizens from a country listed in appendix G shall be required to 
undergo a BI if they are employed in a position covered by this 
paragraph.
    (m) Contract guards. Any person performing contract guard functions 
shall have been the subject of a favorably adjudicated NAC prior to such 
assignment.
    (n) Transportation of arms, ammunition and explosives (AA&E). Any 
DoD military, civilian or contract employee (including commercial 
carrier) operating a vehicle or providing security to a vehicle 
transporting Category I, II or Confidential AA&E shall have been the 
subject of a favorably adjudicated NAC or ENTNAC.
    (o) Personnel occupying information systems positions designated 
ADP-I, ADP-II & ADP-III. DoD military, civilian personnel, consultants, 
and contractor personnel performing on unclassified automated 
information systems may be assigned to one of three position sensitivity 
designations (in accordance with appendix J) and investigated as 
follows:

ADP-I: BI
ADP-II: DNACI/NACI
ADP-III: NAC/ENTNAC


Those personnel falling in the above categories who require access to 
classified information will, of course, be subject to the appropriate 
investigative scope contained in Sec. 154.16(b).
    (p) Others. Requests for approval to conduct an investigation on 
other personnel, not provided for in Sec. 154.18 (b) through (o) 
considered to fall within the general provisions of Sec. 154.18(a) 
shall be submitted, detailing the justification therefor, for approval 
to the Deputy Under Secretary of Defense for Policy. Approval of such 
requests shall be contingent upon an assurance that appropriate review 
procedures exist and that adverse determinations will be made at no 
lower than major command level.



Sec. 154.19  Reinvestigation.

    (a) General. DoD policy prohibits unauthorized and unnecessary 
investigations. There are, however, certain situations and requirements 
that necessitate reinvestigation of an individual who has already been 
investigated under the provisions of this part. It is the policy to 
limit reinvestigation of individuals to the scope contained in paragraph 
5, appendix A to meet overall security requirements. Reinvestigation, 
generally, is authorized only as follows:
    (1) To prove or disprove an allegation relating to the criteria set 
forth in Sec. 154.7 of this part with respect to an individual holding 
a security clearance or assigned to a position that requires a 
trustworthiness determination;
    (2) To meet the periodic reinvestigation requirements of this part 
with respect to those security programs enumerated below; and
    (3) Upon individual request, to assess the current eligibility of 
individuals

[[Page 621]]

who did not receive favorable adjudicative action after an initial 
investigation, if a potential clearance need exists and there are 
reasonable indications that the factors upon which the adverse 
determination was made no longer exists.
    (b) Allegations related to disqualification. Whenever questionable 
behavior patterns develop, derogatory information is discovered, or 
inconsistencies arise related to the disqualification criteria outlined 
in Sec. 154.7 that could have an adverse impact on an individual's 
security status, a Special Investigative Inquiry (SII), psychiatric, 
drug or alcohol evaluation, as appropriate, may be requested to resolve 
all relevant issues in doubt. If it is essential that additional 
relevant personal data is required from the investigative subject, and 
the subject fails to furnish the required data, the subject's existing 
security clearance or assignment to sensitive duties shall be terminated 
in accordance with Sec. 154.56(b).
    (c) Access to Sensitive Compartmented Information (SCI). Each 
individual having current access to SCI shall be the subject of a PR 
conducted on a 5-year recurring basis scoped as set forth in paragraph 
5, appendix A.
    (d) Critical-sensitive positions. Each DoD civilian employee 
occupying a critical sensitive position shall be the subject of a PR 
conducted on a 5-year recurring basis scoped as set forth in paragraph 
5, appendix A.
    (e) Presidential support duties. Each individual assigned 
Presidential Support duties shall be the subject of a PR conducted on a 
5-year recurring basis scoped as set forth in paragraph 5, appendix A.
    (f) NATO staff. Each individual assigned to a NATO staff position 
requiring a COSMIC clearance shall be the subject of a PR conducted on a 
5-year recurring basis scoped as set forth in paragraph 5, appendix A. 
Those assigned to a NATO staff position requiring a NATO SECRET 
clearance shall be the subject of a new NAC conducted on a 5-year 
recurring basis.
    (g) Extraordinarily sensitive duties. In extremely limited 
instances, extraordinary national security implications associated with 
certain SCI duties may require very special compartmentation and other 
special security measures. In such instances, a Component SOIC may, with 
the approval of the Deputy Under Secretary of Defense for Policy, 
request PR's at intervals of less than 5 years as outlined in paragraph 
5, appendix A. Such requests shall include full justification and a 
recommendation as to the desired frequency. In reviewing such requests, 
the Deputy Under Secretary of Defense for Policy shall give due 
consideration to:
    (1) The potential damage that might result from the individual's 
defection or abduction.
    (2) The availability and probable effectiveness of means other than 
reinvestigation to evaluate factors concerning the individual's 
suitability for continued SCI access.
    (h) Foreign nationals employed by DoD organizations overseas. 
Foreign nationals employed by DoD organizations overseas who have been 
granted a ``Limited Access Authorization'' pursuant to Sec. 154.16(d) 
shall be the subject of a PR, as set forth in paragraph 5, appendix A, 
conducted under the auspices of DIS by the appropriate military 
department or other U.S. Government investigative agency consistent with 
Sec. 154.9(e) and appendix I of this part.
    (i) Persons accessing very sensitive information classified Secret. 
(1) Heads of DoD Components shall submit a request to the Deputy Under 
Secretary of Defense for Policy for approval to conduct periodic 
reinvestigations on persons holding Secret clearances who are exposed to 
very sensitive Secret information.
    (2) Generally, the Deputy Under Secretary of Defense for Policy will 
only approve periodic reinvestigations of persons having access to 
Secret information if the unauthorized disclosure of the information in 
question could reasonably be expected to:
    (i) Jeopardize human life or safety.
    (ii) Result in the loss of unique or uniquely productive 
intelligence sources or methods vital to U.S. security.
    (iii) Compromise technologies, plans, or procedures vital to the 
strategic advantage of the United States.
    (3) Each individual accessing very sensitive Secret information who 
has been designated by an authority listed

[[Page 622]]

in paragraph A, appendix E as requiring periodic reinvestigation, shall 
be the subject of a PR conducted on a 5-year recurring basis scoped as 
stated in paragraph 5, appendix A.
    (j) Access to Top Secret information. Each individual having current 
access to Top Secret information shall be the subject of a PR conducted 
on a 5-year recurring basis scoped as outlined in paragraph 5, appendix 
A.
    (k) Personnel occupying computer positions designated ADP-1. All DoD 
military, civilians, consultants, and contractor personnel occupying 
computer positions designated ADP-I, shall be the subject of a PR 
conducted on a 5-year recurring basis as set forth in paragraph 5, 
appendix A.



Sec. 154.20  Authority to waive investigative requirements.

    Authorized officials. Only an official designated in paragraph G, 
appendix E, is empowered to waive the investigative requirements for 
appointment to a sensitive position, assignment to sensitive duties or 
access to classified information pending completion of the investigation 
required by this section. Such waiver shall be based upon certification 
in writing by the designated official that such action is necessary to 
the accomplishment of a DoD mission. A minor investigative element that 
has not been met should not preclude favorable.



 Subpart D_Reciprocal Acceptance of Prior Investigations and Personnel 

                         Security Determinations



Sec. 154.23  General.

    Previously conducted investigations and previously rendered 
personnel security determinations shall be accepted within DoD in 
accordance with the policy set forth below.



Sec. 154.24  Prior investigations conducted by DoD investigative 

organizations.

    As long as there is no break in military service/civilian employment 
greater than 12 months, any previous personnel security investigation 
conducted by DoD investigative organizations that essentially is 
equivalent in scope to an investigation required by this part will be 
accepted without requesting additional investigation. There is no time 
limitation as to the acceptability of such investigations, subject to 
the provisions of Sec. Sec. 154.8(h) and 154.25(b) of this part.



Sec. 154.25  Prior personnel security determinations made by DoD authorities.

    (a) Adjudicative determinations for appointment in sensitive 
positions, assignment to sensitive duties or access to classified 
information (including those pertaining to SCI) made by designated DoD 
authorities will be mutually and reciprocally accepted by all DoD 
Components without requiring additional investigation, unless there has 
been a break in the individual's military service/civilian employment of 
greater than 12 months or unless derogatory information that occurred 
subsequent to the last prior security determination becomes known. A 
check of the DCII should be conducted to accomplish this task.
    (b) Whenever a valid DoD security clearance or Special Access 
authorization (including one pertaining to SCI) is on record, Components 
shall not request DIS or other DoD investigative organizations to 
forward prior investigative files for review unless:
    (1) Significant derogatory information or investigation completed 
subsequent to the date of last clearance or Special Access 
authorization, is known to the requester; or
    (2) The individual concerned is being considered for a higher level 
clearance (e.g., Secret or Top Secret) or the individual does not have a 
Special Access authorization and is being considered for one; or
    (3) There has been a break in the individual's military service/
civilian employment of greater than 12 months subsequent to the issuance 
of a prior clearance.
    (4) The most recent SCI access authorization of the individual 
concerned was based on a waiver.
    (c) Requests for prior investigative files authorized by this part 
shall be made in writing, shall cite the specific justification for the 
request (i.e., upgrade of clearance, issue Special Access

[[Page 623]]

authorization, etc.), and shall include the date, level, and issuing 
organization of the individual's current or most recent security 
clearance or Special Access authorization.
    (d) All requests for non-DoD investigative files, authorized under 
the criteria prescribed by paragraphs (a), (b) (1), (2), (3), and (4) 
and (c) of this section shall be:
    (1) Submitted on DD Form 398-2 to DIS;
    (2) Annotated as a ``Single Agency Check'' of whichever agency or 
agency developed the investigative file or to obtain the check of a 
single national agency.
    (e) When further investigation is desired, in addition to an 
existing non-DoD investigative file, a DD Form 1879 will be submitted to 
DIS with the appropriate security forms attached. The submission of a 
Single Agency Check via DD Form 398-2 will be used to obtain an existing 
investigative file or check a single national agency.
    (f) Whenever a civilian or military member transfers from one DoD 
activity to another, the losing organization's security office is 
responsible for advising the gaining organization of any pending action 
to suspend, deny or revoke the individual's security clearance as well 
as any adverse information that may exist in security, personnel or 
other files. In such instances the clearance shall not be reissued until 
the questionable information has been adjudicated.



Sec. 154.26  Investigations conducted and clearances granted by other agencies 

of the Federal government.

    (a) Whenever a prior investigation or personnel security 
determination (including clearance for access to information classified 
under E.O. 12356 of another agency of the Federal Government meets the 
investigative scope and standards of this part, such investigation or 
clearance may be accepted for the investigative or clearance purposes of 
this part, provided that the employment with the Federal agency 
concerned has been continuous and there has been no break longer than 12 
months since completion of the prior investigation, and further provided 
that inquiry with the agency discloses no reason why the clearance 
should not be accepted. If it is determined that the prior investigation 
does not meet the provisions of this paragraph, supplemental 
investigation shall be requested.
    (b) A NACI conducted by OPM shall be accepted and considered 
equivalent to a DNACI for the purposes of this part.
    (c) Department of Defense policy on reciprocal acceptance of 
clearances with the Nuclear Regulatory Commission and the Department of 
Energy is set forth in DoD Directive 5210.2. \1\
---------------------------------------------------------------------------

    \1\ See footnote l to Sec. 154.2(c).
---------------------------------------------------------------------------



         Subpart E_Requesting Personnel Security Investigations



Sec. 154.30  General.

    Requests for personnel security investigations shall be limited to 
those required to accomplish the Defense mission. Such requests shall be 
submitted only by the authorities designated in Sec. 154.31. These 
authorities shall be held responsible for determining if persons under 
their jurisdiction require a personnel security investigation. Proper 
planning must be effected to ensure that investigative requests are 
submitted sufficiently in advance to allow completion of the 
investigation before the time it is needed to grant the required 
clearance or otherwise make the necessary personnel security 
determination.



Sec. 154.31  Authorized requesters.

    Requests for personnel security investigation shall be accepted only 
from the requesters designated below:
    (a) Military Departments. (1) Army.
    (i) Central Clearance Facility.
    (ii) All activity commanders.
    (iii) Chiefs of recruiting stations.
    (2) Navy (including Marine Corps).
    (i) Central Adjudicative Facility.
    (ii) Commanders and commanding officers of organizations listed on 
the Standard Navy Distribution List.
    (iii) Chiefs of recruiting stations.
    (3) Air Force.
    (i) Air Force Security Clearance Office.
    (ii) Assistant Chief of Staff for Intelligence.

[[Page 624]]

    (iii) All activity commanders.
    (iv) Chiefs of recruiting stations.
    (b) Defense Agencies--Directors of Security and activity commanders.
    (c) Organization of the Joint Chiefs of Staff--Chief, Security 
Division.
    (d) Office of the Secretary of Defense--Director for Personnel and 
Security, Washington Headquarters Services.
    (e) Commanders of Unified and Specified Commands or their designees.
    (f) Such other requesters approved by the Deputy Under Secretary of 
Defense for Policy.



Sec. 154.32  Criteria for requesting investigations.

    Authorized requesters shall use the tables set forth in appendix C 
to determine the type of investigation that shall be requested to meet 
the investigative requirement of the specific position or duty 
concerned.



Sec. 154.33  Request procedures.

    To insure efficient and effective completion of required 
investigations, all requests for personnel security investigations shall 
be prepared and forwarded in accordance with Appendix B and the 
investigative jurisdictional policies set forth in Sec. 154.9.



Sec. 154.34  Priority requests.

    To insure that personnel security investigations are conducted in an 
orderly and efficient manner, requests for priority for individual 
investigations or categories of investigations shall be kept to a 
minimum. DIS shall not assign priority to any personnel security 
investigation or categories of investigations without written approval 
of the Deputy Under Secretary of Defense for Policy.



Sec. 154.35  Personal data provided by the subject of the investigation.

    (a) To conduct the required investigation, it is necessary that the 
investigative agency be provided certain relevant data concerning the 
subject of the investigation. The Privacy Act of 1974 requires that, to 
the greatest extent practicable, personal information shall be obtained 
directly from the subject individual when the information may result in 
adverse determinations affecting an individual's rights, benefits, and 
privileges under Federal programs.
    (b) Accordingly, it is incumbent upon the subject of each personnel 
security investigation to provide the personal information required by 
this part. At a minimum, the individual shall complete the appropriate 
investigative forms, provide fingerprints of a quality acceptable to the 
FBI, and execute a signed release, as necessary, authorizing custodians 
of police, credit, education, employment, and medical and similar 
records, to provide relevant record information to the investigative 
agency. When the FBI returns a fingerprint card indicating that the 
quality of the fingerprints is not acceptable, an additional set of 
fingerprints will be obtained from the subject. In the event the FBI 
indicates that the additional fingerprints are also unacceptable, no 
further attempt to obtain more fingerprints need be made; this aspect of 
the investigation will then be processed on the basis of the name check 
of the FBI files. As an exception, a minimum of three attempts will be 
made for all Presidential Support cases, for SCI access nominations if 
the requester so indicates, and in those cases in which more than minor 
derogatory information exists. Each subject of a personnel security 
investigation conducted under the provisions of this part shall be 
furnished a Privacy Act Statement advising of the authority for 
obtaining the personal data, the principal purpose(s) for obtaining it, 
the routine uses, whether disclosure is mandatory or voluntary, the 
effect on the individual if it is not provided, and that subsequent use 
of the data may be employed as part of an aperiodic review process to 
evaluate continued eligibility for access to classified information.
    (c) Failure to respond within the time limit prescribed by the 
requesting organization with the required security forms or refusal to 
provide or permit access to the relevant information required by this 
part shall result in termination of the individual's security clearance 
or assignment to sensitive duties utilizing the procedures of Sec. 
154.59 or further administrative processing of the investigative 
request.

[[Page 625]]



                         Subpart F_Adjudication



Sec. 154.40  General.

    (a) The standard which must be met for clearance or assignment to 
sensitive duties is that, based on all available information, the 
person's loyalty, reliability, and trustworthiness are such that 
entrusting the person with classified information or assigning the 
person to sensitive duties is clearly consistent with the interests of 
national security.
    (b) The principal objective of the DoD personnel security 
adjudicative function, consequently, is to assure selection of persons 
for sensitive positions who meet this standard. The adjudication process 
involves the effort to assess the probability of future behavior which 
could have an effect adverse to the national security. Since few, if 
any, situations allow for positive, conclusive evidence of certain 
future conduct, it is an attempt to judge whether the circumstances of a 
particular case, taking into consideration prior experience with similar 
cases, reasonably suggest a degree of probability of prejudicial 
behavior not consistent with the national security. It is invariably a 
subjective determination, considering the past but necessarily 
anticipating the future. Rarely is proof of trustworthiness and 
reliability or untrustworthiness and unreliability beyond all reasonable 
doubt.
    (c) Establishing relevancy is one of the key objectives of the 
personnel security adjudicative process in evaluating investigative 
material. It involves neither the judgment of criminal guilt nor the 
determination of general suitability for a given position; rather, it is 
the assessment of a person's trustworthiness and fitness for a 
responsibility which could, if abused, have unacceptable consequences 
for the national security.
    (d) While equity demands optimal uniformity in evaluating individual 
cases, assuring fair and consistent assessment of circumstances from one 
situation to the next, each case must be weighed on its own merits, 
taking into consideration all relevant facts, and prior experience in 
similar cases. All information of record, both favorable and 
unfavorable, must be considered and assessed in terms of accuracy, 
completeness, relevance, seriousness, and overall significance. In all 
adjudications the protection of the national security shall be the 
paramount determinant.



Sec. 154.41  Central adjudication.

    (a) To ensure uniform application of the requirement of this part 
and to ensure that DoD personnel security determinations are effected 
consistent with existing statutes and Executive orders, the head of each 
Military Department and Defense Agencies shall establish a single 
Central Adjudication Facility for his/her component. The function of 
such facility shall be limited to evaluating personnel security 
investigations and making personnel security determinations. The chief 
of each Central Adjudication Facility shall have the authority to act on 
behalf of the head of the Component concerned with respect to personnel 
security determinations. All information relevant to determining whether 
a person meets the appropriate personnel security standard prescribed by 
this part shall be reviewed and evaluated by personnel security 
specialists specifically designated by the head of the Component 
concerned, or designee.
    (b) In view of the significance each adjudicative decision can have 
on a person's career and to ensure the maximum degree of fairness and 
equity in such actions, a minimum level of review shall be required for 
all clearance/access determinations related to the following categories 
of investigations:
    (1) BI/SBI/PR/ENAC/SII:
    (i) Favorable: Completely favorable investigations shall be reviewed 
and approved by an adjudicative official in the civilian grade of GS-7/9 
or the military rank of O-3.
    (ii) Unfavorable: Investigations that are not completely favorable 
shall undergo at least two levels of review by adjudicative officials, 
the second of which must be at the civilian grade of GS-11/12 or the 
military rank of O-4. When an unfavorable administrative action is 
contemplated under Sec. 154.56(b), the letter of intent (LOI) to deny 
or revoke must be approved and signed by an adjudicative official at the 
civilian grade of GS-13/14 or the military rank

[[Page 626]]

of O-5. A final notification of unfavorable administrative action, 
subsequent to the issuance of the LOI, must be approved and signed at 
the civilian grade of GS-14/15 or the military rank of O-6.
    (2) NACI/DNACI/NAC/ENTNAC:
    (i) Favorable: A completely favorable investigation may be finally 
adjudicated after one level of review provided that the decisionmaking 
authority is at the civilian grade of GS-5/7 or the military rank of 0-
2.
    (ii) Unfavorable: Investigations that are not completely favorable 
must be reviewed by an adjudicative official in the civilian grade of 
GS-7/9 or the military rank of 0-3. When an unfavorable administrative 
action is contemplated under Sec. 154.56(b), the letter of intent to 
deny/revoke must be signed by an adjudicative official at the civilian 
grade of GS-11/12 or the military rank of 0-4. A final notification of 
unfavorable administrative action subsequent to the issuance of the LOI 
must be signed by an adjudicative official at the civilian grade of GS-
13 or the military rank of 0-5 or above.
    (c) Exceptions to the above policy may only be granted by the Deputy 
Under Secretary of Defense for Policy.



Sec. 154.42  Evaluation of personnel security information.

    (a) The criteria and adjudicative policy to be used in applying the 
principles at Sec. 154.40 are set forth in Sec. 154.7(a) and appendix 
H of this part. The ultimate consideration in making a favorable 
personnel security determination is whether such determination is 
clearly consistent with the interests of national security and shall be 
an overall common sense evaluation based on all available information. 
Such a determination shall include consideration of the following 
factors:
    (1) The nature and seriousness of the conduct;
    (2) The circumstances surrounding the conduct;
    (3) The frequency and recency of the conduct;
    (4) The age of the individual;
    (5) The voluntariness of participation; and
    (6) The absence or presence of rehabilitation.
    (b) Detailed adjudication policy guidance to assist adjudicators in 
determining whether a person is eligible for access to classified 
information or assignment to sensitive duties is contained in appendix 
H. Adjudication policy for access to SCI is contained in DCID 1/14.



Sec. 154.43  Adjudicative record.

    (a) Each adjudicative determinations, whether favorable or 
unfavorable, shall be entered into the Defense Clearance and 
Investigations Index (DCII) on a daily basis, but in no case to exceed 5 
working days from the date of determination.
    (b) The rationale underlying each unfavorable personnel security 
determination, to include the appeal process, and each favorable 
personnel security determination where the investigation or information 
upon which the determination was made included significant derogatory 
information of the type set forth in Sec. 154.7 and appendix H to part 
154, shall be maintained in written or automated form and is subject to 
the provisions of 32 CFR part 285 and 32 CFR part 310. This information 
shall be maintained for a minimum of 5 years from the date of 
determination.

[58 FR 61025, Nov. 19, 1993]



             Subpart G_Issuing Clearance and Granting Access



Sec. 154.47  General.

    (a) The issuance of a personnel security clearance (as well as the 
function of determining that an individual is eligible for access to 
Special Access program information, or is suitable for assignment to 
sensitive duties or such other duties that require a trustworthiness 
determination) is a function distinct from that involving the granting 
of access to classified information. Clearance determinations are made 
on the merits of the individual case with respect to the subject's 
suitability for security clearance. Access determinations are made 
solely on the basis of the individual's need for access to classified 
information in order to

[[Page 627]]

perform official duties. Except for suspension of access pending final 
adjudication of a personnel security clearance, access may not be 
finally denied for cause without applying the provisions of Sec. 
154.56(b).
    (b) Only the authorities designated in paragraph A, appendix E are 
authorized to grant, deny or revoke personnel security clearances or 
Special Access authorizations (other than SCI). Any commander or head of 
an organization may suspend access for cause when there exists 
information raising a serious question as to the individual's ability or 
intent to protect classified information, provided that the procedures 
set forth in Sec. 154.55(b) of this part are complied.
    (c) All commanders and heads of DoD organizations have the 
responsibility for determining those position functions in their 
jurisdiction that require access to classified information and the 
authority to grant access to incumbents of such positions who have been 
cleared under the provisions of this part.



Sec. 154.48  Issuing clearance.

    (a) Authorities designated in paragraph A, appendix E shall record 
the issuance, denial or revocation of a personnel security clearance in 
the DCII (see Sec. 154.43). A record of the clearance issued shall also 
be recorded in an individual's personnel/security file or official 
personnel folder, as appropriate.
    (b) A personnel security clearance remains valid until the 
individual is separated from the Armed Forces, separated from DoD 
civilian employment, has no further official relationship with DoD, 
official action has been taken to deny, revoke or suspend the clearance 
or access, or regular access to the level of classified information for 
which the individual holds a clearance is no longer necessary in the 
normal course of his or her duties. If an individual resumes his or her 
affiliation with DoD no single break in the individual's relationship 
with DoD exists greater than 24 months and/or, the need for regular 
access to classified information at or below the previous level recurs, 
and no record of an unfavorable administrative action exists, the 
appropriate clearance shall be reissued without further investigation or 
adjudication provided there has been no additional investigation or 
development of derogatory information.
    (c) Personnel security clearances of DoD military personnel shall be 
granted denied or revoked only by the designated authority of the parent 
Military Department. Issuance, reissuance, denial, or revocation of a 
personnel security clearance by any DoD Component concerning personnel 
who have been determined to be eligible for clearance by another 
component is expressly prohibited. Investigations conducted on Army, 
Navy, and Air Force personnel by DIS will be returned only to the parent 
service of the subject for adjudication regardless of the source of the 
original request. The adjudicative authority will be responsible for 
expeditiously transmitting the results of the clearance determination. 
As an exception, the employing DoD Component may issue an interim 
clearance to personnel under their administrative jurisdiction pending a 
final eligibility determination by the individual's parent Component. 
Whenever an employing DoD Component issues an interim clearance to an 
individual from another Component, written notice of the action shall be 
provided to the parent Component.
    (d) When a Defense agency, to include Chairman of the Joint Chiefs 
of Staff, initiates an SBI (or PR) for access to SCI on a military 
member, DIS will return the completed investigation to the appropriate 
Military Department adjudicative authority in accordance with paragraph 
(c) of this section for issuance (or reissuance) of the Top Secret 
clearance. Following the issuance of the security clearance, the 
military adjudicative authority will forward the investigative file to 
the Defense agency identified in the ``Return Results To'' block of the 
DD Form 1879. The receiving agency will then forward the completed SBI 
on to DIA for the SCI adjudication in accordance with DCID 1/14.
    (e) The interim clearance shall be recorded in the DCSI (Sec. 
154.43) by the parent DoD Component in the same manner as a final 
clearance.

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61025, Nov. 19, 1993]

[[Page 628]]



Sec. 154.49  Granting access.

    (a) Access to classified information shall be granted to persons 
whose official duties require such access and who have the appropriate 
personnel security clearance. Access determinations (other than for 
Special Access programs) are not an adjudicative function relating to an 
individual's suitability for such access. Rather they are decisions made 
by the commander that access is officially required.
    (b) In the absence of derogatory information on the individual 
concerned, DoD commanders and organizational managers shall accept a 
personnel security clearance determination, issued by any DoD authority 
authorized by this part to issue personnel security clearances, as the 
basis for granting access, when access is required, without requesting 
additional investigation or investigative files.
    (c) The access level of cleared individuals will, wherever possible, 
be entered into the Defense Clearance and Investigations Index (DCII), 
along with clearance eligibility. However, completion of the DCII Access 
field is required effective October 1, 1993 in all instances where the 
adjudicator with a personnel security investigation. Agencies are 
encouraged to start completing this field as soon as possible.

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61025, Nov. 19, 1993]



Sec. 154.50  Administrative withdrawal.

    As set forth in Sec. 154.48 the personnel security clearance and 
access eligibility must be withdrawn when the events described therein 
occur. When regular access to a prescribed level of classified 
information is no longer required in the normal course of an 
individual's duties, the previously authorized access eligibility level 
must be administratively downgraded or withdrawn, as appropriate.



              Subpart H_Unfavorable Administrative Actions



Sec. 154.55  Requirements.

    (a) General. For purposes of this part, an unfavorable 
administrative action includes any adverse action which is taken as a 
result of a personnel security determination, as defined at Sec. 154.3 
and any unfavorable personnel security determination, as defined at 
Sec. 154.3. This subpart is intended only to provide guidance for the 
internal operation of the Department of Defense and is not intended to, 
does not, and may not be relied upon, to create or enlarge the 
jurisdiction or review authority of any court or administrative 
tribunal, including the Merit Systems Protection Board.
    (b) Referral for action. (1) Whenever derogatory information 
relating to the criteria and policy set forth in Sec. 154.7(a) and 
appendix H of this part is developed or otherwise becomes available to 
any DoD element, it shall be referred by the most expeditious means to 
the commander or the security officer of the organization to which the 
individual is assigned for duty. The commander or security officer of 
the organization to which the subject of the information is assigned 
shall review the information in terms of its security significance and 
completeness. If further information is needed to confirm or disprove 
the allegations, additional investigation should be requested. The 
commander of the duty organization shall insure that the parent 
Component of the individual concerned is informed promptly concerning 
the derogatory information developed and any actions taken or 
anticipated with respect thereto. However, referral of derogatory 
information to the commander or security officer shall in no way affect 
or limit the responsibility of the central adjudication facility to 
continue to process the individual for denial or revocation of clearance 
or access to classified information, in accordance with Sec. 154.56(b), 
if such action is warranted and supportable by the criteria and policy 
contained in Sec. 154.7(a) and appendix H. No unfavorable 
administrative action as defined in Sec. 154.3 may be taken by the 
organization to which the individual is assigned for duty without 
affording the person the full range of protections contained in Sec. 
154.56(b) or, in the case of SCI, Annex B, DCID 1/14.
    (2) The Director DIS shall establish appropriate alternative means 
whereby information with potentially serious security significance can 
be reported

[[Page 629]]

other than through DoD command or industrial organization channels. Such 
access shall include utilization of the DoD Inspector General 
``hotline'' to receive such reports for appropriate follow-up by DIS. 
DoD Components and industry will assist DIS in publicizing the 
availability of appropriate reporting channels. Additionally, DoD 
Components will augment the system when and where necessary. Heads of 
DoD Components will be notified immediately to take action if 
appropriate.
    (c) Suspension. (1) The commander or head of the organization shall 
determine whether, on the basis of all facts available upon receipt of 
the initial derogatory information, it is in the interests of national 
security to continue subject's security status unchanged or to take 
interim action to suspend subject's access to classified information or 
assignment to sensitive duties (or other duties requiring a 
trustworthiness determination), if information exists which raises 
serious questions as to the individual's ability to intent to protect 
classified information or execute sensitive duties (or other duties 
requiring a trustworthiness determination) until a final determination 
is made by the appropriate authority designated in appendix F to this 
part.
    (2) Whenever a determination is made to suspend a security clearance 
for access to classified information or assignment to sensitive duties 
(or other duties requiring a trustworthiness determination), the 
individual concerned must be notified of the determination in writing by 
the commander, or head of the component or adjudicative authority, to 
include a brief statement of the reason(s) for the suspension action 
consistent with the interests of national security.
    (3) Component field elements must promptly report all suspension 
actions to the appropriate central adjudicative authority, but not later 
than 10 working days from the date of the suspension action. The 
adjudicative authority will immediately update the DCII Eligibility and 
Access fields to alert all users to the individual's changed status.
    (4) Every effect shall be made to resolve suspension cases as 
expeditiously as circumstances permit. Suspension cases exceeding 180 
days shall be closely monitored and managed by the DoD Component 
concerned until finally resolved. Suspension cases pending in excess of 
12 months will be reported to the DASD(CI&SCM) for review and 
appropriate action.
    (5) A final security clearance eligibility determination shall be 
made for all suspension actions and the determination entered in the 
DCII. If, however, the individual under suspension leaves the 
jurisdiction of the Department of Defense and no longer requires a 
clearance (or trustworthiness determination), entry of the ``Z'' Code 
(adjudication action incomplete due to loss of jurisdiction) if the 
clearance eligibility field is appropriate. In no case shall a 
``suspension'' code (Code Y) remain as a permanent record in the DCII.
    (6) A clearance or access entry in the DCII shall not be suspended 
or downgraded based solely on the fact that a periodic reinvestigation 
was not conducted precisely within the 5 year time period for TOP 
SECRET/SCI or within the period prevailing for SECRET clearances under 
departmental policy. While every effort should be made to ensure that 
PRs are conducted within the prescribed time frame, agencies must be 
flexible in their administration of this aspect of the personnel 
security program so as not to undermine the ability of the Department of 
Defense to accomplish its mission.
    (d) Final unfavorable administrative actions. The authority to make 
personnel security determinations that will result in an unfavorable 
administrative action is limited to those authorities designated in 
appendix E, except that the authority to terminate the employment of a 
civilian employee of a military department or Defense agency is vested 
solely in the head of the DoD component concerned and in such other 
statutory official as may be designated. Action to terminate civilian 
employees of the Office of the Secretary of Defense and DoD Components, 
on the basis of criteria listed in Sec. 154.7 (a) through (f), shall be 
coordinated with the Deputy Under Secretary

[[Page 630]]

of Defense for Policy prior to final action by the head of the DoD 
Component. DoD civilian employees or members of the Armed Forces shall 
not be removed from employment or separated from the Service under 
provisions of this part if removal or separation can be effected under 
OPM regulations or administrative (nonsecurity) regulations of the 
military departments. However, actions contemplated in this regard shall 
not affect or limit the responsibility of the central adjudication 
facility to continue for process the individual for denial or revocation 
of a security clearance, access to classified information on or 
assignment to a sensitive position if warranted and supportable by the 
criteria and standards contained in this part.

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61025, Nov. 19, 1993]



Sec. 154.56  Procedures.

    (a) General. No final personnel security determination shall be made 
on a member of the Armed Forces, an employee of the Department of 
Defense, a consultant to the Department of Defense, or any other person 
affiliated with the Department of Defense without granting the 
individual concerned the procedural benefits set forth in paragraph (b) 
of this section when such determination results in an unfavorable 
administrative action (see Sec. 154.55(a)). As an exception, Red Cross/
United Service Organizations employees shall be afforded the procedures 
prescribed by 32 CFR part 253.
    (b) Unfavorable administrative action procedures. Except as provided 
for below, no unfavorable administrative action shall be taken under the 
authority of this part unless the person concerned has been given:
    (1) A written statement of the reasons why the unfavorable 
administrative action is being taken. The statement shall be as 
comprehensive and detailed as the protection of sources afforded 
confidentiality under the provisions of the Privacy Act of 1974 (5 
U.S.C. 552a) and national security permit. The statement will also 
provide the name and address of the agencies (agencies) to which the 
individual may write to obtain a copy of the investigative file(s) upon 
which the unfavorable administrative action is being taken. Prior to 
issuing a statement of reasons to a civilian employee for suspension or 
removal action, the issuing authority must comply with the provisions of 
Federal Personnel Manual, chapter 732, subchapter 1, paragraph 1-6b. The 
signature authority must be as provided for in Sec. 154.41(b) (1)(ii) 
and (2)(ii).
    (2) An opportunity to reply in writing to such authority as the head 
of the Component concerned may designate;
    (3) A written response to any submission under subparagraph b. 
stating the final reasons therefor, which shall be as specific as 
privacy and national security considerations permit. The signature 
authority must be as provided for in Sec. 154.41(b) (1)(ii) and 
(2)(ii). Such response shall be as prompt as individual circumstances 
permit, not to exceed 60 days from the date of receipt of the appeal 
submitted under paragraph (b)(2) of this section provided no additional 
investigative action is necessary. If a final response cannot be 
completed within the time frame allowed, the subject must be notified in 
writing of this fact, the reasons therefor, and the date a final 
response is expected, which shall not, in any case, exceed a total of 90 
days from the date of receipt of the appeal under paragraph (b) of this 
section.
    (4) An opportunity to appeal to a higher level of authority 
designated by the Component concerned.
    (c) Exceptions to policy. Notwithstanding paragraph (b) of this 
section or any other provision of this part, nothing in this part shall 
be deemed to limit or affect the responsibility and powers of the 
Secretary of Defense to find that a person is unsuitable for entrance or 
retention in the Armed Forces, or is ineligible for a security clearance 
or assignment to sensitive duties, if the national security so requires, 
pursuant to section 7532, title 5, U.S. Code. Such authority may not be 
delegated and may be exercised only when it is determined that the 
procedures prescribed in paragraph (b) of this section are not 
appropriate. Such determination shall be conclusive.

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61025, Nov. 19, 1993]

[[Page 631]]



Sec. 154.57  Reinstatement of civilian employees.

    (a) General. Any person whose civilian employment in the Department 
of Defense is terminated under the provisions of this part shall not be 
reinstated or restored to duty or reemployed in the Department of 
Defense unless the Secretary of Defense, or the head of a DoD Component, 
finds that such reinstatement, restoration, or reemployment is clearly 
consistent with the interests of national security. Such a finding shall 
be made a part of the personnel security record.
    (b) Reinstatement benefits. A DoD civilian employee whose employment 
has been suspended or terminated under the provisions of this part and 
who is reinstated or restored to duty under the provisions of section 
3571 of title 5 U.S. Code is entitled to benefits as provided for by 
section 3 of Pub. L. 89-380.



             Subpart I_Continuing Security Responsibilities



Sec. 154.60  Evaluating continued security eligibility.

    (a) General. A personnel security determination is an effort to 
assess the future trustworthiness of an individual in terms of the 
likelihood of the individual preserving the national security. Obviously 
it is not possible at a given point to establish with certainty that any 
human being will remain trustworthy. Accordingly the issuance of a 
personnel security clearance or the determination that a person is 
suitable for assignment to sensitive duties cannot be considered as a 
final personnel security action. Rather, there is the clear need to 
assure that, after the personnel security determination is reached, the 
individual's trustworthiness is a matter of continuing assessment. The 
responsibility for such assessment must be shared by the organizational 
commander or manager, the individual's supervisor and, to a large 
degree, the individual himself. Therefore, the heads of DoD Components 
shall establish and maintain a program designed to evaluate on a 
continuing basis the status of personnel under their jurisdiction with 
respect to security eligibility. This program should insure close 
coordination between security authorities and personnel, medical, legal 
and supervisory personnel to assure that all pertinent information 
available within a command is considered in the personnel security 
process.
    (b) Management responsibility. (1) Commanders and heads of 
organizations shall insure that personnel assigned to sensitive duties 
(or other duties requiring a trustworthiness determination under the 
provisions of this part) are initially indoctrinated and periodically 
instructed thereafter on the national security implication of their 
duties and on their individual responsibilities.
    (2) The heads of all DoD components are encouraged to develop 
programs designed to counsel and assist employees in sensitive positions 
who are experiencing problems in their personal lives with respect to 
such areas as financial, medical or emotional difficulties. Such 
initiatives should be designed to identify potential problem areas at an 
early stage so that any assistance rendered by the employing activity 
will have a reasonable chance of precluding long term, job-related 
security problems.
    (c) Supervisory responsibility. Security programs shall be 
established to insure that supervisory personnel are familiarized with 
their special responsibilities in matters pertaining to personnel 
security with respect to personnel under their supervision. Such 
programs shall provide practical guidance as to indicators that may 
signal matters of personnel security concern. Specific instructions 
should be disseminated concerning reporting procedures to enable the 
appropriate authority to take timely corrective action to protect the 
interests of national security as well as to provide any necessary help 
to the individual concerned to correct any personal problem which may 
have a bearing upon the individual's continued eligibility for access.
    (1) In conjunction with the submission of PRs stated in Sec. 
154.19, and paragraph 5, appendix A, supervisors will be required to 
review an individual's DD Form 398 to ensure that no significant adverse 
information of which they are aware and that may have a bearing on

[[Page 632]]

subject's continued eligibility for access to classified information is 
omitted.
    (2) If the supervisor is not aware of any significant adverse 
information that may have a bearing on the subject's continued 
eligibility for access, then the following statement must be documented, 
signed and dated, and forwarded to DIS with the investigative package.

    I am aware of no information of the type contained at Appendix D, 32 
CFR part 154, relating to subject's trustworthiness, reliability, or 
loyalty that may reflect adversely on his/her ability to safeguard 
classified information.

    (3) If the supervisor is aware of such significant adverse 
information, the following statement shall be documented, signed and 
dated and forwarded to DIS with the investigative package, and a written 
summary of the derogatory information forwarded to DIS with the 
investigative package:

    I am aware of information of the type contained in Appendix D, 32 
CFR part 154, relating to subject's trustworthiness, reliability, or 
loyalty that may reflect adversely on his/her ability to safeguard 
classified information and have reported all relevant details to the 
appropriate security official(s).

    (4) In conjunction with regularly scheduled fitness and performance 
reports of military and civilian personnel whose duties entail access to 
classified information, supervisors will include a comment in accordance 
with paragraphs (c) (2) and (3) of this section as well as a comment 
regarding an employee's discharge of security responsibilities, pursuant 
to their Component guidance.
    (d) Individual responsibility. (1) Individuals must familiarize 
themselves with pertinent security regulations that pertain to their 
assigned duties. Further, individuals must be aware of the standards of 
conduct required of persons holding positions of trust. In this 
connection, individuals must recognize and avoid the kind of personal 
behavior that would result in rendering one ineligible for continued 
assignment in a position of trust. In the final analysis, the ultimate 
responsibility for maintaining continued eligibility for a position of 
trust rests with the individual.
    (2) Moreover, individuals having access to classified information 
must report promptly to their security office:
    (i) Any form of contact, intentional or otherwise, with individuals 
of any nationality, whether within or outside the scope of the 
employee's official activities, in which:
    (A) Illegal or unauthorized access is sought to classified or 
otherwise sensitive information.
    (B) The employee is concerned that he or she may be the target of 
exploitation by a foreign entity.
    (ii) Any information of the type referred to in Sec. 154.7 or 
appendix H to this part.
    (e) Co-worker responsibility. Co-workers have an equal obligation to 
advise their supervisor or appropriate security official when they 
become aware of information with potentially serious security 
significance regarding someone with access to classified information or 
employed in a sensitive position.

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61025, Nov. 19, 1993]



Sec. 154.61  Security education.

    (a) General. The effectiveness of an individual in meeting security 
responsibilities is proportional to the degree to which the individual 
understands them. Thus, an integral part of the DoD security program is 
the indoctrination of individuals on their security responsibilities. 
Moreover, such indoctrination is essential to the efficient functioning 
of the DoD personnel security program. Accordingly, heads of DoD 
Components shall establish procedures in accordance with this chapter 
whereby persons requiring access to classified information, or being 
assigned to positions that require the occupants to be determined 
trustworthy are periodically briefed as to their security 
responsibilities.
    (b) Initial briefing. (1) All persons cleared for access to 
classified information or assigned to duties requiring a trustworthiness 
determination under this part shall be given an initial security 
briefing. The briefing shall be in accordance with the requirements of 
32 CFR part 159 and consist of the following elements:

[[Page 633]]

    (i) The specific security requirements of their particular job.
    (ii) The techniques employed by foreign intelligence activities in 
attempting to obtain classified information and their responsibility for 
reporting such attempts.
    (iii) The prohibition against disclosing classified information, by 
any means, to unauthorized persons or discussing or handling classified 
information in a manner that would make it accessible to unauthorized 
persons.
    (iv) The penalties that may be imposed for security violations.
    (2) If an individual declines to execute Standard Form 312, 
``Classified Information Nondisclosure Agreement'' (replaced the 
Standard Form 189), the DoD Component shall initiate action to deny or 
revoke the security clearance of such person in accordance with Sec. 
154.56(b).
    (c) Refresher briefing. Programs shall be established to provide, at 
a minimum, annual security training for personnel having continued 
access to classified information. The elements outlined in 32 CFR part 
159 shall be tailored to fit the needs of experienced personnel.
    (d) Foreign travel briefing. While world events during the past 
several years have diminished the threat to our national security from 
traditional cold-war era foreign intelligence services, foreign 
intelligence service continue to pursue the unauthorized acquisition of 
classified or otherwise sensitive U.S. Government information, through 
the recruitment of U.S. Government employees with access to such 
information. Through security briefings and education, the Department of 
Defense continues to provide for the protection of information and 
technology considered vital to the national security interests from 
illegal or unauthorized acquisition by foreign intelligence services.
    (1) DoD Components will establish appropriate internal procedures 
requiring all personnel possessing a DoD security clearance to report to 
their security office all contacts with individuals of any nationality, 
whether within or outside the scope of the employee's official 
activities, in which:
    (i) Illegal or unauthorized access is sought to classified or 
otherwise sensitive information.
    (ii) The employee is concerned that he or she may be the target of 
exploitation by a foreign entity.
    (2) The DoD security manager, security specialist or other qualified 
individual will review and evaluate the reported information. Any facts 
or circumstances of a reported contact with a foreign national that 
appear to:
    (i) Indicate an attempt or intention to obtain unauthorized access 
to proprietary, sensitive, or classified information or technology;
    (ii) Offer a reasonable potential for such; or
    (iii) Indicate the possibility of continued contact with the foreign 
national for such purposes, shall be promptly reported to the 
appropriate counterintelligence agency.
    (e) Termination briefing. (1) Upon termination of employment 
administrative withdrawal of security clearance, or contemplated absence 
from duty or employment for 60 days or more, DoD military personnel and 
civilian employees shall be given a termination briefing, return all 
classified material, and execute a Security Termination Statement. This 
statement shall include:
    (i) An acknowledgment that the individual has read the appropriate 
provisions of the Espionage Act, other criminal statutes, DoD 
Regulations applicable to the safeguarding of classified information to 
which the individual has had access, and understands the implications 
thereof;
    (ii) A declaration that the individual no longer has any documents 
or material containing classified information in his or her possession;
    (iii) An acknowledgment that the individual will not communicate or 
transmit classified information to any unauthorized person or agency; 
and
    (iv) An acknowledgment that the individual will report without delay 
to the FBI or the DoD Component concerned any attempt by any 
unauthorized person to solicit classified information.

[[Page 634]]

    (2) When an individual refuses to execute a Security Termination 
Statement, that fact shall be reported immediately to the security 
manager of the cognizant organization concerned. In any such case, the 
individual involved shall be debriefed orally. The fact of a refusal to 
sign a Security Termination Statement shall be reported to the Director, 
Defense Investigative Service who shall ensure that it is recorded in 
the Defense Clearance and Investigations Index.
    (3) The Security Termination Statement shall be retained by the DoD 
Component that authorized the individual access to classified 
information for the period specified in the Component's records 
retention schedules, but for a minimum of 2 years after the individual 
is given a termination briefing.
    (4) In addition to the provisions of paragraphs (e)(1), (e)(2), and 
(e)(3) of this section, DoD Components shall establish a central 
authority to be responsible for ensuring that Security Termination 
Statements are executed by senior personnel (general officers, flag 
officers and GS-16s and above). Failure on the part of such personnel to 
execute a Security Termination Statement shall be reported immediately 
to the Deputy Under Secretary of Defense for Policy.

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61026, Nov. 19, 1993]



     Subpart J_Safeguarding Personnel Security Investigative Records



Sec. 154.65  General.

    In recognition of the sensitivity of personnel security reports and 
records, particularly with regard to individual privacy, it is 
Department of Defense policy that such personal information shall be 
handled with the highest degree of discretion. Access to such 
information shall be afforded only for the purpose cited herein and to 
persons whose official duties require such information. Personnel 
security investigative reports may be used only for the purposes of 
determining eligibility of DoD military and civilian personnel, 
contractor employees, and other persons affiliated with the Department 
of Defense, for access to classified information, assignment or 
retention in sensitive duties or other specifically designated duties 
requiring such investigation, or for law enforcement and 
counterintelligence investigations. Other uses are subject to the 
specific written authorization of the Deputy Under Secretary of Defense 
for Policy.



Sec. 154.66  Responsibilities.

    DoD authorities responsible for administering the DoD personnel 
security program and all DoD personnel authorized access to personnel 
security reports and records shall ensure that the use of such 
information is limited to that authorized by this part and that such 
reports and records are safeguarded as prescribed herein. The heads of 
DoD Components and the Deputy Under Secretary of Defense for Policy for 
the Office of the Secretary of Defense shall establish internal controls 
to ensure adequate safeguarding and limit access to and use of personnel 
security reports and records as required by Sec. Sec. 154.67 and 
154.68.



Sec. 154.67  Access restrictions.

    Access to personnel security investigative reports and personnel 
security clearance determination information shall be authorized only in 
accordance with 32 CFR parts 286 and 286a and with the following:
    (a) DoD personnel security investigative reports shall be released 
outside of the DoD only with the specific approval of the investigative 
agency having authority over the control and disposition of the reports.
    (b) Within DoD, access to personnel security investigative reports 
shall be limited to those designated DoD officials who require access in 
connection with specifically assigned personnel security duties, or 
other activities specifically identified under the provisions of Sec. 
154.65.
    (c) Access by subjects of personnel security investigative reports 
shall be afforded in accordance with 32 CFR part 286a.
    (d) Access to personnel security clearance determination information 
shall be made available, other than provided for in paragraph (c) of 
this

[[Page 635]]

section, through security channels, only to DoD or other officials of 
the Federal Government who have an official need for such information.



Sec. 154.68  Safeguarding procedures.

    Personnel security investigative reports and personnel security 
determination information shall be safeguarded as follows:
    (a) Authorized requesters shall control and maintain accountability 
of all reports of investigation received.
    (b) Reproduction, in whole or in part, of personnel security 
investigative reports by requesters shall be restricted to the minimum 
number of copies required for the performance of assigned duties.
    (c) Personnel security investigative reports shall be stored in a 
vault, safe, or steel file cabinet having at least a lockbar and an 
approved three-position dial-type combination padlock or in a similarly 
protected area/container.
    (d) Reports of DoD personnel security investigations shall be sealed 
in double envelopes or covers when transmitted by mail or when carried 
by persons not authorized access to such information. The inner cover 
shall bear a notation substantially as follows:
TO BE OPENED ONLY BY OFFICIALS DESIGNATED TO RECEIVE REPORTS OF 
    PERSONNEL SECURITY INVESTIGATION
    (e) An individual's status with respect to a personnel security 
clearance or a Special Access authorization is to be protected as 
provided for in 32 CFR part 286.



Sec. 154.69  Records disposition.

    (a) Personnel security investigative reports, to include OPM NACIs 
may be retained by DoD recipient organizations, only for the period 
necessary to complete the purpose for which it was originally requested. 
Such reports are considered to be the property of the investigating 
organization and are on loan to the recipient organization. All copies 
of such reports shall be destroyed within 90 days after completion of 
the required personnel security determination. Destruction shall be 
accomplished in the same manner as for classified information in 
accordance with 32 CFR part 159.
    (b) DoD record repositories authorized to file personnel security 
investigative reports shall destroy PSI reports of a favorable or of a 
minor derogatory nature 15 years after the date of the last action. That 
is, after the completion date of the investigation or the date on which 
the record was last released to an authorized user--whichever is later. 
Personnel security investigative reports resulting in an unfavorable 
administrative personnel action or court-martial or other investigations 
of a significant nature due to information contained in the 
investigation shall be destroyed 25 years after the date of the last 
action. Files in this latter category that are determined to be of 
possible historical value and those of widespread public or 
congressional interest may be offered to the National Archives after 15 
years.
    (c) Personnel security investigative reports on persons who are 
considered for affiliation with DoD will be destroyed after 1 year if 
the affiliation is not completed.



Sec. 154.70  Foreign source information.

    Information that is classified by a foreign government is exempt 
from public disclosure under the Freedom of Information and Privacy 
Acts. Further, information provided by foreign governments requesting an 
express promise of confidentiality shall be released only in a manner 
that will not identify or allow unauthorized persons to identify the 
foreign agency concerned.



                      Subpart K_Program Management



Sec. 154.75  General.

    To ensure uniform implementation of the DoD personnel security 
program throughout the Department, program responsibility shall be 
centralized at DoD Component level.



Sec. 154.76  Responsibilities.

    (a) The Assistant Secretary of Defense for Command, Control, 
Communications, and Intelligence (ASD(C31)) shall have primary 
responsibility for providing guidance, oversight, development and 
approval for policy and procedures governing personnel security

[[Page 636]]

program matters within the Department:
    (1) Provide program management through issuance of policy and 
operating guidance.
    (2) Provide staff assistance to the DoD Components and defense 
agencies in resolving day-to-day security policy and operating problems.
    (3) Conduct inspections of the DoD Components for implementation and 
compliance with DoD security policy and operating procedures.
    (4) Provide policy, oversight, and guidance to the component 
adjudication functions.
    (5) Approve, coordinate and oversee all DoD personnel security 
research initiatives and activities.
    (b) The General Counsel shall ensure that the program is 
administered in a manner consistent with the laws; all proceedings are 
promptly initiated and expeditiously completed; and that the rights of 
individuals involved are protected, consistent with the interests of 
national security. The General Counsel shall also ensure that all 
relevant decisions of the courts and legislative initiatives of the 
Congress are obtained on a continuing basis and that analysis of the 
foregoing is accomplished and disseminated to DoD personnel security 
program management authorities.
    (c) The Heads of the Components shall ensure that:
    (1) The DoD personnel security program is administered within their 
area of responsibility in a manner consistent with this part.
    (2) A single authority within the office of the head of the DoD 
Component is assigned responsibility for administering the program 
within the Component.
    (3) Information and recommendations are provided the Assistant 
Secretary of Defense for Command, Control, Communications, and 
Intelligence (ASD(C31)) and the General Counsel at their request 
concerning any aspect of the program.

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61026, Nov. 19, 1993]



Sec. 154.77  Reporting requirements.

    (a) The OASD(C31) shall be provided personnel security program 
management data by the Defense Data Manpower Center (DMDC) by December 
31 each year for the preceding fiscal year. To facilitate accurate 
preparation of this report, all adjudicative determinations must be 
entered into the DC11 by all DoD central adjudication facilities no 
later than the end of the fiscal year. The information required below is 
essential for basic personnel security program management and in 
responding to requests from the Secretary of Defense and Congress. The 
report shall cover the preceding fiscal year, broken out by clearance 
category, according to military (officer or enlisted), civilian or 
contractor status and by the central adjudication facility that took the 
action, using the enclosed format:
    (1) Number of Top Secret, Secret, and Confidential clearances 
issued;
    (2) Number of Top Secret, Secret, and Confidential clearances 
denied;
    (3) Number of Top Secret, Secret, and Confidential clearances 
revoked;
    (4) Number of SCI access determinations issued;
    (5) Number of SCI access determinations denied;
    (6) Number of SCI access determinations revoked; and
    (7) Total number of personnel holding a clearance for Top Secret, 
Secret, Confidential and Sensitive Compartmented Information as of the 
end of the fiscal year.
    (b) The Defense Investigative Service (DIS) shall provide the 
OASD(C3I) a quarterly report that reflects investigative cases opened 
and closed during the most recent quarter, by case category type, and by 
major requester. The information provided by DIS is essential for 
evaluating statistical data regarding investigative workload and the 
manpower required to perform personnel security investigations. Case 
category types include National Agency Checks (NACs); Expanded NACs; 
Single Scope Background Investigations (SSBIs), Periodic 
Reinvestigations (PRs); Secret Periodic Reinvestigations (SPRs); Post 
Adjudicative (PA); Special Investigative Inquiries (SIIs); and Limited 
Inquiries (LIs). This report shall be forwarded to OASD(C3I) within 45 
days after the end of each quarter.

[[Page 637]]

    (c) The reporting requirement for DMDC and DIS has been assigned 
Report Control Symbol DD-C3I(A) 1749.

[58 FR 61026, Nov. 19, 1993]



Sec. 154.78  Inspections.

    The heads of DoD Components shall assure that personnel security 
program matters are included in their administrative inspection 
programs.



            Sec. Appendix A to Part 154--Investigative Scope

    This appendix prescribes the scope of the various types of personnel 
security investigations.
    1. National Agency Check (NAC). Components of a NAC. At a minimum, 
the first three of the described agencies (DCII, FBI/HQ, and FBI/ID) 
below shall be included in each complete NAC; however, a NAC may also 
include a check of any or all of the other described agencies, if 
appropriate.
    a. DCII records consist of an alphabetical index of personal names 
and impersonal titles that appear as subjects or incidentals in 
investigative documents held by the criminal, counterintelligence, 
fraud, and personnel security investigative activities of the three 
military departments, DIS, Defense Criminal Investigative Service 
(DCIS), and the National Security Agency. DCII records will be checked 
on all subjects of DoD investigations.
    b. FBI/HQ has on file copies of investigations conducted by the FBI. 
The FBI/HQ check, included in every NAC, consists of a review of files 
for information of a security nature and that developed during 
applicant-type investigations.
    c. An FBI/ID check, included in every NAC (but not ENTNAC), is based 
upon a technical fingerprint search that consists of a classification of 
the subject's fingerprints and comparison with fingerprint cards 
submitted by law enforcement activities. If the fingerprint card is not 
classifiable, a ``name check only'' of these files is automatically 
conducted.
    d. OPM. The files of OPM contain the results of investigations 
conducted by OPM under Executive Orders 9835 and 10450, those requested 
by the Nuclear Regulatory Commission (NRC), the Department of Energy 
(DOE) and those requested since August 1952 to serve as a basis for 
``Q'' clearances. Prior to that date, ``Q'' clearance investigations 
were conducted by the FBI. A ``Q'' clearance is granted to individuals 
who require access to DOE information. In order to receive a ``Q'' 
clearance, a full field background investigation must be completed on 
the individual requiring access in accordance with the Atomic Energy Act 
of 1954. Also on file are the results of investigations on the operation 
of the Merit System, violations of the Veterans Preference Act, appeals 
of various types, fraud and collusion in Civil Service examinations and 
related matters, data on all Federal employment, and an index of all BIs 
on civilian employees or applicants completed by agencies of the 
Executive Branch of the U.S. Government. The OPM files may also contain 
information relative to U.S. citizens who are, or who were, employed by 
a United Nations organization or other public international organization 
such as the Organization of American States. OPM records are checked on 
all persons who are, or who have been, civilian employees of the U.S. 
Government; or U.S. citizens who are, or who have been, employed by a 
United Nations organization or other public international organization; 
and on those who have been granted security clearances by the NRC or 
DOE.
    e. Immigration and Naturalization Service (I&NS). The files of I&NS 
contain (or show where filed) naturalization certificates, certificates 
of derivative citizenship, all military certificates of naturalization, 
repatriation files, petitions for naturalization and declaration of 
intention, visitors' visas, and records of aliens (including government 
officials and representatives of international organizations) admitted 
temporarily into the U.S. I&NS records are checked when the subject is:
    (1) An alien in the U.S., or
    (2) A naturalized citizen whose naturalization has not been 
verified, or
    (3) An immigrant alien, or
    (4) A U.S. citizen who receives derivative citizenship through the 
naturalization of one or both parents, provided that such citizenship 
has not been verified in a prior investigation.
    f. State Department. The State Department maintains the following 
records:
    (1) Security Division (S/D) files contain information pertinent to 
matters of security, violations of security, personnel investigations 
pertinent to that agency, and correspondence files from 1950 to date. 
These files are checked on all former State Department employees.
    (2) Passport Division (P/D) shall be checked if subject indicates 
U.S. citizenship due to birth in a foreign country of American parents. 
This is a check of State Department Embassy files to determine if 
subject's birth was registered at the U.S. Embassy in the country where 
he was born. Verification of this registration is verification of 
citizenship.
    g. Central Intelligence Agency (CIA). The files of CIA contain 
information on present and former employees, including members of the 
Office of Strategic Services (OSS), applicants for employment, foreign 
nationals, including immigrant aliens in the U.S., and

[[Page 638]]

U.S. citizens traveling outside the U.S. after July 1, 1946. These files 
shall be checked under the following guidelines.

------------------------------------------------------------------------
            Investigation                   Criteria for CIA Checks
------------------------------------------------------------------------
NAC, DNACI or ENTNAC................  Residence anywhere outside of the
                                       U.S. for a year or more since age
                                       18 except under the auspices of
                                       the U.S. Government; and, travel,
                                       education, residence, or
                                       employment since age 18 in any
                                       designated country (Appendix G).
BI..................................  Same as NAC, DNACI, and ENTNAC
                                       requirements plus travel,
                                       residence, employment, and
                                       education outside the U.S. for
                                       more than a continuous 3-month
                                       period during the past 5 years,
                                       or since age 18, except when
                                       under the auspices of the
                                       Government.
SBI.................................  Same as BI requirements except the
                                       period of the investigation will
                                       cover the past 15 years, or since
                                       age 18. Also when subject's
                                       employment, education or
                                       residence has occurred overseas
                                       for a period of more than one
                                       year under the auspices of the
                                       U.S. Government, such checks will
                                       be made.
------------------------------------------------------------------------

    These files shall also be checked if subject has been an employee of 
CIA or when other sources indicate that CIA may have pertinent 
information.
    h. Military Personnel Record Center files are maintained by separate 
departments of the Armed Forces, General Services Administration and the 
Reserve Records Centers. They consist of the Master Personnel Records of 
retired, separated, reserve, and active duty members of the Armed Force. 
These records shall be checked when the requester provides required 
identifying data indicating service during the last 15 years.
    i. Treasury Department. The files of Treasury Department agencies 
(Secret Service, Internal Revenue Service, and Bureau of Customs) will 
be checked only when available information indicates that an agency of 
the Treasury Department may be reasonably expected to have pertinent 
information.
    j. The files of other agencies such as the National Guard Bureau, 
the Defense Industrial Security Clearance Office (DISCO), etc., will be 
checked when pertinent to the purpose for which the investigation is 
being conducted.
    2. DoD National Agency Check plus Written Inquires (DNACI):
    a. Scope: The time period covered by the DNACI is limited to the 
most recent five (5) years, or since the 18th birthday, whichever is 
shorter, provided that the investigation covers at least the last two 
(2) full years of the subject's life, although it may be extended to the 
period necessary to resolve any questionable or derogatory information. 
No investigation will be conducted prior to an individual's 16th 
birthday. All DNACI investigation information will be entered on the DD 
Form 398-2 and FD-Form 258 and forwarded to the Defense Investigative 
Service (paragraph D, Appendix B).
    b. Components of a DNACI:
    (1) NAC. This is the same as described in paragraph 1, above.
    (2) Credit. (a) A credit bureau check will be conducted to cover the 
50 States, the District of Columbia, Puerto Rico, Guam, and the Virgin 
Islands, at all locations where subject has resided (including duty 
stations and home ports), been employed, or attended school for 6 months 
(cumulative) during the past five (5) years.
    (b) When information developed reflects unfavorably upon a person's 
current credit reputation or financial responsibility, the investigation 
will be expanded as necessary.
    (3) Employment--(a) Non-Federal Employment. (1) Verify, via written 
inquiry, all employment within the period of investigation with a 
duration of six (6) months or more. Current employment will be checked 
regardless of duration.
    (2) If all previous employments have been less than 6 months long, 
the most recent employment, in addition to the current, will be checked 
in all cases.
    (3) Seasonal holiday, part-time and temporary employment need not be 
checked unless subparagraph 2 above applies.
    (b) Federal employment. All Federal employment (to include military 
assignments) within the period of investigation will be verified by the 
requester through locally available records, and a statement reflecting 
that such checks have been favorably accomplished will be contained in 
the investigative request. Those that cannot be verified in this fashion 
will be accomplished via written inquiry by DIS (within the 50 United 
States, Puerto Rico, Guam, and the Virgin Islands).
    3. Background Investigation (BI). The period of investigation for 
the BI is 5 years and applies to military, civilian, and contractor 
personnel.
    a. NAC. See paragraph 1, above.
    b. Local Agency Checks (LAC). Same as paragraph 4j, below, except 
period of coverage is five years.
    c. Credit checks. Same as paragraph 4i, below.
    d. SUBJECT Interview (SI). This is the principal component of a BI. 
In some instances an issue will arise after the primary SI and a 
secondary interview will be conducted. Interviews in the latter category 
are normally ``issue'' interviews that will be reported in the standard 
BI narrative format.
    e. Employment records. Employment records will be checked at all 
places where employment references are interviewed with the exception of 
current Federal employment when the requester indicates that such 
employment has been verified with favorable results.
    f. Employment reference coverage. A minimum of three references, 
either supervisors or

[[Page 639]]

co-workers, who have knowledge of the SUBJECT's activities in the work 
environment will be interviewed. At least one employment reference at 
the current place of employment will always be interviewed with the 
exception of an individual attending military basic training, or other 
military training schools lasting less than 90 days. However, if the 
SUBJECT has only been at the current employment for less than 6 months, 
it will be necessary to go not only to his or her current employment 
(for example, for one employment reference) but also to the preceding 
employment of at least 6 months for additional employment references. If 
the SUBJECT has not had prior employment of at least 6 months, 
interview(s) will be conducted at the most recent short-term employment 
in addition to the current employment.
    g. Developed and Listed Character References. A minimum of three 
developed character references (DCR) whose combined association with the 
SUBJECT covers the entire period of investigation will be interviewed. 
If coverage cannot be obtained through the DCRs, listed character 
reference (LCR) will be contacted to obtain coverage.
    h. Unfavorable information. Unfavorable information developed in the 
field will be expanded.
    4. Special Background Investigation (SBI)--a. Components of an SBI. 
The period of investigation for an SBI is the last 15 years or since the 
18th birthday, whichever is the shorter period, provided that the 
investigation covers at least the last 2 full years of the subject's 
life. No investigation will be conducted for the period prior to an 
individual's 16th birthday. Emphasis shall be placed on peer coverage 
whenever interviews are held with personal sources in making education, 
employment, and reference (including developed) contact.
    b. NAC. In addition to conducting a NAC on the subject of the 
investigation, the following additional requirements apply.
    (1) A DCII, FBI/ID name check only and FBI/HQ check shall be 
conducted on subject's current spouse or cohabitant. In addition, such 
other national agency checks as deemed appropriate based on information 
on the subject's SPH or PSQ shall be conducted.
    (2) A check of FBI/HQ files on members of subject's immediate family 
who are aliens in the U.S. or immigrant aliens who are 18 years of age 
or older shall be conducted. As used throughout the part, members of 
subject's immediate family include the following:
    (a) Current spouse.
    (b) Adult children, 18 years of age or older, by birth, adoption, or 
marriage.
    (c) Natural, adopted, foster, or stepparents.
    (d) Guardians.
    (e) Brothers and sisters either by birth, adoption, or remarriage of 
either parent.
    (3) The files of CIA shall be reviewed on alien members of subject's 
immediate family who are 18 years of age or older, regardless of whether 
or not these persons reside in the U.S.
    (4) I&NS files on members of subject's immediate family 18 years of 
age or older shall be reviewed when they are:
    (a) Aliens in the U.S., or
    (b) Naturalized U.S. citizens whose naturalization has not been 
verified in a prior investigation, or
    (c) Immigrant aliens, or
    (d) U.S. citizens born in a foreign country of American parent(s) or 
U.S. citizens who received derivative citizenship through the 
naturalization of one or both parents, provided that such citizenship 
has not been verified in a prior investigation.
    c. Birth. Verify subject's date and place of birth (DPOB) through 
education, employment and/or other records. Verify through Bureau of 
Vital Statistics (BVS) records if not otherwise verified under d., 
below, or if a variance is developed.
    d. Citizenship. Subject's citizenship status must be verified in all 
cases. U.S. citizens who are subjects of investigation will be required 
to produce documentation that will confirm their citizenship. Normally 
such documentation should be presented to the DoD Component concerned 
prior to the initiation of the request for investigation. When such 
documentation is not readily available, investigative action may be 
initiated with the understanding that the designated authority in the 
DoD Component will be provided with the documentation prior to the 
issuance of a clearance. DIS will not check the BVS for native-born U.S. 
citizens except as indicated in 4.c. above. In the case of foreign-born 
U.S. citizens, DIS will check I&NS records. The citizenship status of 
all foreign-born members of subject's immediate family shall be 
verified. Additionally, when the investigation indicates that a member 
of subject's immediate family has not obtained U.S. citizenship after 
having been eligible for a considerable period of time, an attempt 
should be made to determine the reason. The documents listed below are 
acceptable for proof of U.S. citizenship for personnel security 
determination purposes:
    (1) A birth certificate must be presented if the individual was born 
in the United States. To be acceptable, the certificate must show that 
the birth record was filed shortly after birth and must be certified 
with the registrar's signature and the raised, impressed, or 
multicolored seal of his office except for States or jurisdictions 
which, as a matter of policy, do not issue certificates with a raised or 
impressed seal. Uncertified copies of birth certificates are not 
acceptable.
    (a) A delayed birth certificate (a record filed more than one year 
after the date of birth) is acceptable provided that it shows

[[Page 640]]

that the report of birth was supported by acceptable secondary evidence 
of birth as described in subparagraph (b), below.
    (b) If such primary evidence is not obtainable, a notice from the 
registrar stating that no birth record exists should be submitted. The 
notice shall be accompanied by the best combination of secondary 
evidence obtainable. Such evidence may include a baptismal certificate, 
a certificate of circumcision, a hospital birth record, affidavits of 
persons having personal knowledge of the facts of the birth, or other 
documentary evidence such as early census, school, or family bible 
records, newspaper files and insurance papers. Secondary evidence should 
have been created as close to the time of birth as possible.
    (c) All documents submitted as evidence of birth in the United 
States shall be original or certified documents. Uncertified copies are 
not acceptable.
    (2) A certificate of naturalization shall be submitted if the 
individual claims citizenship by naturalization.
    (3) A certificate of citizenship issued by the I&NS shall be 
submitted if citizenship was acquired by birth abroad to a U.S. citizen 
parent or parents.
    (4) A Report of Birth Abroad of A Citizen of The United States of 
America (Form FS-240), a Certification of Birth (Form FS-545 or DS-
1350), or a Certificate of Citizenship is acceptable if citizenship was 
acquired by birth abroad to a U.S. citizen parent or parents.
    (5) A passport or one in which the individual was included will be 
accepted as proof of citizenship.
    e. Education. (1) Verify graduation or attendance at institutions of 
higher learning in the U.S. within the last 15 years, if such attendance 
was not verified during a prior investigation.
    (2) Attempts will be made to review records at overseas educational 
institutions when the subject resided overseas in excess of one year.
    (3) Verify attendance or graduation at the last secondary school 
attended within the past 10 years if there was no attendance at an 
institution of higher learning within the period of investigation.
    (4) Verification of attendance at military academies is only 
required when the subject failed to graduate.
    f. Employment. (1) Non-Federal employment. Verify all employment 
within the period of investigation to include seasonal, holiday, 
Christmas, part-time, and temporary employment. Interview one supervisor 
and one co-worker at subject's current place of employment as well as at 
each prior place of employment during the past 10 years of six months 
duration or longer. The interview requirement for supervisors and co-
workers does not apply to seasonal, holiday, Christmas, part-time, and 
temporary employment (4 months or less) unless there are unfavorable 
issues to resolve or the letter of inquiry provides insufficient 
information.
    (2) Federal employment. All Federal employment will be verified 
within the period of investigation to include Christmas, seasonal 
temporary, summer hire, part-time, and holiday employment. Do not verify 
Federal employment through review of records if already verified by the 
requester. If Federal employment has not been verified by the requester, 
then subject's personnel file at his/her current place of employment 
will be reviewed. All previous Federal employment will be verified 
during this review. In the case of former Federal employees, records 
shall be examined at the Federal Records Center in St. Louis, Missouri. 
Interview one supervisor and one co-worker at all places of employment 
during the past 10 years if so employed for 6 months or more.
    (3) Military employment. Military service for the last 15 years 
shall be verified. The subject's duty station, for the purpose of 
interview coverage, is considered as a place of employment. One 
supervisor and one co-worker shall be interviewed at subject's current 
duty station if subject has been stationed there for 6 months or more; 
additionally, a supervisor and a co-worker at subject's prior duty 
stations where assigned for 6 months or more during the past 10 years 
shall be interviewed.
    (4) Unemployment. Subject's activities during all periods of 
unemployment in excess of 30 consecutive days, within the period of 
investigation, that are not otherwise accounted for shall be verified.
    (5) When an individual has resided outside the U.S. continuously for 
over one year, attempts will be made to confirm overseas employments as 
well as conduct required interviews of a supervisor and co-worker.
    g. References. Three developed character references who have 
sufficient knowledge of subject to comment on his background, 
suitability, and loyalty shall be interviewed personally. Efforts shall 
be made to interview developed references whose combined association 
with subject covers the full period of the investigation with particular 
emphasis on the last 5 years. Employment, education, and neighborhood 
references, in addition to the required ones, may be used as developed 
references provided that they have personal knowledge concerning the 
individual's character, discretion, and loyalty. Listed character 
references will be interviewed only when developed references are not 
available or when it is necessary to identify and locate additional 
developed character references or when it is necessary to verify 
subject's activities (e.g., unemployment).
    h. Neighborhood investigation. Conduct a neighborhood investigation 
to verify each of subject's residences in the U.S. of a period of 6 
months or more on a cumulative basis, during the past 5 years or during 
the period of

[[Page 641]]

investigation, whichever is shorter. During each neighborhood 
investigation, interview two neighbors who can verify subject's period 
of residence in that area and who were sufficiently acquainted to 
comment on subject's suitability for a position of trust. Neighborhood 
investigations will be expanded beyond this 5-year period only when 
there is unfavorable information to resolve in the investigation.
    i. Credit. Conduct credit bureau check in the 50 States, the 
District of Columbia, Puerto Rico and overseas (where APO/FPO addresses 
are provided) at all places where subject has resided (including duty 
stations and home ports), been employed, or attended school for 6 months 
or more, on a cumulative basis, during the last 7 years or during the 
period of the investigation, whichever is shorter. When coverage by a 
credit bureau is not available, credit references located in that area 
will be interviewed. Financial responsibility, including unexplained 
affluence, will be stressed in all reference interviews.
    j. Local Agency Checks (LAC's). LACs, including State central 
criminal history record repositories, will be conducted on subject at 
all places of residence to include duty stations and/or home ports, in 
the 50 States, the District of Columbia, and Puerto Rico, where 
residence occurred during the past 15 years or during the period of 
investigation, whichever is shorter. If subject's place of employment 
and/or education is serviced by a different law enforcement agency than 
that servicing the area of residence, LACs shall be conducted also in 
these areas.
    k. Foreign travel. If subject has been employed, educated, traveled 
or resided outside of the U.S. for more than 90 days during the period 
of investigation, except under the auspices of the U.S. Government, 
additional record checks during the NAC shall be made in accordance with 
paragraph 1.f. of this Appendix. In addition, the following requirements 
apply:
    (1) Foreign travel not under the auspices of the U.S. Government. 
When employment, education, or residence has occurred overseas for more 
than 90 days during the past 15 years or since age 18, which was not 
under the auspices of the U.S. Government, a check of records will be 
made at the Passport Office of the Department of State, the CIA, and 
other appropriate agencies. Efforts shall be made to develop sources, 
generally in the U.S., who knew the individual overseas to cover 
significant employment, education, or residence and to determine whether 
any lasting foreign contacts or connections were established during this 
period. If the individual has worked or lived outside of the U.S. 
continuously for over one year, the investigation will be expanded to 
cover fully this period through the use of such investigative assets and 
checks of record sources as may be available to the U.S. Government in 
the foreign country in which the individual resided.
    (2) Foreign travel under the auspices of the U.S. Government. When 
employment, education, or residence has occurred overseas for a period 
of more than one year, under the auspices of the U.S. Government, a 
record check will be made at the Passport Office of the Department of 
State, the CIA and other appropriate agencies. Efforts shall be made to 
develop sources (generally in the U.S.) who knew the individual overseas 
to cover significant employment, education, or residence and to 
determine whether any lasting foreign contacts or connections were 
established during this period. Additionally, the investigation will be 
expanded to cover fully this period through the use of such 
investigative assets and checks of record sources as may be available to 
the U.S. Government in the foreign country in which the individual 
resided.
    1. Foreign connections. All foreign connections (friends, relatives, 
and/or business connections) of subject and immediate family in the U.S. 
or abroad, except where such association was the direct result of 
subject's official duties with the U.S. Government, shall be 
ascertained. Investigation shall be directed toward determining the 
significance of foreign connections on the part of subject and the 
immediate family, particularly where the association is or has been with 
persons whose origin was within a country whose national interests are 
inimical to those of the U.S. When subject or his spouse has close 
relatives residing in a Communist-controlled country, or subject has 
resided, visited, or traveled in such a country, not under U.S. 
Government auspices, the provisions of Sec. 154.8(i)(3) of this part 
apply.
    m. Organizations. Efforts will be made during reference interviews 
and record reviews to determine if subject and/or the immediate family 
has, or formerly had, membership in, affiliation with, sympathetic 
association towards, or participated in any foreign or domestic 
organization, association, movement, group, or combination of persons of 
the type described in Sec. 154.7(a) through (d) of this part.
    n. Divorce. Divorces, annulments, and legal separations of subject 
shall be verified only when there is reason to believe that the grounds 
for the action could reflect on subject's suitability for a position of 
trust.
    o. Military service. All military service and types of discharge 
during the last 15 years shall be verified.
    p. Medical records. Medical records shall not be reviewed unless:
    (1) The requester indicates that subject's medical records were 
unavailable for review prior to submitting the request for 
investigation, or
    (2) The requester indicates that unfavorable information is 
contained in subject's medical records, or

[[Page 642]]

    (3) The subject lists one or more of the following on the SPH or 
PSQ:
    (a) A history of mental or nervous disorders.
    (b) That subject is now or has been addicted to the use of habit-
forming drugs such as narcotics or barbiturates or is now or has been a 
chronic user to excess of alcoholic beverages.
    q. Updating a previous investigation to SBI standards. If a previous 
investigation does not substantially meet the minimum standards of an 
SBI or if it is more than 5 years old, a current investigation is 
required but may be limited to that necessary to bring the individual's 
file up to date in accordance with the investigative requirements of an 
SBI. Should new information be developed during the current 
investigation that bears unfavorably upon the individual's activities 
covered by the previous investigation, the current inquiries shall be 
expanded as necessary to develop full details of this new information.
    5. Periodic Reinvestigation (PR). a. Each DoD military, civilian, 
consultant and contractor employee (to include non-U.S. citizens 
(foreign nationals and/or immigrant aliens) holding a limited access 
authorization) occupying a critical sensitive position, possessing a TOP 
SECRET clearance, or occupying a special access program position shall 
be the subject of a PR initiated 5 years from the date of completion of 
the last investigation. The PR shall cover the period of the last 5 
years.
    b. Minimum investigative requirements. A PR shall include the 
following minimum scope.
    (1) NAC. A valid NAC on the SUBJECT will be conducted in all cases. 
Additionally, for positions requiring SCI access, checks of DCII, FBI/
HQ, FBI/ID name check only, and other agencies deemed appropriate, will 
be conducted on the SUBJECT's current spouse or cohabitant, if not 
previously conducted. Additionally, NACs will be conducted on immediate 
family members, 18 years of age or older, who are aliens and/or 
immigrant aliens, if not previously accomplished.
    (2) Credit. Credit bureau checks covering all places where the 
SUBJECT resided for 6 months or more, on a cumulative basis, during the 
period of investigation, in the 50 States, District of Columbia, Puerto 
Rico and overseas (where APO/FPO addresses are provided), will be 
conducted.
    (3) Subject interview. The interview should cover the entire period 
of time since the last investigation, not just the last 5-year period. 
Significant information disclosed during the interview, which has been 
satisfactorily covered during a previous investigation, need not be 
explored again unless additional relevant information warrants further 
coverage. An SI is not required if one of the following conditions 
exists:
    (a) The SUBJECT is aboard a deployed ship or in some remote area 
that would cause the interview to be excessively delayed.
    (b) The SUBJECT is in an overseas location serviced by the State 
Department or the FBI.
    (4) Employment. Current employment will be verified. Military and 
Federal service records will not routinely be checked, if previously 
checked by the requester when PR was originally submitted. Also, 
employment records will be checked wherever employment interviews are 
conducted. Records need be checked only when they are locally available, 
unless unfavorable information has been detected.
    (5) Employment references. Two supervisors or co-workers at the most 
recent place of employment or duty station of 6 months; if the current 
employment is less than 6 months employment reference interviews will be 
conducted at the next prior place of employment, which was at least a 6-
month duration.
    (6) Developed Character References (DCRs). Two developed character 
references who are knowledgeable of the SUBJECT will be interviewed. 
Developed character references who were previously interviewed will only 
be reinterviewed when other developed references are not available.
    (7) Local Agency Checks (LACs). DIS will conduct local agency checks 
on the SUBJECT at all places of residence, employment, and education 
during the period of investigation, regardless of duration, including 
overseas locations.
    (8) Neighborhood Investigation. Conduct a neighborhood investigation 
to verify subjects' current residence in the United States. Two 
neighbors who can verify subject's period of residence in that area and 
who are sufficiently acquainted to comment on the subject's suitability 
for a position of trust will be interviewed. Neighborhood investigations 
will be expanded beyond the current residence when unfavorable 
information arises.
    (9) Ex-spouse interview. If the subject of investigation is 
divorced, the ex-spouse will be interviewed when the date of final 
divorce action is within the period of investigation.
    (10) Select scoping. When the facts of the case warrant, additional 
select scoping will be accomplished, as necessary, to fully develop or 
resolve an issue.

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61026, Nov. 19, 1993]



             Sec. Appendix B to Part 154--Request Procedures

    A. General. To conserve investigative resources and to insure that 
personnel security investigations are limited to those essential

[[Page 643]]

to current operations and are clearly authorized by DoD policies, 
organizations requesting investigations must assure that continuing 
command attention is given to the investigative request process.
    In this connection, it is particularly important that the provision 
of Executive Order 12356 requiring strict limitations on the 
dissemination of official information and material be closely adhered to 
and that investigations requested for issuing clearances are limited to 
those instances in which an individual has a clear need for access to 
classified information. Similarly, investigations required to determine 
eligibility for appointment or retention in DoD, in either a civilian or 
military capacity, must not be requested in frequency or scope exceeding 
that provided for in this part.
    In view of the foregoing, the following guidelines have been 
developed to simplify and facilitate the investigative request process:
    1. Limit requests for investigation to those that are essential to 
current operations and clearly authorized by DoD policies and attempt to 
utilize individuals who, under the provisions of this part, have already 
met the security standard;
    2. Assure that military personnel on whom investigative requests are 
initiated will have sufficient time remaining in service after 
completion of the investigation to warrant conducting it;
    3. Insure that request forms and prescribed documentation are 
properly executed in accordance with instructions;
    4. Dispatch the request directly to the DIS Personnel Investigations 
Center;
    5. Promptly notify the DIS Personnel Investigations Center if the 
investigation is no longer needed (notify OPM if a NACI is no longer 
needed); and
    6. Limit access through strict need-to-know, thereby requiring fewer 
investigations.
    In summary, close observance of the above-cited guidelines will 
allow the DIS to operate more efficiently and permit more effective, 
timely, and responsive service in accomplishing investigations.
    B. National Agency Check (NAC). When a NAC is requested an original 
only of the DD Form 398-2 (National Agency Check Request) and a 
completed FD 258 (Applicant Fingerprint Card) are required. If the 
request is for an ENTNANC, an original only of the DD Form 398-2 and a 
completed DD Form 2280 (Armed Forces Fingerprint Card) are required. 
Those forms should be sent directly to: Personnel Investigation Center, 
Defense Investigative Service, P.O. Box 1083, Baltimore, Maryland 21203.
    C. National Agency Check plus written Inquiries (NACI). When a NACI 
is requested, an original and one copy of the SF 85 (Data for 
Nonsensitive or Noncritical-sensitive Position), an SF 171 (Personal 
Qualifications Statement), and an SF 87 (U.S. Civil Service Commission 
Fingerprint Chart) shall be sent directly to: Office of Personnel 
Management, Bureau of Personnel Investigations, NACI Center, Boyers, 
Pennsylvania 16018.
    The notation ``ALL REFERENCES'' shall be stamped immediately above 
the title at the top of the Standard Form 85.
    D. DoD National Agency Check with Inquiries (DNACI). 1. When a DNACI 
is requested, one copy of DD Form 1879, an original and two copies of 
the DD Form 398-2 (National Agency Check Request), two copies of FD 258 
(Fingerprint Card), and an original of DD Form 2221 (Authority for 
Release of Information and Records) shall be sent directly to: Personnel 
Investigations Center, Defense Investigative Service, P.O. Box 1083, 
Baltimore, Maryland 21203.
    2. The DD Form 398-2 must be completed to cover the most recent five 
year period. All information, to include items relative to residences 
and employment, must be complete and accurate to avoid delays in 
processing.
    E. Special Background Investigation (SBI)/Background Investigation 
(BI). 1. When requesting a BI or SBI, one copy of DD Form 1879 (Request 
for Personnel Security Investigation), an original and four copies of DD 
Form 398 (Statement of Personnel History), two copies of FD 258, and an 
original of DD Form 2221 (Authority for Release of Information and 
Records) shall be sent directly to the: Personnel Investigations Center, 
Defense Investigative Service, P.O. Box 454, Baltimore, Maryland 21203.
    2. For the BI and SBI, the DD Form 398 must be completed to cover 
the most recent five and 15 year period, respectively, or since the 18th 
birthday, whichever is shorter.
    F. Periodic Reinvestigation (PR). 1. PRs shall be requested only in 
such cases as are authorized by Sec. 154.19 (a) through (k) of this 
part.
    a. For a PR requested in accordance with Sec. 154.19 (a) and (k) 
and the DD Form 1879 must be accompanied by the following documents:
    (1) Original and four copies of DD Form 398.
    (2) Two copies of FD-258.
    (3) Original copy of DD Form 2221.
    b. In processing PRs, previous investigative reports will not be 
requested by the requesting organization, unless significant derogatory 
or adverse information, postdating the most recent favorable 
adjudication, is developed during the course of reviewing other locally 
available records. In the latter instance, requests for previous 
investigative reports may only be made if it is determined by the 
requesting organization that the derogatory information is so 
significant that a review of previous investigative reports is

[[Page 644]]

necessary for current adjudicative determinations.
    2. No abbreviated version of DD Form 398 may be submitted in 
connection with a PR.
    3. The PR request shall be sent to the address in paragraph E.1.
    G. Additional investigation to resolve derogatory or adverse 
information. 1. Requests for additional investigation required to 
resolve derogatory or adverse information shall be submitted by DD Form 
1879 (Request for Personnel Security Investigation) to the: Defense 
Investigative Service, P.O. Box 454, Baltimore, Maryland 21203.
    Such requests shall set forth the basis for the additional 
investigation and describe the specific matter to be substantiated or 
disproved.
    2. The request should be accompanied by an original and four copies 
of the DD Form 398, where appropriate, two copies of FD-258 and an 
original copy of DD Form 2221, unless such documentation was submitted 
within the last 12 months to DIS as part of a NAC or other personnel 
security investigation. If pertinent, the results of a recently 
completed NAC, NACI, or other related investigative reports available 
should also accompany the request.
    H. Obtaining results of prior investigations. Requesters requiring 
verification of a specified type of personnel security investigation, 
and/or requiring copies of prior investigations conducted by the DIS 
shall submit requests by letter or message to: Defense Investigative 
Service Investigative Files Division, P.O. Box 1211, Baltimore, Maryland 
21203, Message Address: DIS PIC BALTIMORE MD/ /D0640.
    The request will include subject's name, grade, social security 
number, date and place of birth, and DIS case control number if known.
    I. Requesting postadjudication cases. 1. Requests pertaining to 
issues arising after adjudication of an investigation (postadjudication 
cases) shall be addressed to DIS on a DD Form 1879 accompanied by a DD 
Form 398, where appropriate.
    2. All requests for initial investigations will be submitted to PIC 
regardless of their urgency. If, however, there is an urgent need for a 
postadjudication investigation, or the mailing of a request to PIC for 
initiation of a postadjudication case would prejudice timely pursuit of 
investigative action, the DD Form 1879 may be directed for initiation, 
in CONUS, to the nearest DIS Field Office, and in overseas locations, to 
the military investigative service element supporting the requester 
(Appendix I). The field element (either DIS or the military 
investigative agency) will subsequently forward either the DD Form 1879 
or completed investigation to PIC.
    3. A fully executed DD Form 1879 and appropriate supporting 
documents may not be immediately available. Further, a case that is 
based on sensitive security issues may be compromised by a request that 
the subject submit a DD Form 398. A brief explanation should appear on 
DD Form 1879s which does not include complete supporting documentation.
    J. Requests involving contractor employees. To preclude duplicative 
investigative requests and double handling of contractor employee cases 
involving access to classified information, all requests for 
investigation of contractor personnel must be submitted, using 
authorized industrial security clearance forms, for processing through 
the Defense Industrial Security Clearance Office, except for programs in 
which specific approval has been obtained from the Deputy Under 
Secretary of Defense for Policy to utilize other procedures.
    K. Responsibility for proper documentation of requests. The official 
signing the request for investigation shall be responsible for insuring 
that all documentation is completed in accordance with these 
instructions.

      Appendix C to Part 154--Tables for Requesting Investigations

                          Guide for Requesting Background Investigations (BI) (Table 1)
----------------------------------------------------------------------------------------------------------------
                  A                                  B                                     C
----------------------------------------------------------------------------------------------------------------
If the individual is a:                And duties require:..........  Then a BI is required before:
----------------------------------------------------------------------------------------------------------------
 
U.S. national military member,         Top Secret clearance.........  Granting final clearance.
 civilian, consultant, or contractor
 employee.
U.S. national civilian employee......  Assignment to a ``Critical''   Assignment to the position.
                                        sensitive position.
U.S. national military member, DoD     Occupying a ``critical''       Occupying a ``critical'' position.
 civilian or contractor employee.       position in the Nuclear
                                        Weapon Personnel Reliability
                                        Program (PRP).
U.S. national military member or       Granting, denying clearances.  Performing clearance functions.
 civilian employee.
U.S. national military member or       Membership on security         Appointment to the board.
 civilian employee.                     screening, hearing, or
                                        review board.
Immigrant alien......................  Limited access to Secret or    Issuing limited access authorization (Note
                                        Confidential information.      1).

[[Page 645]]

 
Non-U.S. national employee excluding   Limited access to Secret or    Issuing limited access authorization.
 immigrant alien.                       Confidential information.
Non-U.S. national nominee military     Education and orientation for  Before performing duties.
 education and orientation program      of military personnel.
 (from a country listed at Appendix
 G).
U.S. national military member DoD      Assignment to a category two   Assignment.
 civilian or contractor employee.       Presidential Support
                                        position.
U.S. national military member, DoD     Access to NATO COSMIC          Access may be granted.
 civilian or contractor employee        information.
 assigned to NATO.
 Note 1: BI will cover a 10 year scope.


                     Guide for Requesting Special Background Investigations (SBI) (Table 2)
----------------------------------------------------------------------------------------------------------------
                  A                                  B                                     C
----------------------------------------------------------------------------------------------------------------
If the individual is a:                And duties require:..........  Then a SBI is required before:
----------------------------------------------------------------------------------------------------------------
 
U.S. national military member, DoD     Access to SCI................  Granting Access.
 civilian, consultant, or contractor   Assisgnment to a category one  Assignment.
 employee.                              Presidential Support
                                        position.
                                       Access to SIOP-ESI...........  Granting access.
                                       Assignment to the National     Assignment.
                                        Security Agency.
                                       Access to other Special        Granting access.
                                        Access programs approved
                                        under Sec.  154.17(g).
                                       Assignment to personnel        Assignment.
                                        security,
                                        counterintelligence, or
                                        criminal investigative or
                                        direct investigative support
                                        duties.


                          Guide for Requesting Periodic Reinvestigations (PR) (Table 3)
----------------------------------------------------------------------------------------------------------------
                  A                                  B                                     C
----------------------------------------------------------------------------------------------------------------
If the individual is a:                And duties require:..........  Then a PR is required before:
----------------------------------------------------------------------------------------------------------------
 
U.S. national military member, DoD     Access to SCI................  5 years from date of last SBI/BI or PR.
 civilian, consultant, or contractor    Top Secret Clearance........  5 years from date of last SBI/BI or PR.
 employee.
                                       Access to NATO COSMIC........  5 years from date of last SBI/BI or PR.
                                       Assignment to Presidential     5 years from date of last SBI/BI or PR.
                                        Support activities.
U.S. national civilian employee......  Assignment to a ``Critical''   5 years from last SBI/BI or PR.
                                        sensitive position.
Non-U.S. national employee...........  Current limited access         5 years from last SBI/BI or PR.
                                        authorization to Secret or
                                        Confidential information.


             Guide for Requesting DOD National Agency Check With Inquiries (DNACI) or NACI (Table 4)
----------------------------------------------------------------------------------------------------------------
                  A                                  B                                     C
----------------------------------------------------------------------------------------------------------------
If the individual is a:                And duties require:..........  Then DNACI/NACI is required
----------------------------------------------------------------------------------------------------------------
U.S. national military member or       Secret clearance.............  Before granting clearance (note 1).
 contractor.                           .............................  May be automatically issued (note 2).
                                       Interim Secret Clearance.....
U.S. national civilian employee or     Secret clearance.............  Before granting clearance.
 consultant.                           Interim Secret Clearance.....  May be automatically issued (note 3).
                                       Appointment to ``Non           Before appointment.
                                        Critical'' sensitive
                                        position.
U.S. national military member, DoD     Occupying a ``controlled''     Before assignment.
 civilian or contractor employee.       position in the Nuclear
                                        Weapon PRR.

[[Page 646]]

 
Applicant for appointment as a         Commission in the Award        Before appointment (after appointment for
 commissioned officer.                  Forces.                        health professionals, chaplains, and
                                                                       attorneys, under conditions authorized by
                                                                       Sec.  154.15(d) of this part).
Naval Academy Midshipman, Military     Enrollment...................  To be initiated 90 days after entry.
 Academy Cadet, or Air Force Academy
 Cadet.
Reserve Officer Training Corps Cadet   Entry to advanced course or    Then a DNACI is required to be initiated
 of Midshipman.                         College Scholarship Program.   90 days after entry.
Note 1: First term enlistees shall require an ENTNAC.
Note 2: Provided DD Form 398-2 is favorably reviewed, local records check favorably accomplished, and DNACI
  initiated.
Note 3: Provided an authority designated in Appendix E finds delay in such appointment would be harmful to
  national security; favorable review of DD Form 398-2; NACI initiated; favorable local records check
  accomplished. Table 5.


                           Guide for Requesting National Agency Checks (NAC) (Table 5)
----------------------------------------------------------------------------------------------------------------
                  A                                  B                                     C
----------------------------------------------------------------------------------------------------------------
If the individual is a:                And duties require:..........  Then a NAC is required:
----------------------------------------------------------------------------------------------------------------
A first-term enlistee................  Retention in the Armed Forces  To be initiated NLT three work days after
                                        (including National Guard      entry (note 1).
                                        and Reserve).
Prior service member reentering        Retention in the Armed Forces  To be initiated NLT three work days after
 military service after break in        (including National Guard      reentry.
 Federal employment exceeding 1 year.   and Reserve).
Nominee for military education and     Education and orientation of   Before performing duties (note 2).
 orientation program.                   military personnel.
U.S. national military, DoD civilian,  Access to restricted areas,    Before authorizing entry.
 or contractor employee.                sensitive information, or
                                        equipment as defined in Sec.
                                          154.18(b).
Nonappropriated fund instrumentality   Appointment as NAFI custodian  Before appointment.
 (NAFI) civilian employee.             Accountability for non         Before completion of probationary period.
                                        appropriated funds.
                                       Fiscal responsibility as       Before completion of probationary period.
                                        determined by NAFI custodian.
                                       Other ``positions of trust''.  Before appointment.
Persons requiring access to chemical   Access to or security of       Before assignment.
 agents.                                chemical agents.
U.S. national, civilian employee       Wavier under provisions of     Before appointment (note 3).
 nominee for customs inspection         Sec.  154.18(d).
 duties.
Red Cross/United States Organization   Assignment with the Armed      Before assignment (See note 4 for foreign
 personnel.                             Forces overseas.               national personnel).
U.S. national........................  DoD building pass............  Prior to issuance.
Foreign national employed overseas...  No access to classified        Prior to employment (note 4).
                                        information.
Note 1: Request ENTNAC only.
Note 2: Except where personnel whose country of origin is a country listed at Appendix G, a BI will be required
  (See Sec.  154.18(1)).
Note 3: A NAC not over 5 years old suffices unless there has been a break in employment over 12 months. Then a
  current NAC is required.
Note 4: In such cases, the NAC shall consist of: (a) Host government law enforcement and security agency record
  checks at the city, state (province), and national level, and (b) DCII.



      Sec. Appendix D to Part 154--Reporting of Nonderogatory Cases

    Background Investigation (BI) and Special Background Investigation 
(SBI) shall be considered as devoid of significant adverse information 
unless they contain information listed below:
    1. Incidents, infractions, offenses, charges, citations, arrests, 
suspicion or allegations of illegal use or abuse of drugs or alcohol, 
theft or dishonesty, unreliability, irresponsibility, immaturity, 
instability or recklessness, the use of force, violence or weapons or 
actions that indicate disregard for the law due to multiplicity of minor 
infractions.
    2. All indications of moral turpitude, heterosexual promiscuity, 
aberrant, deviant, or bizarre sexual conduct or behavior, 
transvestitism, transsexualism, indecent exposure, rape, contributing to 
the delinquency of a minor, child molestation, wife-swapping, window-
peeping, and similar situations from whatever source. Unlisted full-time 
employment or education; full-time education or employment that cannot 
be verified by any

[[Page 647]]

reference or record source or that contains indications of falsified 
education or employment experience. Records or testimony of employment, 
education, or military service where the individual was involved in 
serious offenses or incidents that would reflect adversely on the 
honesty, reliability, trustworthiness, or stability of the individual.
    3. Foreign travel, education, visits, correspondence, relatives, or 
contact with persons from or living in a foreign country or foreign 
intelligence service.
    4. Mental, nervous, emotional, psychological, psychiatric, or 
character disorders/behavior or treatment reported or alleged from any 
source.
    5. Excessive indebtedness, bad checks, financial difficulties or 
irresponsibility, unexplained affluence, bankruptcy, or evidence of 
living beyond the individual's means.
    6. Any other significant information relating to the criteria 
included in paragraphs (a) through (q) of Sec. 154.7 or Appendix H of 
this part.

[52 FR 11219, Apr. 8, 1987, as amended at 58 FR 61026, Nov. 19, 1993]



     Sec. Appendix E to Part 154--Personnel Security Determination 

                               Authorities

    A. Officials authorized to grant, deny or revoke personnel security 
clearances (Top Secret, Secret, and Confidential):
1. Secretary of Defense and/or designee
2. Secretary of the Army and/or designee
3. Secretary of the Navy and/or designee
4. Secretary of the Air Force and/or designee
5. Chairman, Joint Chiefs of Staff and/or designee
6. Directors of the Defense Agencies and/or designee
7. Commanders of the Unified and Specified Commands and/or designee

    B. Officials authorized to grant Limited Access Authorizations:

1. Secretaries of the Military Departments and/or designee
2. Director, Washington Headquarters Service for OSD and/or designee
3. Chairman, JCS and/or designee
4. Directors of the Defense Agencies and/or designee
5. Commanders, Unified and Specified Commands and/or designee

    C. Officials authorized to grant access to SCI:

Director, NSA--for NSA
Director, DIA--for OSD, OJCS, and Defense Agencies
Senior Officers of the Intelligence Community of the Army, Navy, and Air 
Force--for their respective Military Departments, or their single 
designee.

    D. Officials authorized to certify personnel under their 
jurisdiction for access to Restricted Data (to include Critical Nuclear 
Weapon Design Information): see enclosure to DoD Directive 5210.2.
    E. Officials authorized to approve personnel for assignment to 
Presidential Support activities: The Executive Secretary to the 
Secretary and Deputy Secretary of Defense or designee.

    F. Officials authorized to grant access to SIOP-ESI:

1. Director of Strategic Target Planning
2. Director, Joint Staff, OJCS
3. Chief of Staff, U.S. Army
4. Chief of Naval Operations
5. Chief of Staff, U.S. Air Force
6. Commandant of the Marine Corps
7. Commanders of Unified and Specified Commands
8. The authority to grant access delegated above may be further 
delegated in writing by the above officials to the appropriate 
subordinates.

    G. Officials authorized to designate sensitive positions:
    1. Heads of DoD Components or their designees for critical-sensitive 
positions.

    2. Organizational commanders for noncritical-sensitive positions.

    H. Nonappropriated Fund Positions of Trust:

    Officials authorized to designate nonappropriated fund positions of 
trust: Heads of DoD Components and/or their designees.



  Sec. Appendix F to Part 154--Guidelines for Conducting Prenomination 

                           Personal Interviews

    A. Purpose. The purpose of the personal interview is to assist in 
determining the acceptability of an individual for nomination and 
further processing for a position requiring an SBI.
    B. Scope. Questions asked during the course of a personal interview 
must have a relevance to a security determination. Care must be taken 
not to inject improper matters into the personal interview. For example, 
religious beliefs and affiliations, beliefs and opinions regarding 
racial matters, political beliefs and affiliations of a nonsubversive 
nature, opinions regarding the constitutionality of legislative 
policies, and affiliations with labor unions and fraternal organizations 
are not proper subjects for inquiry. Department of Defense 
representatives conducting personal interviews should always be prepared 
to explain the relevance of their inquiries. Adverse inferences shall 
not be drawn from the refusal of a person to answer questions the 
relevance of which has not been established.
    C. The interviewer. Except as prescribed in paragraph B. above, 
persons conducting personal interviews normally will have broad

[[Page 648]]

latitude in performing this essential and important function and, 
therefore, a high premium must necessarily be placed upon the exercise 
of good judgment and common sense. To insure that personal interviews 
are conducted in a manner that does not violate lawful civil and private 
rights or discourage lawful political activity in any of its forms, or 
intimidate free expression, it is necessary that interviewers have a 
keen and well-developed awareness of and respect for the rights of 
interviewees. Interviewers shall never offer an opinion as to the 
relevance or significance of information provided by the interviewee to 
eligibility for access to SCI. If explanation in this regard is 
required, the interviewer will indicate that the sole function of the 
interview is to obtain information and that the determination of 
relevance or significance to the individual's eligibility will be made 
by other designated officials.
    D. Interview procedures. 1. The Head of the DoD Component concerned 
shall establish uniform procedures for conducting the interview that are 
designed to elicit information relevant to making a determination of 
whether the interviewee, on the basis of the interview and other locally 
available information (DD 398, Personnel Security Investigation 
Questionnaire, personnel records, security file, etc.), is considered 
acceptable for nomination and further processing.
    2. Such procedures shall be structured to insure the interviewee his 
full rights under the Constitution of the United States, the Privacy Act 
of 1974 and other applicable statutes and regulations.
    E. Protection of interview results. All information developed during 
the course of the interview shall be maintained in personnel security 
channels and made available only to those authorities who have a need-
to-know in connection with the processing of an individual's nomination 
for duties requiring access to SCI or those who need access to 
information either to conduct the required SBI or to adjudicate the 
matter of the interviewee's eligibility for access to SCI, or as 
otherwise authorized by Executive order or statute.
    F. Acceptability determination. 1. The determination of the 
interviewee's acceptability for nomination for duties requiring access 
to sensitive information shall be made by the commander, or designee, of 
the DoD organization that is considering nominating the interviewee for 
such duties.
    2. Criteria guidelines contained in DCID 1/14 upon which the 
acceptability for nomination determination is to be based shall be 
provided to commanders of DoD organizations who may nominate individuals 
for access to SCI and shall be consistent with those established by the 
Senior Officer of the Intelligence Community of the Component concerned 
with respect to acceptability for nomination to duties requiring access 
to SCI.



                 Sec. Appendix G to Part 154 [Reserved]



  Sec. Appendix H to Part 154--Adjudicative Guidelines for Determining 

            Eligibility for Access to Classified Information

    1. Introduction. The following adjudicative guidelines are 
established for all U.S. Government civilian and military personnel, 
consultants, contractors, employees of contractors, licensees, 
certificate holders or grantees and their employees, and other 
individuals who require access to classified information. They apply to 
persons being considered for initial or continued eligibility for access 
to classified information, to include sensitive compartmented 
information and special access programs, and are to be used by 
government departments and agencies in all final clearance 
determinations. Government departments and agencies may also choose to 
apply these guidelines to analogous situations regarding persons being 
considered for access to other types of protected information.
    Decisions regarding eligibility for access to classified information 
take into account factors that could cause a conflict of interest and 
place a person in the position of having to choose between his or her 
commitments to the United States, including the commitment to protect 
classified information, and any other compelling loyalty. Accesses 
decisions also take into account a person's reliability, trustworthiness 
and ability to protect classified information. No coercive policing 
could replace the self-discipline and integrity of the person entrusted 
with the nation's secrets as the most effective means of protecting 
them. When a person's life history shows evidence of unreliability or 
untrustworthiness, questions arise whether the person can be relied on 
and trusted to exercise the responsibility necessary for working in a 
secure environment where protecting classified information is paramount.
    2. The adjudicative process.
    (a) The adjudicative process is an examination of a sufficient 
period of a person's life to make an affirmative determination that the 
person is an acceptable security risk. Eligibility for access to 
classified information is predicated upon the individual meeting these 
personnel security guidelines. The adjudication process is the careful 
weighing of a number of variables known as the whole-person concept. 
Available, reliable information about the person, past and present, 
favorable and unfavorable, should be considered in reaching a 
determination. In evaluating the relevance of an individual's conduct, 
the adjudicator should consider the following factors:
    (1) The nature, extent, and seriousness of the conduct;

[[Page 649]]

    (2) The circumstances surrounding the conduct, to include 
knowledgeable participation;
    (3) The frequency and recency of the conduct;
    (4) The individual's age and maturity at the time of the conduct;
    (5) The extent to which participation is voluntary;
    (6) The presence or absence of rehabilitation and other permanent 
behavioral changes;
    (7) The motivation for the conduct;
    (8) The potential for pressure, coercion, exploitation, or duress; 
and
    (9) The likelihood of continuation or recurrence;
    (b) Each case must be judged on its own merits, and final 
determination remains the responsibility of the specific department or 
agency. Any doubt concerning personnel being considered for access to 
classified information will be resolved in favor of the national 
security.
    (c) The ability to develop specific thresholds for action under 
these guidelines is limited by the nature and complexity of human 
behavior. The ultimate determination of whether the granting or 
continuing of eligibility for a security clearance is clearly consistent 
with the interests of national security must be an overall common sense 
judgment based upon careful consideration of the following guidelines, 
each of which is to be evaluated in the context of the whole person.
    (1) GUIDELINE A: Allegiance to the United States;
    (2) GUIDELINE B: Foreign Influence;
    (3) GUIDELINE C: Foreign Preference;
    (4) GUIDELINE D: Sexual Behavior;
    (5) GUIDELINE E: Personal Conduct;
    (6) GUIDELINE F: Financial Considerations;
    (7) GUIDELINE G: Alcohol Consumption;
    (8) GUIDELINE H: Drug Involvement;
    (9) GUIDELINE I: Psychological Conditions;
    (10) GUIDELINE J: Criminal Conduct;
    (11) GUIDELINE K: Handling Protected Information;
    (12) GUIDELINE L: Outside Activities;
    (13) GUIDELINE M: Use of Information Technology Systems
    (d) Although adverse information concerning a single criterion may 
not be sufficient for an unfavorable determination, the individual may 
be disqualified if available information reflects a recent or recurring 
pattern of questionable judgment, irresponsibility, or emotionally 
unstable behavior. Notwithstanding the whole-person concept, pursuit of 
further investigation may be terminated by an appropriate adjudicative 
agency in the face of reliable, significant, disqualifying, adverse 
information.
    (e) When information of security concern becomes known about an 
individual who is currently eligible for access to classified 
information, the adjudicator should consider whether the person:
    (1) Voluntarily reported the information;
    (2) Was truthful and complete in responding to questions;
    (3) Sought assistance and followed professional guidance, where 
appropriate;
    (4) Resolved or appears likely to favorably resolve the security 
concern;
    (5) Has demonstrated positive changes in behavior and employment;
    (6) Should have his or her access temporarily suspended pending 
final adjudication of the information.
    (f) If after evaluating information of security concern, the 
adjudicator decides that the information is not serious enough to 
warrant a recommendation of disapproval or revocation of the security 
clearance, it may be appropriate to recommend approval with a warning 
that future incidents of a similar nature may result in revocation of 
access.

              Guideline A: Allegiance To The United States

    3. The concern. An individual must be of unquestioned allegiance to 
the United States. The willingness to safeguard classified information 
is in doubt if there is any reason to suspect an individual's allegiance 
to the United States.
    4. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Involvement in, support of, training to commit, or advocacy of 
any act of sabotage, espionage, treason, terrorism, or sedition against 
the United States of America;
    (b) Association or sympathy with persons who are attempting to 
commit, or who are committing, any of the above acts;
    (c) Association or sympathy with persons or organizations that 
advocate, threaten, or use force or violence, or use any other illegal 
or unconstitutional means, in an effort to:
    (1) Overthrow or influence the government of the United States or 
any state or local government;
    (2) Prevent Federal, state, or local government personnel from 
performing their official duties;
    (3) Gain retribution for perceived wrongs caused by the Federal, 
state, or local government;
    (4) Prevent others from exercising their rights under the 
Constitution or laws of the United States or of any state.
    5. Conditions that could mitigate security concerns include:
    (a) The individual was unaware of the unlawful aims of the 
individual or organization and severed ties upon learning of these;
    (b) The individual's involvement was only with the lawful or 
humanitarian aspects of such an organization;
    (c) Involvement in the above activities occurred for only a short 
period of time and

[[Page 650]]

was attributable to curiosity or academic interest;
    (d) The involvement or association with such activities occurred 
under such unusual circumstances, or so much time has elapsed, that it 
is unlikely to recur and does not cast doubt on the individual's current 
reliability, trustworthiness, or loyalty.

                     Guideline B: Foreign Influence

    6. The concern. Foreign contacts and interests may be a security 
concern if the individual has divided loyalties or foreign financial 
interests, may be manipulated or induced to help a foreign person, 
group, organization, or government in a way that is not in U.S. 
interests, or is vulnerable to pressure or coercion by any foreign 
interest. Adjudication under this Guideline can and should consider the 
identity of the foreign country in which the foreign contact or 
financial interest is located, including, but not limited to, such 
considerations as whether the foreign country is known to target United 
States citizens to obtain protected information and/or is associated 
with a risk of terrorism.
    7. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Contact with a foreign family member, business or professional 
associate, friend, or other person who is a citizen of or resident in a 
foreign country if that contact creates a heightened risk of foreign 
exploitation, inducement, manipulation, pressure, or coercion;
    (b) Connections to a foreign person, group, government, or country 
that create a potential conflict of interest between the individual's 
obligation to protect sensitive information or technology and the 
individual's desire to help a foreign person, group, or country by 
providing that information;
    (c) Counterintelligence information, that may be classified, 
indicates that the individual's access to protected information may 
involve unacceptable risk to national security;
    (d) Sharing living quarters with a person or persons, regardless of 
citizenship status, if that relationship creates a heightened risk of 
foreign inducement, manipulation, pressure, or coercion;
    (e) A substantial business, financial, or property interest in a 
foreign country, or in any foreign-owned or foreign-operated business, 
which could subject the individual to heightened risk of foreign 
influence or exploitation;
    (f) Failure to report, when required, association with a foreign 
national;
    (g) Unauthorized association with a suspected or known agent, 
associate, or employee of a foreign intelligence service;
    (h) Indications that representatives or nationals from a foreign 
country are acting to increase the vulnerability of the individual to 
possible future exploitation, inducement, manipulation, pressure, or 
coercion;
    (i) Conduct, especially while traveling outside the U.S., which may 
make the individual vulnerable to exploitation, pressure, or coercion by 
a foreign person, group, government, or country.
    8. Conditions that could mitigate security concerns include:
    (a) The nature of the relationships with foreign persons, the 
country in which these persons are located, or the positions or 
activities of those persons in that country are such that it is unlikely 
the individual will be placed in a position of having to choose between 
the interests of a foreign individual, group, organization, or 
government and the interests of the U.S.;
    (b) There is no conflict of interest, either because the 
individual's sense of loyalty or obligation to the foreign person, 
group, government, or country is so minimal, or the individual has such 
deep and longstanding relationships and loyalties in the U.S., that the 
individual can be expected to resolve any conflict of interest in favor 
of the U.S. interest;
    (c) Contact or communication with foreign citizens is so casual and 
infrequent that there is little likelihood that it could create a risk 
for foreign influence or exploitation;
    (d) The foreign contacts and activities are on U.S. Government 
business or are approved by the cognizant security authority;
    (e) The individual has promptly complied with existing agency 
requirements regarding the reporting of contacts, requests, or threats 
from persons, groups, or organizations from a foreign country;
    (f) The value or routine nature of the foreign business, financial, 
or property interests is such that they are unlikely to result in a 
conflict and could not be used effectively to influence, manipulate, or 
pressure the individual.

                     Guideline C: Foreign Preference

    9. The concern. When an individual acts in such a way as to indicate 
a preference for a foreign country over the United States, then he or 
she may be prone to provide information or make decisions that are 
harmful to the interests of the United States.
    10. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Exercise of any right, privilege or obligation of foreign 
citizenship after becoming a U.S. citizen or through the foreign 
citizenship of a family member. This includes but is not limited to:
    (1) Possession of a current foreign passport;
    (2) Military service or a willingness to bear arms for a foreign 
country;
    (3) Accepting educational, medical, retirement, social welfare, or 
other such benefits from a foreign country;

[[Page 651]]

    (4) Residence in a foreign country to meet citizenship requirements;
    (5) Using foreign citizenship to protect financial or business 
interests in another country;
    (6) Seeking or holding political office in a foreign country;
    (7) Voting in a foreign election;
    (b) Action to acquire or obtain recognition of a foreign citizenship 
by an American citizen;
    (c) Performing or attempting to perform duties, or otherwise acting, 
so as to serve the interests of a foreign person, group, organization, 
or government in conflict with the national security interest;
    (d) Any statement or action that shows allegiance to a country other 
than the United States: for example, declaration of intent to renounce 
United States citizenship; renunciation of United States citizenship.
    11. Conditions that could mitigate security concerns include:
    (a) Dual citizenship is based solely on parents' citizenship or 
birth in a foreign country;
    (b) The individual has expressed a willingness to renounce dual 
citizenship;
    (c) Exercise of the rights, privileges, or obligations of foreign 
citizenship occurred before the individual became a U.S. citizen or when 
the individual was a minor;
    (d) Use of a foreign passport is approved by the cognizant security 
authority.
    (e) The passport has been destroyed, surrendered to the cognizant 
security authority, or otherwise invalidated;
    (f) The vote in a foreign election was encouraged by the United 
States Government.

                      Guideline D: Sexual Behavior

    12. The concern. Sexual behavior that involves a criminal offense 
indicates a personality or emotional disorder, reflects lack of judgment 
or discretion, or which may subject the individual to undue influence or 
coercion, exploitation, or duress can raise questions about an 
individual's reliability, trustworthiness and ability to protect 
classified information. No adverse inference concerning the standards in 
this Guideline may be raised solely on the basis of the sexual 
orientation of the individual.
    13. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Sexual behavior of a criminal nature, whether or not the 
individual has been prosecuted;
    (b) A pattern of compulsive, self-destructive, or high risk sexual 
behavior that the person is unable to stop or that may be symptomatic of 
a personality disorder;
    (c) Sexual behavior that causes an individual to be vulnerable to 
coercion, exploitation, or duress;
    (d) Sexual behavior of a public nature and/or that reflects lack of 
discretion or judgment.
    14. Conditions that could mitigate security concerns include:
    (a) The behavior occurred prior to or during adolescence and there 
is no evidence of subsequent conduct of a similar nature;
    (b) The sexual behavior happened so long ago, so infrequently, or 
under such unusual circumstances, that it is unlikely to recur and does 
not cast doubt on the individual's current reliability, trustworthiness, 
or good judgment;
    (c) The behavior no longer serves as a basis for coercion, 
exploitation, or duress.
    (d) The sexual behavior is strictly private, consensual, and 
discreet.

                      Guideline E: Personal Conduct

    15. The concern. Conduct involving questionable judgment, lack of 
candor, dishonesty, or unwillingness to comply with rules and 
regulations can raise questions about an individual's reliability, 
trustworthiness and ability to protect classified information. Of 
special interest is any failure to provide truthful and candid answers 
during the security clearance process or any other failure to cooperate 
with the security clearance process.
    The following will normally result in an unfavorable clearance 
action or administrative termination of further processing for clearance 
eligibility:
    (a) Refusal, or failure without reasonable cause, to undergo or 
cooperate with security processing, including but not limited to meeting 
with a security investigator for subject interview, completing security 
forms or releases, and cooperation with medical or psychological 
evaluation;
    (b) Refusal to provide full, frank and truthful answers to lawful 
questions of investigators, security officials, or other official 
representatives in connection with a personnel security or 
trustworthiness determination.
    16. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Deliberate omission, concealment, or falsification of relevant 
facts from any personnel security questionnaire, personal history 
statement, or similar form used to conduct investigations, determine 
employment qualifications, award benefits or status, determine security 
clearance eligibility or trustworthiness, or award fiduciary 
responsibilities;
    (b) Deliberately providing false or misleading information 
concerning relevant facts to an employer, investigator, security 
official, competent medical authority, or other official government 
representative;
    (c) Credible adverse information in several adjudicative issue areas 
that is not sufficient for an adverse determination under any

[[Page 652]]

other single guideline, but which, when considered as a whole, supports 
a whole-person assessment of questionable judgment, untrustworthiness, 
unreliability, lack of candor, unwillingness to comply with rules and 
regulations, or other characteristics indicating that the person may not 
properly safeguard protected information;
    (d) Credible adverse information that is not explicitly covered 
under any other guideline and may not be sufficient by itself for an 
adverse determination, but which, when combined with all available 
information supports a whole-person assessment of questionable judgment, 
untrustworthiness, unreliability, lack of candor, unwillingness to 
comply with rules and regulations, or other characteristics indicating 
that the person may not properly safeguard protected information. This 
includes but is not limited to consideration of:
    (1) Untrustworthy or unreliable behavior to include breach of client 
confidentiality, release of proprietary information, unauthorized 
release of sensitive corporate or other government protected 
information:
    (2) Disruptive, violent, or other inappropriate behavior in the 
workplace;
    (3) A pattern of dishonesty or rule violations;
    (4) Evidence of significant misuse of Government or other employer's 
time or resources;
    (e) Personal conduct or concealment of information about one's 
conduct that creates a vulnerability to exploitation, manipulation, or 
duress, such as:
    (1) Engaging in activities which, if known, may affect the person's 
personal, professional, or community standing, or
    (2) While in another country, engaging in any activity that is 
illegal in that country or that is legal in that country but illegal in 
the United States and may serve as a basis for exploitation or pressure 
by the foreign security or intelligence service or other group;
    (f) violation of a written or recorded commitment made by the 
individual to the employer as a condition of employment;
    (g) association with persons involved in criminal activity.
    17. Conditions that could mitigate security concerns include:
    (a) The individual made prompt, good-faith efforts to correct the 
omission, concealment, or falsification before being confronted with the 
facts;
    (b) The refusal or failure to cooperate, omission, or concealment 
was caused or significantly contributed to by improper or inadequate 
advice of authorized personnel or legal counsel advising or instructing 
the individual specifically concerning the security clearance process. 
Upon being made aware of the requirement to cooperate or provide the 
information, the individual cooperated fully and truthfully.
    (c) The offense is so minor, or so much time has passed, or the 
behavior is so infrequent, or it happened under such unique 
circumstances that it is unlikely to recur and does not cast doubt on 
the individual's reliability, trustworthiness, or good judgment;
    (d) The individual has acknowledged the behavior and obtained 
counseling to change the behavior or taken other positive steps to 
alleviate the stressors, circumstances, or factors that caused 
untrustworthy, unreliable, or other inappropriate behavior, and such 
behavior is unlikely to recur;
    (e) The individual has taken positive steps to reduce or eliminate 
vulnerability to exploitation, manipulation, or duress;
    (f) The information was unsubstantiated or from a source of 
questionable reliability;
    (g) Association with persons involved in criminal activity has 
ceased or occurs under circumstances that do not cast doubt upon the 
individual's reliability, trustworthiness, judgment, or willingness to 
comply with rules and regulations.

                  Guideline F: Financial Considerations

    18. The concern. Failure or inability to live within one's means, 
satisfy debts, and meet financial obligations may indicate poor self-
control, lack of judgment, or unwillingness to abide by rules and 
regulations, all of which can raise questions about an individual's 
reliability, trustworthiness and ability to protect classified 
information. An individual who is financially overextended is at risk of 
having to engage in illegal acts to generate funds. Compulsive gambling 
is a concern as it may lead to financial crimes including espionage. 
Affluence that cannot be explained by known sources of income is also a 
security concern. It may indicate proceeds from financially profitable 
criminal acts.
    19. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Inability or unwillingness to satisfy debts;
    (b) Indebtedness caused by frivolous or irresponsible spending and 
the absence of any evidence of willingness or intent to pay the debt or 
establish a realistic plan to pay the debt.
    (c) A history of not meeting financial obligations;
    (d) Deceptive or illegal financial practices such as embezzlement, 
employee theft, check fraud, income tax evasion, expense account fraud, 
filing deceptive loan statements, and other intentional financial 
breaches of trust;
    (e) Consistent spending beyond one's means, which may be indicated 
by excessive indebtedness, significant negative cash flow, high debt-to-
income ratio, and/or other financial analysis;

[[Page 653]]

    (f) Financial problems that are linked to drug abuse, alcoholism, 
gambling problems, or other issues of security concern;
    (g) Failure to file annual Federal, state, or local income tax 
returns as required or the fraudulent filing of the same;
    (h) Unexplained affluence, as shown by a lifestyle or standard of 
living, increase in net worth, or money transfers that cannot be 
explained by subject's known legal sources of income;
    (i) Compulsive or addictive gambling as indicated by an unsuccessful 
attempt to stop gambling, ``chasing losses'' (i.e. increasing the bets 
or returning another day in an effort to get even), concealment of 
gambling losses, borrowing money to fund gambling or pay gambling debts, 
family conflict or other problems caused by gambling.
    20. Conditions that could mitigate security concerns include:
    (a) The behavior happened so long ago, was so infrequent, or 
occurred under such circumstances that it is unlikely to recur and does 
not cast doubt on the individual's current reliability, trustworthiness, 
or good judgment;
    (b) The conditions that resulted in the financial problem were 
largely beyond the person's control (e.g., loss of employment, a 
business downturn, unexpected medical emergency, or a death, divorce or 
separation), and the individual acted responsibly under the 
circumstances;
    (c) The person has received or is receiving counseling for the 
problem and/or there are clear indications that the problem is being 
resolved or is under control;
    (d) The individual initiated a good-faith effort to repay overdue 
creditors or otherwise resolve debts;
    (e) The individual has a reasonable basis to dispute the legitimacy 
of the past-due debt which is the cause of the problem and provides 
documented proof to substantiate the basis of the dispute or provides 
evidence of actions to resolve the issue;
    (f) The affluence resulted from a legal source of income.

                    Guideline G: Alcohol Consumption

    21. The concern. Excessive alcohol consumption often leads to the 
exercise of questionable judgment or the failure to control impulses, 
and can raise questions about an individual's reliability and 
trustworthiness.
    22. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Alcohol-related incidents away from work, such as driving while 
under the influence, fighting, child or spouse abuse, disturbing the 
peace, or other incidents of concern, regardless of whether the 
individual is diagnosed as an alcohol abuser or alcohol dependent;
    (b) Alcohol-related incidents at work, such as reporting for work or 
duty in an intoxicated or impaired condition, or drinking on the job, 
regardless of whether the individual is diagnosed as an alcohol abuser 
or alcohol dependent;
    (c) Habitual or binge consumption of alcohol to the point of 
impaired judgment, regardless of whether the individual is diagnosed as 
an alcohol abuser or alcohol dependent;
    (d) Diagnosis by a duly qualified medical professional (e.g., 
physician, clinical psychologist, or psychiatrist) of alcohol abuse or 
alcohol dependence;
    (e) Evaluation of alcohol abuse or alcohol dependence by a licensed 
clinical social worker who is a staff member of a recognized alcohol 
treatment program;
    (f) Relapse after diagnosis of alcohol abuse or dependence and 
completion of an alcohol rehabilitation program;
    (g) Failure to follow any court order regarding alcohol education, 
evaluation, treatment, or abstinence.
    23. Conditions that could mitigate security concerns include:
    (a) So much time has passed, or the behavior was so infrequent, or 
it happened under such unusual circumstances that it is unlikely to 
recur or does not cast doubt on the individual's current reliability, 
trustworthiness, or good judgment;
    (b) The individual acknowledges his or her alcoholism or issues of 
alcohol abuse, provides evidence of actions taken to overcome this 
problem, and has established a pattern of abstinence (if alcohol 
dependent) or responsible use (if an alcohol abuser);
    (c) The individual is a current employee who is participating in a 
counseling or treatment program, has no history of previous treatment 
and relapse, and is making satisfactory progress;
    (d) The individual has successfully completed inpatient or 
outpatient counseling or rehabilitation along with any required 
aftercare, has demonstrated a clear and established pattern of modified 
consumption or abstinence in accordance with treatment recommendations, 
such as participation in meetings of Alcoholics Anonymous or a similar 
organization and has received a favorable prognosis by a duly qualified 
medical professional or a licensed clinical social worker who is a staff 
member of a recognized alcohol treatment program.

                      Guideline H: Drug Involvement

    24. The concern. Use of an illegal drug or misuse of a prescription 
drug can raise questions about an individual's reliability and 
trustworthiness, both because it may impair judgment and because it 
raises questions about a person's ability or willingness to comply with 
laws, rules, and regulations.
    (a) Drugs are defined as mood and behavior altering substances, and 
include:

[[Page 654]]

    (1) Drugs, materials, and other chemical compounds identified and 
listed in the Controlled Substances Act of 1970, as amended (e.g., 
marijuana or cannabis, depressants, narcotics, stimulants, and 
hallucinogens), and
    (2) Inhalants and other similar substances;
    (b) Drug abuse is the illegal use of a drug or use of a legal drug 
in a manner that deviates from approved medical direction.
    25. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Any drug abuse (see above definition); \1\
---------------------------------------------------------------------------

    \1\ Under the provisions of 10 U.S.C. 986 any person who is an 
unlawful user of, or is addicted to, a controlled substance as defined 
in section 102 of the Controlled Substances Act (21 U.S.C. 802), may not 
be granted or have renewed their access to classified information.
---------------------------------------------------------------------------

    (b) Testing positive for illegal drug use;
    (c) Illegal drug possession, including cultivation, processing, 
manufacture, purchase, sale, or distribution; or possession of drug 
paraphernalia;
    (d) Diagnosis by a duly qualified medical professional (e.g., 
physician, clinical psychologist, or psychiatrist) of drug abuse or drug 
dependence;
    (e) Evaluation of drug abuse or drug dependence by a licensed 
clinical social worker who is a staff member of a recognized drug 
treatment program;
    (f) Failure to successfully complete a drug treatment program 
prescribed by a duly qualified medical professional;
    (g) Any illegal drug use after being granted a security clearance;
    (h) Expressed intent to continue illegal drug use, or failure to 
clearly and convincingly commit to discontinue drug use.
    26. Conditions that could mitigate security concerns include:
    (a) The behavior happened so long ago, was so infrequent, or 
happened under such circumstances that it is unlikely to recur or does 
not cast doubt on the individual's current reliability, trustworthiness, 
or good judgment;
    (b) A demonstrated intent not to abuse any drugs in the future, such 
as:
    (1) Disassociation from drug-using associates and contacts;
    (2) Changing or avoiding the environment where drugs were used;
    (3) An appropriate period of abstinence;
    (4) A signed statement of intent with automatic revocation of 
clearance for any violation;
    (c) Abuse of prescription drugs was after a severe or prolonged 
illness during which these drugs were prescribed, and abuse has since 
ended;
    (d) Satisfactory completion of a prescribed drug treatment program, 
including but not limited to rehabilitation and aftercare requirements, 
without recurrence of abuse, and a favorable prognosis by a duly 
qualified medical professional.

                  Guideline I: Psychological Conditions

    27. The concern. Certain emotional, mental, and personality 
conditions can impair judgment, reliability, or trustworthiness. A 
formal diagnosis of a disorder is not required for there to be a concern 
under this guideline. A duly qualified mental health professional (e.g., 
clinical psychologist or psychiatrist) employed by, or acceptable to and 
approved by the U.S. Government, should be consulted when evaluating 
potentially disqualifying and mitigating information under this 
guideline. No negative inference concerning the standards in this 
Guideline may be raised solely on the basis of seeking mental health 
counseling.
    28. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Behavior that casts doubt on an individual's judgment, 
reliability, or trustworthiness that is not covered under any other 
guideline, including but not limited to emotionally unstable, 
irresponsible, dysfunctional, violent, paranoid, or bizarre behavior;
    (b) An opinion by a duly qualified mental health professional that 
the individual has a condition not covered under any other guideline 
that may impair judgment, reliability, or trustworthiness; \2\
---------------------------------------------------------------------------

    \2\ Under the provisions of 10 U.S.C. 986, any person who is 
mentally incompetent, as determined by a credentialed mental health 
professional approved by the Department of Defense, may not be granted 
or have renewed their access to classified information.
---------------------------------------------------------------------------

    (c) The individual has failed to follow treatment advice related to 
a diagnosed emotional, mental, or personality condition, e.g., failure 
to take prescribed medication.
    29. Conditions that could mitigate security concerns include:
    (a) The identified condition is readily controllable with treatment, 
and the individual has demonstrated ongoing and consistent compliance 
with the treatment plan;
    (b) The individual has voluntarily entered a counseling or treatment 
program for a condition that is amenable to treatment, and the 
individual is currently receiving counseling or treatment with a 
favorable prognosis by a duly qualified mental health professional;
    (c) Recent opinion by a duly qualified mental health professional 
employed by, or acceptable to and approved by the U.S. Government that 
an individual's previous condition is under control or in remission, and 
has a low probability of recurrence or exacerbation;

[[Page 655]]

    (d) The past emotional instability was a temporary condition (e.g., 
one caused by death, illness, or marital breakup), the situation has 
been resolved, and the individual no longer shows indications of 
emotional instability;
    (e) There is no indication of a current problem.

                      Guideline J: Criminal Conduct

    30. The concern. Criminal activity creates doubt about a person's 
judgment, reliability, and trustworthiness. By its very nature, it calls 
into question a person's ability or willingness to comply with laws, 
rules and regulations.
    31. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) A single serious crime or multiple lesser offenses;
    (b) Discharge or dismissal from the Armed Forces under dishonorable 
conditions; \3\
---------------------------------------------------------------------------

    \3\ Under the provisions of 10 U.S.C. 986, a person who has received 
a dishonorable discharge or has been dismissed from the Armed Forces may 
not be granted or have renewed access to classified information. In a 
meritorious case, the Secretaries of the Military Departments or 
designee; or the Directors of WHS, DIA, NSA, DOHA or designee may 
authorize a waiver of this prohibition.
---------------------------------------------------------------------------

    (c) Allegation or admission of criminal conduct, regardless of 
whether the person was formally charged, formally prosecuted or 
convicted;
    (d) Individual is currently on parole or probation;
    (e) Violation of parole or probation, or failure to complete a 
court-mandated rehabilitation program;
    (f) Conviction in a Federal or State court, including a court-
martial of a crime, sentenced to imprisonment for a term exceeding one 
year and incarcerated as a result of that sentence for not less than a 
year. \4\
---------------------------------------------------------------------------

    \4\ Under the above mentioned statute, a person who has been 
convicted in a Federal or State court, including courts martial, 
sentenced to imprisonment for a term exceeding one year and incarcerated 
for not less than one year, may not be granted or have renewed access to 
classified information. The same waiver provision also applies.
---------------------------------------------------------------------------

    32. Conditions that could mitigate security concerns include:
    (a) So much time has elapsed since the criminal behavior happened, 
or it happened under such unusual circumstances that it is unlikely to 
recur and does not cast doubt on the individual's reliability, 
trustworthiness, or good judgment;
    (b) The person was pressured or coerced into committing the act and 
those pressures are no longer present in the person's life;
    (c) Evidence that the person did not commit the offense;
    (d) There is evidence of successful rehabilitation; including but 
not limited to the passage of time without recurrence of criminal 
activity, remorse or restitution, job training or higher education, good 
employment record, or constructive community involvement;
    (e) Potentially disqualifying conditions 31. (b) and (f) may not be 
mitigated unless, where meritorious circumstances exist, the Secretaries 
of the Military Departments or designee; or the Directors of Washington 
Headquarters Services (WHS), Defense Intelligence Agency (DIA), National 
Security Agency (NSA), Defense Office of Hearings and Appeals (DOHA) or 
designee has granted a waiver.

               Guideline K: Handling Protected Information

    33. The concern. Deliberate or negligent failure to comply with 
rules and regulations for protecting classified or other sensitive 
information raises doubt about an individual's trustworthiness, 
judgment, reliability, or willingness and ability to safeguard such 
information, and is a serious security concern.
    34. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Deliberate or negligent disclosure of classified or other 
protected information to unauthorized persons, including but not limited 
to personal or business contacts, to the media, or to persons present at 
seminars, meetings, or conferences;
    (b) Collecting or storing classified or other protected information 
at home or in any other unauthorized location;
    (c) Loading, drafting, editing, modifying, storing, transmitting, or 
otherwise handling classified reports, data, or other information on any 
unapproved equipment including but not limited to any typewriter, word 
processor, or computer hardware, software, drive, system, gameboard, 
handheld, ``palm'' or pocket device or other adjunct equipment;
    (d) Inappropriate efforts to obtain or view classified or other 
protected information outside one's need to know;
    (e) Copying classified or other protected information in a manner 
designed to conceal or remove classification or other document control 
markings;
    (f) Viewing or downloading information from a secure system when the 
information is beyond the individual's need-to-know;
    (g) Any failure to comply with rules for the protection of 
classified or other sensitive information;
    (h) Negligence or lax security habits that persist despite 
counseling by management.
    (i) Failure to comply with rules or regulations that results in 
damage to the National

[[Page 656]]

Security, regardless of whether it was deliberate or negligent.
    35. Conditions that could mitigate security concerns include:
    (a) So much time has elapsed since the behavior, or it has happened 
so infrequently or under such unusual circumstances, that it is unlikely 
to recur and does not cast doubt on the individual's current 
reliability, trustworthiness, or good judgment;
    (b) The individual responded favorably to counseling or remedial 
security training and now demonstrates a positive attitude toward the 
discharge of security responsibilities;
    (c) The security violations were due to improper or inadequate 
training.

                     Guideline L: Outside Activities

    36. The concern. Involvement in certain types of outside employment 
or activities is of security concern if it poses a conflict of interest 
with an individual's security responsibilities and could create an 
increased risk of unauthorized disclosure of classified information.
    37. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Any employment or service, whether compensated or volunteer, 
with:
    (1) The government of a foreign country;
    (2) Any foreign national, organization, or other entity;
    (3) A representative of any foreign interest;
    (4) Any foreign, domestic, or international organization or person 
engaged in analysis, discussion, or publication of material on 
intelligence, defense, foreign affairs, or protected technology;
    (b) Failure to report or fully disclose an outside activity when 
this is required.
    38. Conditions that could mitigate security concerns include:
    (a) Evaluation of the outside employment or activity by the 
appropriate security or counterintelligence office indicates that it 
does not pose a conflict with an individual's security responsibilities 
or with the national security interests of the United States;
    (b) The individual terminated the employment or discontinued the 
activity upon being notified that it was in conflict with his or her 
security responsibilities.

           Guideline M: Use of Information Technology Systems

    39. The concern. Noncompliance with rules, procedures, guidelines or 
regulations pertaining to information technology systems may raise 
security concerns about an individual's reliability and trustworthiness, 
calling into question the willingness or ability to properly protect 
sensitive systems, networks, and information. Information Technology 
Systems include all related computer hardware, software, firmware, and 
data used for the communication, transmission, processing, manipulation, 
storage, or protection of information.
    40. Conditions that could raise a security concern and may be 
disqualifying include:
    (a) Illegal or unauthorized entry into any information technology 
system or component thereof;
    (b) Illegal or unauthorized modification, destruction, manipulation 
or denial of access to information, software, firmware, or hardware in 
an information technology system;
    (c) Use of any information technology system to gain unauthorized 
access to another system or to a compartmented area within the same 
system;
    (d) Downloading, storing, or transmitting classified information on 
or to any unauthorized software, hardware, or information technology 
system;
    (e) Unauthorized use of a government or other information technology 
system;
    (f) Introduction, removal, or duplication of hardware, firmware, 
software, or media to or from any information technology system without 
authorization, when prohibited by rules, procedures, guidelines or 
regulations;
    (g) Negligence or lax security habits in handling information 
technology that persist despite counseling by management;
    (h) Any misuse of information technology, whether deliberate or 
negligent, that results in damage to the national security.
    41. Conditions that could mitigate security concerns include:
    (a) So much time has elapsed since the behavior happened, or it 
happened under such unusual circumstances, that it is unlikely to recur 
and does not cast doubt on the individual's reliability, 
trustworthiness, or good judgment;
    (b) The misuse was minor and done only in the interest of 
organizational efficiency and effectiveness, such as letting another 
person use one's password or computer when no other timely alternative 
was readily available;
    (c) The conduct was unintentional or inadvertent and was followed by 
a prompt, good-faith effort to correct the situation and by notification 
of supervisor.

[71 FR 51475, Aug. 30, 2006]



          Sec. Appendix I to Part 154--Overseas Investigations

                               1. Purpose

    The purpose of this appendix is to establish, within the framework 
of this part, 32 CFR part 361 and Defense Investigative Service Manual 
20-1, standardized procedures for the military investigative agencies to 
follow when they perform administrative and investigative functions on 
behalf of DIS at overseas locations.

[[Page 657]]

                          2. Type Investigation

    This part describes in detail Background Investigations (BI) which 
are conducted for Limited Access Authorizations and those Special 
Investigative Inquiries conducted for post-adjudicative purposes. 
Hereafter they are referred to as LAA and Post-adjudicative cases and 
are briefly described in paragraphs a and b below:
    a. Limited access authorization. A level of access to classified 
defense information that may be granted to a non-U.S. citizen under 
certain conditions, one of which is that a BI must have been completed 
with satisfactory results. Sec. 154.16(d) further describes LAA cases.
    b. Post-adjudication investigation. A Personnel Security 
Investigation (PSI) predicated on new, adverse or questionable security, 
suitability or hostage information that arises and requires the 
application of investigation procedures subsequent to adjudicative 
action on a DoD-affiliated person's eligibility for continued access to 
classified information, assignment to or retention in sensitive duties 
or other designated duties requiring such investigation. While these 
cases are normally predicated on the surfacing of unfavorable 
information subsequent to favorable adjudication, they may also be 
opened when favorable information is offered to counter a previous 
unfavorable adjudication. Sec. 154.9(c)(3) further describes these 
cases.

                               3. General

    a. As a rule, investigative activity in most PSIs occurs in the U.S. 
even when the Subject is at an overseas location. Therefore, the 
submission of requests for investigation to the Personnel Investigation 
Center (PIC) at Baltimore is a required procedure as it ensures uniform 
application of DoD PSI policy and the efficient dispatch and 
coordination of leads.
    b. When the purpose of the investigation is for an LAA or post-
adjudication on a Subject overseas, much, if not all of the leads are at 
an overseas location. While these cases also may be submitted directly 
to PIC for action, there is an inherent delay in the mailing of the 
request, the exchange of leads and reports with PIC, and transmittal of 
the reports back to the requester. To avoid this delay, the military 
investigative agencies, when acting for DIS overseas in accordance with 
32 CFR part 361 may, with their Headquarters approval, accept these 
requests for investigations, initiate them and disseminate the results 
from the same level as they open, close, and disseminate their own 
cases. Usually this will greatly improve response time to the requester.
    c. Under the procedures in paragraph b., above, DIS will not often 
be in a position to directly exercise its responsibility for control and 
direction until the case or lead is in progress or even completed; 
therefore, adherence to the policy stated in referenced documents, and 
as modified herein, is mandatory. When the policy of the military 
investigative agency is at variance with the above, the matter will be 
referred to the respective headquarters for resolution.
    d. Since DIS is ultimately responsible for the personnel security 
product, it must be kept informed of all such matters referred to in 
this appendix. For instance, when the investigative agency overseas 
receives a DD Form 1879, Request for Personnel Security Investigation, 
which sets forth an issue outside DIS jurisdiction, it will reject the 
request, inform the requester of the reason and furnish an information 
copy of the DD Form 1879 and rejection letter to PIC. When the issue/
jurisdiction is unclear to the investigative agency, the DD Form 1879 
and the perceived jurisdictional question should be promptly forwarded 
to DIS for action and, if appropriate, to the component's headquarters 
for information. Questions on the interpretation of DIS or DoD policy 
and Directives pertaining to individual PSI cases can usually be 
resolved through direct communications with PIC.
    e. 32 CFR part 361 establishes the supporting relationship of the 
military investigative agencies to DIS in overseas areas, and DIS 
provides these agencies with copies of relevant policy and interpretive 
guidance. For these reasons, the investigative agency vice the 
requester, is responsible for evaluating the request, processing it, 
collecting and evaluating the results within their jurisdiction for 
sufficiency, and forwarding the completed product to the appropriate 
activity.
    f. The magnitude of operations at PIC requires that methods of 
handling LAA and post-adjudicative cases be consistent to the maximum 
extent possible. For this reason, the procedures for LAA cases are 
nearly identical to those for post-adjudicative cases. Briefly, the main 
exceptions are:
    (1) The notification to PIC that a post-adjudication case has been 
opened will be by message, since an issue is present at the outset, 
whereas notification of an LAA case should normally be by mail.
    (2) The scope of the LAA investigation is 10 years or since the 
person's 18th birthday, whichever is shortest, whereas the leads in a 
post-djudication case are limited to resolving the issue.

                             4. Jurisdiction

    a. As set-forth in 32 CFR part 361 DIS is responsible for conducting 
all DoD PSIs in the 50 States, District of Columbia, and Puerto Rico, 
and will request the military departments to accomplish investigative 
requirements elsewhere. The military investigative

[[Page 658]]

agencies in overseas locations routinely respond to personnel security 
investigative leads for DIS.
    b. DIS jurisdiction also includes investigation of subversive 
affiliations, suitability information, and hostage situations when such 
inquiries are required for personnel security purposes; however, 
jurisdiction will rest with the military investigative agencies, FBI 
and/or civil authorities as appropriate when the alleged subversion or 
suitability issue represents a violation of law or, in the case of a 
hostage situation, there is an indication that the person concerned is 
actually being pressured, coerced, or influenced by interests inimical 
to the United States, or that hostile intelligence is taking action 
specifically directed against that person. Specific policy guidance on 
the applicability of these procedures and the jurisdictional 
considerations are stated in Sec. 154.9.

                             5. Case Opening

    a. A request for investigation must be submitted by using DD Form 
1879 and accompanied by supporting documentation unless such 
documentation is not immediately available, or the obtaining of 
documentation would compromise a sensitive investigation. Upon receipt 
of the request, the military investigative component will identify the 
issue(s), scope the leads, and ensure that the proposed action is that 
which is authorized for DIS as delineated in this part, 32 CFR part 361 
and Defense Investigative Service Manual 201-1.
    b. Upon such determination, the Component will prepare an Action 
Lead Sheet (ALS) which fully identifies the Subject and the scope of the 
case, and specifies precisely the leads which each investigative 
component (including DIS/PIC when appropriate) is to conduct.
    c. Case opening procedures described above are identical for LAA and 
post-adjudication cases except with respect to notification of case 
opening to PIC:
    (1) Post-adjudication Cases. These cases, because they involve an 
issue, are potentially sensitive and must be examined as early as 
possible by PIC for conformity to the latest DoD policy. Accordingly, 
the initial notification to PIC of case openings will always be by 
message. The message will contain at a minimum:
    (a) Full identification of the subject;
    (b) A narrative describing the allegation/facts in sufficient detail 
to support opening of the case; and
    (c) A brief listing of the leads that are planned.
    The DD Form 1879 and supporting documents, along with the agency's 
ALS, should be subsequently mailed to PIC.
    (2) LAA Cases. The notification to PIC of case opening will normally 
be accomplished by mailing the DD Form 1879, DD Form 398 (Personal 
History Statement), a copy of the ALS, and any other supporting 
documents to PIC. Message notification to PIC in LAA cases will only be 
required if there is a security or suitability issue apparent in the DD 
Form 1879 or supporting documents.
    (d) Beyond initial actions necessary to test allegation for 
investigative merit and jurisdiction, no further investigative action 
should commence until the notification of case opening to PIC has been 
dispatched.
    (e) PIC will promptly respond to the notification of case opening by 
mail or message specifying any qualifying remarks along with a summary 
of previously existing data. PIC will also provide a DIS case control 
number (CCN). This number must be used by all components on all case 
related paperwork/reports.
    (The investigating agency may assign its unique service CCN for 
interim internal control; however, the case will be processed, 
referenced, and entered into the DCII by the DIS case control number.) 
The first five digits of the DIS CCN will be the Julian date of the case 
opening when received at DIS.

                           6. Case Processing

    a. The expected completion time for leads in LAA cases is 50 
calendar days and for post-adjudication cases, 30 days, as computed from 
the date of receipt of the request. If conditions preclude completion in 
this time period, a pending report of the results to date, along with an 
estimated date of completion will be submitted to PIC.
    b. Copies of all ALSs will be furnished to PIC. In addition, PIC 
will be promptly notified of any significant change in the scope of the 
case, or the development of an investigative issue.
    c. The procedures for implementing the Privacy Act in PSI cases are 
set in DIS Manual 20-1-M 1. Any other restrictions on the release of 
information imposed by an overseas source or by regulations of the 
country where the inquiry takes place will be clearly stated in the 
report.
    d. The report format for these cases will be that used by the 
military investigative agency.
    e. Investigative action outside the jurisdictional area of an 
investigative component office may be directed elsewhere by ALS as 
needed in accordance with that agency's procedures and within the 
following geographical considerations:
    (1) Leads will be sent to PIC if the investigative action is in the 
United States, District of Columbia, Puerto Rico, American Samoa, Bahama 
Islands, the U.S. Virgin Islands, and the following islands in the 
Pacific: Wake, Midway, Kwajalin, Johnston, Carolines, Marshalls, and 
Eniwetok.
    (2) Leads to areas not listed above may be dispatched to other units 
of the investigative agency or even to another military agency's

[[Page 659]]

field units if there is an agreement or memorandum of understanding that 
provides for such action. For case accountability purposes, copies of 
such ``lateral'' leads must be sent to the PIC.
    (3) Leads that cannot be dispatched as described in paragraph (2) 
above, and those that must be sent to a non-DoD investigative agency 
should be sent to PIC for disposition.
    f. The Defense Investigative Manual calls for obtaining PIC approval 
before conducting a Subject interview on a post-adjudicative 
investigation. To avoid the delay that compliance with this procedure 
would create, a military investigative component may conduct the 
interview provided:
    (1) All other investigative leads have been completed and reviewed.
    (2) The CCN has been received, signifying DIS concurrence with the 
appropriateness of the investigation.
    (3) Contrary instructions have not been received from the PIC.
    (4) The interview is limited to the resolution of the relevant 
issues disclosed by the investigation.
    g. Notwithstanding the provisions of paragraphs f.(1) through (4) of 
this Appendix, if time is of the essence due to imminent transfer of the 
subject, a subject interview may be conducted at the discretion of the 
investigative agency.

                    7. Case Responsibility LAA and PA

    Paragraph 3, above, describes the advantages of timely handling 
which accrue when the military investigative components act for DIS 
overseas. These actions for DIS may, however, be limited by the 
component's staffing and resource limitations, especially since some 
cases require more administration and management than others. Post-
adjudication case leads, for instance, will normally be within the 
geographical jurisdiction of the component that accepted the request for 
investigation; therefore, relatively little case management is required. 
In contrast, LAA cases may require leads world-wide, and, therefore, 
create more complex case management and administration, especially in 
the tracking, monitoring and reviewing of leads outside the component's 
geographical area. Accordingly, an investigative component will accept 
the case from the requester, but only assign itself the appropriate 
leads within its own geographical jurisdiction and send the balance to 
PIC for appropriate disposition in accordance with the following:
    a. The investigative agency will accept the request for 
investigation (thereby saving time otherwise lost in mailing to PIC) but 
limit its involvement in case management by extracting only those leads 
it will conduct or manage locally.
    b. The agency should then prepare an ALS that shows clearly what 
leads it will cover and send PIC a copy of this ALS, along with the 
request for investigation and any other appropriate documentation. It 
must be clear in the ALS that PIC is to act on all those leads that the 
unit has not assigned to itself.
    c. PIC, as case manager, will assume responsibility for the complete 
investigative package and, upon receipt of the last lead, will send the 
results to the appropriate activity.
    d. The agency that accepted the case and assigned itself leads may 
send a copy of its report to the activity in the ``Results to'' block at 
the same time it sends the originals to PIC. If so, the letter of 
transmittal must inform the recipient that these reports are only a 
portion of the investigation, and that the balance will be forthcoming 
from PIC. Similarly, PIC must be informed of which investigative reports 
were disseminated. (This is normally done by sending PIC a copy of the 
letter of transmittal.)

                                8. Scope

    a. LAA. The scope of investigation is 10 years or from age 18, 
whichever is the shortest period.
    b. Post-Adjudication Cases. There is no standard scope. The 
inquiries conducted will be limited to those necessary to resolve the 
issue(s).

                       9. Case Closing: LAA and PA

    a. Whether the investigative component or PIC closes out an 
investigation, there are three key elements to consider:
    (1) The investigative results must be reviewed for quality and 
conformance to policy.
    (2) The results must be sent to the activity listed in the ``Results 
to'' block of the DD Form 1879.
    (3) PIC must be informed whether or not any dissemination was made 
by the investigative agency and, if so, what reports were furnished.
    b. Investigative results may also be sent to a requester or higher 
level activity that makes a statement of need for the results. In such 
instances, a copy of the letter requesting the results and the 
corresponding letter of transmittal must be sent to PIC for retention.
    c. When an investigative agency disseminates reports for PIC, it may 
use the transmittal documents, letters, or cover sheets it customarily 
uses for its own cases.
    d. The material that is to be provided to PIC will consist of: The 
originals of all reports, and all other case documentation such as 
original statements, confidential source sheets, interview logs, 
requests for investigation, letters of transmittal to adjudicaters/
requesters, or communications with the requester, such as those that 
modify the scope of the investigation.

[[Page 660]]

    e. For DIS to fulfill its responsibilities under DoD 5220.22-R and 
the Privacy Act of 1974 all inquiries conducted in its behalf must be 
set forth in an ROI for the permanent file, whether the case is 
completed, terminated early, or referred to another agency.

                              10. Referral

    A case may require premature closing at any time after receipt of 
the DD Form 1879 by the investigative component if the information 
accompanying the request, or that which is later developed, is outside 
DIS jurisdiction. For example, alleged violations of law, a 
counterintelligence matter, or actual coercion/influence in a hostage 
situation (see paragraph 4.b. of this Appendix ) must be referred to the 
appropriate agency, and DIS involvement terminated. The requester will 
be informed by letter or indorsement to the DD Form 1879 of the 
information developed that, due to jurisdictional consideration, the 
case was referred to (fill in appropriate address) and that the DIS case 
is closed. The agency to which referral was made and PIC will be 
furnished with the results of all investigations conducted under DIS 
auspices. DIS, however, has an interest in the referral agency's actions 
and no information should be solicited from that agency.



 Sec. Appendix J to Part 154--ADP Position Categories and Criteria for 

                          Designating Positions

    OMB Circular A-71 (and Transmittal Memo B1), July 1978 OMB 
Circular A-130, December 12, 1985, and FPM Letter 732, November 14, 1978 
contain the criteria for designating positions under the existing 
categories used in the personnel security program for Federal civilian 
employees as well as the criteria for designating ADP and ADP related 
positions. This policy is outlined below:

                         ADP Position Categories

                     1. Critical-Sensitive Positions

    ADP-I positions. Those positions in which the incumbent is 
responsible for the planning, direction, and implementation of a 
computer security program; major responsibility for the direction, 
planning and design of a computer system, including the hardware and 
software; or, can access a system during the operation or maintenance in 
such a way, and with a relatively high risk for causing grave damage, or 
realize a significant personal gain.

                   2. Noncritical-Sensitive Positions

    ADP-II positions. Those positions in which the incumbent is 
responsible for the direction, planning, design, operation, or 
maintenance of a computer system, and whose work is technically reviewed 
by a higher authority of the ADP-I category to insure the integrity of 
the system.

                        3. Nonsensitive Positions

    ADP-III positions. All other positions involved in computer 
activities.
    In establishing the categories of positions, other factors may enter 
into the determination, permitting placement in higher or lower 
categories based on the agency's judgement as to the unique 
characteristics of the system or the safeguards protecting the system.

                   Criteria for Designating Positions

    Three categories have been established for designating computer and 
computer-related positions--ADP-I, ADP-II, and ADP-III. Specific 
criteria for assigning positions to one of these categories is as 
follows:

------------------------------------------------------------------------
            Category                             Criteria
------------------------------------------------------------------------
ADP-I..........................  Responsibility or the development and
                                  administration of agency computer
                                  security programs, and also including
                                  direction and control of risk analysis
                                  and/or threat assessment.
                                 Significant involvement in life-
                                  critical or mission-critical systems.
                                 Significant involvement in life-
                                  critical or mission-critical systems.
                                 Responsibility for the preparation or
                                  approval of data for input into a
                                  system which does not necessarily
                                  involve personal access to the system,
                                  but with relatively high risk for
                                  effecting grave damage or realizing
                                  significant personal gain.
                                 Relatively high risk assignments
                                  associated with or directly involving
                                  the accounting, disbursement, or
                                  authorization for disbursement from
                                  systems of (1) dollar amounts of $10
                                  million per year or greater, or (2)
                                  lesser amounts if the activities of
                                  the individual are not subject to
                                  technical review by higher authority
                                  in the ADP-I category to ensure the
                                  integrity of the system.
                                 Positions involving major
                                  responsibility for the direction
                                  planning, design, testing,
                                  maintenance, operation, monitoring,
                                  and/or management of systems hardware
                                  and software.
                                 Other positions as designated by the
                                  agency head that involve relatively
                                  high risk for effecting grave damage
                                  or realizing significant personal
                                  gain.
ADP-II.........................  Responsibility for systems design,
                                  operation, testing, maintenance, and/
                                  or monitoring that is carried out
                                  under technical review of higher
                                  authority in the ADP-I category,
                                  includes, but is not limited to:
                                 (1) access to and/or processing of
                                  proprietary data, information
                                  requiring protection under the Privacy
                                  Act of 1974, and Government-developed
                                  privileged information involving the
                                  award of contracts;

[[Page 661]]

 
                                 (2) accounting, disbursement, or
                                  authorization for disbursement from
                                  systems of dollar amounts less than
                                  $10 million per year. Other positions
                                  are designated by the agency head that
                                  involve a degree of access to a system
                                  that creates a significant potential
                                  for damage or personal gain less than
                                  that in ADP-I positions.
ADP-III........................  All other positions involved in Federal
                                  computer activities.
------------------------------------------------------------------------



PART 155_DEFENSE INDUSTRIAL PERSONNEL SECURITY CLEARANCE PROGRAM--Table of 

Contents



Sec.
155.1 Purpose.
155.2 Applicability and scope.
155.3 Definitions.
155.4 Policy.
155.5 Responsibilities.
155.6 Procedures.

Appendix A to Part 155--Additional Procedural Guidance

    Authority: E.O. 10865, 3 CFR 1959-1963 Comp., p. 398, as amended by 
E.O. 10909, 3 CFR 1959-1963 Comp., p. 437; E.O. 11382, 3 CFR 1966-1970 
Comp., p. 690; and E.O. 12829, 3 CFR 1993 Comp., p. 570.

    Source: 57 FR 5383, Feb. 14, 1992, unless otherwise noted.



Sec. 155.1  Purpose.

    This part updates policy, responsibilities, and procedures of the 
Defense Industrial Personnel Security Clearance Review Program 
implementing E.O. 10865, as amended.

[57 FR 5383, Feb. 14, 1992, as amended at 59 FR 48565, Sept. 22, 1994]



Sec. 155.2  Applicability and scope.

    This part:
    (a) Applies to the Office of the Secretary of Defense, the Military 
Departments, the Chairman of the Joint Chiefs of Staff and the Joint 
Staff, the Inspector General of the Department of Defense (IG, DoD), and 
the Defense Agencies (hereafter referred to collectively as ``the DoD 
Components'').
    (b) By mutual agreement, also extends to other Federal Agencies that 
include:
    (1) Department of Agriculture.
    (2) Department of Commerce.
    (3) Department of Interior.
    (4) Department of Justice.
    (5) Department of Labor.
    (6) Department of State.
    (7) Department of Transportation.
    (8) Department of Treasury.
    (9) Environmental Protection Agency.
    (10) Federal Emergency Management Agency.
    (11) Federal Reserve System.
    (12) General Accounting Office.
    (13) General Services Administration.
    (14) National Aeronautics and Space Administration.
    (15) National Science Foundation.
    (16) Small Business Administration.
    (17) United States Arms Control and Disarmament Agency.
    (18) United States Information Agency.
    (19) United States International Trade Commission.
    (20) United States Trade Representative.
    (c) Applies to cases that the Defense Industrial Security Clearance 
Office (DISCO) forwards to the ``Defense Office of Hearings and Appeals 
(DOHA)'' for action under this part to determine whether it is clearly 
consistent with the national interest to grant or continue a security 
clearance for the applicant.
    (d) Provides a program that may be extended to other security cases 
at the direction of the Assistant Secretary of Defense for Command, 
Control, Communications, and Intelligence (ASD(C\3\I)).
    (e) Does not apply to cases in which:
    (1) A security clearance is withdrawn because the applicant no 
longer has a need for access to classified information;
    (2) An interim security clearance is withdrawn by the DISCO during 
an investigation; or
    (3) A security clearance is withdrawn for administrative reasons 
that are without prejudice as to a later determination of whether the 
grant or continuance of the applicant's security clearance would be 
clearly consistent with the national interest.
    (f) Does not apply to cases for access to sensitive compartmented 
information or a special access program.

[57 FR 5383, Feb. 14, 1992, as amended at 59 FR 35464, July 12, 1994]

[[Page 662]]



Sec. 155.3  Definitions.

    (a) Applicant. Any U.S. citizen who holds or requires a security 
clearance or any immigrant alien who holds or requires a limited access 
authorization for access to classified information needed in connection 
with his or her employment in the private sector; any U.S. citizen who 
is a direct-hire employee or selectee for a position with the North 
Atlantic Treaty Organization (NATO) and who holds or requires NATO 
certificates of security clearance or security assurances for access to 
U.S. or foreign classified information; or any U.S. citizen nominated by 
the Red Cross or United Service Organizations for assignment with the 
Military Services overseas. The term ``applicant'' does not apply to 
those U.S. citizens who are seconded to NATO by U.S. Departments and 
Agencies or to U.S. citizens recruited through such Agencies in response 
to a request from NATO.
    (b) Clearance Decision. A decision made in accordance with this part 
concerning whether it is clearly consistent with the national interest 
to grant an applicant a security clearance for access to Confidential, 
Secret, or Top Secret information. A favorable clearance decision 
establishes eligibility of the applicant to be granted a security 
clearance for access at the level governed by the documented need for 
such access, and the type of investigation specified for that level in 
32 CFR part 154. An unfavorable clearance decision denies any 
application for a security clearance and revokes any existing security 
clearance, thereby preventing access to classified information at any 
level and the retention of any existing security clearance.



Sec. 155.4  Policy.

    It is DoD policy that:
    (a) All proceedings provided for by this part shall be conducted in 
a fair and impartial manner.
    (b) A clearance decision reflects the basis for an ultimate finding 
as to whether it is clearly consistent with the national interest to 
grant or continue a security clearance for the applicant.
    (c) Except as otherwise provided for by E.O. 10865, as amended, or 
this part, a final unfavorable clearance decision shall not be made 
without first providing the applicant with:
    (1) Notice of specific reasons for the proposed action.
    (2) An opportunity to respond to the reasons.
    (3) Notice of the right to a hearing and the opportunity to cross-
examine persons providing information adverse to the applicant.
    (4) Opportunity to present evidence on his or her own behalf, or to 
be represented by counsel or personal representative.
    (5) Written notice of final clearance decisions.
    (6) Notice of appeal procedures.
    (d) Actions pursuant to this part shall cease upon termination of 
the applicant's need for access to classified information except in 
those cases in which:
    (1) A hearing has commenced;
    (2) A clearance decision has been issued; or
    (3) The applicant's security clearance was suspended and the 
applicant provided a written request that the case continue.

[57 FR 5383, Feb. 14, 1992, as amended at 59 FR 48565, Sept. 22, 1994]



Sec. 155.5  Responsibilities.

    (a) The Assistant Secretary of Defense of Command, Control, 
Communications and Intelligence shall:
    (1) Establish investigative policy and adjudicative standards and 
oversee their application.
    (2) Coordinate with the General Counsel of the Department of Defense 
(GC, DoD) on policy affecting clearance decisions.
    (3) Issue clarifying guidance and instructions as needed.
    (b) The General Counsel of the Department of Defense shall:
    (1) Establish guidance and provide oversight as to legal sufficiency 
of procedures and standards established by this part.
    (2) Establish the organization and composition of the DOHA.
    (3) Designate a civilian attorney to be the Director, DOHA.
    (4) Issue clarifying guidance and instructions as needed.

[[Page 663]]

    (5) Administer the program established by this part.
    (6) Issue invitational travel orders in appropriate cases to persons 
to appear and testify who have provided oral or written statements 
adverse to the applicant relating to a controverted issue.
    (7) Designate attorneys to be Department Counsels assigned to the 
DOHA to represent the Government's interest in cases and related matters 
within the applicability and scope of this part.
    (8) Designate attorneys to be Administrative Judges assigned to the 
DOHA.
    (9) Designate attorneys to be Administrative Judge members of the 
DOHA Appeal Board.
    (10) Provide for supervision of attorneys and other personnel 
assigned or attached to the DOHA.
    (11) Develop and implement policy established or coordinated with 
the GC, DoD, in accordance with this part.
    (12) Establish and maintain qualitative and quantitative standards 
for all work by DOHA employees arising within the applicability and 
scope of this part.
    (13) Ensure that the Administrative Judges and Appeal Board members 
have the requisite independence to render fair and impartial decisions 
consistent with DoD policy.
    (14) Provide training, clarify policy, or initiate personnel 
actions, as appropriate, to ensure that all DOHA decisions are made in 
accordance with policy, procedures, and standards established by this 
part.
    (15) Provide for maintenance and control of all DOHA records.
    (16) Take actions as provided for in Sec. 155.6(b), and the 
additional procedural guidance in appendix A to this part.
    (17) Establish and maintain procedures for timely assignment and 
completion of cases.
    (18) Issue guidance and instructions, as needed, to fulfill the 
foregoing responsibilities.
    (19) Designate the Director, DOHA, to implement paragraphs (b)(5) 
through (b)(18) of this section, under general guidance of the GC, DoD.
    (c) The Heads of the DoD Components shall provide (from resources 
available to the designated DoD Component) financing, personnel, 
personnel spaces, office facilities, and related administrative support 
required by the DOHA.
    (d) The ASD(C\3\I) shall ensure that cases within the scope and 
applicability of this part are referred promptly to the DOHA, as 
required, and that clearance decisions by the DOHA are acted upon 
without delay.

[57 FR 5383, Feb. 14, 1992, as amended at 59 FR 35464, July 12, 1994]



Sec. 155.6  Procedures.

    (a) Applicants shall be investigated in accordance with the 
standards in 32 CFR part 154.
    (b) An applicant is required to give, and to authorize others to 
give, full, frank, and truthful answers to relevant and material 
questions needed by the DOHA to reach a clearance decision and to 
otherwise comply with the procedures authorized by this part. The 
applicant may elect on constitutional or other grounds not to comply; 
but refusal or failure to furnish or authorize the providing of relevant 
and material information or otherwise cooperate at any stage in the 
investigation or adjudicative process may prevent the DOHA from making a 
clearance decision. If an applicant fails or refuses to:
    (1) Provide relevant and material information or to authorize others 
to provide such information; or
    (2) Proceed in a timely or orderly fashion in accordance with this 
part; or
    (3) Follow directions of an Administrative Judge or the Appeal 
Board; then the Director, DOHA, or designee, may revoke any security 
clearance held by the applicant and discontinue case processing. 
Requests for resumption of case processing and reinstatement of a 
security clearance may be approved by the Director, DOHA, only upon a 
showing of good cause. If the request is denied, in whole or in part, 
the decision is final and bars reapplication for a security clearance 
for 1 year from the date of the revocation.
    (c) Each clearance decision must be a fair and impartial common 
sense determination based upon consideration of all the relevant and 
material information and the pertinent criteria in 32 CFR 154.7 and 
adjudication policy in appendix H to 32 CFR part 154, including as 
appropriate:

[[Page 664]]

    (1) Nature and seriousness of the conduct and surrounding 
circumstances.
    (2) Frequency and recency of the conduct.
    (3) Age of the applicant.
    (4) Motivation of the applicant, and the extent to which the conduct 
was negligent, willful, voluntary, or undertaken with knowledge of the 
consequences involved.
    (5) Absence or presence of rehabilitation.
    (6) Probability that the circumstances or conduct will continue or 
recur in the future.
    (d) Whenever there is a reasonable basis for concluding that an 
applicant's continued access to classified information poses an imminent 
threat to the national interest, any security clearance held by the 
applicant may be suspended by the ASD(C\3\I), with the concurrence of 
the GC, DoD, pending a final clearance decision. This suspension may be 
rescinded by the same authorities upon presentation of additional 
information that conclusively demonstrates that an imminent threat to 
the national interest no longer exists. Procedures in appendix A to this 
part shall be expedited whenever an applicant's security clearance has 
been suspended pursuant to this section.
    (e) Nothing contained in this part shall limit or affect the 
responsibility and powers of the Secretary of Defense or the head of 
another Department or Agency to deny or revoke a security clearance when 
the security of the nation so requires. Such authority may not be 
delegated and may be exercised only when the Secretary of Defense or the 
head of another Department or Agency determines that the hearing 
procedures and other provisions of this part cannot be invoked 
consistent with the national security. Such a determination shall be 
conclusive.
    (f) Additional procedural guidance is in appendix A to this part.

[57 FR 5383, Feb. 14, 1992, as amended at 59 FR 35464, July 12, 1994]



       Sec. Appendix A to Part 155--Additional Procedural Guidance

    1. When the DISCO cannot affirmatively find that it is clearly 
consistent with the national interest to grant or continue a security 
clearance for an applicant, the case will be promptly referred to the 
DOHA.
    2. Upon referral, the DOHA shall make a prompt determination whether 
to grant or continue a security clearance, issue a statement of reasons 
(SOR) as to why it is not clearly consistent with the national interest 
to do so, or take interim actions, including but not limited to:
    a. Direct further investigation.
    b. Propound written interrogatories to the applicant or other 
persons with relevant information.
    c. Requiring the applicant to undergo a medical evaluation by a DoD 
Psychiatric Consultant.
    d. Interviewing the applicant.
    3. An unfavorable clearance decision shall not be made unless the 
applicant has been provided with a written SOR that shall be as detailed 
and comprehensive as the national security permits. A letter of 
instruction with the SOR shall explain that the applicant or Department 
Counsel may request a hearing. It shall also explain the adverse 
consequences for failure to respond to the SOR within the prescribed 
time frame.
    4. The applicant must submit a detailed written answer to the SOR 
under oath or affirmation that shall admit or deny each listed 
allegation. A general denial or other similar answer is insufficient. To 
be entitled to a hearing, the applicant must specifically request a 
hearing in his or her answer. The answer must be received by the DOHA 
within 20 days from receipt of the SOR. Requests for an extension of 
time to file an answer may be submitted to the Director, DOHA, or 
designee, who in turn may grant the extension only upon a showing of 
good cause.
    5. If the applicant does not file a timely and responsive answer to 
the SOR, the Director, DOHA, or designee, may discontinue processing the 
case, deny issuance of the requested security clearance, and direct the 
DISCO to revoke any security clearance held by the applicant.
    6. Should review of the applicant's answer to the SOR indicate that 
allegations are unfounded, or evidence is insufficient for further 
processing, Department Counsel shall take such action as appropriate 
under the circumstances, including but not limited to withdrawal of the 
SOR and transmittal to the Director for notification of the DISCO for 
appropriate action.
    7. If the applicant has not requested a hearing with his or her 
answer to the SOR and Department Counsel has not requested a hearing 
within 20 days of receipt of the applicant's answer, the case shall be 
assigned to an Administrative Judge for a clearance decision based on 
the written record. Department Counsel shall provide the applicant with 
a copy of all relevant and material information that could be adduced at 
a hearing. The applicant shall have 30 days from

[[Page 665]]

receipt of the information in which to submit a documentary response 
setting forth objections, rebuttal, extenuation, mitigation, or 
explanation, as appropriate.
    8. If a hearing is requested by the applicant or Department Counsel, 
the case shall be assigned to an Administrative Judge for a clearance 
decision based on the hearing record. Following issuance of a notice of 
hearing by the Administrative Judge, or designee, the applicant shall 
appear in person with or without counsel or a personal representative at 
a time and place designated by the notice of hearing. The applicant 
shall have a reasonable time to prepare his or her case. The applicant 
shall be notified at least 15 days in advance of the time and place of 
the hearing, which generally shall be held at a location in the United 
States within a metropolitan area near the applicant's place of 
employment or residence. A continuance may be granted by the 
Administrative Judge only for good cause. Hearings may be held outside 
of the United States in NATO cases, or in other cases upon a finding of 
good cause by the Director, DOHA, or designee.
    9. The Administrative Judge may require a prehearing conference.
    10. The Administrative Judge may rule on questions of procedure, 
discovery, and evidence and shall conduct all proceedings in a fair, 
timely, and orderly manner.
    11. Discovery by the applicant is limited to non-privileged 
documents and materials subject to control by the DOHA. Discovery by 
Department Counsel after issuance of an SOR may be granted by the 
Administrative Judge only upon a showing of good cause.
    12. A hearing shall be open except when the applicant requests that 
it be closed, or when the Administrative Judge determines that there is 
a need to protect classified information or there is other good cause 
for keeping the proceeding closed. No inference shall be drawn as to the 
merits of a case on the basis of a request that the hearing be closed.
    13. As far in advance as practical, Department Counsel and the 
applicant shall serve one another with a copy of any pleading, proposed 
documentary evidence, or other written communication to be submitted to 
the Administrative Judge.
    14. Department Counsel is responsible for presenting witnesses and 
other evidence to establish facts alleged in the SOR that have been 
controverted.
    15. The applicant is responsible for presenting witnesses and other 
evidence to rebut, explain, extenuate, or mitigate facts admitted by the 
applicant or proven by Department Counsel, and has the ultimate burden 
of persuasion as to obtaining a favorable clearance decision.
    16. Witnesses shall be subject to cross-examination.
    17. The SOR may be amended at the hearing by the Administrative 
Judge on his or her own motion, or upon motion by Department Counsel or 
the applicant, so as to render it in conformity with the evidence 
admitted or for other good cause. When such amendments are made, the 
Administrative Judge may grant either party's request for such 
additional time as the Administrative Judge may deem appropriate for 
further preparation or other good cause.
    18. The Administrative Judge hearing the case shall notify the 
applicant and all witnesses testifying that 18 U.S.C. 1001 is 
applicable.
    19. The Federal Rules of Evidence (28 U.S.C. 101 et seq.) shall 
serve as a guide. Relevant and material evidence may be received subject 
to rebuttal, and technical rules of evidence may be relaxed, except as 
otherwise provided herein, to permit the development of a full and 
complete record.
    20. Official records or evidence compiled or created in the regular 
course of business, other than DoD personnel background reports of 
investigation (ROI), may be received and considered by the 
Administrative Judge without authenticating witnesses, provided that 
such information has been furnished by an investigative agency pursuant 
to its responsibilities in connection with assisting the Secretary of 
Defense, or the Department or Agency head concerned, to safeguard 
classified information within industry under to E.O. 10865, as amended. 
An ROI may be received with an authenticating witness provided it is 
otherwise admissible under the Federal Rules of Evidence (28 U.S.C. 101 
et seq.).
    21. Records that cannot be inspected by the applicant because they 
are classified may be received and considered by the Administrative 
Judge, provided the GC, DoD, has:
    a. Made a preliminary determination that such evidence appears to be 
relevant and material.
    b. Determined that failure to receive and consider such evidence 
would be substantially harmful to the national security.
    22. A written or oral statement adverse to the applicant on a 
controverted issue may be received and considered by the Administrative 
Judge without affording an opportunity to cross-examine the person 
making the statement orally, or in writing when justified by the 
circumstances, only in either of the following circumstances:
    a. If the head of the Department or Agency supplying the statement 
certifies that the person who furnished the information is a 
confidential informant who has been engaged in obtaining intelligence 
information for the Government and that disclosure of his or her 
identity would be substantially harmful to the national interest; or
    b. If the GC, DoD, has determined the statement concerned appears to 
be relevant, material, and reliable; failure to receive and

[[Page 666]]

consider the statement would be substantially harmful to the national 
security; and the person who furnished the information cannot appear to 
testify due to the following:
    (1) Death, severe illness, or similar cause, in which case the 
identity of the person and the information to be considered shall be 
made available to the applicant; or
    (2) Some other cause determined by the Secretary of Defense, or when 
appropriate by the Department or Agency head, to be good and sufficient.
    23. Whenever evidence is received under item 21. or 22., the 
applicant shall be furnished with as comprehensive and detailed a 
summary of the information as the national security permits. The 
Administrative Judge and Appeal Board may make a clearance decision 
either favorable or unfavorable to the applicant based on such evidence 
after giving appropriate consideration to the fact that the applicant 
did not have an opportunity to confront such evidence, but any final 
determination adverse to the applicant shall be made only by the 
Secretary of Defense, or the Department or Agency head, based on a 
personal review of the case record.
    24. A verbatim transcript shall be made of the hearing. The 
applicant shall be furnished one copy of the transcript, less the 
exhibits, without cost.
    25. The Administrative Judge shall make a written clearance decision 
in a timely manner setting forth pertinent findings of fact, policies, 
and conclusions as to the allegations in the SOR, and whether it is 
clearly consistent with the national interest to grant or continue a 
security clearance for the applicant. The applicant and Department 
Counsel shall each be provided a copy of the clearance decision. In 
cases in which evidence is received under items 21. and 22., the 
Administrative Judge's written clearance decision may require deletions 
in the interest of national security.
    26. If the Administrative Judge decides that it is clearly 
consistent with the national interest for the applicant to be granted or 
to retain a security clearance, the DISCO shall be so notified by the 
Director, DOHA, or designee, when the clearance decision becomes final 
in accordance with item 36., below.
    27. If the Administrative Judge decides that it is not clearly 
consistent with the national interest for the applicant to be granted or 
to retain a security clearance, the Director, DOHA, or designee, shall 
expeditiously notify the DISCO, which shall in turn notify the 
applicant's employer of the denial or revocation of the applicant's 
security clearance. The letter forwarding the Administrative Judge's 
clearance decision to the applicant shall advise the applicant that 
these actions are being taken, and that the applicant may appeal the 
Administrative Judge's clearance decision.
    28. The applicant or Department Counsel may appeal the 
Administrative Judge's clearance decision by filing a written notice of 
appeal with the Appeal Board within 15 days after the date of the 
Administrative Judge's clearance decision. A notice of appeal received 
after 15 days from the date of the clearance decision shall not be 
accepted by the Appeal Board, or designated Board Member, except for 
good cause. A notice of cross appeal may be filed with the Appeal Board 
within 10 days of receipt of the notice of appeal. An untimely cross 
appeal shall not be accepted by the Appeal Board, or designated Board 
Member, except for good cause.
    29. Upon receipt of a notice of appeal, the Appeal Board shall be 
provided the case record. No new evidence shall be received or 
considered by the Appeal Board.
    30. After filing a timely notice of appeal, a written appeal brief 
must be received by the Appeal Board within 45 days from the date of the 
Administrative Judge's clearance decision. The appeal brief must state 
the specific issue or issues being raised, and cite specific portions of 
the case record supporting any alleged error. A written reply brief, if 
any, must be filed within 20 days from receipt of the appeal brief. A 
copy of any brief filed must be served upon the applicant or Department 
Counsel, as appropriate.
    31. Requests for extension of time for submission of briefs may be 
submitted to the Appeal Board or designated Board Member.
    A copy of any request for extension of time must be served on the 
opposing party at the time of submission. The Appeal Board, or 
designated Board Member, shall be responsible for controlling the Appeal 
Board's docket, and may enter an order dismissing an appeal in an 
appropriate case or vacate such an order upon a showing of good cause.
    32. The Appeal Board shall address the material issues raised by the 
parties to determine whether harmful error occurred. Its scope of review 
shall be to determine whether or not:
    a. The Administrative Judge's findings of fact are supported by such 
relevant evidence as a reasonable mind might accept as adequate to 
support a conclusion in light of all the contrary evidence in the same 
record. In making this review, the Appeal Board shall give deference to 
the credibility determinations of the Administrative Judge;
    b. The Administrative Judge adhered to the procedures required by 
E.O. 10865, as amended and this part; or
    c. The Administrative Judge's rulings or conclusions are arbitrary, 
capricious, or contrary to law.
    33. The Appeal Board shall issue a written clearance decision 
addressing the material

[[Page 667]]

issues raised on appeal. The Appeal Board shall have authority to:
    a. Affirm the decision of the Administrative Judge;
    b. Remand the case to an Administrative Judge to correct identified 
error. If the case is remanded, the Appeal Board shall specify the 
action to be taken on remand; or
    c. Reverse the decision of the Administrative Judge if correction of 
identified error mandates such action.
    34. A copy of the Appeal Board's written clearance decision shall be 
provided to the parties. In cases in which evidence was received under 
items 21. and 22., the Appeal Board's clearance decision may require 
deletions in the interest of national security.
    35. Upon remand, the case file shall be assigned to an 
Administrative Judge for correction of error(s) in accordance with the 
Appeal Board's clearance decision. The assigned Administrative Judge 
shall make a new clearance decision in the case after correcting the 
error(s) identified by the Appeal Board. The Administrative Judge's 
clearance decision after remand shall be provided to the parties. The 
clearance decision after remand may be appealed pursuant to items 28. to 
35.
    36. A clearance decision shall be considered final when:
    a. A security clearance is granted or continued pursuant to item 2.;
    b. No timely notice of appeal is filed;
    c. No timely appeal brief is filed after a notice of appeal has been 
filed;
    d. The appeal has been withdrawn;
    e. When the Appeal Board affirms or reverses an Administrative 
Judge's clearance decision; or
    f. When a decision has been made by the Secretary of Defense, or the 
Department or Agency head, under item 23.
    The Director, DOHA, or designee, shall notify the DISCO of all final 
clearance decisions.
    37. An applicant whose security clearance has been finally denied or 
revoked by the DOHA is barred from reapplication for 1 year from the 
date of the initial unfavorable clearance decision.
    38. A reapplication for a security clearance must be made initially 
by the applicant's employer to the DISCO and is subject to the same 
processing requirements as those for a new security clearance 
application. The applicant shall thereafter be advised he is responsible 
for providing the Director, DOHA, with a copy of any adverse clearance 
decision together with evidence that circumstances or conditions 
previously found against the applicant have been rectified or 
sufficiently mitigated to warrant reconsideration.
    39. If the Director, DOHA, determines that reconsideration is 
warranted, the case shall be subject to this part for making a clearance 
decision.
    40. If the Director, DOHA, determines that reconsideration is not 
warranted, the DOHA shall notify the applicant of this decision. Such a 
decision is final and bars further reapplication for an additional one 
year period from the date of the decision rejecting the application.
    41. Nothing in this part is intended to give an applicant reapplying 
for a security clearance any greater rights than those applicable to any 
other applicant under this part.
    42. An applicant may file a written petition, under oath or 
affirmation, for reimbursement of loss of earnings resulting from the 
suspension, revocation, or denial of his or her security clearance. The 
petition for reimbursement must include as an attachment the favorable 
clearance decision and documentation supporting the reimbursement claim. 
The Director, DOHA, or designee, may in his or her discretion require 
additional information from the petitioner.
    43. Claims for reimbursement must be filed with the Director, DOHA, 
or designee, within 1 year after the date the security clearance is 
granted. Department Counsel generally shall file a response within 60 
days after receipt of applicant's petition for reimbursement and provide 
a copy thereof to the applicant.
    44. Reimbursement is authorized only if the applicant demonstrates 
by clear and convincing evidence to the Director, DOHA, that all of the 
following conditions are met:
    a. The suspension, denial, or revocation was the primary cause of 
the claimed pecuniary loss; and
    b. The suspension, denial, or revocation was due to gross negligence 
of the Department of Defense at the time the action was taken, and not 
in any way by the applicant's failure or refusal to cooperate.
    45. The amount of reimbursement shall not exceed the difference 
between the earnings of the applicant at the time of the suspension, 
revocation, or denial and the applicant's interim earnings, and further 
shall be subject to reasonable efforts on the part of the applicant to 
mitigate any loss of earnings. No reimbursement shall be allowed for any 
period of undue delay resulting from the applicant's acts or failure to 
act. Reimbursement is not authorized for loss of merit raises and 
general increases, loss of employment opportunities, counsel's fees, or 
other costs relating to proceedings under this part.
    46. Claims approved by the Director, DOHA, shall be forwarded to the 
Department or Agency concerned for payment. Any payment made in response 
to a claim for reimbursement shall be in full satisfaction of any 
further claim against the United States or any Federal Department or 
Agency, or any of its officers or employees.

[[Page 668]]

    47. Clearance decisions issued by Administrative Judges and the 
Appeal Board shall be indexed and made available in redacted form to the 
public.

[57 FR 5383, Feb. 14, 1992, as amended at 59 FR 35464, July 12, 1994; 59 
FR 48565, Sept. 22, 1994]



PART 156_DEPARTMENT OF DEFENSE PERSONNEL SECURITY PROGRAM (DoDPSP)--Table of 

Contents



Sec.
156.1 Purpose.
156.2 Applicability and scope.
156.3 Policy
156.4 Responsibilities.

    Authority: 50 U.S.C. 781.

    Source: 58 FR 42855, Aug. 12, 1993, unless otherwise noted.



Sec. 156.1  Purpose.

    This part:
    (a) Updates the policy and responsibilities for the DoDPSP under 
Pub. L. 81-832; E.O. 10450, 18 FR 2489, 3 CFR, 1949-1953 Comp., p. 936; 
E.O. 10865, 25 FR 1583, 3 CFR, 1959-1963 Comp., p. 398; E.O. 12333, 46 
FR 59941, 3 CFR, 1981 Comp., p.200; and E.O. 12356, 47 FR 14874 and 
15557, 3 CFR 1982 Comp., p. 166.
    (b) Continues to authorize the publication of DoD 5200.2-R \1\ in 
accordance with DoD 5025.1-M. \2\
---------------------------------------------------------------------------

    \1\ Copies may be obtained at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
    \2\ See footnote 1 to 156.1(b).
---------------------------------------------------------------------------



Sec. 156.2  Applicability and scope.

    This part applies to:
    (a) The Office of the Secretary of Defense, the Military Departments 
(including the Coast Guard when it is operating as a Military Service in 
the Navy), the Chairman of the Joint Chiefs of Staff and the Joint 
Staff, the Unified and Specified Commands, and the Defense Agencies, 
except as provided for the National Security Agency (NSA) in paragraph 
(b) of this section (hereafter referred to collectively as ``the DoD 
Components'').
    (b) The NSA is exempt from the provisions of this Directive. The 
personnel security program for the NSA is implemented pursuant to DoD 
Directive 5210.45, \3\ and internal regulations of the NSA.
---------------------------------------------------------------------------

    \3\ See footnote 1 to 156.1(b).
---------------------------------------------------------------------------

    (c) DoD military and civilian personnel, consultants to the 
Department of Defense, contractors cleared under the Defense Industrial 
Security Program (DISP) Regulations DoD 5220.22 \4\ and others 
affiliated with the Department of Defense.
---------------------------------------------------------------------------

    \4\ See footnote 1 to 156.1(b).
---------------------------------------------------------------------------



Sec. 156.3  Policy.

    It is DoD policy that:
    (a) No person shall be appointed as a civilian employee of the 
Department of Defense, accepted for entrance into the Armed Forces of 
the United States, authorized access to classified information, or 
assigned to duties that are subject to investigation under this part 
unless such appointment, acceptance, clearance, or assignment is clearly 
consistent with the interests of national security.
    (b) A personnel security clearance shall be granted and assignment 
to sensitive duties shall be authorized only to U.S. citizens. As an 
exception, a non-U.S. citizen may, by an authorized official (as 
specified in 32 CFR part 154) be assigned to sensitive duties or granted 
a Limited Access Authorization for access to classified information if 
there is a need for access in support of a specific DoD program, 
project, or contract.
    (c) The personnel security standard that shall be applied in 
determining a person's eligibility for a security clearance or 
assignment to sensitive duties is whether, based on all available 
information, the person's allegiance, trustworthiness, reliability, and 
judgment are such that the person can reasonably to expected to comply 
with Government policy and procedures for safeguarding classified 
information and performing sensitive duties.
    (d) 32 CFR part 154 shall identify those positions and duties that 
require a personnel security investigation (PSI). A PSI is required for:
    (1) Appointment to a sensitive civilian position.
    (2) Entry into military service.

[[Page 669]]

    (3) The granting of a security clearance or approval for access to 
classified information.
    (4) Assignment to other duties that require a personnel security or 
trustworthiness determination.
    (5) Continuing eligibility for retention of a security clearance and 
approval for access to classified information or for assignment to other 
sensitive duties.
    (e) 32 CFR part 154 shall contain personnel security criteria and 
adjudicative guidance to assist in determining whether an individual 
meets the clearance and sensitive position standards referred to in 
paragraphs (a) and (c) of this section.
    (f) No unfavorable personnel security determination shall be made 
except in accordance with procedures set forth in 32 CFR part 154 or 32 
CFR part 155 or as otherwise authorized by law.



Sec. 156.4  Responsibilities.

    (a) The Assistant Secretary of Defense for Command, Control, 
Communications, and Intelligence shall:
    (1) Be responsible for overall policy, guidance, and control of the 
DoDPSP.
    (2) Develop and implement plans, policies, and procedures for the 
DoDPSP.
    (3) Issue and maintain DoD 5200.2-R consistent with DoD 5025.1-M.
    (4) Conduct an active oversight program to ensure compliance with 
DoDPSP requirements.
    (5) Ensure that research is conducted to assess and improve the 
effectiveness of the DoDPSP (DoD Directive 5210.79 \5\).
---------------------------------------------------------------------------

    \5\ See footnote 1 to 156.1(b).
---------------------------------------------------------------------------

    (6) Ensure that the Defense Investigative Service is operated 
pursuant to 32 CFR part 361.
    (7) Ensure that the DoD Security Institute provides the education, 
training, and awareness support to the DoDPSP under DoD Directive 
5200.32. \6\
---------------------------------------------------------------------------

    \6\ See footnote 1 to 156.1(b).
---------------------------------------------------------------------------

    (8) Be authorized to make exceptions to the requirements of this 
part on a case-by-case basis when it is determined that doing so 
furthers the mission of the Department of Defense and is consistent with 
the protection of classified information from unauthorized disclosure.
    (b) The General Counsel of the Department of Defense shall:
    (1) Be responsible for providing advice and guidance as to the legal 
sufficiency of procedures and standards implementing the DoDPSP and the 
DISP.
    (2) Exercise oversight of PSP appeals procedures to verify that the 
rights of individuals are being protected consistent with the 
constitution, laws of the United States, Executive Orders, Directives, 
or Regulations that implement the DoDPSP and DISP, and with the 
interests of national security.
    (c) The Heads of the DoD Components shall:
    (1) Designate a senior official who shall be responsible for 
implementing the DoDPSP within their components.
    (2) Ensure that the DoDPSP is properly administered under this 
Directive within their components.
    (3) Ensure that information and recommendations are provided to the 
Assistant Secretary of Defense for Command, Control, Communications, and 
Intelligence on any aspect of the program.



PART 159_PRIVATE SECURITY CONTRACTORS OPERATING IN CONTINGENCY OPERATIONS--

Table of Contents



Sec.
159.1 Purpose.
159.2 Applicability and scope.
159.3 Definitions.
159.4 Policy.
159.5 Responsibilities.
159.6 Procedures.

    Authority: Public Law 110-181; Pub. L. 110-417.

    Source: 74 FR 34691, July 17, 2009, unless otherwise noted.



Sec. 159.1  Purpose.

    This part establishes policy, assigns responsibilities and provides 
procedures for the regulation of the selection, accountability, 
training, equipping, and conduct of personnel performing private 
security functions under a covered contract. It also assigns 
responsibilities and establishes procedures for incident reporting, use 
of and accountability for equipment, rules for the use of force, and a 
process

[[Page 670]]

for administrative action or the removal, as appropriate, of PSCs and 
PSC personnel.



Sec. 159.2  Applicability and scope.

    This part:
    (a) Applies to:
    (1) The Office of the Secretary of Defense, the Military 
Departments, the Office of the Chairman of the Joint Chiefs of Staff and 
the Joint Staff, the Combatant Commands, the Office of the Inspector 
General of the Department of Defense, the Defense Agencies, the DoD 
Field Activities, and all other organizational entities in the 
Department of Defense (hereafter referred to as the ``DoD Components'').
    (2) The Department of State and other U.S. Federal agencies insofar 
as it implements the requirements of section 862 of Public Law 110-181. 
Specifically, in areas of operations which require enhanced coordination 
of PSC and PSC personnel working for U.S. Government (U.S.G.) agencies, 
the Secretary of Defense may designate such areas as areas of combat 
operations for the limited purposes of this part. In such an instance, 
the standards established in accordance with this part would, in 
coordination with the Secretary of State, expand from covering only DoD 
PSCs and PSC personnel to cover all U.S.G.-funded PSCs and PSC personnel 
operating in the designated area.
    (b) Prescribes policies applicable to all:
    (1) DoD PSCs and PSC personnel performing private security functions 
during contingency operations outside the United States.
    (2) USG-funded PSCs and PSC personnel performing private security 
functions in an area of combat operations, as designated by the 
Secretary of Defense.



Sec. 159.3  Definitions.

    Unless otherwise noted, these terms and their definitions are for 
the purpose of this part.
    Area of combat operations. An area of operations designated as such 
by the Secretary of Defense for the purpose of this part, when enhanced 
coordination of PSCs working for U.S.G. agencies is required.
    Contingency operation. A military operation that is either 
designated by the Secretary of Defense as a contingency operation or 
becomes a contingency operation as a matter of law (10 U.S.C. 
101(a)(13)). It is a military operation that: a. Is designated by the 
Secretary of Defense as an operation in which members of the Armed 
Forces are or may become involved in military actions, operations, or 
hostilities against an enemy of the United States or against an opposing 
force; or b. Is created by definition of law. Under 10 U.S.C. 
101(a)(13)(B), a contingency operation exists if a military operation 
results in the (1) call-up to (or retention on) active duty of members 
of the uniformed Services under certain enumerated statutes (10 U.S.C. 
688, 12301(a), 12302, 12304, 12305, 12406, or 331-335); and (2) the 
call-up to (or retention on) active duty of members of the uniformed 
Services under any other (non-enumerated) provision of law during war or 
national emergency declared by the President or Congress. These may 
include humanitarian or peacekeeping operations or other military 
operations or exercises.
    Contractor. The contractor, subcontractor, grantee, or other party 
carrying out the covered contract.
    Covered contract. A DoD contract for performance of services in an 
area of contingency operations or a contract of a non-DoD Federal agency 
for performance of services in an area of combat operations, as 
designated by the Secretary of Defense;
    A subcontract at any tier under such a contract; or
    A task order or delivery order issued under such a contract or 
subcontract.
    Also includes contracts or subcontracts funded under grants and sub-
grants by a Federal agency for performance in an area of combat 
operations as designated by the Secretary of Defense. Excludes temporary 
arrangements entered into by non-DoD contractors or grantees for the 
performance of private security functions by individual indigenous 
personnel not affiliated with a local or expatriate security company. 
Such arrangements must still be in compliance with local law.

[[Page 671]]

    Private security functions. Activities engaged in by a contractor 
under a covered contract as follows:
    (1) Guarding of personnel, facilities, designated sites, or property 
of a Federal agency, the contractor or subcontractor, or a third 
party.\1\
---------------------------------------------------------------------------

    \1\ Contractors performing private security functions are not 
authorized to perform inherently governmental functions. In this regard, 
they are limited to a defensive response to hostile acts or demonstrated 
hostile intent.
---------------------------------------------------------------------------

    (2) Any other activity for which personnel are required to carry 
weapons in the performance of their duties. For the DoD, DoDI 
Instruction 3020.41, ``Contractor Personnel Authorized to Accompany the 
U.S. Armed Forces,'' \2\ prescribes policies related to personnel 
allowed to carry weapons for self defense.
---------------------------------------------------------------------------

    \2\ Available at http://www.dtic.mil/whs/directives/corres/pdf/
302041p.pdf.
---------------------------------------------------------------------------

    PSC. During contingency operations ``PSC'' means a company employed 
by the DoD performing private security functions under a covered 
contract. In a designated area of combat operations, the term ``PSC'' 
expands to include all companies employed by U.S.G. agencies performing 
private security functions under a covered contract.
    PSC personnel. Any individual performing private security functions 
under a covered contract.



Sec. 159.4  Policy.

    (a) Consistent with the requirements of paragraph (a)(2) of section 
862 of Public Law 110-181, the selection, training, equipping, and 
conduct of PSC personnel including the establishment of appropriate 
processes shall be coordinated between the DoD and the Department of 
State.
    (b) Geographic Combatant Commanders will provide tailored PSC 
guidance and procedures for the operational environment in their Area of 
Responsibility (AOR) in accordance with this part, the Federal 
Acquisition Regulation (FAR) \3\ and the Defense Federal Acquisition 
Regulation Supplement (DFARS).\4\
---------------------------------------------------------------------------

    \3\ Published in Title 48 of the Code of Federal Regulations.
    \4\ Published in Title 48 of the Code of Federal Regulations.
---------------------------------------------------------------------------

    (c) In a designated area of combat operations, the relevant Chief of 
Mission will be responsible for developing and issuing implementing 
instructions for non-DoD PSCs and their personnel consistent with the 
standards set forth by the geographic Combatant Commander in accordance 
with paragraph (b) of this section. The Chief of Mission has the option 
to instruct non DoD PSCs and their personnel to follow the guidance and 
procedures developed by the Geographic Combatant Commander and/or 
Subordinate Commander.
    (d) The requirements of this part shall not apply to contracts 
entered into by elements of the intelligence community in support of 
intelligence activities.



Sec. 159.5  Responsibilities.

    (a) The Assistant Deputy Under Secretary of Defense for Program 
Support, under the authority, direction, and control of the Deputy Under 
Secretary of Defense for Logistics and Materiel Readiness, shall monitor 
the registering, processing, and accounting of PSC personnel in an area 
of contingency operations.
    (b) The Director, Defense Procurement and Acquisition Policy, under 
the authority, direction, and control of the Deputy Under Secretary of 
Defense for Acquisition and Technology (DUSD(AT)), shall ensure that the 
DFARS and (in consultation with the other members of the FAR Council) 
the FAR provide appropriate guidance and contract clauses consistent 
with this part and paragraph (b) of section 862 of Public Law 110-181.
    (c) The Director, Defense Business Transformation Agency, under the 
authority, direction, and control of the Deputy Chief Management Officer 
of the Department of Defense, through the DUSD(AT), shall ensure that 
information systems effectively support the accountability and 
visibility of contracts, contractors, and specified equipment associated 
with private security functions.

[[Page 672]]

    (d) The Chairman of the Joint Chiefs of Staff shall ensure that 
joint doctrine is consistent with the principles established by DoD 
Directive 3020.49 ``Orchestrating, Synchronizing, and Integrating 
Program Management of Contingency Acquisition Planning and Its 
Operational Execution,'' \5\ DoD Instruction 3020.41, ``Contractor 
Personnel Authorized to Accompany the U.S. Armed Forces,'' and this 
part.
---------------------------------------------------------------------------

    \5\ Available from http://www.dtic.mil/whs/directives/corres/pdf/
302040p.pdf.
---------------------------------------------------------------------------

    (e) The geographic Combatant Commanders in whose AOR a contingency 
operation is occurring, and within which PSCs and PSC personnel perform 
under covered contracts, shall:
    (1) Provide guidance and procedures, as necessary and consistent 
with the principles established by DoD Directive 3020.49, 
``Orchestrating, Synchronizing, and Integrating Program Management of 
Contingency Acquisition Planning and Its Operational Execution,'' DoD 
Instruction 3020.41, ``Contractor Personnel Authorized to Accompany the 
U.S. Armed Forces,'' \6\ and this part, for the selection, training, 
accountability and equipping of such PSC personnel and the conduct of 
PSCs and PSC personnel within their AOR. Individual training and 
qualification standards shall meet, at a minimum, one of the Military 
Departments' established standards.
---------------------------------------------------------------------------

    \6\ Available from http://www.dtic.mil/whs/directives/corres/html/
302041.htm.
---------------------------------------------------------------------------

    Within a geographic Combatant Command, Subordinate Commanders shall 
be responsible for developing and issuing implementing procedures as 
warranted by the situation, operation, and environment, in consultation 
with the relevant Chief of Mission in designated areas of combat 
operations.
    (2) Through the Contracting Officer, ensure that PSC personnel 
acknowledge, through their PSC, their understanding and obligation to 
comply with the terms and conditions of their covered contracts.
    (3) Issue written authorization to the PSC identifying individual 
PSC personnel who are authorized to be armed. Rules for the use of 
force, developed in accordance with Chairman of the Joint Chief of Staff 
Instruction 3121.01B, ``Standing Rules of Engagement/Standing Rules for 
the Use of Force for U.S. Forces,'' \7\ shall be included with the 
written authorization.
---------------------------------------------------------------------------

    \7\ CJCSI 3121.01B provides guidance on the standing rules of 
engagement (SROE) and establishes standing rules for the use of force 
(SRUF) for DOD operations worldwide. This document is classified secret. 
CJCSI 3121.01B is available via Secure Internet Protocol Router Network 
at http://js.smil.mil If the requester is not an authorized user of the 
classified network, the requester should contact Joint Staff J-3 at 703-
614-0425.
---------------------------------------------------------------------------

    (4) Ensure that the procedures, orders, directives and instructions 
prescribed Sec. 159.6(a) of this part are available through a single 
location (to include an Internet Web site, consistent with security 
considerations and requirements).
    (f) The Heads of the DoD Components shall:
    (1) Ensure that all private security-related requirement documents 
are in compliance with the procedures listed in Sec. 159.6 of this part 
and the guidance and procedures issued by the geographic Combatant 
Command,
    (2) Ensure private security-related contracts contain the 
appropriate clauses in accordance with the applicable FAR clause and 
include additional mission-specific requirements as appropriate.



Sec. 159.6  Procedures.

    (a) Standing Combatant Command Guidance and Procedures. Each 
geographic Combatant Commander shall develop and publish guidance and 
procedures for PSCs and PSC personnel operating during a contingency 
operation within their AOR, consistent with applicable law; this part; 
applicable Military Department publications; and other applicable DoD 
issuances to include DoD Directive 3020.49, ``Orchestrating, 
Synchronizing, and Integrating Program Management of Contingency 
Acquisition Planning and Its Operational Execution,'' DFARS, DoD 
Directive 2311.01E, ``DoD Law of War Program,'' \8\ DoD 5200.8-R, 
``Physical Security Program,'' \9\ CJCSI 3121.01B,

[[Page 673]]

``Standing Rules of Engagement/Standing Rules for the Use of Force for 
U.S. Forces,'' and DoD Directive 5210.56, ``Use of Deadly Force and the 
Carrying of Firearms by DoD Personnel Engaged in Law Enforcement and 
Security Duties.'' \10\ The guidance and procedures shall:
---------------------------------------------------------------------------

    \8\ Available at http://www.dtic.mil/whs/directives/corres/html/
231101.htm.
    \9\ Available at http://www.dtic.mil/whs/directives/corres/pdf/
520008r.pdf.
    \10\ Available at http://www.dtic.mil/whs/directives/corres/html/
521056.htm.
---------------------------------------------------------------------------

    (1) Contain, at a minimum, procedures to implement the following 
processes, and identify the organization responsible for managing these 
processes:
    (i) Registering, processing, accounting for and keeping appropriate 
records of PSCs and PSC personnel in accordance with DoD Instruction 
3020.41, ``Contractor Personnel Authorized to Accompany the U.S. Armed 
Forces.''
    (ii) PSC verification that PSC personnel meet all the legal, 
training, and qualification requirements for authorization to carry a 
weapon in accordance with the terms and conditions of their contract and 
host country law. Weapons accountability procedures will be established 
and approved prior to the weapons authorization.
    (iii) Arming of PSC personnel. Requests for permission to arm PSC 
personnel shall be reviewed on a case-by-case basis by the appropriate 
Staff Judge Advocate to the geographic Combatant Commander (or a 
designee) to ensure there is a legal basis for approval. The request 
will then be approved or denied by the geographic Combatant Commander or 
a specifically identified designee, no lower than the flag officer 
level. Requests to arm non-DOD PSC personnel shall be reviewed and 
approved in accordance with Sec. 159.4(c) of this part. Requests for 
permission to arm PSC personnel shall include:
    (A) A description of where PSC personnel will operate, the 
anticipated threat, and what property or personnel such personnel are 
intended to protect, if any.
    (B) A description of how the movement of PSC personnel will be 
coordinated through areas of increased risk or planned or ongoing 
military operations, including how PSC personnel will be rapidly 
identified by members of the U.S. Armed Forces.
    (C) A communication plan, to include a description of how relevant 
threat information will be shared between PSC personnel and U.S. 
military forces and how appropriate assistance will be provided to PSC 
personnel who become engaged in hostile situations. DoD contractors 
performing private security functions are only to be used in accordance 
with DoD Instruction 1100.22, ``Guidance for Determining Workforce 
Mix,'' \11\ that is, they are limited to a defensive response to hostile 
acts or demonstrated hostile intent.
---------------------------------------------------------------------------

    \11\ Available at http://www.dtic.mil/whs/directives/corres/pdf/
110022p.pdf.
---------------------------------------------------------------------------

    (D) Documentation of individual training covering weapons 
familiarization and qualification, rules for the use of force, limits on 
the use of force including whether defense of others is consistent with 
host nation Status of Forces Agreements or local law, the distinction 
between the rules of engagement applicable to military forces and the 
prescribed rules for the use of force that control the use of weapons by 
civilians, and the Law of Armed Conflict.
    (E) Written acknowledgment by the PSC and its individual PSC 
personnel, after investigation of background of PSC personnel by the 
contractor, verifying such personnel are not prohibited under U.S. law 
to possess firearms.
    (F) Written acknowledgment by the PSC and individual PSC personnel 
that:
    (1) Potential civil and criminal liability exists under U.S. and 
local law or host nation Status of Forces Agreements for the use of 
weapons.\12\
---------------------------------------------------------------------------

    \12\ This requirement is specific to arming procedures. Such written 
acknowledgement should not be construed to limit civil and criminal 
liability to conduct arising from ``the use of weapons.'' PSC personnel 
could be held criminally liable for any conduct that would constitute a 
federal offense (see MEJA, 18 USC 3261(a)).
---------------------------------------------------------------------------

    (2) Proof of authorization to be armed must be carried by each PSC 
personnel.
    (3) PSC personnel may possess only U.S.G.-issued and/or -approved 
weapons and ammunition for which they have been qualified according to 
paragraph (a)(1)(iii)(E) of this section.

[[Page 674]]

    (4) PSC personnel were briefed and understand limitations on the use 
of force.
    (5) Authorization to possess weapons and ammunition may be revoked 
for non-compliance with established rules for the use of force.
    (6) PSC personnel are prohibited from consuming alcoholic beverages 
or being under the influence of alcohol while armed.
    (iv) Registration and identification in the Synchronized 
Predeployment and Operational Tracker (or its successor database) of 
armored vehicles, helicopters, and other vehicles operated by PSC 
personnel.
    (v) Reporting alleged criminal activity or other incidents involving 
PSCs or PSC personnel by another company or any other person. All 
incidents involving the following shall be reported and documented:
    (A) A weapon is discharged by an individual performing private 
security functions;
    (B) An individual performing private security functions is killed or 
injured in the performance of their duties;
    (C) A person other than an individual performing private security 
functions is killed or injured as a result of conduct by PSC personnel;
    (D) Property is destroyed as a result of conduct by a PSC or PSC 
personnel;
    (E) An individual performing private security functions has come 
under attack including in cases where a weapon is discharged against an 
individual performing private security functions or personnel performing 
such functions believe a weapon was so discharged; or
    (F) Active, non-lethal counter-measures (other than the discharge of 
a weapon) are employed by PSC personnel in response to a perceived 
immediate threat in an incident that could significantly affect U.S. 
objectives with regard to the military mission or international 
relations.
    (vi) The independent review and, if practicable, investigation of 
incidents reported pursuant to paragraphs (a)(1)(v)(A) through 
(a)(1)(v)(F) of this section and incidents of alleged misconduct by PSC 
personnel.
    (vii) Identification of ultimate criminal jurisdiction and 
investigative responsibilities, where conduct of U.S.G.-funded PSCs or 
PSC personnel are in question, in accordance with applicable laws to 
include a recognition of investigative jurisdiction and coordination for 
joint investigations (i.e., other U.S.G. agencies, host nation, or third 
country agencies), where the conduct of PSCs and PSC personnel is in 
question.
    (viii) A mechanism by which a commander of a combatant command may 
request an action by which PSC personnel who are non-compliant with 
contract requirements are removed from the designated operational area.
    (ix) Interagency coordination of administrative penalties or 
removal, as appropriate, of non-DoD PSC personnel who fail to comply 
with the terms and conditions of their contract, as is applicable to 
this part.
    (x) Implementation of the training requirements contained below in 
paragraph (a)(2)(ii) of this section.
    (2) Specifically cover:
    (i) Matters relating to authorized equipment, force protection, 
security, health, safety, and relations and interaction with locals in 
accordance with DoD Instruction 3020.41, ``Contractor Personnel 
Authorized to Accompany the U.S. Armed Forces.''
    (ii) Predeployment training requirements addressing, at a minimum, 
the identification of resources and assistance available to PSC 
personnel as well as country information and cultural training, and 
guidance on working with host country nationals and military personnel.
    (iii) Rules for the use of force and graduated force procedures.
    (iv) Requirements and procedures for direction, control and the 
maintenance of communications with regard to the movement and 
coordination of PSCs and PSC personnel, including specifying 
interoperability requirements. These include coordinating with the Chief 
of Mission, as necessary, private security operations outside secure 
bases and U.S. diplomatic properties to include movement control 
procedures for all contractors, including PSC personnel.
    (b) Availability of Guidance and Procedures. The geographic 
Combatant Commander shall ensure the guidance and procedures prescribed 
in paragraph (a)

[[Page 675]]

of this section are readily available and accessible by PSCs and their 
personnel (e.g., on a Web page and/or through contract terms), 
consistent with security considerations and requirements.
    (c) Subordinate Guidance and Procedures. The Subordinate Commander, 
in consultation with the Chief of Mission, will issue guidance and 
procedures implementing the standing combatant command publications 
specified in paragraph (a) of this section, consistent with the 
situation and operating environment.
    (d) Consultation and Coordination. The Chief of Mission and the 
geographic Combatant Commander/Subordinate Commander shall make every 
effort to consult and coordinate responses to common threats and common 
concerns related to oversight of the conduct of U.S.G.-funded PSC and 
their personnel. The Memorandum of Agreement between the Department of 
Defense and Department of State on U.S.G. Private Security Contractors 
\13\ shall provide the framework for the development of guidance and 
procedures without regard to the specific locations identified therein.
---------------------------------------------------------------------------

    \13\ Available at http://www.acq.osd.mil/log/PS/p--vault.html.

[[Page 676]]



                    SUBCHAPTER G_DEFENSE CONTRACTING



PART 162_PRODUCTIVITY ENHANCING CAPITAL INVESTMENT (PECI)--Table of Contents



Sec.
162.1 Purpose.
162.2 Applicability and scope.
162.3 Definitions.
162.4 Policy.
162.5 Responsibilities.
162.6 Procedures.
162.7 Information requirements.

Appendix A to Part 162--Reporting Procedures

    Authority: 10 U.S.C. 136: E.O. 12367, 3 CFR, 1988 Comp., p. 566.

    Source: 56 FR 50271, Oct. 4, 1991, unless otherwise noted.



Sec. 162.1  Purpose.

    This part:
    (a) Updates policy, responsibilities, procedures, and guidance for 
the PECI process under DoD Directive 5010.31. \1\
---------------------------------------------------------------------------

    \1\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------

    (b) Authorizes the publication of DoD 5010.36 36-H- \2\ 
``Productivity Enhancing Capital Investment (PECI) Handbook,'' 
consistent with DoD 5025.1-M. \3\
---------------------------------------------------------------------------

    \2\ Copies will be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
    \3\ See footnote 1 to Sec. 162.1(a).
---------------------------------------------------------------------------



Sec. 162.2  Applicability and scope.

    This part.
    (a) Applies to the Office of the Secretary of Defense (OSD); the 
Military Departments; Chairman, Joint Chiefs of Staff and the Joint 
Staff; the Defense Agencies; and the DoD Field Activities (hereafter 
referred to collectively as the ``DoD Components'').
    (b) Encompasses the acquisition of equipment and facilities to 
improve the following:
    (1) Productivity, quality, and processes of DoD Components including 
major facilities, equipment, or process modernization.
    (2) Performance of individual jobs, tasks, procedures, operations, 
and processes.
    (c) Encompasses PIF investments at appropriated and industrially 
funded activities, if they are not participating in the Defense Business 
Operations Fund. For industrially funded activities, projects may be 
submitted for PIF on an exception basis; primarily, this includes 
facilities, multi-function projects, prototypes, demonstrations, and 
cross-service initiatives. Investments at Government-owned, contractor-
operated (GOCO) facilities are limited to those for which the Department 
of Defense has responsibility to provide equipment or facilities and 
from which productivity benefits can be recovered within existing 
contractual provisions.



Sec. 162.3  Definition.

    (a) Capital Investment. The acquisition, installation, 
transportation, and other costs needed to place equipment or facilities 
in operation meeting DoD capitalization requirements.
    (b) Economic Life. The time period over which the benefits to be 
gained from a project may reasonably be expected to accrue to the 
Department of Defense.
    (c) Internal Rate of Return (IRR). The discount rate that equates 
the present value of the future cash inflows, e.g. savings and cost 
avoidances, with the present value costs of an investment.
    (d) Life-Cycle Savings. The estimated cumulative budgetary savings 
expected over the life of the project.
    (e) Net Present Value of Investment. The difference between the 
present value benefit and the present value cost at a given discount 
rate.
    (f) Off-the-Shelf. Equipment that is readily available through 
Government or commercial sources or that can be fabricated through 
combination or modification of existing equipment.
    (g) Pay-Back Period. The number of years required for the cumulative 
savings to have the same value as the investment cost.
    (h) PECI Benefits. Benefits resulting from PECIs are classified as 
savings or as cost avoidance:
    (1) Savings. Benefits that can be precisely measured, quantified, 
and placed

[[Page 677]]

under management control at time of realization. Savings can be 
reflected as specific reductions in the approved program or budget, 
after they have been achieved. Examples include costs for manpower 
authorizations and or funded work-year reductions, reduced or eliminated 
operating costs (utilities, travel, and repair), and reduced or 
eliminated parts and contracts.
    (2) Cost-Avoidance. Benefits from actions that obviate the 
requirements for an increase in future levels of manpower or costs that 
would be necessary, if present management practices were continued. The 
effect of cost-avoidance savings is the achievement of a higher level of 
readiness or increased value (quantity, quality or timeliness) of output 
at level staffing cost or the absorption of a growing work load at the 
same level of staffing or cost.
    (i) Post-Investment Assessment (PIA). A PIA is conducted by DoD 
Components to establish accountability and provide information to 
improve future investment strategies.
    (j) Productivity. The efficiency with which resources are used to 
provide a government service or product at specified levels of quality 
and timeliness.
    (k) Productivity Enhancement (or Productivity Improvement). A 
decrease in the unit cost of products and services delivered with equal 
or better levels of quality and timeliness.
    (l) Productivity Enhancing Capital Investment (PECI). Equipment or 
facility funding that shall improve Government service, products, 
quality, or timeliness. PECI projects are funded using PIF, PEIF, and 
CSI programs. These programs are defined as follows:
    (1) Productivity Investment Fund (PIF). PIF projects cost over 
$100,000 and must amortize within 4 years from the date they become 
operational. In FY 1994 the threshold changes to $150,000.
    (2) Productivity Enhancing Incentive Fund (PEIF). PEIF projects cost 
under $100,000 and are expected to amortize within 2 years of the date 
they become operational. In FY 1994 the limit changes to $150,000.
    (3) Component-Sponsored Investment (CSI). CSI projects are fast pay-
back or high interest investments that may have different DoD Component 
selection criteria than those specified for PIF or PEIF projects.
    (m) Quality. The extent to which a product or service meets customer 
requirements and customer expectations.



Sec. 162.4  Policy.

    It is DoD Policy that:
    (a) The PECI program shall be an integral part of DoD Component 
investment planning and of the Defense Planning, Programming, and 
Budgeting System (PPBS) DoD Instruction 7045.7. \4\ PECI planning shall 
include the productivity investment fund (PIF), the productivity 
enhancing incentive fund (PEIF), and component-sponsored investments 
(CSIs). The PECI program is a major DoD strategy to achieve productivity 
goals under E.O. 12637. \5\
---------------------------------------------------------------------------

    \4\ See footnote 1 to Sec. 162.1(a).
    \5\ See footnote 1 to Sec. 162.1(a).
---------------------------------------------------------------------------

    (b) PECI projects shall be selected to improve quality and 
productivity, or to reduce unit cost of outputs in defense operations. 
PECI projects shall be evaluated and approved for funding based on 
recognized principles of economic analysis. Each PECI project shall be 
subject to all restrictions established by public law, DoD policy, and 
other regulatory constraints.
    (c) DoD personnel at all levels shall be encouraged to seek out and 
identify opportunities for quality and productivity improvement. Those 
efforts shall be supported by using the PECI as a means of financing the 
improvements. The PECI Program shall provide incentives for 
participation, supported by the financial management system and 
policies.
    (d) Individuals or groups who successfully identify PECI 
opportunities that result in significant savings or improvements in 
quality or productivity or who aggressively promote PECI incentives 
within their organizations should be recognized through the DoD 
Incentive Awards Program, DoD Instruction 5120.16, \6\ the Secretary of 
Defense Productivity Excellence Awards Program, performance appraisal, 
or other appropriate means. All these savings derived through PECI will 
remain with the originating DoD Component.

[[Page 678]]

As an incentive a portion of these savings, when possible, should remain 
at the submitting activity.
---------------------------------------------------------------------------

    \6\ See footnote 1 to Sec. 162.1(a).
---------------------------------------------------------------------------

    (e) Funds provided through FY 1993 from the centrally managed OSD 
PIF may not be reprogrammed for non-PIF purposes without prior approval 
of the Assistant Secretary of Defense (Force Management and Personnel) 
(ASD(FM&P)). The Heads of DoD Components shall monitor obligation rates 
to ensure PIF projects are executed quickly. If project funding cannot 
be obligated within the specified fiscal year(s) for the type of 
funding, the Head of the DoD Component must reprogram PIF funds to 
alternate approved PIF projects. The PIF projects shall be monitored to 
ensure timely implementation and to validate savings through the 
amortization period. The PECIs are subject to audit as established by 
DoD Instruction 7600.2 \7\ (reference (g)) policy.
---------------------------------------------------------------------------

    \7\ See footnote 1 to Sec. 162.1(a).
---------------------------------------------------------------------------



Sec. 162.5  Responsibilities.

    (a) The Assistant Secretary of Defense (Force Management and 
Personnel (ASD (FM&P)) shall:
    (1) Develop policies and guidance for the overall DoD PECI program.
    (2) Maintain oversight of the PECI program to ensure implementation 
of this instruction. Through FY 1993 that oversight includes total 
process control and coordination of PIF actions to identify, select and 
approve, reprogram, and disapprove projects. Starting FY 1994 and ASD 
(FM&P) shall retain central oversight of the PECI program which is 
decentralized to the Components.
    (3) Evaluate program results and training requirements and provide 
additional guidance, as necessary.
    (4) Develop, maintain, and publish a DoD 5010.36-H consistent with 
DoD 5025.1-M \8\
---------------------------------------------------------------------------

    \8\ See footnote 1 to Sec. 162.1(a).
---------------------------------------------------------------------------

    (5) Coordinate PECI efforts with the Heads of the DoD Components on 
matters that affect their particular areas of responsibility.
    (6) Use the Defense Productivity Program Office (DPPO) to:
    (i) Provide technical guidance and support for PECI efforts.
    (ii) Monitor and evaluate DoD Component PECI efforts.
    (iii) Ensure compliance with DoD Directive 7750.5 \9\
---------------------------------------------------------------------------

    \9\ See footnote 1 to Sec. 162.1(a).
---------------------------------------------------------------------------

    (b) The Inspector General of the Department of Defense (IG, DoD) 
shall provide policy and guidance for the audit of the PECI and 
incorporate the requirement for audit into audit planning and program 
documents.
    (c) The Heads of the DoD Components shall:
    (1) Develop and sustain a formal PECI program that:
    (i) Emphasizes and encourages the improvement of day-to-day 
operations through PECI funding.
    (ii) Provides motivation and opportunities for personnel, at all 
levels, to participate in the identification, documentation, and 
implementation of PECI proposals.
    (iii) Includes PIF, PEIF, and CSI efforts, as appropriate.
    (iv) Reviews and approves submitted projects, broadens project 
applicability when reasonable, applies off-the-shelf technology, and 
integrates capital investment planning into the PPBS.
    (2) Designate an official to be the central point of contact (POC) 
who shall oversee and monitor the PECI program.
    (3) Establish procedures ensuring that the policies contained in 
Sec. 162.4, above, are adhered to.



Sec. 162.6  Procedures.

    The following procedures shall be followed by the DoD Components in 
the identification, documentation, selection, and financing of PECI 
projects:
    (a) Document each PECI project to ensure that it is:
    (1) A desirable action in accordance with the DoD Component's long-
range planning and programing objectives, quality objectives, and 
customer and/or user satisfaction.
    (2) Needed to perform and improve valid operations, functions, or 
services (as established by assigned missions and taskings) that cannot 
be performed as effectively or economically by other means, such as the 
use of existing facilities, methods, processes, or procedures.

[[Page 679]]

    (3) Justified on the basis of a valid economic analysis done in 
accordance with DoD Instruction 7041.3.
    (4) Validated as to reasonableness, completeness, and correct 
appropriation.
    (5) Classified properly as having savings or cost avoidance benefits
    (b) Include resources for PECI in programming documents and budget 
submissions. The level of funding shall be established under quality and 
productivity plans and goals established by the Component.
    (c) Use guidelines for project documentation, pre-investment 
analysis, financing, and post-investment accountability of PECI 
projects, when DoD 5010.36-H is published.
    (d) Classify PECI projects for financing and aggregated reporting as 
follows:
    (1) PIF projects. PIF projects are competitively selected from 
candidate proposals and financed through traditional budget 
appropriation processes from funds set aside for this purpose. PIF 
projects must cost over $100,000 and must amortize within 4 years from 
the date that they become operational. Both equipment and facilities 
investments that conform to public law, or DoD policies governing their 
qualification, may be included. Projects may include a function at 
several activities or locations and be Service-wide or Agency-wide. In 
FY 1994 the threshold will change to $150,000.
    (2) PEIF projects. PEIF projects are financed from the DoD Component 
accounts established in annual appropriations and are expected to 
amortize within 2 years of the date they become operational. Funding for 
PEIF projects shall be included in the DoD Component annual 
appropriations as a single amount to cover projects, as they are 
proposed throughout the budget year. PEIF projects cannot exceed 
$100,000 or cost limitations established by the OSD (whichever is 
greater) and are limited to facility modification and acquisition of 
``off-the shelf'' equipment requiring little or no modification before 
use. In FY 1994 the limit changes to $150,000. Justification for those 
projects shall be based on the potential to improve quality and 
productivity that is realized through improvements in operating methods, 
quality, processes, or procedures.
    (3) CSI. CSI projects are investments financed from the DoD 
Component accounts that may have longer amortization periods than the 
PEIF and may have different DoD Component cost or benefit criteria than 
those specified for PIF projects. The CSI projects shall be identified 
and included in the DoD Component's annual budget.



Sec. 162.7  Information requirements.

    (a) DoD Components shall submit to the ASD (FM&P), by December 15th 
of each year, an annual status report on all PECI programs as outlined 
in appendix A to this part. The DoD Components shall maintain the data 
at a central point to support reporting requirements.
    (b) The Summary Report, ``PECI Program Status,'' is assigned Report 
Control Symbol FM&P (A) 1561, in accordance with DoD Directive 7750.5.



             Sec. Appendix to Part 162--Reporting Procedures

                               A. General

    The PECI reporting requirements provide the OSD with summary 
information required to provide program accountability, and satisfy the 
congressional concerns on program management. Information may be 
submitted in memorandum, letter, or other acceptable form.

                       B. Information Requirements

    1. PIF. Each DoD Component that has a funded PIF project must 
annually report summary PIF information. The information required for 
each project follows:
    a. Project Identification. Provide the 11-digit code for each 
project that has been approved for desired funding, such as follows:
    (1) A92BAxxxxxx
    (a) ``A'' is for an Army project.
    (b) ``92'' is for a FY92 project.
    (c) ``BA'' is an Approved PIF project.
    (d) ``xxxxxx'' is a DoD Component identifier.
    (2) DoD Component PECI points of contact should establish 
identifiers to ensure each project is unique.
    b. Total Funds Provided. For each project provide the cumulative 
amount of PEIC funds invested in the project
    c. Total Amount Obligated. For each project provide the cumulative 
amount of funds obligated against the project.
    d. Actual Savings. For each project provide the cumulative actual 
savings generated.

[[Page 680]]

    e. Projected Life-Cycle Savings. For each PIF project provide the 
estimated amount of savings the project is projected to earn over the 
project's economic life.
    f. Projected Life-Cycle Cost Avoidance. For each PIF project provide 
the estimated amount of cost avoidance the project is projected to 
achieve.
    2. PEIF. Each DoD Component that has funded PEIF projects must 
annually report summary information that includes:
    a. Total Number of Projects.
    b. Total Funds Provided.
    c. Total Amount Obligated.
    d. Total Projected Life-Cycle Savings.
    e. Total Projected Life-Cycle Cost Avoidance.
    3. CSI. Each DoD Component that has funded CSI projects must 
annually report summary information that includes:
    a. Total Number of Projects.
    b. Total Funds Provided.
    c. Total Amount Obligated.
    d. Total Projected Life-Cycle Savings.
    e. Total Projected Life-Cycle Cost Avoidance.
    4. PIA Post-Investment assessments, articles, pictures, and brief 
description of projects and their results are encouraged and may be 
attached to the annual report or submitted throughout the year.



PART 165_RECOUPMENT OF NONRECURRING COSTS ON SALES OF U.S. ITEMS--Table of 

Contents



Sec.
165.1 Purpose.
165.2 Applicability and scope.
165.3 Definitions.
165.4 Policy.
165.5 Responsibilities.
165.6 Procedures.
165.7 Waivers (including reductions).

    Authority: 31 U.S.C. 9701.

    Source: 58 FR 16497, Mar. 29, 1993, unless otherwise noted.



Sec. 165.1  Purpose.

    This part updates policy to conform with Public Law 90-629, ``Arms 
Export Control Act,'' October 22, 1968, as amended for calculating and 
assessing nonrecurring cost recoupment charges on sales of items 
developed for or by the Department of Defense to non-U.S. Government 
customers.



Sec. 165.2  Applicability and scope.

    (a) This part applies to the Office of the Secretary of Defense, the 
Military Departments, the Chairman of the Joint Chiefs of Staff and the 
Joint Staff, the Unified and Specified Commands, the Defense Agencies, 
and the DoD Field Activities (hereafter referred to collectively as 
``the DoD Components'').
    (b) The provisions of this part do not apply to sales of excess 
property when accountability has been transferred to property disposal 
activities and the property is sold in open competition to the highest 
bidder.
    (c) The policies and procedures provided for in this part shall 
apply to all sales on or after January 13, 1993, and supersede 
application thresholds and charges previously established. Previous 
versions continue to govern sales made during applicable effective 
dates. Such previously established nonrecurring cost recoupment 
thresholds and charges shall be eliminated or revised in accordance with 
this part.



Sec. 165.3  Definitions.

    (a) Cost pool. Represents the total cost to be distributed across 
the specific number of units. The nonrecurring research, development, 
test, and evaluation cost pool comprises the costs described in 
paragraph (f), of this section. The nonrecurring production cost pool 
comprises costs described in paragraph (e), of this section.
    (b) Foreign military sale. A sale by the U.S. Government of defense 
items or defense services to a foreign government or international 
organization under authority of the ``Arms Export Control Act,'' Public 
Law No. 90-629 (1968) as amended. Except as waived by the Under 
Secretary of Defense for Policy, Foreign Military Sales are the only 
sales subject to nonrecurring cost recoupment charges.
    (c) Major defense equipment. Any item of significant military 
equipment on the United States Munitions List having a nonrecurring 
research, development, test, and evaluation cost of more than 50 million 
dollars or a total production cost of more than 200 million dollars. The 
determination of whether an item meets the major defense equipment 
dollar threshold for research, development, test, and evaluation shall 
be based on DoD obligations recorded to the date the equipment is 
offered for sale. Production costs shall include costs incurred by the 
Department of

[[Page 681]]

Defense. Production costs for the foreign military sales program and 
known direct commercial sales production are excluded.
    (d) Model. A basic alpha-numeric designation in a weapon system 
series; e.g., a ship hull series, an equipment or system series, an 
airframe series, or a vehicle series. For example, the F5A and the F5F 
are different models in the same F-5 system series.
    (e) Nonrecurring production costs. Those one-time costs incurred in 
support of previous production of the model specified and those costs 
specifically incurred in support of the total projected production run. 
Those nonrecurring cost include DoD expenditures for preproduction 
engineering; rate and special tooling; special test equipment; 
production engineering; product improvement; destructive testing; and 
pilot model production, testing, and evaluation. That includes costs of 
any engineering change proposals initiated before the date of 
calculations of the nonrecurring costs recoupment charge. Nonrecurring 
production costs do not include DoD expenditures for machine tools, 
capital equipment, or facilities for which contractor rental payments 
are made or waived in accordance with the DoD FAR Supplement.
    (f) Nonrecurring research, development, test, and evaluation costs. 
Those costs funded by a research, development, test, and evaluation 
appropriation to develop or improve the product or technology under 
consideration either through contract or in-house DoD effort. This 
includes costs of any engineering change proposal started before the 
date of calculation of the nonrecurring cost recoupment charges as well 
as projections of such costs, to the extent additional effort applicable 
to the sale model or technology is necessary or planned. It does not 
include costs funded by either procurement or operation and maintenance 
appropriations.
    (g) Pro rata recovery of nonrecurring costs. Equal distribution 
(proration) of a pool of nonrecurring cost to a specific number of units 
that benefit from the investment so that a DoD Component shall collect 
from a customer a fair (pro rata) share of the investment in the product 
being sold. The production quantity base used to determine the pro rata 
calculation of major defense equipment includes total production.
    (h) Significant change in nonrecurring cost recoupment charge. A 
significant change occurs as follows:
    (1) A new calculation shows a change of 30 percent of the current 
system nonrecurring cost charge.
    (2) The nonrecurring cost unit charge increases or decreases by 
50,000 dollars or more; or
    (3) Where the potential for a 5 million dollars change in recoupment 
exists. The total collections may be estimated based on the projected 
sales quantities. When potential collections increase or decrease by 5 
million dollars, a significant change occurs.
    (i) ``Special'' research, development, test, and evaluation and 
nonrecurring production costs. Costs incurred under a foreign military 
sale at the request of, or for the benefit of, a foreign customer to 
develop a special feature or unique or joint requirement. Those costs 
must be paid by the customer as they are incurred.



Sec. 165.4  Policy.

    It is DoD policy that:
    (a) A nonrecurring cost recoupment charge shall be imposed for sales 
of major defense equipment only as required by Act of Congress (e.g., 
Arms Export Control Act).
    (b) The Under Secretary of Defense for Policy may grant a waiver to 
recoupment charges in accordance with Sec. 165.7.
    (c) Nonrecurring cost charges shall be based on the amount of the 
DoD nonrecurring investment in an item.



Sec. 165.5  Responsibilities.

    (a) The Comptroller of the Department of Defense shall provide 
necessary financial management guidance.
    (b) The Under Secretary of Defense (Acquisition) shall take 
appropriate action to revise the DoD Federal Acquisition Regulation 
Supplement in accordance with this part.
    (c) The Under Secretary of Defense for Policy shall:
    (1) Monitor the application of this part.

[[Page 682]]

    (2) Review and approve nonrecurring cost recoupment charges and 
nonrecurring cost recoupment charge waiver requests received from 
foreign countries and international organizations for foreign military 
sales.
    (3) Ensure publication of a listing of items developed for or by the 
Department of Defense to which nonrecurring cost recoupment charges are 
applicable.
    (d) The Secretaries of the Military Departments and the Directors of 
the Defense Agencies shall:
    (1) Determine the DoD nonrecurring investment in items developed for 
or by the Department of Defense and perform required pro rata 
calculations in accordance with this part and financial management 
guidance from the Comptroller of the Department of Defense.
    (2) Validate and provide recommended charges to the Under Secretary 
of Defense for Policy. Supporting documentation will be retained until 
the item has been eliminated from the nonrecurring cost recoupment 
charge listing.
    (3) Review approved nonrecurring cost recoupment charges on a 
biennial basis to determine if there has been a change in factors or 
assumptions used to compute a nonrecurring cost recoupment charge and, 
if there is a significant change in a nonrecurring cost recoupment 
charge, provide a recommended change to the Under Secretary of Defense 
for Policy.
    (4) Collect charges on foreign military sales in accordance with DoD 
7290.3-M, \1\ ``Foreign Military Sales Financial Management Manual'' and 
on other sales, made prior to January 13, 1993, in accordance with DoD 
7220.9-M, \2\ ``DoD Accounting Manual.''
---------------------------------------------------------------------------

    \1\ Forward written requests to Defense Institute for Security 
Assistance Management, ATTN: DISAM-DRP, Wright-Patterson Air Force Base, 
Ohio 45433.
    \2\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------

    (5) Deposit collections to accounts as prescribed by the 
Comptroller, DoD.
    (6) Request guidance from the Under Secretary of Defense for Policy, 
within 90 days, if an issue concerning a recoupment charge cannot be 
resolved.



Sec. 165.6  Procedures.

    (a) The nonrecurring cost recoupment charge to be reimbursed shall 
be a pro rata recovery of nonrecurring cost for the applicable major 
defense equipment. Recovery of nonrecurring cost recoupment charges 
shall cease upon the recovery of total DoD costs. Such charges shall be 
based on a cost pool as defined in Sec. 165.3. For a system that 
includes more than one component, a ``building block'' approach (i.e., 
the sum of nonrecurring cost recoupment charges for individual 
components) shall be used to determine the nonrecurring cost recoupment 
charge for the sale of the entire system.
    (b) A nonrecurring cost recoupment charge shall not apply when a 
waiver has been approved by the Under Secretary of Defense for Policy in 
accordance with Sec. 165.7 or when sales are financed with U.S. 
Government funds made available on a nonrepayable basis. Approved 
revised nonrecurring cost recoupment charges shall not be applied 
retroactively to accepted foreign military sales agreements.
    (c) When major defense equipment are sold at a reduced price due to 
age or condition, the nonrecurring cost recoupment charge shall be 
reduced by the same percentage reduction.
    (d) The full amount of ``special'' research, development, test, and 
evaluation and nonrecurring production costs incurred for the benefit of 
particular customers shall be paid by those customers. However, when a 
subsequent purchaser requests the same specialized features that 
resulted from the added ``special'' research, development, test, and 
evaluation and nonrecurring production costs, a pro rata share of those 
costs may be paid by the subsequent purchaser and transferred to the 
original customer if those special nonrecurring costs exceed 50 million 
dollars. The pro rata share may be a unit charge determined by the DoD 
Component as a result of distribution of the total costs divided by the 
total production. Such reimbursements shall not be collected after 10 
years have elapsed since acceptance of DD Form 1513, ``U.S. DoD Offer 
and Acceptance,'' by the original customer, unless otherwise authorized 
by the Under Secretary of

[[Page 683]]

Defense for Policy. The U.S. Government shall not be charged any 
nonrecurring costs recoupment charge if it adopts the features for its 
own use or provides equipment with such features under a U.S. Grant Aid 
or similar program.
    (e) For coproduction, codevelopment and cooperative development, or 
cooperative production DoD agreements, the policy set forth in this part 
shall determine the allocation basis for recouping from the third party 
purchasers the investment costs of the participants. Such DoD agreements 
shall provide for the application of the policies in this part to sales 
to third parties by any of the parties to the agreement and for the 
distribution of recoupments among the parties to the agreement.



Sec. 165.7  Waivers (including reductions).

    (a) The ``Arms Export Control Act,'' Public Law No. 90-629, as 
amended, requires the recoupment of a proportionate amount of 
nonrecurring cost of major defense equipment from foreign military sales 
customers but authorizes consideration of reductions or waivers for 
particular sales which, if made, significantly advance U.S. Government 
interests and the furtherance of mutual defense treaties between the 
United States and certain countries.
    (b) Requests for waivers should originate with the foreign 
government and shall provide information on the extent of 
standardization to be derived as a result of the waiver.
    (c) Blanket waiver requests should not be submitted and shall not be 
considered. The term ``blanket waiver'' refers to a nonrecurring cost 
recoupment charge waiver that is not related to a particular sale; for 
example, waivers for all sales to a country or all sales of a weapon 
system.
    (d) A waiver request shall not be considered for a sale that was 
accepted without a nonrecurring cost recoupment charge waiver, unless 
the acceptance was conditional on consideration of the waiver request.
    (e) Requests for waivers shall be processed expeditiously, and a 
decision normally made to either approve or disapprove the request 
within 60 days after receipt. A waiver in whole or in part of the 
recoupment charge or a denial of the request shall be provided in 
writing to the appropriate DoD Component.



PART 168a_NATIONAL DEFENSE SCIENCE AND ENGINEERING GRADUATE FELLOWSHIPS--Table 

of Contents



Sec.
168a.1 Purpose.
168a.2 Applicability.
168a.3 Definition.
168a.4 Policy and procedures.
168a.5 Responsibilities.

    Authority: 10 U.S.C. 2191.

    Source: 55 FR 29844, July 23, 1990, unless otherwise noted.



Sec. 168a.1  Purpose.

    This part:
    (a) Establishes guidelines for the award of National Defense Science 
and Engineering Graduate (NDSEG) Fellowships, as required by 10 U.S.C. 
2191.
    (b) Authorizes, in accordance with 10 U.S.C. 2191 and consistent 
with DoD 5025.1, the publication of a regulation which will be codified 
at 32 CFR part 168b.



Sec. 168a.2  Applicability.

    This part applies to the Office of the Secretary of Defense (OSD), 
the Military Departments, and the Defense Agencies (hereafter referred 
to collectively as ``DoD Components'').



Sec. 168a.3  Definition.

    Sponsoring Agency. A DoD Component or an activity that is designated 
to award NDSEG fellowships under Sec. 168a.5(a).



Sec. 168a.4  Policy and procedures.

    (a) Sponsoring Agencies, in awarding NDSEG fellowships, shall award:
    (1) Solely to U.S. citizens and nationals who agree to pursue 
graduate degrees in science, engineering, or other fields of study that 
are designated, in accordance with Sec. 168a.5(b)(2), to be of priority 
interest to the Department of Defense.
    (2) Through a nationwide competition in which all appropriate 
actions

[[Page 684]]

have been taken to encourage applications from members of groups 
(including minorities, women, and disabled persons) that historically 
have been underrepresented in science and engineering.
    (3) Without regard to the geographic region in which the applicant 
lives or the geographic region in which the applicant intends to pursue 
an advanced degree.
    (b) The criteria for award of NDSEG fellowships shall be:
    (1) The applicant's academic ability relative to other persons 
applying in the applicant's proposed field of study.
    (2) The priority of the applicant's proposed field of study to the 
Department of Defense.



Sec. 168a.5  Responsibilities.

    (a) The Deputy Director, Defense Research and Engineering (Research 
and Advanced Technology) [DDDR&E(R&AT)], shall:
    (1) Administer this part and issue DoD guidance, as needed, for 
NDSEG fellowships.
    (2) Designate those DoD Components that will award NDSEG 
fellowships, consistent with relevant statutory authority.
    (3) Issue a regulation in accordance with 10 U.S.C. 2191 and DoD 
5025.1-M.
    (b) The Heads of Sponsoring Agencies, or their designees, in 
coordination with a representative of the Deputy Director, Defense 
Research and Engineering (Research and Advanced Technology) 
[DDDR&E(R&AT)], shall:
    (1) Oversee the nationwide competition to select NDSEG fellowship 
recipients.
    (2) Determine those science, engineering and other fields of 
priority interest to the Department of Defense in which NDSEG 
fellowships are to be awarded.
    (3) Prepare a regulation, in accordance with 10 U.S.C. 2191, that 
prescribes.
    (i) Procedures for selecting NDSEG fellows.
    (ii) The basis for determining the amounts of NDSEG fellowships.
    (iii) The maximum NDSEG fellowship amount that may be awarded to an 
individual during an academic year.



PART 169_COMMERCIAL ACTIVITIES PROGRAM--Table of Contents



Sec.
169.1 Purpose.
169.2 Applicability and Scope.
169.3 Definitions.
169.4 Policy.
169.5 Responsibilities.

    Authority: 5 U.S.C. 301 and 552 and Pub. L. 93-400.

    Source: 54 FR 13373, Apr. 3, 1989, unless otherwise noted.



Sec. 169.1  Purpose.

    This document:
    (a) Revises 32 CFR part 169.
    (b) Updates DoD policies and assigns responsibilities for commercial 
activities (CAs) as required by E.O. 12615, Pub. L. 100-180, sec. 1111, 
and OMB Circular A-76.



Sec. 169.2  Applicability and scope.

    This part:
    (a) Applies to the Office of the Secretary of Defense (OSD), the 
Military Departments, and the Defense Agencies (hereafter referred to 
collectively as ``DoD Components'').
    (b) Encompasses DoD policy for CAs in the United States, its 
territories and possessions, the District of Columbia, and the 
Commonwealth of Puerto Rico.
    (c) Is not mandatory for CAs staffed solely with DoD civilian 
personnel paid by nonappropriated funds, such as military exchanges. 
However, this part is mandatory for CAs when they are staffed partially 
with DoD civilian personnel paid by or reimbursed from appropriated 
funds, such as libraries, open messes, and other morale, welfare, and 
recreation (MWR) activities. When related installation support functions 
are being cost-compared under a single solicitation, a DoD Component may 
decide that it is practical to include activities staffed solely with 
DoD civilian personnel paid by nonappropriated funds.
    (d) Does not apply to DoD governmental functions as defined Sec. 
169.3.
    (e) Does not apply when contrary to law, Executive orders, or any 
treaty or international agreement.
    (f) Does not apply in times of a declared war or military 
mobilization.

[[Page 685]]

    (g) Does not provide authority to enter into contracts.
    (h) Does not apply to the conduct of research and development, 
except for severable in-house CAs that support research and development, 
such as those listed in enclosure 3 of DoD Instruction 4100.33 \1\ (32 
CFR part 169a).
---------------------------------------------------------------------------

    \1\ Copies may be obtained, if needed, from the U.S. Naval 
Publications and Forms Center, ATTN: Code 1053, 5801 Tabor Avenue, 
Philadelphia, PA 19120.
---------------------------------------------------------------------------

    (i) Does not justify conversion to contract solely to avoid 
personnel ceilings or salary limitations.
    (j) Does not authorize contracts that establish an employer-employee 
relationship between the Department of Defense and contractor employees, 
as described in FAR 37.104.



Sec. 169.3  Definitions.

    Commercial Activity Review. The process of evaluating CAs for the 
purpose of determining whether or not a cost comparison will be 
conducted.
    Commercial Source. A business or other non-Federal activity located 
in the United States, its territories and possessions, the District of 
Columbia, or the Commonwealth of Puerto Rico that provides a commercial 
product or service.
    Conversion to Contract. The changeover of a CA from performance by 
DoD personnel to performance under contract by a commercial source.
    Conversion to In-House. The changeover of a CA from performance 
under contract to performance by DoD personnel.
    Core Logistics. Those functions identified as core logistics 
activities pursuant to section 307 of Pub. L 98-525 and section 1231 of 
Pub. L. 99-145, codified at section 2464, title 10 that are necessary to 
maintain a logistics capability (including personnel, equipment, and 
facilities) to ensure a ready and controlled source of technical 
competence and resources necessary to ensure effective and timely 
response to a mobilization, national defense contingency situation, and 
other emergency requirements.
    Cost Comparison. The process of developing an estimate of the cost 
of performance of a CA by DoD employees and comparing it, in accordance 
with the requirements in DoD Instruction 4100.33 to the cost of 
performance by contract.
    Direct-Conversion. Conversion to contract performance of an in-house 
commercial activity based on a simplified cost comparsion or the 
conversion of an in-house commerical activity performed exclusively by 
military personnel.
    Displaced DoD Employee. Any DoD employee affected by conversion to 
contract operation (including such actions as job elimination, or grade 
reduction). It includes both employees in the function converted to 
contract and employees outside the function who are affected adversely 
by conversion through reassignment or the exercise of bumping or retreat 
rights.
    DoD Commercial Activity (CA). An activity that provides a product or 
service obtainable (or obtained) from a commerical source. A DoD CA may 
be the mission of an organization or a function within the organization. 
It must be type of work that is separable from other functions or 
activities so that it is suitable for performance by contract. A 
representative list of the functions performed by such activities is 
provided in enclosure 3 of DoD Instruction 4100.33. A DoD CA falls into 
one of two categories:
    (a) Contract CA. A DoD CA managed by a DoD Component, but operated 
with contractor personnel.
    (b) In-House CA. A DoD CA operated by a DoD Component with DoD 
personnel.
    DoD Employee. Civilian personnel of the Department of Defense.
    DoD Governmental Function. A function that is related so intimately 
to the public interest as to mandate performance by DoD personnel. These 
functions include those that require either the exercise of discretion 
in applying Government authority or the use of value judgment in making 
the decision for the Department of Defense. Services or products in 
support of Governmental functions, such as those listed in enclosure 3 
of DoD Instruction 4100.33, are CAs and are subject to this part and its 
implementing Instructions. Governmental functions normally fall into two 
categories:

[[Page 686]]

    (a) Act of Governing. The discretionary exercise of Governmental 
authority. Examples include criminal investigations, prosecutions, and 
other judicial functions; management of Government programs requiring 
value judgments, as in direction of the national defense; management and 
direction of the Armed Services; activities performed exclusively by 
military personnel who are subject to deployment in a combat, combat 
support, or combat service support role; conduct of foreign relations; 
selection of program priorities; direction of Federal employees; 
regulation of the use of space, oceans, navigable rivers, and other 
natural resources; management of natural resources on Federal Property; 
direction of intelligence and counterintelligence operations; and 
regulation of industry and commerce, including food and drugs.
    (b) Monetary Transactions and Entitlements. Refers to such actions 
as tax collection and revenue disbursements; control of treasury 
accounts and the money supply, and the administration of public trusts.
    DoD Personnel. Military and civilian personnel of the Department of 
Defense.
    Expansion. The modernization, replacement, upgrading, or enlargement 
of a DoD CA involving a cost increase exceeding either 30 percent of the 
total capital investment or 30 percent of the annual personnel and 
material costs. A consolidation of two or more CAs is not an expansion, 
unless the proposed total capital investment or annual personnel and 
material costs of the consolidation exceeds the total of the individual 
CAs by 30 percent or more.
    Installation. An installation is the grouping of facilities, 
collocated in the same vicinity, that supports particular functions. 
Activities collocated and supported by an installation are considered to 
be tenants.
    Installation Commander. The commanding officer or head of an 
installation or a tenant activity, who has budget and supervisory 
control over resources and personnel.
    New Requirement. A recently established need for a commercial 
product or service. A new requirement does not include interim in-house 
operation of essential services pending reacquisition of the services 
prompted by such action as the termination of an existing contract 
operation.
    Preferential Procurement Programs. Preferential procurement programs 
include mandatory source programs such as Federal Prison Industries 
(FPI) and the workshops administered by the Committee for Purchase from 
the Blind and Other Severely Handicapped under Pub. L. 92-98. Small, 
minority, and disadvantaged businesses; and labor surplus area set-
asides and awards made under Pub. L. 85-536, section 8(a) and Pub. L. 
95-507 are included under preferential procurement programs.
    Right of First Refusal of Employment. Contractors provide Government 
employees, displaced as a result of the conversion to contract 
performance, the right of first refusal for employment openings under 
the contract in positions for which they are qualified, if that 
employment is consistent with post-Government employment conflict of 
interest standards.



Sec. 169.4  Policy.

    (a) Ensure DoD Mission Accomplishment. When complying with this part 
and its implementing Instruction, DoD Components shall consider the 
overall DoD mission and the defense objective of maintaining readiness 
and sustainability to ensure a capability for mobilizing the defense and 
support structure.
    (b) Achieve Economy and Quality through Competition. Encourage 
competition with the objective of enhancing quality, economy, and 
performance. When performance by a commercial source is permissible, a 
comparsion of the cost of contracting and the cost of in-house 
performance shall be performed to determine who shall provide the best 
value for the Government, considering price and other factors included 
in the solicitation. The restriction of a solicitation to a preferential 
procurement program does not negate the requirement to perform a cost 
comparison. Performance history will be considered in the source 
selection process, and high quality performance should be rewarded.

[[Page 687]]

    (c) Retain Governmental Functions In-House. Certain functions that 
are inherently governmental in nature, and intimately related to the 
public interest, mandate performance by DoD personnel only. These 
functions are not in competition with commercial sources; therefore, 
these functions shall be performed by DoD personnel.
    (d) Rely on the Commercial Sector. DoD Components shall rely on 
commercially available sources to provide commercial products and 
services except when required for national defense, when no satisfactory 
commercial source is available, or when in the best interest of direct 
patient care. DoD Components shall not consider an in-house new 
requirement, an expansion of an in-house requirement, conversion to in-
house, or otherwise carry on any CAs to provide commercial products or 
services if the products or services can be procured more economically 
from commercial sources.
    (e) Delegate Decision Authority and Responsibility. DoD Components 
shall delegate decision authority and responsibility to lower 
organization levels, giving more authority to the doers, and linking 
responsibility with that authority. This shall facilitate the work that 
installation commanders must perform without limiting their freedom to 
do their jobs. When possible, the installation commanders should have 
the freedom to make intelligent use of their resources, while preserving 
the essential wartime capabilities of U.S. support organizations in 
accordance with DoD Directive 4001.1. \2\
---------------------------------------------------------------------------

    \2\ See footnote 1 to Sec. 169.2(h)
---------------------------------------------------------------------------

    (f) Share Resources Saved. When possible, make available to the 
installation commander a share of any resources saved or earned so that 
the commander can improve operations or working and living conditions on 
the installation.
    (g) Provide Placement Assistance. Provide a variety of placement 
assistance to employees whose Federal jobs are eliminated through CA 
competitions.

[54 FR 13373, Apr. 3, 1989; 54 FR 21726, May 19, 1989]



Sec. 169.5  Responsibilities.

    (a) The Assistant Secretary of Defense (Production and Logistics) 
(ASD (P&L)), or designee, shall:
    (1) Formulate and develop policy consistent with this part for the 
DoD CA program.
    (2) Issue Instructions to implement the policies of this part.
    (3) Maintain an inventory of in-house DoD CAs and the Commercial 
Activities Management Information System (CAMIS).
    (4) Establish criteria for determining whether a CA is required to 
be retained in-house for national defense.
    (5) Approve or disapprove core logistics waiver requests.
    (b) The Comptroller of the Department of Defense (C, DoD) shall 
provide inflation factors and/or price indices and policy guidance to 
the DoD Components on procedures and systems for obtaining cost data for 
use in preparing the in-house cost estimate.
    (c) The Heads of DoD Components shall:
    (1) Comply with this part and DoD Instruction 4100.33.
    (2) Designate an official at the Military Service Assistant 
Secretary level, or equivalent, to implement this part.
    (3) Establish an office as a central point of contact for 
implementing this part.
    (4) Encourage and facilitate CA competitions.
    (5) Delegate, as much as practicable, broad authority to 
installation commanders to decide how best to use the CA program to 
accomplish the mission. Minimally, as prescribed by P.L. 100-180, 
section 1111 and E.O. 12615, installation commanders shall have the 
authority and responsibility to carry out the following:
    (i) Prepare an inventory each fiscal year of commercial activities 
carried out by Government personnel on the military installation in 
accordance with DoD Instruction 4100.33.
    (ii) Decide which commercial activities shall be reviewed under the 
procedures and requirements of E.O. 12615, OMB Circular A-76, and DoD 
Instruction 4100.33. This authority shall not be applied retroactively. 
Cost comparisons and direct conversions initiated,

[[Page 688]]

as of December 4, 1987, shall be continued.
    (iii) Conduct a cost comparison of those commercial activities 
selected for conversion to contractor performance under OMB Circular A-
76.
    (iv) To the maximum extent practicable, assist in finding suitable 
employment for any DoD employee displaced because of a contract entered 
into with a contractor for performance of a commercial activity on the 
military installation.
    (6) Develop specific national defense guidance consistent with DoD 
Instruction 4100.33.
    (7) Establish administrative appeal procedures consistent with DoD 
Instruction 4100.33.
    (8) Ensure that contracts resulting from cost comparisons conducted 
under this part are solicited and awarded in accordance with the FAR and 
the DFARS.
    (9) Ensure that all notification and reporting requirements 
established in DoD Instruction 4100.33 are satisfied.
    (10) Ensure that the Freedom of Information Act Program is complied 
with in responding to requests for disclosure of contractor-supplied 
information obtained in the course of procurement.
    (11) Ensure that high standards of objectivity and consistency are 
maintained in compiling and maintaining the CA inventory and conducting 
the reviews and cost comparisons.
    (12) Provide, when requested, assistance to installation commanders 
to ensure effective CA program implementation and technical competence 
in management and implementation of the CA program.
    (13) Ensure that maximum efforts are exerted to assist displaced DoD 
employees in finding suitable employment, to include, as appropriate:
    (i) Providing priority placement assistance for other Federal jobs.
    (ii) Training and relocation when these shall contribute directly to 
placement.
    (iii) Providing outplacement assistance for employment in other 
sectors of the economy with particular attention to assisting eligible 
employees to exercise their right of first refusal with the successful 
contractor.
    (14) Maintain the technical competence necessary to ensure effective 
and efficient management of the CA program.
    (15) Ensure, once the cost comparison is initiated, that the 
milestones are met, and completion of the cost comparison is without 
unreasonable delay.



PART 169a_COMMERCIAL ACTIVITIES PROGRAM PROCEDURES--Table of Contents



                            Subpart A_General

Sec.
169a.1 Purpose.
169a.2 Applicability and scope.
169a.3 Definitions.
169a.4 Policy.

                          Subpart B_Procedures

169a.8 Inventory and review schedule (Reports Control Symbol DD-P&L(A)).
169a.9 Reviews: Existing in-house commercial activities.
169a.10 Contracts.
169a.11 Expansions.
169a.12 New requirements.
169a.13 CAs involving forty-five or fewer DoD civilian employees.
169a.14 Military personnel commerical activity.
169a.15 Special considerations.
169a.16 Independent review.
169a.17 Solicitation considerations.
169a.18 Administrative appeal procedures.
169a.19 Study limits.

                    Subpart C_Reporting Requirements

169a.21 Reporting requirements.
169a.22 Responsibilities.

Appendix A to Part 169a--Codes and Definitions of Functional Areas
Appendix B to Part 169a--Commercial Activities Inventory Report and 
          Five-year Review Schedule
Appendix C to Part 169a--Simplified Cost Comparisons for Direct 
          Conversion of CAs
Appendix D to Part 169a--Commercial Activities Management Information 
          System (CAMIS)

    Authority: 5 U.S.C. 301 and 552.

    Source: 50 FR 40805, Oct. 7, 1985, unless otherwise noted.



                            Subpart A_General



Sec. 169a.1  Purpose.

    This part:

[[Page 689]]

    (a) Reissues DoD Instruction 4100.33 \1\ to update policy, 
procedures, and responsibilities required by DoD Directive 4100.15 \2\ 
and OMB Circular A-76 \3\ for use by the Department of Defense (DoD) to 
determine whether needed commercial activities (CAs) should be 
accomplished by DoD personnel or by contract with a commercial source.
---------------------------------------------------------------------------

    \1\ Copies may be obtained, at cost, from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161
    \2\ See footnote 1 to Sec. 169a.1(a).
    \3\ Copies may be obtained if needed, from the Office of Management 
and Budget, Executive Office Building, Washington, DC 20503.
---------------------------------------------------------------------------

    (b) Cancels DoD 4100.33-H, \4\ ``DoD In-House vs. Contract 
Commercial and Industrial Activities Cost Comparison Handbook.''
---------------------------------------------------------------------------

    \4\ See footnote 1 to Sec. 169a.1(a).
---------------------------------------------------------------------------



Sec. 169a.2  Applicability and scope.

    This part:
    (a) Applies to the Office of the Secretary of Defense (OSD), the 
Military Departments, the Defense Agencies and DoD Field Activities 
(hereafter referred to collectively as the ``DoD Components'').
    (b) Contains DoD procedures for CAs in the United States, its 
territories and possessions, the District of Columbia, and the 
Commonwealth of Puerto Rico.
    (c) Is not mandatory for CAs staffed solely with DoD civilian 
personnel paid by nonappropriated funds, such as military exchanges. 
However, this part is mandatory for CAs when they are staffed partially 
with DoD civilian personnel paid by or reimbursed from appropriated 
funds, such as libraries, open messes, and other morale, welfare, and 
recreation (MWR) activities. When related installation support functions 
are being cost-compared under a single solicitation, a DoD Component may 
decide that it is practical to include activities staffed solely with 
DoD civilian personnel paid by nonappropriated funds.
    (d) Does not apply to DoD governmental functions are defined in 
Sec. 169a.3.
    (e) Does not apply when contrary to law, Executive orders, or any 
treaty or international agreement.
    (f) Does not apply in times of a declared war or military 
mobilization.
    (g) Does not provide authority to enter into contracts.
    (h) Does not apply to the conduct of research and development, 
except for severable in-house CAs that support research and development, 
such as those listed in appendix A to this part.
    (i) Does not justify conversion to contract solely to avoid 
personnel ceilings or salary limitations.
    (j) Doe not authorize contracts that establish employer-employee 
relations between the Department of Defense and contractor employees as 
described in the Federal Acquisition Regulation (FAR), 48 CFR 37.104.
    (k) Does not establish and shall not be construed to create any 
substantive or procedural basis for anyone to challenge any DoD action 
or inaction on the basis that such action or inaction was not in 
accordance with this part except as specifically set forth in Sec. 
169a.15(d).

[57 FR 29207, July 1, 1992]



Sec. 169a.3  Definitions.

    Commercial activity review. The process of evaluating CAs for the 
purpose of determining whether or not a cost comparison will be 
conducted.
    Commercial source. A business or other non-Federal activity located 
in the United States, its territories and possessions, the District of 
Columbia, or the Commonwealth of Puerto Rico that provides a commercial 
product or service.
    Conversion to contract. The changeover of a CA from performance by 
DoD personnel to performance under contract by a commercial source.
    Conversion to in-house. The changeover of a CA from performance 
under contract by a commercial source to performance by DoD personnel.
    Cost comparison. The process of developing an estimate of the cost 
of performance of a CA by DoD employees and comparing it, in accordance 
with the requirements in this part, to the cost to the Government for 
contract performance of the CA.
    Directly affected parties. DoD employees and their representative 
organizations and bidders or offerers on the solicitation.

[[Page 690]]

    Displaced DoD employee. Any DoD employee affected by conversion to 
contract operation (including such actions as job elimination, grade 
reduction, or reduction in rank). It includes both employees in the 
function converted to contract and to employees outside the function who 
are affected adversely by conversion through reassignment or the 
exercise of bumping or retreat rights.
    DoD Commercial Activity (CA). An activity that provides a product or 
service obtainable (or obtained) from a commercial source. A DoD CA is 
not a Governmental function. A DoD CA may be an organization or part of 
another organization. It must be a type of work that is separable from 
other functions or activities so that it is suitable for performance by 
contract. A representative list of the functions performed by such 
activities is provided in Enclosure 1. A DoD CA falls into one of two 
categories:
    (a) In-house CA. A DoD CA operated by a DoD Component with DoD 
personnel.
    (b) Contract CA. A DoD CA managed by a DoD Component operated with 
contractor personnel.
    DoD Employee. Refers to only civilian personnel of the Department of 
Defense.
    DoD governmental function. A function that is related so intimately 
to the public interest as to mandate performance by DoD personnel. These 
functions require either the exercise of discretion in applying 
Government authority or the use of value judgement in making the 
decision for the Department of Defense.
    Services or products in support of Governmental functions such as 
those listed in enclosure 3 of DoD Instruction 4100.33 are normally 
subject to this part and its implementing instructions. Governmental 
functions normally fall into two categories:
    (a) The act of governing; that is, the discretionary exercise of 
Governmental authority. Examples include criminal investigations, 
prosecutions, and other judicial functions; management of Governmental 
programs requiring value judgments, as in direction of the national 
defense; management and direction of the Armed Services; activities 
performed exclusively by military personnel who are subject to 
deployment in a combat, combat support, or combat service support role; 
conduct of foreign relations; selection of program priorities; direction 
of Federal employees; regulation of the use of space, oceans, navigable 
rivers, and other natural resources; direction of intelligence and 
counterintelligence operations; and regulation of industry and commerce, 
including food and drugs.
    (b) Monetary transactions and entitlements, such as tax collection 
and revenue disbursements; control of the money supply treasury 
accounts; and the administration of public trusts.
    DoD personnel. Refers to both military and civilian personnel of the 
Department of Defense.
    Expansion. The modernization, replacement, upgrading, or enlargement 
of a DoD CA involving a cost increase exceeding either 30 percent of the 
total capital investment or 30 percent of the annual personnel and 
material costs. A consolidation of two or more CAs is not an expansion 
unless the proposed total capital investment or annual personnel and 
material costs of the consolidation exceeds the total of the individual 
CAs by 30 percent or more.
    New requirement. A recently established need for a commercial 
product or service. A new requirement does not include interim in-house 
operation of essential services pending reacquisition of the services 
prompted by such action as the termination of an existing contract 
operation.
    Preferential procurement programs. Mandatory source programs such as 
Federal Prison Industries (FPI) and the workshops administered by the 
Committee for Purchase from the Blind and Other Severely Handicapped 
under the Javits-Wagner-O'Day Act. Also included are small, minority and 
disadvantaged businesses, and labor surplus area set-asides and awards 
made under 15 U.S.C. section 637.

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29207, July 1, 1992]



Sec. 169a.4  Policy.

    (a) Ensure DoD mission accomplishment. The implementation of this 
part shall consider the overall DoD mission

[[Page 691]]

and the defense objective of maintaining readiness and sustainability to 
ensure a capability for mobilizing the defense and support structure.
    (b) Retain governmental functions in-house. Certain functions that 
are inherently governmental in nature, and intimately related to the 
public interest, mandate performance by DoD personnel only. These 
functions are not in competition with commercial sources; therefore, 
these functions shall be performed by DoD personnel.
    (c) Rely on the commercial sector. DoD Components shall rely on 
commercially available sources to provide commercial products and 
services, except when required for national defense, when no 
satisfactory commercial source is available, or when in the best 
interest of direct patient care. DoD Components shall not consider an 
in-house new requirement, an expansion of an in-house requirement, 
conversion to in-house, or otherwise carry on any CAs to provide 
commercial products or services if the products or services can be 
procured more economically from commercial sources.
    (d) Achieve economy and enhance productivity. Encourage competition 
with the objective of enhancing quality, economy, and performance.

When performance by a commercial source is permissible, a comparison of 
the cost of contracting and the cost of in-house performance shall be 
performed to determine who shall provide the best value for the 
Government, considering price and other factors included in the 
solicitation. If the installation commander has reason to believe that 
it may not be cost effective to make an award under mandatory source 
programs, section 8(a) of the Small Business Act or any other 
noncompetitive preferential procurement program, a cost comparison, or 
any other cost analysis, although not required by OMB Circular A-76, may 
be performed. Performance history will be considered in the source 
selection process, and high quality performance should be rewarded.
    (e) Delegate decision authority and responsibility. DoD Components 
shall delegate decision authority and responsibility to lower 
organization levels, giving more authority to the doers, and linking 
responsibility with that authority. This shall facilitate the work that 
installation commanders must perform without limiting their freedom to 
do their jobs. When possible, the installation commanders should have 
the freedom to make intelligent use of their resources, while preserving 
the essential wartime capabilities of U.S. support organizations in 
accordance with DoD Directive 4001.15. \5\
---------------------------------------------------------------------------

    \5\ See footnote 1 to Sec. 169a.1(a).
---------------------------------------------------------------------------

    (f) Share resources saved. When possible, make available to the 
installation commander a share of any resources saved or earned so that 
the commander can improve operations or working and living conditions on 
the installation.
    (g) Provide Placement Assistance. Provide a variety of placement 
assistance to employees whose Federal jobs are eliminated through CA 
competitions.
    (h) Permit interim-in-house operation. A DoD in-house CA may be 
established on a temporary basis if a contractor defaults. Action shall 
be taken to resolicit bids or proposals in accordance with this part.

[57 FR 29207, July 1, 1992]



                          Subpart B_Procedures



Sec. 169a.8  Inventory and review schedule (Report Control Symbol DD-P&L(A)).

    (a) Information in each DoD Component's inventory shall be used to 
assess DoD implementation of OMB Circular A-76 and for other purposes. 
Each Component's inventory shall be updated at least annually to reflect 
changes to their review schedule and the results of reviews, cost 
comparisons, and direct conversions. Updated inventories for all DoD 
Components except National Security Agency/Central Security Service 
(NSA/CSS) and the Defense Intelligence Agency (DIA) Shall be submitted 
to the Assistant Secretary of Defense Production and Logistics) 
(ASD(P&L)) within 90 days after the end of each fiscal year. Inventory 
data pertaining to NSA/CSS and DIA shall be held at the specific Agency 
concerned for subsequent review by properly cleared personnel. Appendix 
A to

[[Page 692]]

this part provides the codes and explanations for functional areas and 
Appendix B to this part provides procedures for submitting the 
inventory.
    (b) DoD component's review schedules should be coordinated with the 
DoD Component's Efficiency Review Program and the Defense Regional 
Interservice Support (DRIS) Program to preclude duplication of efforts 
and to make use of information already available.
    (c) Review of CAs that provide interservice support shall be 
scheduled by the supplying DoD Component. Subsequent cost comparisons, 
when appropriate, shall be executed by the same DoD Component. All 
affected DoD Components shall be notified of the intent to perform a 
review.

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29208, July 1, 1992]



Sec. 169a.9  Reviews: Existing in-house commercial activities.

    (a) DoD components shall conduct reviews of in-house CAs in 
accordance with their established review schedules. Existing in-house 
CAs, once reviewed shall be retained in-house without a cost comparison 
only when certain conditions are satisfied. (Detailed documentation will 
be maintained to support the decision to continue in-house performance). 
These conditions are as follows:
    (1) National Defense. In most cases, application of this criteria 
shall be made considering the wartime and peacetime duties of the 
specific positions involved rather than in terms of broad functions.
    (i) A CA, staffed with military personnel who are assigned to the 
activity, may be retained in-house for national defense reason when the 
following apply.
    (A) The CA is essential for training or experience in required 
military skills;
    (B) The CA is needed to provide appropriate work assignments for a 
rotation base for overseas or sea-to-shore assignments; or
    (C) The CA is necessary to provide career progression to needed 
military skill levels.
    (ii) Core logistics activities. The core logistics capability 
reported to Congress, March 29, 1984, under the provisions of 10 U.S.C. 
2646 is comprised of the facilities, equipment, and management personnel 
at the activities listed in the report. The work at those activities may 
be performed by either government or contractor personnel, whichever is 
more cost effective. Core logistics activities reported to Congress 
under the provisions of 10 U.S.C. 2646, shall be retained in-house 
unless the Secretary of Defense grants a waiver as provided for in 10 
U.S.C. 2464. Requests for waivers shall be submitted to the ASD (P&L). 
DoD Components may propose to the ASD (P&L) additional core logistics 
capability for inclusion in the list of core logistics activities. Core 
logistics activities reported to Congress as additions to the original 
list shall be retained in-house unless subsequently waived by the 
Secretary of Defense.
    (iii) If the DoD Component has a larger number of similar CAs with a 
small number of essential military personnel in each CA, action shall be 
taken, when appropriate, to consolidate the military positions 
consistent with military requirements so that economical performance by 
either DoD civilian employees or by contract can be explored for 
accomplishing a portion of the work.
    (iv) The DoD Components may propose to the ASD (P&L) other criteria 
for exempting CAs for national defense reasons.
    (2) No satisfactory commercial source available. A DoD commercial 
activity may be performed by DoD personnel when it can be demonstrated 
that:
    (i) There is no satisfactory commercial source capable of providing 
the product or service that is needed. Before concluding that there is 
no satisfactory commercial source available, the DoD Component shall 
make all reasonable efforts to identify available sources.
    (A) DoD Components' efforts to find satisfactory commercial sources 
shall be carried out in accordance with the FAR and Defense FAR 
Supplement (DFAS) including review of bidders lists and inventories of 
contractors, consideration of preferential procurement programs, and 
requests for help

[[Page 693]]

from Government agencies such as the Small Business Administration.
    (B) Where the availability of commercial sources is uncertain, the 
DoD Component will place up to three notices of the requirement in the 
Commerce Business Daily (CBD) over a 90-day period. (Notices will be in 
the format specified in FAR, 48 CFR part 5 and part 7, subpart 7.3) When 
a bona fide urgent requirement occurs, the publication period in the CBD 
may be reduced to two notices, 15 days apart. Specifications and 
requirements in the notice will not be unduly restrictive and will not 
exceed those required of Government personnel or operations.
    (ii) Use of a commercial source would cause an unacceptable delay or 
disruption of an essential program. In-house operation of a commercial 
activity on the basis that use of a commercial source would cause an 
unacceptable delay or disrupt an essential DoD program requires a 
specific documented explanation.
    (A) The delay or disruption must be specific as to cost, time, and 
performance measures.
    (B) The disruption must be shown to be a lasting or unacceptable 
nature. Temporary disruption caused by conversion to contract is not 
sufficient support for the use of this criteria.
    (C) The fact that a DoD commercial activity involves a classified 
program, or is part of a DoD Component's basic mission, or that there is 
the possibility of a strike by contract employees is not adequate reason 
for Government performance of that activity. Further, urgency alone is 
not an adequate reason to continue Government operation of a commercial 
activity. It must be shown that commercial sources are not able, and the 
Government is able, to provide the product or service when needed.
    (D) Use of an exemption due to an unacceptable delay or disruption 
of an essential program shall be approved by the DoD Component's central 
point of contact office. This authority may be redelegated.
    (3) Patient Care. Commercial activities at DoD hospitals may be 
performed by DoD personnel when it is determined by the head of the DoD 
Component or his designee, in consultation with the DoD Component's 
chief medical director, that performance by DoD personnel would be in 
the best interest of direct patient care.

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29208, July 1, 1992]



Sec. 169a.10  Contracts.

    When contract cost becomes unreasonable or performance becomes 
unsatisfactory, the requirement must be resolicited. If the DoD 
Component competes in the resolicitation, then a cost comparison of a 
contracted CA shall be performed in accordance with part III of the 
Supplement to OMB Circular A-76 (Office of Federal Procurement Policy 
pamphlet No. 4) \6\, part II of the Supplement to OMB Circular A-76 
(Management Study Guide) \7\, part IV of the Supplement to OMB Circular 
A-76 (Cost Comparison Handbook) \8\, if in-house performance is 
feasible. When contracted CAs are justified for conversion to in-house 
performance, the contract will be allowed to expire (options will not be 
exercised) once in-house capability is established.
---------------------------------------------------------------------------

    \6\ See footnote 3 to Sec. 169a.1(a).
    \7\ See footnote 3 to Sec. 169a.1(a).
    \8\ See footnote 3 to Sec. 169a.1(a).

[57 FR 29208, July 1, 1992]



Sec. 169a.11  Expansions.

    In cases where expansion of an in-house commercial activity is 
anticipated, a review of the entire commercial activity, including the 
proposed expansion, shall be conducted to determine if performance by 
DoD personnel is authorized for national defense reasons, because no 
commercial source is available, or because it is in the best interest of 
direct patient care. If performance by DoD personnel is not justified 
under these criteria, a cost comparison of the entire activity shall be 
performed. Government facilities and equipment normally will not be 
expanded to accommodate expansions if adequate and cost effective 
contractor facilities and equipment are available.

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29208, July 1, 1992]

[[Page 694]]



Sec. 169a.12  New requirements.

    (a) In cases where a new requirement for a commercial product or 
service is anticipated, a review shall be conducted to determine if 
performance by DoD personnel is authorized for national defense reasons, 
because no commercial source is available, or because it is in the best 
interest of direct patient care. If performance by DoD personnel is not 
justified under these criteria, then the new requirement normally shall 
be performed by contract.
    (b) If there is reason to believe that commercial prices may be 
unreasonable, a preliminary cost analysis shall be conducted to 
determine whether it is likely that the work can be performed in-house 
at a cost that is less than anticipated for contract performance. If in-
house performance appears to be more economical, a cost comparison shall 
be scheduled. The appropriate conversion differentials will be added to 
the preliminary in-house cost before it is determined that in-house 
performance is likely to be more economical.
    (c) Government facilities and equipment normally will not be 
expanded to accommodate new requirements if adequate and cost-effective 
contractor facilities are available. The requirement for Government 
ownership of facilities does not obviate the possibility of contract 
operation. If justification for in-house operation is dependent on 
relative cost, the cost comparison may be delayed to accommodate the 
lead time necessary for acquiring the facilities.
    (d) Approval or disapproval of in-house performance of new 
requirements involving a capital investment of $500,000 or more will not 
be redelegated below the level of DAS or equivalent.
    (e) Approval to budget for a major capital investment associated 
with a new requirement will not constitute OSD approval to perform the 
new requirement with DoD personnel. Government performance shall be 
determined in accordance with this part.



Sec. 169a.13  CAs involving forty-five or fewer DoD civilian employees.

    (a) When adequately justified under the criteria required in 
Appendix C to this part, CAs involving 11 to 45 DoD civilian employees 
may be competed based on simplified cost comparison procedures and 10 or 
fewer DoD civilian employees may be directly converted to contract 
without the use of a simplified cost comparison. Such conversion shall 
be approved by the DoD Component's central point of contact office 
having the responsibility for implementation of this part. Part IV of 
the Supplement to OMB Circular A-76 and Appendix C to this part shall be 
utilized to define the specific elements of costs to be estimated in the 
simplified cost comparison.
    (b) In no case shall any CA involving more than forty-five employees 
be modified, reorganized, divided, or in any way changed for the purpose 
of circumventing the requirement to perform a full cost comparison.
    (c) The decision to perform a simplified cost comparison on a CA 
involving military personnel and 11 to 45 DoD Civilian employees 
reflects a management decision that the work need not be performed in-
house. Therefore, all direct military personnel costs will be estimated 
in the simplified cost comparison (see Appendix C to this part) on the 
basis of civilian performance.
    (d) A most efficient and cost-effective organization analysis 
certification is required for studies involving 11 to 45 DoD civilian 
employees (see Appendix C to this part).

[57 FR 29208, July 1, 1992]



Sec. 169a.14  Military personnel commercial activity.

    Commercial activities performed exclusively by military personnel 
not subject to deployment in a combat, combat support, or combat service 
support role may be converted to contract without a cost comparison, 
when adequate competition is available and reasonable prices can be 
obtained from qualified commercial sources.



Sec. 169a.15  Special considerations.

    (a) Signals Intelligence, Telecommunications (SIGINT) and Automated 
Information System (AIS) security.
    (1) Before making a determination that an activity involving SIGINT 
as prescribed in Executive Order 12333, and AIS, security should be 
subjected

[[Page 695]]

to a cost comparison, the DoD Component shall specifically identify the 
risk to national security and complete a risk assessment to determine if 
the use of commercial resources poses a potential threat to national 
security. Information copies of the risk assessment and a decision 
memorandum containing data on the acceptable and/or unacceptable risk 
will be maintained within the requesting DoD Component's contracting 
office.
    (2) The National Security Agency (NSA) considers the polygraph 
program an effective means to enhance security protection for special 
access type information. The risk to national security is of an 
acceptable level if contractor personnel assigned to the maintenance and 
operation of SIGINT, Computer Security (COMPUSEC) and Communications 
Security (COMSEC) equipment agree to an aperiodic counter-intelligence 
scope polygraph examination. The following clause should be included in 
every potential contract involving SIGINT, Telecommunications, and AIS 
systems:

Contract personnel engaged in operation or maintaining SIGINT, COMSEC or 
COMPUSEC equipment or having access to classified documents or key 
material must consent to an aperiodic counter-intelligence scope 
polygraph examination administered by the Government. Contract personnel 
who refuse to take the polygraph examination shall not be considered for 
selection.
    (b) National intelligence. Before making a determination that an 
activity involving the collection/processing/production/dissemination of 
national intelligence as prescribed in Executive Order 12333 should be 
subjected to a cost comparison, the DoD Component must specifically 
identify the risk to national intelligence of using commercial sources. 
Except as noted in paragraph (a) of this section, the DoD Component 
shall provide its assessment of the risk to national intelligence of 
using commercial sources to the Director, DIA, who shall make the 
determination if the risk to national intelligence is unacceptable. DIA 
shall consult with other organizations as deemed necessary and shall 
provide the decision to the DoD Component. (Detailed documentation shall 
be maintained to support the decision).
    (c) Accountable Officer. (1) The functions and responsibilities of 
the Accountable Officer are defined by DoD 7200.10-M. \9\ Those 
functions of the Accountable Officer that involve the exercise of 
substantive discretionary authority in determining the Government's 
requirements and controlling Government assets cannot be performed by a 
contractor and must be retained in-house. The responsibilities of the 
Accountable Officer as an individual and the position of the Accountable 
Officer are not contractable.
---------------------------------------------------------------------------

    \9\ See footnote 1 to Sec. 169a.1(a).
---------------------------------------------------------------------------

    (2) Contractors can perform functions in support of the Accountable 
Officer and functions where they are performing in accordance with 
criteria defined by the Government. For instance, contractors can 
process requisitions, maintain stock control records, perform storage 
and warehousing, and make local procurements of items specified as 
deliverables in the contract.
    (3) The responsibility for administrative fund control must be 
retained in-house. The contractor can process all required paperwork up 
to funds obligation which must be done by the Government employee 
designated as responsible for funds control. The contractor can also 
process such documents as reports of survey and adjustments to stockage 
levels, but approval must rest with the Accountable Officer. In all 
cases, the administrative control of funds must be retained by the 
Government since contractors or their employees cannot be held 
responsible for violations of the United States Code.
    (d) Cost Comparison Process. If performance of a commercial activity 
by DoD personnel cannot be justified under national defense, non-
availability of commercial source, or patient care criteria, than a full 
cost comparison shall be conducted in accordance with part II of the 
Supplement to OMB Circular No. A-76, part III of the Supplement to OMB 
Circular No. A-76, and part IV of the Supplement to OMB Circular A-76, 
to determine if performance by DoD employees

[[Page 696]]

is justified on the basis of lower cost (unless the criteria of Sec. 
169a. and Sec. 169a. are met). The conclusion that a commercial 
activity will be cost compared reflects a management decision that the 
work need not be accomplished by military personnel. Therefore, all 
direct personnel costs shall be estimated on the basis of civilian 
performance. Funds shall be budgeted to cover either the cost of the 
appropriate in-house operation required to accomplish the work or the 
estimated cost of the contract. Neither funds nor manpower 
authorizations shall be removed from the activity's budget in 
anticipation of the outcome of a study.
    (1) Notification--(i) Congressional notification. DoD Components 
shall notify Congress of the intention to do a cost comparison involving 
46 or more DoD civilian personnel. DoD Components shall annotate the 
notification when a cost comparison is planned at an activity listed in 
the report to Congress on core logistics (see section 169a.9(a)(1)(ii)). 
The DoD Component shall notify the ADS(P&L) of any such intent at least 
5 working days before the Congressional notification. The cost 
comparison process begins on the date of Congressional notification.
    (ii) DoD employee notification. DoD Components shall, in accordance 
with 10 U.S.C. 2467(b), at least monthly during the development and 
preparation of the performance work statement (PWS) and management 
study, consult with DoD civilian employees who will be affected by the 
cost comparison and consider the views of such employees on the 
development and preparation of the PWS and management study. DoD 
Components may consult with such employees more frequently and on other 
matters relating to the cost comparison. In the case of DoD employees 
represented by a labor organization accorded exclusive recognition under 
5 U.S.C. 7111, consultation with representatives of the labor 
organization satisfies the consultation requirement. Consultation with 
nonunion DoD civilian employees may be through such means as group 
meetings. Alternatively, DoD civilian employees may be invited to 
designate one or more representatives to speak for them. Other methods 
may be implemented if adequate notice is provided to the nonunion DOD 
civilian employees and the right to be represented during the 
consultations is ensured.
    (iii) Local notification. It is suggested that upon starting the 
cost comparison process, the installation make an announcement of the 
cost comparison, including a brief explanation of the cost-comparison 
process to the employees of the activity and the community. The 
installations' labor relations specialist also should be apprised to 
ensure appropriate notification to employees and their representatives 
in accordance with applicable collective bargaining agreements. Local 
Interservice Support Coordinators (ISCs) and the Chair of the 
appropriate Joint Interservice Regional Support Group (JIRSG) also 
should be notified of a pending cost comparison.
    (2) Performance Work Statement (PWS). (i) The PWS and its Quality 
Assurance Plan shall be prepared in accordance with part II of the 
Supplement to OMB Circular No. A-76 5 for full cost comparison, 
simplified cost comparisons, and direct conversions of DoD personnel 
commercial activities. The PWS shall include reasonable performance 
standards that can be used to ensure a comparable level of performance 
for both Government and contractor and a common basis for evaluation. 
Employees and/or their bargaining unit representatives should be 
encouraged to participate in preparing or reviewing the PWS.
    (ii) Each DoD Component shall:
    (A) Prepare PWSs that are based on accurate and timely historical or 
projected workload data and that provide measurable and verifiable 
performance standards.
    (B) Monitor the development and use of prototype PWSs.
    (C) Review and initiate action to correct disagreements on PWS 
discrepancies.
    (D) Approve prototype PWSs for Component-wide use.
    (E) Coordinate these efforts with the other DoD Components to avoid 
duplication and to provide mutual assistance.
    (iii) Guidance on Government Property:

[[Page 697]]

    (A) For the purposes of this instruction, Government property is 
defined in accordance with the 48 CFR part 45.
    (B) The decision to offer or not to offer Government property to a 
contractor shall be determined by a cost-benefit analysis justifying 
that the decision is in the government's best interest. The 
determination on Government property must be supported by current, 
accurate, complete information and be readily available for the 
independent reviewing activity. The design of this analysis shall not 
give a decided advantage or disadvantage to either in-house or contract 
competitors. The management of Government property offered to the 
contractor shall also be in compliance with 48 CFR part 45.
    (iv) If a commercial activity provides critical or sensitive 
services, the PWS shall include sufficient data for the in-house 
organization and commercial sources to prepare a plan for expansion in 
emergency situations.
    (v) DoD Components that provide interservice support to other DoD 
Components or Federal agencies through interservice support agreements 
or other arrangements shall ensure that the PWS includes this work load 
and is coordinated with all affected Dod Components and Federal 
Agencies.
    (vi) If there is a requirement for the commercial source to have 
access to classified information in order to provide the product or 
service, the commercial source shall be processed for a facility 
security clearance under the Defense Industrial Security Program in 
accordance with DoD Directive 5220.22 \10\ and DoD Regulation 5220.22-R. 
\11\ However, if no bona fide requirement for access to classified 
information exists, no action shall be taken to obtain security 
clearance for the commercial source.
---------------------------------------------------------------------------

    \10\ See footnote 1 to Sec. 169a.1(a).
    \11\ See footnote 1 to Sec. 169a.1(a).
---------------------------------------------------------------------------

    (vii) Employees of commercial sources who do not require access to 
classified information for work performance, but require entry into 
restricted areas of the installation, may be authorized unescorted entry 
only when the provisions of DoD Regulation 5200.2-R \12\ apply.
---------------------------------------------------------------------------

    \12\ See footnote 1 to Sec. 169a.1(a).
---------------------------------------------------------------------------

    (3) Management Study. A management study shall be performed to 
analyze completely the method of operation necessary to establish the 
most efficient and cost-effective in-house organization (MEO) needed to 
accomplish the requirements in the PWS. The MEO must reflect only 
approved resources for which the commercial activity has been 
authorized. As a part of the management study, installations should 
determine if specific requirements can be met through an Inter/
Intraservice Support Agreement (ISA) with other activities or Government 
Agencies which have excess capacity or capability.
    (i) The commercial activity management study is mandatory. Part III 
of the Supplement to OMB Circular No. A-76 provides guidance on how to 
conduct the management study. The study shall identify essential 
functions to be performed, determine performance factors, organization 
structure, staffing, and operating procedures for the most efficient and 
cost effective in-house performance of the commercial activity. The MEO 
becomes the basis of the Government estimate for the cost comparison 
with potential contractors. In this context, ``efficient'' (or cost-
effective) means that the required level of workload (output, as 
described in the performance work statement) is accomplished with as 
little resource consumption (input) as possible without degradation in 
the required quality level of products or services.
    (ii) DoD Components have formal programs and training for the 
performance of management studies, and those programs are appropriate 
for teaching how to conduct commercial activity management studies. Part 
III of the Supplement to OMB Circular No. A-76 does not purport to 
replace the DoD Component's own management techniques, but merely to 
establish the basic criteria and the interrelationship between the 
management study and the PWS.
    (iii) If a commercial activity provides critical or sensitive 
services, the management study shall include a plan for expansion in 
emergency situations.

[[Page 698]]

    (iv) Early in the management study, management will solicit the 
views of the employees in the commercial activity under review, and/or 
their representatives for their recommendations as to the MEO or ways to 
improve the method of operation.
    (v) The management study will be the basis on which the DoD 
Component certifies that the Government cost estimate is based on the 
most efficient and cost effective organization practicable.
    (vi) Implementation of the MEO shall be initiated no later than 1 
month after cancellation of the soliciation and completed within 6 
months. DoD Components shall take action, within 1 month, to schedule 
and conduct a subsequent cost comparison when the MEO is not initiated 
and completed as prescribed above. Subsequent cost comparisons may be 
delayed by the DoD Component's central point of contact office, when 
situations outside the control of the DoD Component prevent timely or 
full implementation of the MEO. This authority may not be redelegated.
    (vii) DoD Components shall establish procedures to ensure that the 
in-house operation, as specified in the MEO, is capable of performing in 
accordance with the requirements of the PWS. The procedures also shall 
ensure that the resources (facilities, equipment, and personnel) 
specified in the MEO are available to the in-house operation and that 
in-house performance remains within the requirements and resources 
specified in the PWS and MEO for the period of the cost comparison, 
unless documentation to support changes in workload/scope is available.
    (viii) A management study is not required for simplified cost 
comparisons however, a MEO analysis and certification is required.
    (4) Cost Comparisons. Cost comparisons shall include all significant 
costs of both Government and contract performance. Common costs; that 
is, costs that would be the same for either in-house or contract 
operation, need not be computed, but the basis of those common costs 
must be identified and included in the cost comparison documentation. 
Part IV of the Supplement to OMB Circular A-76 (Cost Comparison 
Handbook) provides the basic guidance for conducting full cost 
comparisons. Appendix D provides guidance for conducting simplified cost 
comparisons. The supplemental guidance contained below is intended to 
establish uniformity and to ensure all factors are considered when 
making cost comparisons. Deviation from the guidance contained in part 
IV of the Supplement to OMB Circular A-76, will not be allowed, except 
as provided in the following subparagraphs.
    (i) In-house Cost Estimate. (A) The in-house cost estimate shall be 
based on the most efficient and cost-effective in-house organization 
needed to accomplish the requirements in the PWS.
    (B) Heads of DoD Components or their designees shall certify that 
the in-house cost estimate is based on the most efficient and cost-
effective operation practicable. Such certification shall be made before 
the bid opening or the date for receipt of initial proposals.
    (C) The ASD(P&L) shall provide inflation factors for adjusting costs 
for the first and subsequent performance periods. These factors shall be 
the only acceptable factors for use in cost comparisons. Inflation 
factors for outyear (second and subsequent) performance periods will not 
be applied to portions of the in-house estimate that are comparable with 
those portions of the contract estimate subject to economic price 
adjustment clauses.
    (D) Military positions in the organization under cost comparison 
shall be converted to civilian positions for costing purposes. Civilian 
grades and series shall be based on the work described in the PWS and 
the MEO, determined by the management study rather than on the current 
organization structure.
    (E) DoD Components shall not use the DLA Wholesale Stock Fund Rate 
and/or the DLA Direct Delivery rate for supplies and materials as 
reflected in paragraph 3.a. (1) and (2) of part IV of the Supplement to 
OMB Circular No. A-76. The current standard and pricing formula includes 
full cost under the Defense Business Operations Fund (DBOF). No further 
mark-up is required.
    (F) DoD Components shall assume for the purpose of depreciation 
computations that residual value is equal to the

[[Page 699]]

disposal values listed in Appendix C of part IV of the Supplemental to 
OMB Circular No. 76 (Cost Comparison Handbook) if more precise figures 
are not available from the official accounting records or other 
knowledgeable authority. Therefore, the basis for depreciation shall be 
the original cost plus the cost of capital improvements (if any) less 
the residual value. The original cost plus the cost of capital 
improvements less the residual value shall be divided by the useful life 
(as projected for the commercial activity cost comparison) to determine 
the annual depreciation.
    (G) Purchased services which augment the current in-house work 
effort and that are included in the PWS should be included in line 3 
(other specifically attributable costs). When these purchased services 
are long-term and contain labor costs subject to economic price 
adjustment clauses, then the applicable labor portion will not be 
escalated by outyear inflation factors. In addition, purchased services 
shall be offset for potential Federal income tax revenue by applying the 
appropriate rate in Appendix D of part IV of the Supplement to OMB 
Circular A-76 (Cost Comparison Handbook) to total cost of purchased 
services.
    (H) Overhead costs shall be computed only when such costs will not 
continue in the event of contract performance. This includes the cost of 
any position (full time, part time, or intermittent) that is dedicated 
to providing support to the activity(ies) under cost comparison 
regardless of the support organization's location. Military positions 
provided overhead support shall be costed using current military 
composite standard rates that include PCS costs multiplied by the 
appropriate support factor.
    (ii) Cost of Contract Performance. (A) The contract cost estimate 
shall be based on firm bids or negotiated proposals solicited in 
accordance with the FAR and the DoD FAR Supplement (DFARS) for full cost 
comparisons. Existing contract prices (such as those from GSA Supply 
Schedules) will not be used in a cost comparison. For simplified cost 
comparisons, the guidance in Appendix C of this part applies.
    (B) Standby costs are costs incurred for the upkeep of property in 
standby status. Such costs neither add to the value of the property nor 
prolong its life, but keep it in efficient operating condition or 
available for use. When an in-house activity is terminated in favor of 
contract performance and an agency elects to hold Government equipment 
and facilities on standby solely to maintain performance capability, 
this is a management decision, and such standby costs will not be 
charged to the cost of contracting.
    (C) A specific waiver is required to use contract administration 
factors that exceed the limits established in Table 3-1 of part IV of 
the Supplement to OMB Circular No. A-76 (Cost Comparison Handbook). The 
reason for the deviation from the limits, the supporting alternative 
computation, and documentation supporting the alternative method, shall 
be provided to the DoD Component's central point of contact office for 
advance approval on a case-by-case basis. The authority may not be 
redelegated. ASD(A&L) shall be notified within 30 days of any such 
decisions.
    (D) The following guidance pertains to one-time conversion costs:
    (1) Material Related Costs. The cost factors below shall be used, if 
more precise costs are not known, to estimate the cost associated with 
disposal/transfer of excess government material which result from a 
conversion to contract performance:

------------------------------------------------------------------------
                                                  Percentage of current
                                                     replacement cost
------------------------------------------------------------------------
Packing, crating , and handling (PCH)..........                      3.5
Transportation.................................                     3.75
------------------------------------------------------------------------

    (2) Labor-Related Costs. If unique circumstances prevail when a 
strict application of the 2 percent factor for computation of severance 
pay results in a substantial overstatement or understatement of this 
cost, an alternative methodology may be employed. The reason for the 
deviation from this standard, the alternative computation, and 
documentation supporting the alternative method shall be provided to the 
appropriate DoD Component's central point of contact office for advance

[[Page 700]]

approval on a case-by-case basis. This authority may not be redelegated.
    (3) Other Transition Costs. Normally, government personnel 
assistance after the contract start date (to assist in transition from 
in-house performance to contract performance) should not be necessary. 
When transition assistance will not be made available, this condition 
should be stated clearly in the solicitation so that contractors will be 
informed that they will be expected to meet full performance 
requirements from the first date of the contract. Also, when 
circumstances require full performance on the contract start date, the 
solicitation shall state that time will be made available for contractor 
indoctrination prior to the start date of the contract. The inclusion of 
personnel transition costs in a cost comparison requires advance 
approval of the DoD Component's central point of contact office. This 
authority may not be redelegated.
    (E) Gain or Loss on Disposal/Transfer of Assets. If more precise 
costs are not available from the Defense Reutilization and Marketing 
Office or appropriate authority, then:
    (1) The same factors for PCH and transportation costs as prescribed 
in Sec. 169a.12E(ii)(D)(1) for the costs associated with disposal/
transfer of materials may be used.
    (2) The estimated disposal value may be calculated from the net book 
value as derived from the table in Appendix C of part IV of the 
Supplement to OMB Circular No. A-76 (Cost Comparison Handbook), minus 
the disposal/transfer costs. This figure shall be entered as a gain or 
loss on line 11 or line 13 of the cost comparison form as appropriate.

    Note: If a cost-benefit analysis, as prescribed in Sec. 
169a.12(B)(iii), indicates that the retention of Government-owned 
facilities, equipment, or real property for use elsewhere in the 
Government is cost advantageous to the Government, then the cost 
comparison form shall reflect a gain to the Government and therefore a 
decrease to the cost of contracting on line 11 or line 13 of the cost 
comparison form as appropriate.

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29209, July 1, 1992]



Sec. 169a.16  Independent review.

    (a) The estimates of in-house and contracting costs that can be 
computed before the cost comparison shall be reviewed by a qualified 
activity, independent of the Task Group preparing the cost comparison. 
This review shall be completed far enough in advance of the bid or 
initial proposal opening date to allow the DoD Component to correct any 
discrepancies found before sealing the in-house cost estimate.
    (b) The independent review shall substantiate the currency, 
reasonableness, accuracy, and completeness of the inhouse estimate. The 
review shall ensure that the in-house cost estimate is based on the same 
required services, performance standards, and workload contained in the 
solicitation. The reviewer shall scrutinize and attest to the adequacy 
and authenticity of the supporting documentation. Supporting 
documentation shall be sufficient to require no additional 
interpretation.
    (c) The purpose of the independent review is to ensure costs have 
been estimated and supported in accordance with provisions of this 
Instruction. If no (or only minor) discrepancies are noted during this 
review, the reviewer indicates the minor discrepancies, signs, dates, 
and returns the CCF to the preparer. If significant discrepancies are 
noted during the review, the discrepancies shall be reported to the 
preparer for recommended correction and resubmission.
    (d) The independent review is not required for simplified cost 
comparisons.

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29210, July 1, 1992]



Sec. 169a.17  Solicitation considerations.

    (a) Every effort must be made to avoid postponement or cancellation 
of CA solicitations even if there are significant changes, omissions, or 
defects in the Government's in-house cost estimate. Such corrections 
shall be made before the expiration of bids or proposals and may require 
the extensions of bids or proposals. When there is no alternative, 
contracting officers must clearly document the reason(s).
    (b) Bidders or offerers shall be informed that an in-house cost 
estimate

[[Page 701]]

is being developed and that a contract may or may not result.
    (c) Bids or proposals shall be on at least a 3-year multi-year basis 
(when appropriate) or shall include prepriced renewal options to cover 2 
fiscal years after the initial period.
    (d) All contracts awarded as a result of a conversion (whether or 
not a cost comparison was performed) shall comply with all requirements 
of the FAR and DFARS.
    (e) Solicitations shall be restricted for preferential procurement 
when the requirements applicable to such programs (such as, small 
business set-asides or other required sources of supplies and services) 
are met, in accordance with the FAR.
    (f) Solicitations will not be restricted for preferential 
procurement unless the contracting officer determines that there is a 
reasonable expectation that the commercial prices will be fair and 
reasonable, in accordance with the FAR.
    (g) Contract defaults may result in temporary performance by 
Government personnel or other suitable means; such as, an interim 
contract source. Personnel detailed to such a temporary assignment 
should be clearly informed that they will return to their permanent 
assignment when a new contract is awarded. If the default occurs within 
the first year of contract performance, the following procedures apply:
    (1) If the Government was the next lowest bidder/offerer, and in-
house performance is still feasible, the function may be returned to in-
house performance. If in-house performance is no longer feasible, the 
contracting officer shall obtain the requirement by contract in 
accordance with the requirements of the FAR, 48 CFR part 49. A return to 
in-house performance under the above criteria shall be approved by the 
DoD Component's central point of contact office. This authority may not 
be redelegated.
    (2) If the contract wage rates are no longer valid or if the 
contracting officer, after a review of the availability of the next 
lowest responsible and responsive bidders/offerers, determines that 
resolicitation is appropriate, the Government may submit a bid for 
comparison with other bids/offers from the private sector. Submission of 
a Government bid requires a determination by the DoD Component that 
performance by DoD employees is still feasible and that a likelihood 
exists that such performance may be more economical than performance by 
contract. In such cost comparisons, the conversion differentials will 
not be applied to the costs of either in-house or contract performance.
    (h) If contract default occurs during the second or subsequent year 
of contract performance, the procedures of Sec. 169a.8(b)(2)(i) of this 
part apply.
    (1) Grouping of Commercial Activities. (i) The installation 
commander shall determine carefully which CAs should be grouped in a 
single solicitation. The installation commander should keep in mind that 
the grouping of commercial activities can influence the amount of 
competition (number of commercial firms that will bid or submit 
proposals) and the eventual cost to the Government.
    (ii) [Reserved]
    (2) The installation commander shall consider the adverse impacts 
that the grouping of commercial activities into a single solicitation 
may have on small and small disadvantaged business concerns. Commercial 
activities being performed wholly by small or small disadvantaged 
businesses will not be incorporated into a cost comparison unless 
consolidation is necessary to meet mission requirements. Actions must be 
taken to ensure that such contractors are not displaced merely to 
accomplish consolidation. Similarly, care must be taken so that 
nonincumbent small and small disadvantaged business contractors are not 
handicapped or prejudiced unduly from competing effectively at the prime 
contractor level.
    (3) In developing solicitations for commercial activities, the 
procurement plan should reflect an analysis of the advantages and 
disadvantages to the Government that might result from making more than 
one award. The decision to group commercial activities should reflect an 
analysis of all relevant factors including the following:
    (A) The effect on competition.

[[Page 702]]

    (B) The duplicative management functions and costs to be eliminated 
through grouping.
    (C) The economies of administering multifunction vs. single function 
contracts, including cost risks associated with the pricing structure of 
each.
    (D) The feasibility of separating unrelated functional tasks or 
groupings.
    (E) The effect grouping will have on the performance of the 
functions.
    (4) When the solicitation package includes totally independent 
functions which are clearly divisible, severable, limited in number, and 
not price interrelated, they shall be solicited on the basis of an ``any 
or all'' bid or offer. Commerical bidders or offerors shall be permitted 
to submit bids or offers on one or any combination of the functions 
being solicited. These bids or offers shall be evaluated to determine 
the lowest aggregate contract cost to the Government. This lowest 
aggregate contract cost then will be compared to the in-house cost 
estimate based on the MEO for performance of the functions in the single 
solicitation. The procedures in part IV of the Supplement to OMB 
Circular No. A-76 (Cost Comparison Handbook) apply.
    (5) There are instances when this approach to contracting for CAs 
may not apply; such as, situations when physical limitations of site 
(where the activities are to be performed) preclude allowing more than 
one contractor to perform, when the function cannot be divided for 
purposes of performance accountability, or for other national security 
considerations. However, if an ``all or none'' solicitation is issued, 
the decision to do so must include a cost analysis to reflect that the 
``all or none'' solicitation is less costly to the Government or an 
analysis indicating it is otherwise in the best interest of the 
Government, all factors considered.
    (6) It is recognized that in some cases, decisions will result in 
the elimination of prime contracting opportunities for small business. 
In such cases special measures shall be taken. At a minimum, small and 
small disadvantaged business concerns shall be given preferential 
consideration by all competing prime contractors in the award of 
subcontracts. For negotiated procurements the degree to which this is 
accomplished will be a weighted factor in the evaluation and source 
selection process leading to contract award.
    (7) The contract files shall be documented fully to demonstrate 
compliance with these procedures.
    (i) If no bids or proposals, or no responsive or responsible bids or 
proposals are received in response to a solicitation, the in-house cost 
estimate shall remain unopened. The contracting officer shall examine 
the solicitation to ascertain why no responses were received. Depending 
on the results of this review, the contracting officer shall consider 
restructuring the requirement, if feasible and reissue it under 
restricted or unrestricted solicitation procedures, as appropriate.
    (j) Continuation of an in-house CA for lack of a satisfactory 
commercial source will not be based upon lack of response to a 
restricted solicitation.
    (k) The guidance of subparagraph E.3.f. applies to sumplified cost 
comparisons and direct conversions of military personnel CAs.
    (l) To ensure that bonds and/or insurance requirements are being 
used in the best interest of the Government, as a general rule, 
requirements (for other than construction related services) above the 
levels established in the FAR and DFARS should not be included in 
acquisitions.

[50 FR 40805, Oct. 7, 1985, as amended at 56 FR 27901, June 18, 1991; 57 
FR 29210, July 1, 1992]



Sec. 169a.18  Administrative appeal procedures.

    (a) Appeals of Cost Comparison Decisions. (1) Each DoD Component 
shall establish an administrative appeals procedure to resolve questions 
from directly affected parties relating to determinations resulting from 
cost comparisons performed in compliance with this part. The appeal 
procedure will not apply to questions concerning the following:
    (i) Award to one contractor in preference to another;
    (ii) DoD management decisions.
    (2) The appeals procedure is to provide an administrative safeguard 
to ensure that DoD Component decisions are fair, equitable, and in 
accordance with procedures in this part. The procedure

[[Page 703]]

does not authorize an appeal outside the DoD Component or a judicial 
review.
    (3) The appeals procedure shall be independent and objective and 
provide for a decision on the appeal within 30 calendar days of receipt 
of the appeal. The decision shall be made by an impartial official at a 
level organizationally higher than the official who approved the cost 
comparison decision. The appeal decision shall be final, unless the DoD 
Component procedures provide for further discretionary review within the 
DoD Component.
    (4) All detailed documentation supporting the initial cost 
comparison decision shall be made available to directly affected parties 
upon request when the initial decision is announced. The detailed 
documentation shall include, at a minimum, the following: the in-house 
cost estimate with detailed supporting documentation (see Sec. 
169a.5(c)(ii) of this part), the completed CCF, name of the tentative 
winning contractor (if the decision is to contract), or the price of the 
bidder whose bid or proposal would have been most advantageous to the 
Government (if the decision is to perform in-house). If the 
documentation is not available when the initial decision is announced, 
the time alloted for submission of appeals shall be extended the number 
of days equal to the delay.
    (5) To be considered eligible for review under the DoD Component 
appeals procedures, appeals shall:
    (i) Be received by the DoD Component in writing within 15 working 
days after the date the supporting documentation is made available to 
directly affected parties.
    (ii) Address specific line items on the CCF and the rationale for 
questioning those items.
    (iii) Demonstrate that the result of the appeal may change the 
decision.
    (b) Appeals of Simplified Cost Comparisons and Direct Conversions. 
(1) Directly affected parties may appeal decision to convert to contract 
based on a simplified cost comparison involving 11-45 DoD civilian 
employees or a direct conversion involving 10 or fewer DoD civilian 
employees. The appeal must address reasons why fair and reasonable 
prices will not be obtainable.
    (2) Each DoD Component shall establish an administrative appeal 
procedure that is independent and objective; Installation Commanders 
must make available, upon request, the documentation supporting the 
decision to directly convert activities; appeals of direct conversions 
must be filed within 30 calendar days after the decision is announced in 
the Commerce Business Daily and/or Federal Register, and the supporting 
documentation is made available; an impartial official one level 
organizationally higher than the official who approved the direct 
conversion decision shall hear the appeal; officials shall provide an 
appeal decision within 30 calendar days of receipt of the appeal.
    (c) Since the appeal procedure is intended to protect the rights of 
all directly affected parties, the DoD Component's procedures, as well 
as the decision upon appeal, will not be subject to negotiation, 
arbitration, or agreement.
    (d) DoD Components shall include administrative appeal procedures as 
part of their implementing documents.

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29210, July 1, 1992]



Sec. 169a.19  Study limits.

    No DoD funds shall be available to perform any cost study pursuant 
to the provisions of OMB Circular A-76 if the study being performed 
exceeds a period of 24 months after initiation of such study with 
respect to a single function activity or 48 months after initiation of 
such study for a multi-function activity.

[60 FR 67328, Dec. 29, 1995]



                    Subpart C_Reporting Requirements



Sec. 169a.21  Reporting requirements.

    (a) Inventory and Review Schedule (Report Control Symbol DD-A&T(A) 
1540). See Sec. 169a.8(a) of this part.
    (b) Commercial Activities Management Information System (CAMIS) 
(Report Control Symbol DD-A&T(Q) 1542). (1) The purpose of CAMIS is to 
maintain an accurate DoD data base of commercial activities that undergo 
an OMB Circular A-76 cost comparison and CAs

[[Page 704]]

that are converted directly to contract without a cost comparison. The 
CAMIS is used to provide information to the Congress, Office of 
Management Budget (OMB), General Accounting Office (GAO), OSD, and 
others. The CAMIS is divided into two parts. Part I contains data on CAs 
that undergo cost comparison. Part II contains data on commercial 
activities converted to contract without a full cost comparison.
    (2) The CAMIS report shall be submitted in accordance with the 
procedures in Appendix C.
    (c) Congressional Data Reports on CA (Report Control Symbol DD-
A&T(A&AR) 1949) and Reports on savings on Costs from Increased Use of 
DoD Civilian Personnel (Report Control Symbol DD-A&T(AR) 1950). To 
insure consistent application of the requirements stated in 10 U.S.C. 
2461 and 2463, the following guidance is provided:
    (1) The geographic scope of section 10 U.S.C. 2461 applies to the 
United States, its territories and possessions, the District of 
Columbia, and the Commonwealth of Puerto Rico.
    (2) Section 10 U.S.C. 2461 applies to proposed conversions of DoD 
CAs that on October 1, 1980, were being performed by more than forty-
five DoD civilian employees. 10 U.S.C. 2463 applies to conversions from 
contract to in-house involving 50 or more contractor employees.
    (3) DoD Components must not proceed with a CA study until 
notification to Congress, as required by 10 U.S.C. 2461. DoD Components 
shall notify the ASD(ES) of any such intent at least 5 working days 
before congressional notification.
    (4) DoD Components shall annotate announcements to Congress when a 
cost comparison is planned at an activity listed in the report to 
Congress on Core Logistics (see Sec. 169a.8(b)(1)(i)(2) of this part).
    (5) The DoD Components shall notify Congress, at least 5 working 
days before sending the detailed summary report required by 10 U.S.C. 
2461 to Congress. The detailed summary of the cost shall include: the 
amount of the offer accepted for the performance of the activity by the 
private contractor; the costs and expenditures that the Government will 
incur because of the contract; the estimated cost of performance of the 
activity by the most efficient Government organization; a statement 
indicating the life of the contract; and certifications that the entire 
cost comparison is available, and that the Government calculation for 
the cost of performance of such function by DoD employees is based on an 
estimate of the most efficient and cost-effective organization for 
performance of such function by DoD employees.
    (6) The potential economic effect on the employees affected, the 
local community, and the Federal Government of contracting for 
performance of the function shall be included in the report to accompany 
the above certifications, if more than 75 total employees (including 
military and civilian, both permanent and temporary) are potentially 
affected. It is suggested that the Army Corps of Engineers' model (or 
equivalent) be used to generate this information. The potential impact 
on affected employees shall be included in the report, regardless of the 
number of employees involved. Also include in the report a statement 
that the decision was made to convert to contractor performance, the 
projected date of contract award, the projected contract start date, and 
the effect of contracting the function on the military mission of that 
function.
    (7) By December 15th of each year, each DoD Component shall submit 
to the ASD(P&L) the data required by 10 U.S.C. 2461(c). In describing 
the extent to which CA functions were performed by DoD contractors 
during the preceding fiscal year, include the estimated number of work 
years for the in-house operation as well as for contract operation 
(including percentages) by major OSD functional areas in Appendix A to 
this part; such as, Social Services, Health Services, Installation 
Services, etc. For the estimate of the percentage of CA functions that 
will be performed in-house and those that will be performed by contract 
during the fiscal year during which the report is submitted, include the 
estimated work years for in-house CAs as well as for contracted CAs and 
the rationale for significant changes when compared to

[[Page 705]]

the previous year's data. Also, include the number of studies you expect 
to complete in the next fiscal year showing total civilian and military 
FTEs.

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29210, July 1, 1992; 60 
FR 67329, Dec. 29, 1995]



Sec. 169a.22  Responsibilities.

    The responsibilities for implementing the policies and procedures of 
the DoD CA Program are prescribed in DoD Directive 4100.15 (32 CFR part 
169) and appropriate paragraphs of this part.

[57 FR 29210, July 1, 1992]



 Sec. Appendix A to Part 169a--Codes and Definitions of Functional Areas

    This list of functional codes and their definitions does not 
restrict the applicability or scope of the commerical activity Program 
within DoD. Section B. of DoD Directive 4100.15 defines the 
applicability and scope of the program. The commerical activity program 
still applies to CAs not defined in this listing. These codes and 
definitions are a guide to assist reporting. As new functions are 
identified, codes will be added or existing definitions will be 
expanded.

                             Social Services

    G001 Care of Remains of Deceased Personnel and/or Funeral Services. 
Includes CAs that provide mortuary services, including transportation 
from aerial port of embarkation (APOE) to mortuary of human remains 
received from overseas mortuaries, inpection, restoration, provision of 
uniform and insignia, dressing, flag, placement in casket, and 
preparation for onward shipment.
    G008 Commissary Store Operation. Includes CAs that provide all 
ordering, receipt, storage, stockage, and retailing for commissaries. 
Excludes procurement of goods for issue or resale.
    G008A: Shelf Stocking.
    G008B: Check Out.
    G008C: Meat Processing.
    G008D: Produce Processing.
    G008E: Storage and Issue.
    G008F: Other.
    G008G: Troop Subsistance Issue Point.
    G009 Clothing Sales Store Operation. Includes commercial activities 
that provide ordering, receipt, storage, stockage, and retailing of 
clothing. Stores operated by the Army and Air Force Exchange Services, 
Navy Exchange Services, and Marine Corps Exchange Services are excluded.
    G010 Recreational Library Services. Includes operation of libraries 
maintained primarily for off-duty use by military personnel and their 
dependents.
    G011 Other Morale, Welfare, and Recreation Services. Operation of 
commercial activities maintained primarily for the off-duty use of 
military personnel and their dependents, including both appropriated and 
partially nonappropriated fund activities. The operation of clubs and 
messes, and morale support activities are included in code G011. 
Examples of activities performing G011 functions are arts and crafts, 
entertainment, sports and athletics, swimming, bowling, marina and 
boating, stables, youth activities, centers, and golf. DoD Directive 
1015.1 \1\ contains amplification of the categories reflected below. 
(NOTE: commercial activities procedures are not mandatory for functions 
staffed solely by civilian personnel paid by nonappropriated funds.)
---------------------------------------------------------------------------

    \1\ See footnote 1 to Sec. 169.1(a).
---------------------------------------------------------------------------

    G011A: All Category II Nonappropriated Fund Instrumentalities 
(NAFIs), except Package Beverage Branch.
    G011B: Package Beverage Branch.
    G011C: All Category IIIa NAFIs.
    G011D: All Category IIIb1, except Libraries.
    G011E: Category IIIb2 Arts and Crafts.
    G011F: Category IIIb2 Music & Theatre.
    G011G: Category IIIb2 Outdoor Recreation.
    G011H: Category IIIb2 Youth Activities.
    G011I: Category IIIb2 Child Development Service.
    G011J: Category IIIb2 Sports--Competitive.
    G011K: All Category IIIb3 except Armed Forces Recreation Center 
(AFRC) Golf Bowling, and membership associations converted from Category 
VI.
    G011L: Category IIIb3 AFRC.
    G011M: Category IIIb3 Golf.
    G011N: Category IIIb3 Bowling.
    G011O: Category IIIb3 membership associations converted from 
Category VI.
    G011P: Category III Information Tour and Travel (ITT).
    G011Q: All Category IV.
    G011R: All Category V.
    G011S: All Category VI, except those converted to Category IIIb3.
    G011T: All Category VII.
    G011U: All Category VIII, except billeting and hotels.
    G011V: Category VIII Billeting.
    G011W: Category VIII Hotels.
    G012 Community Services. DoD Directive 1015.1 contains further 
amplification of the categories.
    G012A: Information and Referral.
    G012B: Relocation Assistance.
    G012C: Exceptionl Family Member.
    G012D: Family Advocacy (Domestic Violence).
    G012E: Foster Care.
    G012F: Family Member Employment.
    G012G: Installation Volunteer Coordination.
    G012H: Outreach.

[[Page 706]]

    G012I: Volunteer Management.
    G012J: Office Management.
    G012K: Consumer Affairs/Financial Assistance.
    G012L: General and Emergency Family Assistance.
    G900 Chaplain Activities and Support Services. Includes commercial 
activities that provide non-military unique support services that 
supplement the command religious program such as non-pastoral 
counseling, organists, choir directors, and directions of religious 
education. The command religious program, which includes chaplains and 
enlisted support personnel, is a Governmental function and is excluded 
from this category.
    G901 Berthing BOQ/BEQ. Includes commercial activities that provide 
temporary or permanent accommodations for officer or enlisted personnel. 
Management of the facility, room service, and daily cleaning are 
included.
    G904 Family Services. Includes commercial activities that perform 
various social services for families, such as family counseling, 
financial counseling and planning, the operation of an abuse center, 
child care center, or family aid center.
    G999 Other Social Services. This code will only be used for unusual 
circumstances and will not be used to report organizations or work that 
can be accommodated under a specifically defined code.

                             Health Services

    H101 Hospital Care. Includes commercial activities that provide 
outpatient and inpatient care and consultative evaluation in the medical 
specialties, including pediatrics and psychiatry; the coordination of 
health care delivery relative to the examination, diagnosis, treatment, 
and disposition of medical inpatients.
    H102 Surgical Care. Includes commercial activities that provide 
outpatient and inpatient care and consultative evaluation in the 
surgical specialties, including obstetrics, gynecology, ophthalmology 
and otorhinolaryngology; the coordination of health care delivery 
relative to the examination, treatment, diagnosis, and disposition of 
surgical patients.
    H105 Nutritional Care. Includes commercial activities that provide 
hospital food services for inpatients and outpatients, dietetic 
treatment, counseling of patients, and nutritional education.
    H106 Pathology Services. Includes commercial activities involved in 
the operation of laboratories providing comprehensive clinical and 
anatomical pathology services; DoD military blood program and blood bank 
activities; and area reference laboratories.
    H107 Radiology Services. Includes commercial activities that provide 
diagnostic and therapeutic radiologic service to inpatients and 
outpatients, including the processing, examining, interpreting, and 
storage and retrieval of radiographs, fluorographs, and radiotherapy.
    H108 Pharmacy Services. Includes commercial activities that produce, 
preserve, store, compound, manufacture, package, control, assay, 
dispense, and distribute medications (including intravenous solutions) 
for inpatients and outpatients.
    H109 Physical Therapy. Includes commercial activities that provide 
care and treatment to patients whose ability to function is impaired or 
threatened by disease or injury; primarily serve patients whose actual 
impairment is related to neuromusculoskeletal, pulmonary, and 
cardiovascular systems; evaluate the function and impairment of these 
systems, and select and apply therapeutic procedures to maintain, 
improve, or restore these functions.
    H110 Materiel Services. Includes commercial activities that provide 
or arrange for the supplies, equipment, and certain services necessary 
to support the mission of the medical facility; responsibilities include 
procurement, inventory control, receipt, storage, quality assurance, 
issue, turn-in, disposition, property accounting, and reporting actions 
for designated medical and nonmedical supplies and equipment.
    H111 Orthopedic Services. Includes commercial activities that 
construct orthopedic appliances such as braces, casts, splints, 
supports, and shoes from impressions, forms, molds, and other 
specifications.
    H112 Ambulance Service. Includes commercial activities that provide 
transportation for personnel who are injured, sick, or otherwise require 
medical treatment, including standby duty in support of military 
activities and ambulance bus services.
    H113 Dental Care. Includes commercial activities that provide oral 
examinations, patient education, diagnosis, treatment, and care 
including all phases of restorative dentistry, oral surgery, 
prosthodontics, oral pathology, periodontics, orthodontics, endodontics, 
oral hygiene, preventive dentistry, and radiodontics.
    H114 Dental Laboratories. Includes commercial activities that 
operate dental prosthetic laboratories required to support the provision 
of comprehensive dental care; services may include preparing casts and 
models, repairing dentures, fabricating transitional, temporary, or 
orthodontic appliances, and finishing dentures.
    H115 Clinics and Dispensaries. Includes commercial activities that 
operate freestanding clinics and dispensaries that provide health care 
services. Operations are relatively independent of a medical treatment 
facility and are separable for in-house or contract performance. Health 
clinics, occupational health clinics, and occupational health nursing 
offices.

[[Page 707]]

    H116 Veterinary Services. Includes commercial activities that 
provide a complete wholesomeness and quality assurance food inspection 
program, including sanitation, inspection of food received, surveillance 
inspections, and laboratory examination and analysis; a complete 
zoonosis control program; complete medical care for Government-owned 
animals; veterinary medical support for biomedical research and 
development; support to other Federal agencies when requested and 
authorized; assistance in a comprehensive preventive medicine program; 
and determination of fitness of all foods that may have been 
contaminated by chemical, bacteriological, or radioactive materials.
    H117 Medical Records Transcription. Includes commercial activities 
that transcribe, file, and maintain medical records.
    H118 Nursing Services. Includes commercial activities that provide 
care and treatment for inpatients and outpatients not required to be 
performed by a doctor.
    H119 Preventive Medicine. Includes commercial activities that 
operate wellness or holistic clinics (preventive medicine), information 
centers, and research laboratories.
    H120 Occupational Health. Includes commercial activities that 
develop, monitor, and inspect installation safety conditions.
    H121 Drug Rehabilitation. Includes commercial activities that 
operate alcohol treatment facilities, urine testing for drug content, 
and drug/alcohol counseling centers.
    H999 Other Health Services. This code will only be used for unusual 
circumstances and will not be used to report organizations or work that 
can be accommodated under a specifically defined code.

  Intermediate, Direct, or General Repair and Maintenance of Equipment

    Definition. Maintenance authorized and performed by designated 
maintenance commercial activities in support of using activities. 
Normally, it is limited to replacement and overhaul of unserviceable 
parts, subassemblies, or assemblies. It includes (1) intermediate/
direct/general maintenance performed by fixed activities that are not 
designed for deployment to combat areas and that provide direct support 
of organizations performing or designed to perform combat missions from 
bases in the United States, and (2) any testing conducted to check the 
repair procedure. Commercial activities engaged in intermediate/direct/
general maintenance and/or repair of equipment are to be grouped 
according to the equipment predominantly handled, as follows:
    J501 Aircraft. Aircraft and associated equipment. Includes armament, 
electronic and communications equipment, engines, and any other 
equipment that is an integral part of an aircraft.
    J502 Aircraft Engines. Aircraft engines that are not repaired while 
an integral part of the aircraft.
    J503 Missiles. Missile systems and associated equipment. Includes 
mechanical, electronics, and communication equipment that is an integral 
part of missile systems.
    J504 Vessels. All vessels, including armament, electronics, 
communications and any other equipment that is an integral part of the 
vessel.
    J505 Combat Vehicles. Tanks, armored personnel carriers, self-
propelled artillery, and other combat vehicles. Includes armament, fire 
control, electronic, and communications equipment that is an integral 
part of a combat vehicle.
    J506 Noncombat Vehicles. Automotive equipment, such as tactical, 
support, and administrative vehicles. Includes electronic and 
communications equipment that is an integral part of the noncombat 
vehicle.
    J507 Electronic and Communications Equipment. Stationary, mobile, 
portable, and other electronic and communications equipment. Excludes 
electronic and communications equipment that is an integral part of 
another weapon/support system. Maintenance of Automatic Data Processing 
Equipment (ADPE) not an integral part of a communications system shall 
be reported under functional code W825; maintenance of tactical ADPE 
shall be reported under function code J999.
    J510 Railway Equipment. Locomotives of any type or gauge, including 
steam, compressed air, straight electric, storage battery, diesel 
electric, gasoline, electric, diesel mechanical locomotives, railway 
cars, and cabooses. Includes electrical equipment for locomotives and 
cars, motors, generators, wiring supplies for railway tracks for both 
propulsion and signal circuits, and on-board communications and control 
equipment.
    J511 Special Equipment. Construction equipment, weight lifting, 
power, and materiel handling equipment (MHE).
    J512 Armament. Small arms, artillery and guns, nuclear munitions, 
chemical, biological, and radiological (CBR) items, conventional 
ammunition, and all other ordnance items. Excludes armament that is an 
integral part of another weapon or support system.
    J513 Dining Facility Equipment. Dining facility kitchen appliances 
and equipment.
    J514 Medical and Dental Equipment. Medical and dental equipment.
    J515 Containers, Textiles, Tents, and Tarpaulins. Containers, tents, 
tarpaulins, other textiles, and organizational clothing.
    J516 Metal Containers. Container Express (CONEX) containers, 
gasoline containers, and other metal containers.
    J517 Training Devices and Audiovisual Equipment. Training devices 
and audiovisual equipment. Excludes maintenance of locally

[[Page 708]]

fabricated devices and functions reported under codes T807 and T900.
    J519 Industrial Plant Equipment. That part of plant equipment with 
an acquisition cost of $3,000 or more, used to cut, abrade, grind, 
shape, form, join, test, measure, heat, or otherwise alter the physical, 
electrical, or chemical properties of materiels, components, or end 
items entailed in manufacturing, maintenance, supply processing, 
assembly, or research and development operations.
    J520 Test, Measurement, and Diagnostic Equipment. Test, measurement, 
and diagnostic equipment (TMDE) that has resident in it a programmable 
computer. Included is equipment referred to as automated test equipment 
(ATE).
    J521 Other Test, Measurement, and Diagnostic Equipment. Test, 
measurement, and diagnostic equipment not classified as ATE or that does 
not contain a resident programmable computer. Includes such items as 
electronic meters, armament circuit testers, and other specialized 
testers.
    J522 Aeronautical Support Equipment. Aeronautical support equipment 
excluding TMDE (and ATE). Includes such items as ground electrical power 
carts, aircraft tow tractors, ground air conditioners, engine stands, 
and trailers. Excludes aeronautical equipment reported under J501.
    J999 Other Intermediate, Direct, or General Repair and Maintenance 
of Equipment. This code will only be used for unusual circumstances and 
will not be used to report organizations or work that can be 
accommodated under a specifically defined code.

  Depot Repair, Maintenance, Modification, Conversion, or Overhaul of 
                                Equipment

    Definition. The maintenance performed on materiel that requires 
major overhaul or a complete rebuild of parts, assemblies, 
subassemblies, and end items, including the manufacture of parts, 
modifications, testing, and reclamation, as required. Depot maintenance 
serves to support lower categories of maintenance. Depot maintenance 
provides stocks of serviceable equipment by using more extensive 
facilities for repair than are available in lower level maintenance 
activities. (See DoD Instruction 4151.15 \2\ for further amplification 
of the category definitions reflected below.) Depot or indirect 
maintenance functions are identified by the type of equipment maintained 
or repaired.
---------------------------------------------------------------------------

    \2\ See footnote 1 to Sec. 169a.1(a).
---------------------------------------------------------------------------

    K531 Aircraft. Aircraft and associated equipment. Includes armament, 
electronics and communications equipment, engines, and any other 
equipment that is an integral part of an aircraft. Aeronautical support 
equipment not reported separately under code K548.
    K532 Aircraft Engines. Aircraft engines that are not repaired while 
an integral part of the aircraft.
    K533 Missiles. Missile systems and associated equipment. Includes 
mechanical, electronic, and communications equipment that is an integral 
part of missile systems.
    K534 Vessels. All vessels, including armament, electronics, and 
communications equipment, and any other equipment that is an integral 
part of a vessel.
    K535 Combat Vehicles. Tanks, armored personnel carriers, self-
propelled artillery, and other combat vehicles. Includes armament, fire 
control, electronics, and communications equipment that is an integral 
part of a combat vehicle.
    K536 Noncombat Vehicles. Automotive equipment, such as tactical 
support and administrative vehicles. Includes electronic and 
communications equipment that is an integral part of the vehicle.
    K537 Electronic and Communications Equipment. Stationary, mobile, 
portable, and other electronics and communications equipment. Excludes 
electronic and communications equipment that is an integral part of 
another weapon/support system. Maintenance of ADPE, not an integral part 
of a communications system, is reported under functional code W825.
    K538 Railway Equipment. Locomotives of any type or gauge, including 
steam, compressed air, straight electric, storage battery, diesel 
electric, gasoline, electric, diesel mechanical locomotives, railway 
cars, and cabooses. Includes electrical equipments for locomotives and 
cars, motors, generators, wiring supplies for railway tracks for both 
propulsion and signal circuits, and on-board communication and control 
equipment.
    K539 Special Equipment. Construction equipment, weight lifting, 
power, and materiel-handling equipment.
    K540 Armament. Small arms; artillery and guns; nuclear munitions, 
CBR items; conventional ammunition; and all other ordnance items. 
Excludes armament that is an integral part of another weapon or support 
system.
    K541 Industrial Plant Equipment. That part of plant equipment with 
an acquisition cost of $3,000 or more, used to cut, abrade, grind, 
shape, form, join, test, measure, heat, or otherwise alter the physical, 
electrical, or chemical properties of materials, components, or end 
items entailed in manufacturing, maintenance, supply, processing, 
assembly, or research and development operations.
    K542 Dining Facility Equipment. Dining facility kitchen applicances 
and equipment. This includes field feeding equipment.
    K543 Medical and Dental Equipment. Medical and dental equipment.

[[Page 709]]

    K544 Containers, Textiles, Tents and Tarpaulins. Containers, tents, 
tarpaulins, and other textiles.
    K545 Metal Containers.  CONEX containers, gasoline containers, and 
other metal containers.
    K546 Test Measurement and Diagnostic Equipment. Test measurement and 
diagnostic equipment (TMDE) that has resident in it a programmable 
computer. Included is equipment referred to as automated test equipment 
(ATE).
    K547 Other Test Measurement and Diagnostic Equipment. Test 
measurement and diagnostic equipment not classfied as ATE or that does 
not contain a resident programmable computer. Includes such items as 
electronic meters, armament circuit testers, and other specialized 
testers.
    K548 Aeronautical Support Equipment. Aeronautical support equipment 
excluding TMDE (and ATE). Includes such items as ground electrical power 
carts, aircraft tow tractors, ground air conditioners, engine stands, 
and trailers. Excludes aeronautical support equipment reported under 
code K531.
    K999 Other Depot Repair, Maintenance, Modification, Conversion, or 
Overhaul of Equipment. This code will only be used for unusual 
circumstances and will not be used to report organizations or work that 
can be accommodated under a specifically defined code.

                Base Maintenance/Multifunction Contracts

    P100 Base Maintenance/Multifunction Contracts. Includes all 
umbrella-type contracts where the contractor performs more than one 
function at one or more installations. (Identify specific functions as 
nonadd entries.)

       Research, Development, Test, and Evaluation (RDT&E) Support

    R660 RDT&E Support. Includes all effort not reported elsewhere 
directed toward support of installation or operations required for 
research, development, test, and evaluation use. Included are 
maintenance support of laboratories, operation and maintenance of test 
ranges, and maintenance of test aircraft and ships.

                          Installation Services

    S700 Natural Resource Services. Includes those commercial activities 
that provide products or services that implement natural resource 
management plans in the areas of fish, game, wildlife, forestry, 
watershed areas or ground water table, erosion control, and mineral 
deposit management. Natural resources planning and management is a 
governmental function and will not be reported.
    S701 Advertising and Public Relations Services. Includes commercial 
activities responsible for advertising and public relations in support 
of public affairs offices, installation newspapers and publications, and 
information offices.
    S702 Financial and Payroll Services. Includes commercial activities 
that prepare payroll, print checks, escrow, or change payroll accounts 
for personnnel. Includes other services normally associated with banking 
operations.
    S703 Debt Collection. Includes commercial activities that monitor, 
record, and collect debts incurred by overdrafts, bad checks, or 
delinquent accounts.
    S706 Installation Bus Services. Includes commercial activities that 
operate local, intrapost, and interpost scheduled bus services. Includes 
scheduled movement of personnel over regular routes by administrative 
motor vehicles to include taxi and dependent school bus services.
    S706A Scheduled Bus Services.
    S706B  Unscheduled Bus Services
    S706C  Dependent School Bus Services.
    S706D  Other Bus Services.
    S708 Laundry and Dry Cleaning Services. Including commercial 
activities that operate and maintain laundry and dry cleaning 
facilities.
    S709 Custodial Services. Includes commercial activities that provide 
janitorial and housekeeping services to maintain safe and sanitary 
conditions and preserve property.
    S710 Pest Management. Includes commercial activities that provide 
control measures directed against fungi, insects, rodents, and other 
pests.
    S712 Refuse Collection and Disposal Services. Includes commercial 
activities that operate incinerators, sanitary fills, and regulated 
dumps, and perform all other approved refuse collection and disposal 
services.
    S713 Food Services. Includes commercial activities engaged in the 
operation and administration of food preparation and serving facilities. 
Excludes operation of central bakeries, pastry kitchens, and central 
meat processing facilities that produce a product and are reported under 
functional area X934. Excludes hospital food service operations (under 
code H105).
    S713A: Food Preparation and Administration.
    S713B: Mess Attendants and Housekeeping Services.
    S714 Furniture. Includes commercial activities that repair and 
refurbish furniture.
    S715 Office Equipment. Includes commercial activities that maintain 
and repair typewriters, calculators, and adding machines.
    S716 Motor Vehicle Operation. Includes commercial activities that 
operate local administrative motor transportation services. Excludes 
installation bus services reported in functional area S706.
    S716A: Taxi Service.
    S716B: Bus Service (unless in S706).

[[Page 710]]

    S716C: Motor Pool Operations.
    S716D: Crane Operation (includes rigging, excludes those listed in 
T800G).
    S716E: Heavy Truck Operation.
    S716F: Construction Equipment Operation.
    S716I: Driver/Operator Licensing & Test.
    S716J: Other Vehicle Operations (Light Truck/Auto).
    S716K: Fuel Truck Operations.
    S716M: Tow Truck Operations.
    S717 Motor Vehicle Maintenance. Includes commercial activities that 
perform maintenance on automotive equipment, such as support and 
administrative vehicles. Includes electronic and communications 
equipment that are an integral part of the vehicle.
    S717A: Upholstery Maintenance and Repair.
    S717B: Glass Replacement and Window Repair.
    S717C: Body Repair and Painting.
    S717D: Accessory Overhaul.
    S717E: General Repairs/Minor Maintenance.
    S717F: Battery Maintenance and Repair.
    S717G: Tire Maintenance and Repair.
    S717H: Major Component Overhaul.
    S717I: Material Handling Equipment Maintenance.
    S717J: Crane Maintenance.
    S717K: Construction Equipment Maintenance.
    S717L: Frame and Wheel Alignment.
    S717M: Other Motor Vehicle Maintenance.
    S718 Fire Prevention and Protection. Includes commercial activities 
that operate and maintain fire protection and preventive services. 
Includes routine maintenance and repair of fire equipment and the 
installation of fire prevention equipment.
    S718A: Fire Protection Engineering.
    S718B: Fire Station Administration.
    S718C: Fire Prevention.
    S718D: Fire Station Operations.
    S718E: Crash and Rescue.
    S718F: Structural Fire Suppression.
    S718G: Fire & Crash/Rescue Equipment Major Maintenance.
    S718H: Other Fire Prevention and Protection.
    S719: Military Clothing. Includes commercial activities that order, 
receive, store, issue, and alter military clothing and repair military 
shoes. Excludes repair of organizational clothing reported under code 
J515.
    S724: Guard Service. Includes commercial activities engaged in 
physical security operations that provide for installation security and 
intransit protection of military property from loss or damage.
    S724A: Ingress and egress control. Regulation of persons, material, 
and vehicles entering or exiting a designated area to provide protection 
of the installation and Government property.
    S724B: Physical security patrols and posts. Mobile and static 
physical security guard activities that provide protection of 
installation or Government property.
    S724C: Conventional arms, ammunition, and explosives (CAAE) 
security. Dedicated security guards for CAAE.
    S724D: Animal control. Patrolling for, capture of, and response to 
complaints about uncontrolled, dangerous, and disabled animals on 
military installations.
    S724E: Visitor information services. Providing information to 
installation resident and visitors about street, agency, unit, and 
activity locations.
    S724F: Vehicle impoundment. Removal, accountability, security, and 
processing of vehicles impounded on military installations.
    S724G: Registration functions. Administration, filing, processing, 
and retrieval information about privately owned items that must be 
registered on military installations.
    S724S: Other guard service.
    S725 Electrical Plants and Systems. Includes commercial activities 
that operate, maintain, and repair Government-owned electrical plants 
and systems.
    S726 Heating Plants and Systems. Includes commercial activities that 
operate, maintain, and repair Government-owned heating plants and 
systems over 750,000 British Thermal Unit (BTU) capacity. Codes Z991 or 
Z992 will be used for systems under 750,000 BTU capacity, as applicable.
    S727 Water Plants and Systems. Includes commercial activities that 
operate, maintain, and repair Government-owned water plants and systems.
    S728 Sewage and Waste Plants and Systems. Includes commercial 
activities that operate, maintain, and repair Government-owned sewage 
and waste plants and systems.
    S729 Air Conditioning and Refrigeration Plants. Includes commercial 
activities that operate, maintain, and repair Government-owned air 
conditioning and refrigeration plants over 5-ton capacity. Codes Z991 or 
Z992 shall be used for plants under 5-ton capacity as applicable.
    S730 Other Services or Utilities. Includes commercial activities 
that operate, maintain, and repair other Government-owned services or 
utilities.
    S731 Base Supply Operations. Includes commercial activities that 
operate centralized installation supply functions providing supplies and 
equipment to all assigned or attached units. Performs all basic supply 
functions to determine requirements for all requisition, receipt, 
storage, issuance, and accountability for materiel.
    S732 Warehousing and Distribution of Publications. Includes 
commercial activities that receive, store, and distribute publications 
and blank forms.
    S740 Installation Transportation Office. Includes technical, 
clerical, and administrative

[[Page 711]]

commercial activities that support traffic management services related 
to the procurement of freight and passenger service from commercial 
``for hire'' transportation companies. Excludes restricted functions 
that must be performed by Government employees such as the review, 
approval, and signing of documents related to the obligation of funds; 
selection of mode or carrier; evaluation of carrier performance; and 
carrier suspension. Excludes installation transportation functions 
described under codes S706, S716, S717, T810, T811, T812, and T814.
    S740A: Installation Transportation Management and Administration.
    S740B: Materiel Movements.
    S740C: Personnel Movements.
    S740D: Personal Property Activities.
    S740E: Quality Control and Inspection.
    S740F: Unit Movements.
    S750 Museum Operations.
    S760 Contractor-Operated Parts Stores and Contractor-Operated Civil 
Engineering Supply Stores.
    S999 Other Installation Services. This code will only be used for 
unusual circumstances and will not be used to report organizations or 
work that can be accommodated under a specifically defined code.

                    Other Nonmanufacturing Operations

    T800 Ocean Terminal Operations. Includes commercial activities that 
operate terminals transferring cargo between overland and sealift 
transportation. Includes handling of Government cargo through commercial 
water terminals.
    T800A: Pier Operations. Includes commercial activities that provide 
stevedore and shipwright carpentry operations supporting the loading, 
stowage, and discharge of cargo and containers on and off ships, and 
supervision of operations at commercial piers and military ocean 
terminals.
    T800B: Cargo Handling Equipment. Includes commercial activities that 
operate and maintain barge derricks, gantries, cranes, forklifts, and 
other materiel handling equipment used to handle cargo within the 
terminal area.
    T800C: Port Cargo Operations. Includes commercial activities that 
load and unload railcars and trucks, pack, repack, crate, warehouse, and 
store cargo moving through the terminal, and stuff and unstuff 
containers.
    T800D: Vehicle Preparation. Includes commercial activites that 
prepare Government and privately owned vehicles (POVs) for ocean 
shipment, inspection, stowage in containers, transportation to pier, 
processing, and issue of import vehicles to owners.
    T800E: Lumber Operations. Includes commercial activities that 
segregate reclaimable lumber from dunnage removed from ships, railcars, 
and trucks; remove nails; even lengths; inspect; and return the lumber 
to inventory for reuse. Includes receipt, storage, and issue of new 
lumber.
    T800F: Materiel Handling Equipment (MHE) Operations. Includes 
commercial activities that deliver MHE to user agencies, perform onsite 
fueling, and operate special purpose and heavy capacity equipment.
    T800G: Crane Operations. Includes commercial activities that operate 
and perform first-echelon maintenance of barge derricks, gantries, and 
truck-mounted cranes in support of vessels and terminal cargo 
activities.
    T800H: Breakbulk Cargo Operations. Includes commercial activities 
that provide stevedoring, shipwright carpentry, stevedore 
transportation, and the loading and unloading of noncontainerized cargo.
    T800I: Other Ocean Terminal Operations.
    T801 Storage and Warehousing. Includes commercial activities that 
receive materiel into depots and other storage and warehousing 
facilities, provide care for supplies, and issue and ship materiel. 
Excludes installation supply in support of unit and tenet activities 
described in S731.
    T801A: Receipt. Includes commercial activities that receive supplies 
and related documents and information. This includes materiel handling 
and related actions, such as materials segregation and checking, and 
tallying incident to receipt.
    T801B: Packing and Crating of Household Goods. Includes commercial 
activities performing packing and crating operations described in T801H, 
incident to the movement or storage of household goods.
    T801C: Shipping. Includes commercial activities that deliver stocks 
withdrawn from storage to shipping. Includes onloading and offloading of 
stocks from transportation carriers, blocking, bracing, dunnage, 
checking, tallying, and materiel handling in central shipping area and 
related documentation and information operations.
    T801D: Care, Rewarehousing, and Support of Materiel. Includes 
commercial activities that provide for actions that must be taken to 
protect stocks in storage, including physical handling, temperature 
control, assembly placement and preventive maintenance of storage aids, 
and realigning stock configuration; provide for movement of stocks from 
one storage location to another and related checking, tallying, and 
handling; and provide for any work being performed within general 
storage support that cannot be identified clearly as one of the 
subfunctions described above.
    T801E: Preservation and Packaging. Includes commercial activities 
that preserve, represerve, and pack materiel to be placed in storage or 
to be shipped. Excludes application of final (exterior) shipping 
containers.
    T801F: Unit and Set Assembly and Disassembly. Includes commercial 
activities that gather or bring together items of various nomenclature 
(parts, components, and

[[Page 712]]

basic issue items) and group, assemble, or restore them to or with an 
item of another nomenclature (such as parent end item or assemblage) to 
permit shipment under a single document. This also includes blocking, 
bracing, and packing preparations within the inner shipping container; 
physical handling and loading; and reverse operation of assembling such 
units.
    T801G: Special Processing of Non Stock Fund-Owned Materiel. Includes 
commercial activities performing special processing actions described 
below that must be performed on Inventory Control Point (ICP)-
controlled, nonstock fund-owned materiel by technically qualified depot 
maintenance personnel, using regular or special maintenance tools or 
equipment. Includes disassembly or reassembly or reserviceable ICP-
controlled materiel being readied for movement, in-house storage, or 
out-of-house location such as a port to a commercial or DoD-operated 
maintenance or storage facility, property disposal or demilitarization 
activity, including blocking, bracing, cushioning, and packing.
    T801H: Packing and Crating. Includes commercial activities that 
place supplies in their final, exterior containers ready for shipment. 
Includes the nailing, strapping, sealing, stapling, masking, marking, 
and weighing of the exterior container. Also, includes all physical 
handling, unloading, and loading of materiel, within the packing and 
shipping area; checking and tallying material in and out; all operations 
incident to packing, repacking, or recrating for shipment, including on-
line fabrication of tailored boxes, crates, bit inserts, blocking, 
bracing and cushioning shrouding, overpacking, containerization, and the 
packing of materiel in transportation containers. Excludes packing of 
household goods and personnel effects reported under code T801B.
    T801I: Other Storage and Warehousing.
    T802 Cataloging. Includes commercial activity that prepare supply 
catalogs and furnish cataloging data on all items of supply for 
distribution to all echelons worldwide. Includes catalog files, 
preparation, and revision of all item identifications for all logistics 
functions; compilation of Federal catalog sections and allied 
publication; development of Federal item identification guides, and 
procurement identification descriptions. Includes printing and 
publication of Federal supply catalogs and related allied publications.
    T803 Acceptance Testing. Includes commercial activities that inspect 
and test supplies and materiel to ensure that products meet minimum 
requirements of applicable specifications, standards, and similar 
technical criteria; laboratories and other facilities with inspection 
and test capabilities; and activities engaged in production acceptance 
testing of ammunition, aircraft armament, mobility material, and other 
military equipment.
    T803A: Inspection and Testing of Oil and Fuel.
    T803B: Other Acceptance Testing.
    T804 Architect-Engineering Services. Includes commercial activities 
that provide Architect/Engineer (A/E) services. Excludes Engineering 
Technical Services (ETS) reported in functional area T813, and those 
required under 40 U.S.C. 541-554.
    T805 Operation of Bulk Liquid Storage. Includes commercial 
activities that operate bulk petroleum storage facilities. Includes 
operation of off-vessel discharging and loading facilities, fixed and 
portable bulk storage facilities, pipelines, pumps, and other related 
equipment within or between storage facilities or extended to using 
agencies (excludes aircraft fueling services); handling of drums within 
bulk fuel activities. Excludes aircraft fueling services reported under 
code T814.
    T806 Printing and Reproduction. Includes commercial activities that 
print, duplicate, and copy. Excludes user-operated office copying 
equipment.
    T807 Audiovisual and Visual Information Services. Includes 
commercial activities that provide base audiovisual (AV) and visual 
information (VI) support, production, depositories, technical 
documentation, and broadcasting.
    T807A: Base VI Support. Includes commercial activities that provide 
production activities that provide general support to all installation, 
base, facility or site, organizations or activities. Typically, they 
supply motion picture, still photography, television, and audio 
recording for nonproduction documentary purposes, their laboratory 
support, graphic arts, VI libraries, and presentation services.
    T807B: AV Production. Includes commercial activities that provide a 
self-contained, complete presentation, developed according to a plan or 
script, combining sound with motion media (film, tape or disc) for the 
purpose of conveying information to, or communicating with, an audience. 
(An AV production is distinguished from a VI production by the absence 
of combined sound and motion media in the latter.)
    T807C: VI Depositories. Includes commercial activities that are 
especially designed and constructed for the low-cost and efficient 
storage and furnishing of reference service on semicurrent records 
pending their ultimate disposition. Includes records centers.
    T807D: VI Technical Documentation. Includes commercial activities 
that provide a technical documentation (TECDOC) which is a continuous 
visual recording (with or without sound as an integral documentation

[[Page 713]]

component) of an actual event made for purposes of evaluation. 
Typically, TECDOC contributes to the study of human or mechanical 
factors, procedures and processes in the context of medicine, science 
logistics, research, development, test and evaluation, intelligence, 
investigations and armament delivery.
    T807E: Electronic Media Transmission. Includes commercial activities 
that transmit and receive audio and video signals for closed circuit 
local and long distance multi-station networking and broadcast 
operations.
    T807F: VI Documentation. Includes commercial activities that provide 
motion media (film or tape) still photography and audio recording of 
technical and nontechnical events, as they occur, usually not controlled 
by the recording crew. VI documentation (VIDOC) encompasses Operational 
Documentation (OPDOC) and TECDOC. OPDOC is VI (photographic or 
electronic) recording of activities, or multiple perspectives of the 
same activity, to convey information about people, places and things.
    T807G: AV Central Library (Inventory Control Point). Includes 
commercial activities that receive, store, issue, and maintain AV 
products at the central library level. May or may not include records 
center operations for AV products.
    T807K: AV or VI Design Service. Includes commercial activities that 
provide professional consultation services involving the selection, 
design, and development of AV or VI equipment or facilities.
    T808 Mapping and Charting. Includes commercial activities that 
design, compile, print, and disseminate cartographic and geodetic 
products.
    T809 Administrative Telephone Service. Includes commercial 
activities that operate and maintain the common-user, administrative 
telephone systems at DoD installations and activities. Includes 
telephone operator services; range communications; emergency action 
consoles; and the cable distribution portion of a fire alarm, intrusion 
detection, emergency monitoring and control data, and similar systems 
that require use of a telephone system.
    T810 Air Transportation Services. Includes commercial activities 
that operate and maintain nontactical aircraft that are assigned to 
commands and installations and used for administrative movement of 
personnel and supplies.
    T811 Water Transportation Services. Includes commercial activities 
that operate and maintain nontactical watercraft that are assigned to 
commands and installations and are used for administrative movement of 
personnel and supplies.
    T811A: Water Transportation Services (except tug operations).
    T811B: Tug Operations.
    T812 Rail Transportation Services. Includes commercial activities 
that operate and maintain nontactical rail equipment assigned to 
commands and installation and used for administrative movement of 
personnel and supplies.
    T813 Engineering and Technical Services. Includes commercial 
activities that advise, instruct, and train DoD personnel in the 
installation, operation, and maintenance of DoD weapons, equipment, and 
systems.
    These services include transmitting the technical skill capability 
to DoD personnel in order for them to install, maintain, and operate 
such equipment and keep it in a high state of military readiness.
    T813A: Contractor Plant Services. Includes commercial manufacturers 
of military equipment contracted to provide technical and engineering 
services to DoD personnel. Qualified employees of the manufacturer 
furnish these services in the manufacturer plants and facilities. 
Through this program, the special skills, knowledge, experience, and 
technical data of the manufacturer are provided for use in training, 
training aid programs, and other essential services directly related to 
the development of the technical capability required to install, 
operate, maintain, supply, and store such equipment.
    T813B: Contract Field Services (CFS). Includes commercial activities 
that provide services of qualified contractor personnel who provide 
onsite technical and engineering services to DoD personnel.
    T813C: In-house Engineering and Technical Services. Includes 
commercial activities that provide technical and engineering services 
described in codes T813A and T813B above that are provided by Government 
employees.
    T813D: Other Engineering and Technical Services.
    T814 Fueling Service (Aircraft). Includes commercial activities that 
distribute aviation petroleum/oil/lubricant products. Includes operation 
of trucks and hydrants.
    T815 Scrap Metal Operation. Includes commercial activities that bale 
or shear metal scrap and melt or sweat aluminum scrap.
    T816 Telecommunication Centers. Includes commercial activities that 
operate and maintain telecommunication centers, nontactical radios, 
automatic message distribution systems, technical control facilities, 
and other systems integral to the communication center. Includes 
operations and maintenance of air traffic control equipment and 
facilities.
    T817 Other Communications and Electronics Systems. Includes 
commercial activities that operate and maintain communications and 
electronics systems not included in T809 and T816.
    T818 Systems Engineering and Installation of Communications Systems. 
Includes commercial activities that provide engineering and

[[Page 714]]

installation services, including design and drafting services associated 
with functions specified in T809, T816, and T817.
    T819 Preparation and Disposal of Excess and Surplus Property. 
Includes commercial activities that accept, classify, and dispose of 
surplus Government property, including scrap metal.
    T820 Administrative Support Services. Includes commercial activities 
that provide centralized administrative support services not included 
specifically in another functional category. These activities render 
services to multiple activities throughout an organization or to 
multiple organizations; such as, a steno or typing pool rather than a 
secretary assigned to an individual. Typical activities included are 
word processing centers, reference and technical libraries, 
microfilming, messenger service, translation services, publication 
distribution centers, etc.
    T820A: Word Processing Centers.
    T820B: Reference and Technical Libraries.
    T820C: Microfilming.
    T820D: Internal Mail and Messenger Services.
    T820E: Translation Services.
    T820F: Publication Distribution Centers.
    T820G: Field Printing and Publication. Includes those activities 
that print or reproduce official publications, regulations, and orders. 
Includes management and operation of the printing facility.
    T820H: Compliance Auditing.
    T820I: Court Reporting.
    T821 Special Studies and Analyses. Includes commercial activities 
that perform research, collect data, conduct time-motion studies, or 
pursue some other planned methodology in order to analyze a specific 
issue, system, device, boat, plane, or vehicle for management.
    Such activities may be temporary or permanent in nature.
    T821A: Cost Benefit Analyses.
    T821B: Statistical Analyses.
    T821C: Scientific Data Studies.
    T821D: Regulatory Studies.
    T821E: Defense, Education, Energy Studies.
    T821F: Legal/Litigation Studies.
    T821G: Management Studies.
    T900 Training Devices and Simulators. Includes commercial activities 
that provide training aids, devices, simulator design, fabrication, 
issue, operation, maintenance, support, and services.
    T900A: Training Aids, Devices, and Simulator Support. Includes 
commercial activities that design, fabricate, stock, store, issue, 
receive, and account for and maintain training aids, devices, and 
simulators (does not include audiovisual production and associated 
services or audiovisual support).
    T900B: Training Device and Simulator Operation. Includes commercial 
activities that operate and maintain training device and simulator 
systems.
    T999 Other Nonmanufacturing Operations.

                         Education and Training

    Includes commercial activities that conduct courses of instruction 
attended by civilian or military personnel of the Department of Defense. 
Terminology of categories and subcategories primarily for military 
personnel (marked by an asterisk) follows the definitions of the 
statutory Military Manpower Training Report submitted annually to the 
Congress. This series includes only the conduct of courses of 
instruction; it does not include education and training support 
functions (that is, Base Operations Functions in the S series and 
Nonmanufacturing Operations in the T series). A course is any separately 
identified instructional entity or unit appearing in a formal school or 
course catalog.
    U100 Recruit Training.* The instruction of recruits.
    U200 Officer Acquisition Training.* Programs concerned with officer 
acquisition training.
    U300 Specialized Skill Training.* Includes Army One-Station Unit 
Training, Naval Apprenticeship Training, and health care training.
    U400 Flight Training.* Includes flight familiarization training.
    U500 Professional Development Education*
    U510 Professional Military Education.* Generally, the conduct of 
instruction at basic, intermediate, and senior Military Service schools 
and colleges and enlisted leadership training does not satisfy the 
requirements of the definition of a DoD CA and is excluded from the 
provision of this Instruction.
    U520 Graduate Education, Fully Funded, Full-Time*
    U530 Other Full-Time Education Programs*
    U540 Off-Duty (Voluntary) and On-Duty Education Programs.* Includes 
the conduct of Basic Skills Education Program (BSEP), English as a 
Second Language (ESL), skill development courses, graduate, 
undergraduate, vocational/technical, and high school completion programs 
for personnel without a diploma.
    U600 Civilian Education and Training. Includes the conduct of 
courses intended primarily for civilian personnel.
    U700 Dependent Education. Includes the conduct of elementary and 
secondary school courses of instruction for the dependents of DoD 
overseas personnel.
    U800 Training Development and Support (not reported elsewhere)
    U999 Other Training. This code will only be used for unusual 
circumstances and will not be used to report organizations or work that 
can be accommodated under a specifically defined code.

                        Automatic Data Processing

    W824 Data Processing Services. Includes commercial activities that 
provide ADP

[[Page 715]]

processing services by using Government-owned or -leased ADP equipment; 
or participating in Government-wide ADP sharing program; or procuring of 
time-sharing processing services (machine time) from commercial sources. 
Includes all types of data processing services performed by general 
purpose ADP and peripheral equipment.
    W824A: Operation of ADP Equipment.
    W824B: Production Control and Customer Services.
    W824C: ADP Magnetic Media Library.
    W824D: Data Transcription/Data Entry Services.
    W824E: Transmission and Teleprocessing Equipment Services.
    W824F: Acceptance Testing and Recovery Systems.
    W824G: Punch Card Processing Services.
    W824H: Other ADP Operations and Support.
    W825 Maintenance of ADP Equipment. Includes commercial activities 
that maintain and repair all Government-owned ADP equipment and 
peripheral equipment.
    W826 Systems Design, Development, and Programing Services. Includes 
commercial activities that provide software services associated with 
nontactical ADP operation.
    W826A: Development and Maintenance of Applications Software.
    W826B: Development and Maintenance of Systems Software.
    W827 Software Services for Tactical Computers and Automated Test 
Equipment. Includes commercial activities that provide software services 
associated with tactical computers and TMDE and ATE hardware.
    W999 Other Automatic Data Processing. This code will only be used 
for unusual circumstances and will not be used to report organizations 
or work that can be accommodated under a specifically defined code.

              Products Manufactured and Fabricated In-House

    Commercial activities that manufacture and/or fabricate products in-
house are grouped according to the products predominantly handled as 
follows:
    X931 Ordnance Equipment. Ammunition and related products.
    X932 Products Made from Fabric or Similar Materials. Including the 
assembly and manufacture of clothing, accessories, and canvas products.
    X933 Container Products and Related Items. Including the design, 
engineering, and manufacture of wooden boxes, crates, and other 
containers; includes the fabrication of fiberboard boxes, and assembly 
of paperboard boxes with metal straps. Excludes on-line fabrication of 
boxes and crates reported in functional area T801.
    X934 Food and Bakery Products. Including the operation of central 
meat processing plants, pastry kitchens, and bakery facilities. Excludes 
food services reported in functional areas S713 and H105.
    X935 Liquid, Gaseous, and Chemical Products. Including the providing 
of liquid oxygen and liquid nitrogen.
    X936 Rope, Cordage, and Twine Products; Chains and Metal Cable 
Products
    X937 Logging and Lumber Products. Logging and sawmill operations.
    X938 Communications and Electronic Products.
    X939 Construction Products. The operation of quarries and pits, 
including crushing, mixing, and concrete and asphalt batching plants.
    X940 Rubber and Plastic Products.
    X941 Optical and Related Products.
    X942 Sheet Metal Products.
    X943 Foundry Products.
    X944 Machined Parts.
    X999 Other Products Manufactured and Fabricated In-House. This code 
will only be used for unusual circumstances and will not be used to 
report organizations or work that can be accommodated under a 
specifically defined code.

    Maintenance, Repair, Alteration, and Minor Construction of Real 
                                Property.

    Z991 Buildings and Structures--Family Housing. Includes commercial 
activities that are engaged in exterior and interior painting and 
glazing; roofing, interior plumbing; interior electric; interior heating 
equipment, including heat sources under 750,000 BTU capacity; installed 
food service and related equipment, air conditioning and refrigeration 
under a 5-ton capacity; elevators; and other equipment affixed as part 
of the building and not included in other activities. Includes fencing, 
flagpoles, and other miscellaneous structures associated with family 
housing.
    Z991A: Rehabilitation--Tenant Change.
    Z991B: Roofing.
    Z991C: Glazing.
    Z991D: Tiling.
    Z991E: Exterior Painting.
    Z991F: Interior Painting
    Z991G: Flooring.
    Z991H: Screens, Blinds, etc.
    Z991I: Appliance Repair.
    Z991J: Electrical Repair. Includes elevators, escalators, and moving 
walks.
    Z991K: Plumbing.
    Z991L: Heating Maintenance.
    Z991M: Air Conditioning Maintenance.
    Z991N: Emergency/Service Work.
    Z991T: Other Work.
    Z992 Buildings and Structures (Other Than Family Housing). Includes 
commercial activities that are engaged in exterior and interior painting 
and glazing; roofing, interior plumbing; interior electric; interior 
heating equipment, including heat sources under 750,000 BTU capacity; 
installed foor service and related equipment; air conditioning and

[[Page 716]]

refrigeration under a 5-ton capacity; elevators; and other equipment 
affixed as part of the building and not reported under other functional 
codes. Includes fencing, flagpoles, guard and watchtowers, grease racks, 
unattached loading ramps, training facilities other than buildings, 
monuments, grandstands and bleachers, elevated garbage racks, and other 
miscellaneous structures.
    Z992A: Rehabilitation--Tenant Change.
    Z992B: Roofing.
    Z992C: Glazing.
    Z992D: Tiling.
    Z992E: Exterior Painting.
    Z992F: Interior Painting.
    Z992G: Flooring.
    Z992H: Screens, Blinds, etc.
    Z992I: Appliance Repair.
    Z992J: Electrical Repair. Includes elevators, escalators, and moving 
walkways.
    Z992K: Plumbing.
    Z992L: Heating Maintenance.
    Z992M: Air Conditioning Maintenance.
    Z992N: Emergency/Service Work.
    Z992T: Other Work.
    Z993 Grounds and Surfaced Areas. Commercial activities that 
maintain, repair, and alter grounds and surfaced areas defined in codes 
Z993A, B, and C, below.
    Z993A: Grounds (Improved). Includes improved grounds, including 
lawns, drill fields, parade grounds, athletic and recreational 
facilities, cemeteries, other ground areas, landscape and windbreak 
plants, and accessory drainage systems.
    Z993B: Grounds (Other than Improved). Small arms ranges, antenna 
fields, drop zones, and firebreaks. Also grounds such as wildlife 
conservation areas, maneuver areas, artillery ranges, safety and 
security zones, desert, swamps, and similar areas.
    Z993C: Surfaced Areas. Includes airfield pavement, roads, walks, 
parking and open storage areas, traffic signs and markings, storm 
sewers, culverts, ditches, and bridges. Includes sweeping and snow 
removal from streets and airfields.
    Z997 Railroad Facilities. Includes commercial activities that 
maintain, repair, and alter narrow and standard gauge two-rail tracks, 
including spurs, sidings, yard, turnouts, frogs, switches, ties, 
ballast, and roadbeds, with accessories and appurtenances, drainage 
facilities, and trestles.
    Z998 Waterways and Waterfront Facilities. Includes commercial 
activities that maintain, repair, and alter approaches, turning basin, 
berth areas and maintenance dredging, wharves, piers, docks, ferry 
racks, transfer bridges, quays, bulkheads, marine railway dolphins, 
mooring, buoys, seawalls, breakwaters, causeways, jetties, revetments, 
etc. Excludes waterways maintained by the Army Corps of Engineers (COE) 
rivers and harbors programs. Also excludes buildings, grounds, 
railroads, and surfaced areas located on waterfront facilities.
    Z999 Other Maintenance, Repair, Alteration, and Minor Construction 
of Real Property. This code will only be used for unusual circumstances 
and will not be used to report organizations or work that can be 
accommodated under a specifically defined code.

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29210, July 1, 1992]



Sec. Appendix B to Part 169a--Commercial Activities Inventory Report and 

                        Five-Year Review Schedule

                         A. General Instructions

    1. Forward your inventory report before January 1 to the Director, 
Installations Management, 400 Army Navy Drive, Room 206, Arlington, VA 
22202-2884. Use Report Control Symbol ``DD-A&T(A) 1540'' as your 
authority to collect this data.
    2. Transmit by use of floppy diskette. Data files must be in 
American Standard Code Information Interchange text file format on a 
MicroSoft-Disk Operating System formatted 3.5 inch floppy diskette. 
Provide submissions in the Defense Utility Energy Reporting System 
format as specified below.
    3. Data Format: In-House DoD Commercial Activities

------------------------------------------------------------------------
                                    Tape
          Data element           positions      Field      Type data \1\
------------------------------------------------------------------------
Designator.....................      1      A              A
Installation...................  .........  A1             .............
  --State, territory, or           2-3      A1a            N
   possession.
  --Place......................    4-9      A1b            A/N
+Function......................  10-14      A2             A/N
In-house civilian workload.....  15-20      A3             N
Military workload..............  21-26      A4             N
+Reason for in-house operation.     49      A8             A
+Most recent year in-house       50-51      A9             N
 operation approved.
+Year DoD CA scheduled for next  52-53      A10            N
 review.
Installation name..............  76-132     A11            A
------------------------------------------------------------------------
\1\ A=Alpha; N=Numeric. A and A/N data shall be left justified space
  filled, N data shall be right justified and zero filled. +Items marked
  with a cross (+) have been registered in the DoD Data Element
  Dictionary.

    4. When definite coding instructions are not provided, reference 
must be made to DoD 5000.12-M. \1\ Failure to follow the coding 
instructions contained in this document, or those published in DoD 
5000.12-M makes the DoD Component responsible for noncompliance of 
required concessions in data base communication.
---------------------------------------------------------------------------

    \1\ See Footnote 1 to Sec. 169a.1(a).

---------------------------------------------------------------------------

[[Page 717]]

                          B. Entry Instructions

------------------------------------------------------------------------
              Field                             Instruction
------------------------------------------------------------------------
A                                 Enter an A to designate that the data
                                   to follow on this record pertains to
                                   a particular DoD CA.
A1a                               Enter the two-position numeric code
                                   for State (Data element reference ST-
                                   GA) or U.S. territory or possession,
                                   as shown in attachment 1 to Appendix
                                   B of this part.
A1b                               Enter the unique alpha-numeric code
                                   established by the DoD Component for
                                   military installation, named
                                   populated place, or related entity
                                   where the CA workload was performed
                                   during the fiscal year covered by
                                   this submission. A separate look-up
                                   listing or file should be provided
                                   showing each unique place code and
                                   its corresponding place name.
A2                                Enter the function code from Appendix
                                   A to this part that best describes
                                   the type of CA workload principally
                                   performed by the CA covered by this
                                   submission. Left justify.
A3                                Enter total (full- and part-time) in-
                                   house civilian workyear equivalents
                                   applied to the performance of the
                                   function during fiscal year. Round
                                   off to the nearest whole workyear
                                   equivalent. (If amount is equal to or
                                   greater than .5, round up. If amount
                                   is less than .5, round down. Amounts
                                   between zero and 0.9 should be
                                   entered as one). Right justify. Zero
                                   fill.
A4                                Enter total military workyear
                                   equivalents applied to the
                                   performance of the function in the
                                   fiscal year. Round off to the nearest
                                   whole workyear equivalent. (Amounts
                                   between zero and one should be
                                   entered as one). Right justify. Zero
                                   fill.
A8                                Enter the reason for in-house
                                   operation of the CA, as shown in
                                   attachment 2 to Appendix B of this
                                   part.
A9                                Enter the last two digits of the most
                                   recent fiscal year corresponding to
                                   the reason for in-house operation of
                                   the CA, as stated in Field A8.
A10                               Enter the last two digits of the
                                   fiscal year the function is scheduled
                                   for study or next review. (Data
                                   element reference YE-NA.)
A11                               Enter the named populated place, or
                                   related entity, where the CA workload
                                   was performed.
------------------------------------------------------------------------

  Attachment 1 to Appendix B to Part 169a--Codes For Denoting States, 
           Territories, and Possessions of the United States.

          a. Numeric State Codes (Data element reference ST-GA)

                                  Code

01 Alabama
02 Alaska
04 Arizona
05 Arkansas
06 California
08 Colorado
09 Connecticut
10 Delaware
11 District of Columbia
12 Florida
13 Georgia
15 Hawaii
16 Idaho
17 Illinois
18 Indiana
19 Iowa
20 Kansas
21 Kentucky
22 Louisiana
23 Maine
24 Maryland
25 Massachusetts
26 Michigan
27 Minnesota
28 Mississippi
29 Missouri
30 Montana
31 Nebraska
32 Nevada
33 New Hampshire
34 New Jersey
35 New Mexico
36 New York
37 North Carolina
38 North Dakota
39 Ohio
40 Oklahoma
41 Oregon
42 Pennsylvania
44 Rhode Island
45 South Carolina
46 South Dakota
47 Tennessee
48 Texas
49 Utah
50 Vermont
51 Virginia
53 Washington
54 West Virginia
55 Wisconsin
56 Wyoming

      b. Numeric Codes for Territories and Possessions (FIPS 55-2)

60 American Samoa
66 Guam
69 Northern Marianna Islands
71 Midway Islands
72 Puerto Rico
75 Trust Territory of the Pacific Islands
76 Navassa Islands
78 Virgin Islands
79 Wake Island
81 Baker Island
86 Jarvis Island
89 Kingman Reef
95 Palmyra Atoll

 Attachment 2 to Appendix B to Part 169a--Codes for Denoting Compelling 
    Reasons for In-House Operations of Planned Changes in Method or 
                               Performance

    1. PERFORMANCE (for entry in field A8)

------------------------------------------------------------------------
              Code                              Explanation
------------------------------------------------------------------------
A                                 Indicates that the DoD CA has been
                                   retained in-house for national
                                   defense reasons in accordance with
                                   paragraph E.2.a(1) of DoD Instruction
                                   4100.33, other than CAs reported
                                   under code ``C'' of this attachment.

[[Page 718]]

 
C                                 Indicates that the DoD CA is retained
                                   in-house because the CA is essential
                                   for training or experience in
                                   required military skills, or the CA
                                   is needed to provide appropriate work
                                   assignments for a rotation base for
                                   overseas or sea-to-shore assignments,
                                   or the CA is necessary to provide
                                   career progression to a needed
                                   military skill level in accordance
                                   with paragraph E.2.a(1)(a) of DoD
                                   Instruction 4100.33.
D                                 Indicates procurement of a product or
                                   service from a commercial source
                                   would cause an unacceptable delay or
                                   disruption of an essential DoD
                                   program.
E                                 Indicates that there is no
                                   satisfactory commercial source
                                   capable of providing the product or
                                   service needed.
F                                 Indicates that a cost comparison has
                                   been conducted and that the
                                   Government is providing the product
                                   or service at a lower total cost as a
                                   result of a cost comparison.
G                                 Indicates that the CA is being
                                   performed by DoD personnel now, but
                                   decision to continue in-house or
                                   convert to contract is pending
                                   results of a scheduled cost
                                   comparison.
H                                 Indicates that the CA is being
                                   performed by DoD employees now, but
                                   will be converted to contract because
                                   of cost comparison results.
J                                 Indicates that the CA is being
                                   performed by DoD hospital and, in the
                                   best interest of direct patient care,
                                   is being retained in-house.
K                                 Indicates that the CA is being
                                   performed by DoD employees now, but a
                                   decision has been made to convert to
                                   contract for reasons other than cost.
N                                 Indicates that the CA is performed by
                                   DoD employees now, but a review is in
                                   progress pending a decision. (i.e.,
                                   base closure, realignment, or
                                   consolidation).
X                                 Indicates that the Installation
                                   commander is not scheduling this CA
                                   for cost study under the provisions
                                   of congressional authority.
Y                                 Indicates that the CA is retained in-
                                   house because the cost study exceeded
                                   the time limit prescribed by law.
Z                                 Indicates that the CA is retained in-
                                   house for reasons not included above.
                                   (i.e., a law, Executive order,
                                   treaty, or international agreement).
------------------------------------------------------------------------

    2. USE OF OTHER CODES. Other codes may be assigned as designated by 
the ODASD (I).

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29210, July 1, 1992; 60 
FR 67329, Dec. 29, 1995]



  Sec. Appendix C to Part 169a--Simplified Cost Comparison and Direct 

                            Conversion of CAs

    A. This appendix provides guidance on procedures to be followed in 
order to convert a commercial activity employing 45 or fewer DoD 
civilian employees to contract performance without a full cost 
comparison. DoD Components may directly convert functions with 10 or 
fewer civilian employees without conducting a simplified cost 
comparison. Simplified cost comparisons may only be conducted on 
activities with 45 or fewer DoD civilian employees.
    B. Direct conversions with 10 or fewer DoD civilian employees must 
meet the following criteria:
    1. The activity is currently performed by 10 or fewer civilian 
employees.
    2. The direct conversion makes sense from a management or 
performance standpoint.
    3. The direct conversion is cost effective.
    4. The installation commander should attempt to place or retrain 
displaced DoD civilian employees by
    a. Placing or retraining employees in available permanent vacant 
positions, or
    b. Assigning displaced employees to valid temporary or over-hire 
positions in similar activities for gainful employment until permanent 
vacancies are available. The type of employee appointment (e.g., career, 
career-conditional, etc., or change from competitive to excepted service 
or vice versa) must not change, or
    c. Where no vacancies exist or are projected, offer employees 
retraining opportunities under the Job Training Partnership Act or 
similar retraining programs for transitioning into the private sector.
    5. The function to be directly converted does not include any DoD 
civilian positions that were as a result of DoD Component streamlining 
plans and/or were removed with buyout offers that satisfied Section 5 of 
the Federal Workforce Restructuring Act requirements.
    C. The following provides general guidance for completion of a 
simplified cost comparison:
    1. Estimated contractor costs should be based on either the past 
history of similar contracts at other installations or on the 
contracting officer's best estimate of what would constitute a fair and 
reasonable price.
    2. For activities small in total size (45 or fewer civilian and 
military personnel):
    a. Estimated in-house cost generally should not include overhead 
costs, as it is unlikely that they would be a factor for a small 
activity.
    b. Similarly, estimated contractor costs generally should not 
include contract administration, on-time conversion costs, or other 
contract price add-ons associated with full cost comparisons.
    3. For activities large in total size (including those with a mix of 
civilian and military personnel) all cost elements should be considered 
for both in-house and contractor estimated costs.
    4. In either case, large or small, the 10 percent conversion 
differential contained in part IV of the Supplement to OMB Circular No. 
A-76 should be applied.
    5. Part IV of the Supplement to OMB Circular No. A-76 shall be 
utilized to define the specific elements of cost to be estimated.
    6. Clearance for CA simplified cost comparison decisions are 
required for Agencies without their own Legislative Affairs (LA)

[[Page 719]]

and Public Affairs (PA) offices. Those Agencies shall submit their draft 
decision brief to the Deputy Assistant Secretary of Defense 
(Installations) room 3E813, the Pentagon, Washington, DC 20301 for 
release to Congress.
    7. Provide CA simplified cost comparison approvals containing a 
certification of the MEO analysis, a copy of the approval to convert, a 
copy of the cost comparison, with back-up data, before conversion to the 
following:
    a. Committee on Appropriations of the House of Representatives and 
the Senate (11-45 civilian employees only).
    b. Copies of the following:
    (1) Assistant Secretary of Defense (LA), room 3D918, the Pentagon, 
Washington, DC 20301.
    (2) Assistant Secretary of Defense (PA), room 2E757, the Pentagon, 
Washington, DC 20301.
    (3) Office of Economic Adjustment, room 4C767, the Pentagon, 
Washington, DC 20301.
    (4) Deputy Assistant Secretary of Defense, (Installations), room 
3E813, the Pentagon, Washington, DC 20301. (exception--no copies 
required from Agencies that do not have legislative and public affairs 
offices).
    8. Most Efficient and Cost-Effective Analysis for Contractor 
Performance of an Activity (Report Control Symbol DD-A&T(AR) 1951. The 
installation commander must certify that the estimated in-house cost for 
activities involving 11 to 45 DoD civilian employees are based on a 
completed most efficient and cost effective organization analysis. 
Certification of this MEO analysis, as required by Public Law 103-139, 
shall be provided to the Committee on Appropriations of the House of 
Representatives and the Senate before conversion to contract 
performance.

[57 FR 29212, July 1, 1992, as amended at 60 FR 67329, Dec. 29, 1995]



     Sec. Appendix D to Part 169a--Commercial Activities Management 

                       Information System (CAMIS)

    Each DoD Component shall create and manage their CAMIS data base. 
The CAMIS data base shall have a comprehensive edit check on all input 
data in the computerized system. All data errors in the CAMIS data base 
shall be corrected as they are found by the established edit check 
program. The data elements described in this appendix represents the DoD 
minimum requirements.
    On approval of a full cost comparison, a simplified cost comparison, 
or a direct conversion CA, the DoD Component shall create the initial 
entry using the data elements in part I for full cost comparisons and 
data elements in part II for all other conversions. Within 30 days of 
the end of each quarter the DoD Component shall submit a floppy 
diskette. Data files must be in American Standard Code Information 
Interchange text file format on a MicroSoft-Disk Operating System 
formatted 3.5 inch floppy diskette. Provide submissions in the Defense 
Utility Energy Reporting System format. The data shall be submitted in 
the Director, Installations Management (D,IM), 400 Army Navy Drive, Room 
206, Arlington, VA 22202-2884 at least 60 days prior to the end of the 
quarter. The D,IM shall use the automated data to update the CAMIS. If 
the DoD Component is unable to provide data in an automated format, the 
D,IM shall provide quarterly printouts of cost comparison records (CCR) 
and conversion and/or comparison records (DCSCCR) that may be annotated 
and returned within 30 days of the end of each quarter to the D,IM. The 
D,IM then shall use the annotated printouts to update the CAMIS.

                         Part I--Cost Comparison

    The record for each cost comparison is divided into six sections. 
Each of these sections contains information provided by the DoD 
Components. The first five sections are arranged in a sequence of 
milestone events occurring during a cost comparison. Each section is 
completed immediately following the completion of the milestone event. 
These events are as follows:
    1. Cost comparison is approved by DoD Component.
    2. Solicitation is issued.
    3. In-house and contractor costs are compared.
    4. Contract is awarded/solicitation is canceled.
    5. Contract starts.
    The events are used as milestones because upon their completion some 
elements of significant information concerning the cost comparison 
become known.
    A sixth section is utilized for CCRs that result in award of a 
contract. This section contains data elements on contract cost and 
information on subsequent contract actions during the second and third 
year of contract operation.
    The data elements that comprise these six sections are defined in 
this enclosure.

       Part II--Direct Conversions and Simplified Cost Comparisons

    The record for each direct conversion and simplified cost comparison 
is divided into six sections. Each of the first five sections is 
completed immediately following the completion of the following events:
    1. DoD Component approves CA action.
    2. The solicitation is issued.
    3. In-house and contractor costs are compared.
    4. Contract is awarded or solicitation is canceled.
    5. Contract starts.

[[Page 720]]

    A sixth section is utilized for tracking historical data after the 
direct conversion or simplified cost comparison is completed. This 
section contains data elements on contracts and cost information during 
the second and third performance period. The data elements that comprise 
the six sections in part II, of this Appendix, are defined in the CAMIS 
Entry and Update Instruction, Part II--Direct Conversions and Simplified 
Cost Comparisons.

                   Camis Entry and Update Instructions

                        Part I--Cost Comparisons

    The bracketed number preceding each definition in sections one 
through five is the DoD data element number. All date fields should be 
in the format MMDDYY (such as, June 30, 1983 = 063083).

                               Section One

       Event: DoD Component Approves Conducting a Cost Comparison

    All entries in this section of CCR shall be submitted by DoD 
Components on the first quarter update after approving the start of a 
cost comparison.
    These entries shall be used to establish the CCR and to identify the 
geographical, organizational, political, and functional attributes of 
the activity (or activities) undergoing cost comparison as well as to 
provide an initial estimate of the manpower associated with the activity 
(or activities). The initial estimate of the manpower in this section of 
the CCR will be in all cases those manpower figures identified in the 
correspondence approving the start of the cost comparison.
    DoD Components shall enter the following data elements to establish 
a CCR:
    [1] Cost Comparison Number. The number assigned by the DoD Component 
to uniquely identify a specific cost comparison. The first character of 
the cost comparison number must be a letter designating DoD Component as 
noted in data element [3], below. The cost comparison number may vary in 
length from five to ten characters, of which the second and subsequent 
may be alpha or numeric and assigned under any system desired by the DoD 
Component.
    [2] Announcement and/or approval date. Date Congress is notified 
when required by 10 U.S.C. 2461, of this part or date DoD Component 
approves studies being performed by 45 or fewer DoD civilian employees.
    [3] DOD Component Code. Use the following codes to identify the 
Military Service or Defense Agency conducting the cost comparison:

A--Department of the Army
B--Defense Mapping Agency
C--Strategic Defense Initiatives Organization
D--Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS) [3D1]
E--Defense Advanced Research Projects Agency
F--Department of the Air Force
G--National Security Agency/Central Security Service
H--Defense Nuclear Agency
J--Joint Chiefs of Staff (including the Joint Staff, Unified and 
Specified Commands, and Joint Service Schools)
K--Defense Information Systems Agency (DISA)
L--Defense Intelligence Agency
M--United States Marine Corps
N--United States Navy
R--Defense Contract Audit Agency
S--Defense Logistics Agency
T--Defense Security Assistance Agency
V--Defense Investigative Service
W--Uniform Services University of the Health Sciences
X--Inspector General, Department of Defense
Y--On Site Inspection Agency (OSIA)
2--Defense Finance & Accounting Service (DFAS)
3--Defense Commissary Agency (DeCA)
4--Defense Technical Information Center (DTIC)
5--U.S. Army Corps of Engineers (USACE) Civil Works

    [4] Command code. The code established by the DoD Component 
headquarters to identify the command responsible for operating the 
commercial activity undergoing cost comparison.
    [5] Installation code. The code established by the DoD Component 
headquarters to identify the installation where the CA(s) under cost 
comparison is and/or are located physically. Two or more codes (for cost 
comparison packages encompassing more than one installation) should be 
separated by commas.
    [6] State code. A two-position numeric code for the State (Data 
element reference ST-GA.) or U.S. Territory (FIPS 55-2), as shown in 
attachment 1 to appendix B to this part, where element [5] is located. 
Two or more codes shall be separated by commas.
    [7] Congressional District (CD). Number of the congressional 
district(s) where [5] is located. If representatives are elected ``at 
large,'' enter ``01'' in this data element; for a delegate or resident 
commissioner (such as, District of Columbia or Puerto Rico) enter 
``98.'' If the installation is located in two or more CDs, all CDs 
should be entered and separated by commas.
    [8] [Reserved]
    [9] Title of Cost Comparison. The title that describes the 
commercial activity(s) under cost comparision (for instance, 
``Facilities Engineering Package,'' ``Installation Bus Service,'' or 
``Motor Pool''). Use a clear title, not acronyms of function codes in 
this data element.

[[Page 721]]

    [10] DOD Functional Area Code(s). The four of five alpha/numeric 
character designators listed in Appendix A of this part that describe 
the type of CA undergoing cost comparison. There would be one code for a 
single CA or possible several codes for a large cost comparison package. 
A series of codes shall be separated by commas.
    [11] Prior Operation Code. A single alpha character that identifies 
the mode of operation for the activity at the time the cost comparison 
is started. Despite the outcome of the cost comparison, this code does 
not change. The coding as as follows:

I--In-house
C--Contract
N--New requirement
E--Expansion

    [12] Cost Comparison Status Code. A single alpha character that 
identifies the current status of the cost comparison. Enter one of the 
following codes:

P--In progress
C--Complete
X--Canceled. The CCR shall be excluded from future updates.
Z--Consolidated. The cost comparison has been consolidated with one or 
more other cost comparisons into a single cost comparison package. The 
CCR for the cost comparison that has been consolidated shall be excluded 
from future updates. (See data element [15].)
B--Broken out. The cost comparison package has been broken into two or 
more separate cost comparisons. The previous CCR shall be excluded from 
future updates. (See data element [15].)

    [13] Announcement--personnel estimate civilian, and [14] 
announcement--personnel estimate military. The number of civilian and 
military personnel allocated to the CAs undergoing cost comparison when 
the cost comparison is approved by the DoD Component or announced to 
Congress. This number in all cases shall be those personnel figures 
identified in the correspondence announcing the start of a cost 
comparison and will include authorized positions, temporaries, and 
borrowed labor. The number is used to give a preliminary estimate of the 
size of the activity.
    [15] Revised and/or original cost comparison number. When a 
consolidation occurs, create a new CCR containing the attributes of the 
consolidated cost comparison. In the CCR of each cost comparison being 
consolidated, enter the cost comparison number of the new CCR in this 
data element and code ``Z'' in data element [12] of this attachment. In 
the new CCR, this data element should be blank and data element [12] of 
this attachment should denote the current status of the cost comparison. 
Once the consolidation has occurred, only the new CCR requires future 
updates. When a single cost comparison is being broken into multiple 
cost comparisons, create a new CCR for each cost comparison broken out 
from the original cost comparison. Each new CCR shall contain its own 
unique set of attributes; in data element [15] of this attachment enter 
the cost comparison number of the original cost comparison from which 
each was derived, and in data element [12] of this attachment enter the 
current status of each cost comparison. For the original cost 
comparison, data element [15] of this attachment, should be blank and 
data element [12] of this attachment should have a code ``B'' entry. 
Only the derivative record entries require future updates. When a 
consolidation or a breakout occurs, an explanatory remark shall be 
entered in data element [57] of this attachment (such as, ``part of SW 
region cost comparison,'' or, ``separated into three cost 
comparisons'').

                               Section Two

                    Event: The Solicitation is Issued

    The entries in this section of the CCR provide information on the 
personnel authorized to perform the workload in the PWS, the number of 
workyears used to accomplish the workload in the PWS, and the type and 
kind of solicitation.
    The DoD Component shall enter the following data elements at the 
first quarterly update subsequent to the issuance of the solicitation:
    [17] [Reserved]
    [18] Solicitation-Type Code. A one-character alpha designator that 
identifies the type of solicitation used to obtain contract bids or 
offers. Use either the CBD as the source document or information 
received from the contracting officer for this entry. Solicitations 
under section 8(a) of the Small Business Act are negotiated. Enter one 
of the following codes:

S--Sealed Bid
N--Negotiated

    [19] Solicitation Kind Code. A one-character (or two-character, if 
``W'' suffix is used) alpha designator indicating whether the 
competition for the contract has been limited to a specific class of 
bidders or offerors. Use either the CBD as the source document or 
information received from the contracting officer to enter one of the 
following codes:

A--Restrict to small business
B--Small Business Administration 8(a) Set Aside
C--Javits-Wagner-O'Day Act (JWOD)
D--Other mandatory sources
U--Unrestricted
W--(optional suffix) Unrestricted after initial restriction

    [20] Current Authorized Civilians and [21] Current Authorized 
Military. The number of

[[Page 722]]

civilian and military authorizations allocated on the DoD Component's 
manpower documents to perform the work described in the PWS. This number 
refines the initial authorization estimate (section one, data elements 
[13] and [14]).
    [22] Baseline Annual Workyears Civilian and [23] Baseline Annual 
Workyears Military. The number of annual workyears it has taken to 
perform the work described by the PWS before the DoD Component conducts 
the MEO study of the in-house organizations; do not include contract 
monitor requirements. Military workyears include assigned, borrowed, 
diverted, and detailed personnel.
    An annual workyear is the use of 2,087 hours (including authorized 
leave and paid time off for training). For example, when full-time 
employees whose work is completely within the PWS are concerned, ``one 
workyear'' normally is comparable to ``one employee'' or two part-time 
employees, each working 1,043 hours in a fiscal year. Also include in 
this total the workyears for full-time employees who do not work on a 
full-time basis on the work described by the PWS. For example, some 
portion of the workload is performed by persons from another work center 
who are used on an ``as needed'' basis. Their total hours performing 
this workload is 4,172 hours. This would be reflected as two workyears. 
Less than one-half year of effort should be rounded down, and one-half 
year or more should be rounded up.
    These workyear figures shall be the baseline for determining the 
manpower savings identified by the management study.

                              Section Three

 Event: The In-House and the Contractor Costs of Operation are Compared

    The entries in this section provide information on the date of the 
cost comparison (initial decision), the preliminary results, the number 
of bids or offers received, and the costing method used in the cost 
comparison.
    The DoD Component shall enter the following data elements in the 
first quarterly update subsequent to the date of the comparison of in-
house and contractor costs (date of initial decision):
    [24] Scheduled Initial Decision Date. Date the initial decision is 
scheduled at the start of a cost comparison.
    [24A] Actual Initial Decision Date. Date the initial decision is 
announced. The initial decision is based on the apparent low bid or 
offer and is subject to preaward surveys and resolution of all appeals 
and protests. In a sealed bid procurement, the initial decision is 
announced at bid opening. In a negotiated procurement, the initial 
decision is announced when the cost comparison is made between the in-
house estimate and the proposal of the selected offeror.
    [25] Cost Comparison Preliminary Results Code. A one-character alpha 
designator indicating the results of the cost comparison as announced by 
the contracting officer at the time the bids or offers are compared. The 
entries are limited to two possibilities:

I--In-house
C--Contract

    [26]-[27] [Reserved]

                              Section Four

Event: The Contracting Officer Either Awards the Contract or Commercial 
                    Activity Cancels the Solicitation

    The entries in this section identify the final result, information 
on the contract, the in-house bid, and costing information from the cost 
comparison record.
    The DoD Component shall enter the following data elements in the 
first quarterly update subsequent to the date the contracting officer 
either awards a contract or cancels the solicitation:
    [28] Contract Award/Solicitation Commercial Activity Cancellation 
Date. For conversions to contract, this is the date a contract was 
awarded in a sealed bid solicitation or the date the contractor was 
authorized to proceed on a conditional award contract in a negotiated 
solicitation. For retentions in-house, this is the date the solicitation 
was canceled (when the contracting officer publishes an amendment to the 
solicitation canceling it).
    [29] Cost Comparison Final Result Code. A one-character alpha 
designator identifying the final result of the comparison between in-
house and contractor costs; the contracting officer either awards the 
contract or cancels the solicitation. Enter one of the following codes:

I--In-house
C--Contract

    [30] Decision Rationale Code. A one-character alpha designator that 
identifies the rationale for awarding a contract or canceling the 
solicitation. The work shall be performed in-house or by contractor, 
based on cost, or the work shall be performed in-house because no 
satisfactory commercial source was available (no bids or offers were 
received or the preaward survey resulted in the determination that no 
commercial sources were responsive or responsible). Enter one of the 
following codes:

C--Cost
N--No satisfactory commercial source
O--Other

    [31] [Reserved]
    [31a] Prime Contractor Size. Enter one of the following

S--Small or small/disadvantaged business
L--Large business


[[Page 723]]


    [32] MEO Workyears. The number of annual workyears it takes to 
perform the work described in the PWS after the MEO study has been 
conducted. Do not include the minimum cost differential (line 14 in CCF 
or line 16 in the ENCR CCF) in the computation of any of these data 
elements.
    For data elements [33] through [36], enter all data after all 
adjustments required by appeals board decisions. Do not include the 
minimum cost differential (line 31 old CCF or line 14 new CCF or line 16 
new ENRC form) in the computation of any of these data elements. If a 
valid cost comparison was not conducted (that is, all bidders or 
offerors disqualified, no bids or offers received, etc.) do not complete 
data elements [33] through [36]. Explain lack of valid cost data in data 
element [57], DOD Component Comments.
    [33] First Performance Period. Expressed in months, the length of 
time covered by the contract. Do not include any option periods.
    [34] Cost Comparison Period. Expressed in months, the total period 
of operation covered by the cost comparison; this is the period used as 
the basis for data elements [35] and [36], below.
    [35] Total in-house Cost ($000). Enter the total cost of in-house 
performance in thousands of dollars, rounded to the nearest thousand. 
This is the total of line 6 of the new CCF or line 8 of the ENCR CCF. An 
entry is required although the activity remains in-house due to absence 
of a satisfactory commercial source.
    [36] Total Contract Cost ($000). Enter the total cost of contract 
performance in thousands of dollars, rounded to the nearest thousand. 
This is the total of line 13 of the CCF or line 15 of the ENCR CCF.
    [37] Scheduled Contract or MEO Start Date. Date the contract and/or 
MEO was scheduled to start at the beginning of a cost comparison.

                              Section Five

                     Event: The Contract/MEO Starts

    The entries in this section identify the contract or MEO start date 
and the personnel actions taken as a result of the cost comparison.
    The DoD Component shall enter the following data elements in the 
first quarterly update subsequent to the start of the contract:
    [38] Contract/MEO Start Date. The actual date the contractor began 
operation of the contract or the Government implements the MEO.
    [39] Permanent Employees Reassigned to Equivalent Positions. The 
number of permanent employees who were reassigned to positions of 
equivalent grade as of the contract start date.
    [40] Permanent Employee Changed To Lower Positions. The number of 
permanent employees who were reassigned to lower grade positions as of 
the contract start date.
    [41] Employees Taking Early Retirement. The number of employees who 
took early retirement as of the contract start date.
    [42] Employees Taking Normal Retirement. The number of employees who 
took normal retirement as of the contract start date.
    [43] Permanent Employees Separated. The number of permanent 
employees who were separated from Federal employment as of the contract 
start date.
    [44] Temporary Employees Separated. The number of temporary 
employees who were separated from Federal employment as of the contract 
start date.
    [45] Employees Entitled to Severance Pay. The estimated number of 
employees entitled to severance pay on their separation from Federal 
employment as of the contract start date.
    [46] Total Amount of Severance Entitlements ($000). The total 
estimated amount of severance to be paid to all employees, in thousands 
of dollars, rounded to the nearest thousand, as of the contract start 
date.
    [47] Number Of Employees Hired by The Contractor. The number of 
estimated DoD civilian employees (full-time or otherwise) that will be 
hired by the contractors, or their subcontractors, at the contract start 
date.

                          Administrative Appeal

    [48] Filed. Were administrative appeals filed?
    N--No
    Y--Yes
    [49] Source. Who filed the appeal?
    B--Both
    C--Contractor
    I--In-house
    [50] Result. Were the appeals finally upheld? (If both appealed, 
explain result in data element [57], of this section).
    N--No
    P--Still in progress
    Y--Yes

                               GAO Protest

    [51] Filed. Was a protest filed with GAO?
    N--No
    Y--Yes
    [52] Source. Who filed the protest?
    B--Both
    C--Contractor
    I--In-house
    [53] Result. Was the protest finally upheld? (Explain result in data 
element [57], below).
    N--No
    P--Still in progress
    Y--Yes

[[Page 724]]

                               Arbitration

    [54] Requested. Was there a request for arbitration?
    N--No
    Y--Yes
    [55] Result. Was the case found arbitrable? (Explain result in data 
element [57], below).
    N--No
    P--Still in progress
    Y--Yes

                           General Information

    +[56] Total Staff-Hours Expended. Enter the estimated number of 
staff-hours expended by the installation for the cost comparison. 
Include direct and indirect hours expended from the time of PWS until a 
final decision is made.
    +[56a] Estimated Cost Of Conducting The Cost Comparison. Enter the 
estimated cost of the total staff-hours identified in data element [56] 
of this section non-labor (travel, reproduction costs, etc.) associated 
with the cost comparision.
    +Data elements [56] and [56A] will only be completed by DoD 
Components that are participating in the pilot test of these data 
elements.
    [57] DoD Component Comments. Enter comments, as required, to explain 
situations that affect the conduct of the cost comparision. Where 
appropriate, precede each comment with the CAMIS data element being 
referenced.
    [58] Effective Date. ``As of'' date of the most current update for 
the cost comparison. This data element will be completed by the DMDC.
    [59] (Leave blank, for DoD computer program use).

                               Section Six

         Event: Quarter Following Contract and/or Option Renewal

    The entries in this section identify original costs, savings, 
information on subsequent performance periods and miscellaneous contract 
data. The DoD Component shall enter the following data elements in the 
first quarterly update annually.
    [60] Original Cost of Function(s) ($000). The estimated total cost 
of functions before to development of an MEO in thousands of dollars, 
rounded to the nearest thousand for the base year and option years. 
(Begin entry when study began for data element [2] after 1 October 
1989).
    [60A] Estimated Dollar Savings ($000). The DoD Component's estimated 
savings from the cost comparison for the base year plus option years, in 
thousands of dollars, rounded to the nearest thousand, for either in-
house or contract performance. Documentation will be available at the 
DoD Component level. (Begin entry after 1 October 1989).
    [61] Contract Or In-House Bid First Performance Period ($000). For 
studies resulting in continued in-house performance, enter the total in-
house cost (Line 6 from the CCF) for the first performance period. For 
studies resulting in conversion to contract performance, enter the 
contract price (Line 7 from the CCF) for the first performance period. 
Figures shall be shown in thousands of dollars, rounded to the nearest 
thousand.
    [61A] Actual Contract or In-House Costs First Performance Period 
($000). Enter the actual first performance period contract cost 
including all change orders (Plus changes in the scope of work) or 
actual in-house performance cost including changes in the scope of work, 
in thousands of dollars, rounded to the nearest thousand. No entry is 
required for actual in-house performance during the second and third 
performance periods.
    [61B] Adjusted Contract Costs First Performance Period ($000). Enter 
an adjusted first performance period contract cost that includes actual 
DoL wage increases and costs for omissions and/or errors in the original 
PWS, but exclude new requirement costs and their associated wage 
increases, in thousands of dollars, rounded to the nearest thousand. 
(Begin entry after 1 October 1989).
    [61C] Adjusted In-House Costs First Performance Period ($000). Enter 
the total first performance period in-house cost of the MEO, including 
civil service pay increases, but excluding increases associated with new 
mission requirements not included in the original scope of work of the 
function. Show costs in thousands of dollars, rounded to the nearest 
thousand. Entry is required even if the function went to contract. 
(Begin entry after 1 October 1989).
    [62] Contract Or In-House Bid Second Performance Period ($000). For 
studies resulting in continued in-house performance, enter the total in-
house cost (Line 6 from the CCF) for the second performance period. For 
studies resulting in conversion to contract performance, enter the 
contract price (Line 7 from the CCF) for the second performance period. 
Figures shall be shown in thousands of dollars, rounded to the nearest 
thousand.
    [62A] Actual Contract Costs Second Performance Period ($000). Enter 
the actual second performance period contract cost including all change 
orders (Plus changes in the scope of work), in thousands of dollars, 
rounded to the nearest thousand. No entry is required when the function 
remained in-house.
    [62B] Adjusted Contract Costs Second Performance Period ($000). 
Enter an adjusted second performance period contract cost that includes 
actual DoL wage increases and costs for omissions and/or errors in the 
original PWS, but exclude new requirement costs and their associated 
wage increases, in thousands of dollars, rounded to the nearest 
thousand. (Begin entry after 1 October 1989).

[[Page 725]]

    [62] Adjusted In-House Costs Second Performance Period ($000). Enter 
the total second performance period in-house cost of the MEO, including 
civil service pay increases, but excluding increases associated with new 
mission requirements not included in the original scope of work of the 
function. Show costs in thousands of dollars, rounded to the nearest 
thousand. Entry is required even if the function went to contract. 
(Begin entry after 1 October 1989).
    [63] Contract Or In-house Bid Third Performance Period ($000). For 
studies resulting in continued in-house performance, enter the total in-
house cost (Line 6 from the CCF) for the third performance period. For 
studies resulting in conversion to contract performance, enter the 
contract price (Line 7 from the CCF) for the third performance period. 
Figures shall be shown in thousands of dollars, rounded to the nearest 
thousand.
    [63A] Actual Contract Costs Third Performance Period ($000). Enter 
the actual third performance period contract cost including all change 
orders (Plus changes in the scope of work), in thousands of dollars, 
rounded to the nearest thousand. No entry is required when the function 
remained in-house.
    [63B] Adjusted Contract Costs Third Performance Period ($000). Enter 
an adjusted third performance period contract cost that includes actual 
DoL wage increases and costs for omissions and/or errors in the original 
PWS, but exclude new requirement costs and their associated wage 
increases, in thousands of dollars, rounded to the nearest thousand 
(Begin entry after 1 October 1989).
    [63C] Adjusted In-House Costs Third Performance Period ($000). Enter 
the total third performance period in-house cost of the MEO, including 
civil service pay increases, but excluding increases associated with new 
mission requirements not included in the original scope of work of the 
function. Show costs in thousands of dollars, rounded to the nearest 
thousand. Entry is required even if the function went to contract (Begin 
entry after 1 October 1989).
    [64] Contractor Change. Enter one of the following alpha designators 
to indicate whether the contract for the second or third performance 
period has changed from the original contractor.
    N--No, the contractor has not changed.
    Y--Yes, the contractor has changed.
    Data elements [65] through [66] of this section are not required if 
the answer to [64] of this section is no (N).
    [65] New Contractor Size (If data element [66] of this section 
contains the alpha designator ``I'' or ``R,'' no entry is required).
    L--New contractor is large business.
    S--New contractor is small and/or small disadvantaged business.
    [66] Reason For Change. DoD Components shall enter one of the 
following designators listed in this section, followed by the last two 
digits of the fiscal year which the change occurred.
    C--Contract workload consolidated with other existing contract 
workload.
    D--New contractor takes over because original contractor defaults.
    I--Returned in-house because original contractor defaults within 12 
months of start date and in-house bid is the next lowest.
    N--New contractor replaced original contractor because Government 
opted not to renew contract in option years.
    R--Returned in-house temporarily pending resolicitation due to 
contract default, etc.
    U--Contract workload consolidated into a larger (umbrella) cost 
comparison.
    X--Other-function either returned in-house or eliminated because of 
base closure, realignment, budget reduction or other change in 
requirements.
    [67] Contract Administration Staffing. The actual number of contract 
administration personnel hired to administer the contract.

                   Camis Entry and Update Instruction

       Part II--Direct Conversions and Simplified Cost Comparisons

    The bracketed number preceding each definition in sections One 
through six of this section, is the DoD data element number. All date 
fields should be in the format YYMMDD (Data element reference DA-FA).

                               Section One

               Event: DoD Component Approves the CA Action

    All entries in this section of the DCSCCR record shall be submitted 
by DoD Components on the first quarter update after approving the start 
of a cost comparison. These entries shall be used to establish the 
DCSCCR and to identify the geographical, organizational, political, and 
functional attributes of the activity (or activities) undergoing 
conversion and/or comparison as well as to provide an initial estimate 
of the manpower associated with the activity (or activities). The 
initial estimate of the personnel in this section of the DCSCCR will be, 
in all cases, those personnel figures identified in the correspondence 
approving the start of the conversion and/or comparison. DoD Components 
shall enter the following data elements to establish a DCSCCR:
    [1] Direct Conversion/Simplified Cost Comparison Number. The number 
assigned by the DoD Component to uniquely identify a specific conversion 
and/or comparison. The first character of the conversion and/or 
comparison number must be a letter designating the DoD Component as 
noted in data element [3]

[[Page 726]]

of this section. The conversion and/or comparison number may vary in 
length from five to ten characters, of which the second and subsequent 
may be alpha or numeric and assigned under any system desired by the DoD 
Component.
    [2] Approval Date. The date has simplified cost comparison or direct 
conversion was approved.
    [3] DoD Component Code. Use the following codes to identify the 
Military Service or Defense Agency and/or Field Activity conducting the 
cost comparison:
    A--Department of the Army
    B--Defense Mapping Agency (DMA)
    D--Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS) [3D1]
    D--Washington Headquarters Service (WHS) [3D2]
    F--Department of the Air Force
    G--National Security Agency/Central Security Service (NSA/CSS)
    H--Defense Nuclear Agency (DNA)
    J--Joint Chiefs of Staff (JCS) (including the Joint Staff, Unified 
and Specified Commands, and Joint Service Schools)
    K--Defense Information Systems Agency (DISA)
    L--Defense Intelligence Agency (DIA)
    M--United States Marine Corps (USMC)
    N--United States Navy (USN)
    R--Defense Contract Audit Agency (DCAA)
    S--Defense Logistics Agency (DLA)
    T--Defense Security Assistance Agency (DSAA)
    V--Defense Investigative Service (DIS)
    W--Uniformed Services University of the Health Sciences (USUHS)
    Y--On Site Inspection Agency (OSIA)
    2--Defense Finance & Accounting Service (DFAS)
    3--Defense Commissary Agency (DeCA)
    4--Defense Technical Information Center (DTIC)
    5--U.S. Army Corps of Engineers (USACE) Civil Works
    [4] Command code. The code established by the DoD Component 
headquarters to identify the command responsible for operating the 
commercial activity undergoing cost comparison.
    [5] Installation code. The code established by the DoD Component 
headquarters to identify the installation where the CA(s) under cost 
comparison is and/or are located physically. Two or more codes (for cost 
comparison packages encompassing more than one installation) should be 
separated by commas.
    [6] State Code. A two-position numeric code for the State (Data 
element reference ST-GA.) or U.S. Territory (FIPS 55-2), as shown in 
attachment 1 to appendix B of this part, where element [5] is located. 
Two or more codes shall be separated by commas.
    [7] Congressional District (CD). Number of the CDs where [5] of this 
section, is located. If representatives are elected ``at large,'' enter 
``01'' in this data element; for a delegate or resident commissioner 
(i.e., District of Columbia or Puerto Rico) enter ``98.'' If the 
installation is located in two or more CDs, all CDs should be entered 
and separated by commas.
    [8] (Leave blank)
    [9] Title of Conversion and/or Comparison. The title that describes 
the CA(s) under conversion/comparison (for instance, ``Facilities 
Engineering Package'', ``Installation Bus Service,'' or ``Motor Pool''). 
Use a clear title, not acronyms or function codes in this data element.
    [10] DoD Functional Area Code(s). The four- or five-alpha and/or 
numeric character designators listed in appendix A of this part that 
describes the type of CA undergoing conversion and/or comparison. This 
would be one code for a single CA or possibly several codes for a large 
cost comparison package. A series of codes shall be separated by commas.
    [11] Prior Operation Code. A single alpha character that identifies 
the mode of operation for the activity at the time the conversion and/or 
comparison is started. Despite the outcome of the conversion and/or 
comparison, this code does not change. The coding is as follows:

C--Contract
E--Expansion
I--In-house
N--New requirement
    [12] Conversion and/or Comparison Status Code. A single alpha 
character that identifies the current status of the conversion and/or 
comparison. Enter one of the following codes:
B--Broken out. The cost comparison package has been broken into two or 
more separate cost comparisons. The previous DCSCCR shall be excluded 
from future updates. (See data element [15] of this section.)
C--Complete
P--In progress
X--Canceled. The DCSCCR shall be excluded from future updates.
Z--Consolidated. The cost comparison has been consolidated with one or 
more other cost comparisons into a single cost comparison package. The 
DCSCCR for the cost comparison that has been consolidated shall be 
excluded from future updates. (See data element [15] of this section.)
    [13] Announcement--personnel estimate civilian, and [14] 
announcement--personnel estimate military. The number of civilian and 
military personnel allocated to the CAs undergoing conversion and/or 
comparison at the time the start of the conversion and/or comparison is 
approved. This number is all cases shall be those personnel figures 
identified when the conversion and/or comparison was approved and will 
include authorized positions, temporaries, and borrowed labor.

[[Page 727]]

The number is used to give a preliminary estimate of the size of the 
activity.
    [15] Revised and/or original cost comparison number. When a 
consolidation occurs, create a new DCSCCR containing the attributes of 
the consolidated conversion and/or comparison. In the DCSCCR of each 
conversion and/or comparison being consolidated, enter the conversion 
and/or comparison number of the new DCSCCR in this data element and code 
``Z'' in data element [12] of this section. In the new DCSCCR, this data 
element should be blank and data element [12] of this section should 
denote the current status of the conversion and/or comparison. Once the 
consolidation has occurred, only the new DCSCCR requires future updates.
    When a single conversion and/or comparison is being broken into 
multiple conversion and/or comparisons, create a new DCSCCR for each 
conversion and/or comparison broken out from the original conversion 
and/or comparison. Each new DCSCCR shall contain its own unique set of 
attributes; in data element [15] of this section enter the conversion 
and/or comparison number of the original conversion and/or comparison 
from which each was derived, and in data element [12] of this section 
enter the current status of each conversion and/or comparison. For the 
original conversion and/or comparison, data element [15] of this section 
should be blank and data element [12] of this section should have a code 
``B'' entry. Only the derivative record entries require future updates.
    When a consolidation or a breakout occurs, an explanatory remark 
shall be entered in data element [56] of this section (such as, ``part 
of SW region cost comparison,'' or, ``separated into three cost 
comparisons'').
    [16] (Leave blank)

                               Section Two

                    Event: The Solicitation is Issued

    The entries in this section of the DCSCCR provide information on the 
personnel authorized to perform the workload in the PWS, the number of 
workyears used to accomplish the workload in the PWS, and the type and 
kind of solicitation.
    The DoD Component shall enter the following data elements at the 
first quarterly update subsequent to the issuance of the solicitation:
    [17] (Leave blank)
    [18] Solicitation-Type code. A one-character alpha designator that 
identifies the type of solicitation used to obtain contract bids or 
offers. Use either the CBD as the source document or information 
received from the contracting officer for this entry. Solicitations 
under section 8(a) of ``The Small Business Act'' are negotiated. Enter 
one of the following codes:

N--Negotiated
S--Sealed Bid
    [19] Solicitation-Kind code. A one-character (or two-character, if 
``W'' suffix is used) alpha designator indicating whether the 
competition for the contract has been limited to a specific class of 
bidders or offerors. Use either the CBD as the source document or 
information received from the contracting officer to enter one of the 
following codes:

A--Restrict to small business
B--Small Business Administration 8(a) Set Aside
C--``Javits-Wagner-O'Day Act'' (JWOD)
D--Other mandatory sources
U--Unrestricted
W--(Optional suffix) Unrestricted after initial restriction
    [20] Current Authorized Civilians, and [21] Current Authorized 
Military. The number of civilian and military authorizations allocated 
on the DoD Component's manpower documents to perform the work described 
in the PWS. This number refines the initial authorization estimate 
(section one, data elements [13] and [14] of this section).
    [22] Baseline Annual Workyears Civilian, and [23] Baseline Annual 
Workyears Military. The number of annual workyears it has taken to 
perform the work described by the PWS before the DoD Component conducts 
the MEO analysis of the in-house organization. Do not include contract 
monitor requirements. Military workyears include assigned, borrowed, 
diverted, and detailed personnel. Less than one-half a year of effort 
should be rounded down, and one-half a year or more should be rounded 
up. These workyear figures shall be the baseline for determining the 
personnel savings identified by the most efficient organization 
analysis.

                              Section Three

 Event: The In-House And The Contractor Costs Of Operations Are Compared

    The entries in this section provide information on the date of the 
conversion and/or comparison (initial decision), the preliminary 
results, the number of bids or offers received, and the costing method 
used in the conversion and/or comparison.
    The DoD Component shall enter the following data elements in the 
first quarterly update subsequent to the date of the comparison of in-
house and contractor costs (date of initial decision):
    [24] Scheduled Initial Decision Date. Date the initial decision is 
scheduled at the start of a conversion and/or comparison
    [24A] Actual Initial Decision Date. Date the initial decision is 
announced. The initial decision is based on the apparent low bid or 
offer and is subject to preaward surveys and resolution of all appeals 
and protests. In a sealed bid procurement, the initial decision is 
announced at bid opening. In a negotiated

[[Page 728]]

procurement, the initial decision is announced when the cost comparison 
is made between the in-house estimate and the proposal of the selected 
offeror. In a conversion, the initial decision is announced when the in-
house cost estimate is evaluated against proposed contractor proposals.
    [25] Cost Comparison Preliminary Results Code. A one-character alpha 
designator indicating the results of the cost comparison as announced by 
the contracting officer at the time of the comparison (No entry required 
for a direct conversion). The entries are limited to two possibilities:

C--Contract
I--In-house
    [26] (Leave blank)
    [27] (Leave blank)

                              Section Four

Event: The Contracting Officer Either Awards The Contract or Cancels The 
                              Solicitation

    The entries in this section identify the final result, information 
on the contract, the in-house bid, and costing information from the 
direct conversion and/or simplified cost comparison fact sheet.
    The DoD Component shall enter the following data elements in the 
first quarterly update subsequent to the date the contracting officer 
either awards a contract or cancels the solicitation:
    [28] Contract Award or Solicitation Cancellation Date. For 
conversions to contract, this is the date a contract was awarded in a 
sealed bid solicitation or the date the contractor was authorized to 
proceed on a conditional award contract in a negotiated solicitation. 
For retentions in-house, this is the date the solicitation was canceled 
(when the contracting officer publishes an amendment to cancel the 
solicitation).
    [29] Cost Comparison Final Result Code. A one-character alpha 
designator identifying the final result of the comparison between in-
house and contractor costs; the contracting officer either awards the 
contract or cancels the solicitation. Enter one of the following codes:

C--Contract
I--In-house
    [30] Decision Rationale Code. A one-character alpha designator that 
identifies the rationale for awarding a contract or canceling the 
solicitation. The work shall be performed in-house or by contractor 
based on cost, for other than cost, or the work shall be performed in-
house because no satisfactory commercial source was available (no bids 
or offers were received or the pre-award survey resulted in the 
determination that no commercial sources were responsive or 
responsible). Enter one of the following codes:

C--Cost
N--No satisfactory commercial source
O--Other
    [31] (Leave blank)
    [31A] Prime Contractor Size. Enter one of the following:

L--Large business
S--Small or small and/or disadvantaged business
    [32] MEO Workyears. The number of annual workyears it takes to 
perform the work described in the PWS after the MEO analysis has been 
conducted. This entry will be equal to the number of annual workyears in 
the in-house bid (No entry required for a direct conversion).
    For data elements [33] through [36] of this section enter all data 
after all adjustments required by appeal board decisions. Do not include 
minimum cost differential in the computation of any of these data 
elements. If a valid conversion and/or comparison was not conducted 
(i.e., all bidders or offerors disqualified, no bids or offers received, 
etc.) do not complete data elements [33], [34] and [36] of this section. 
Explain lack of valid cost data in data element [56], ``DoD Component 
Comments'' of this section.
    [33] First Performance Period. Expressed in months, the length of 
time covered by the contract. Do not include any option periods.
    [34] Conversion and/or Comparison Period. Expressed in months, the 
total period of operation covered by the conversion or cost comparison; 
this is the period used as the basis for data elements [35] and [36] of 
this section.
    [35] Total In-House Cost ($000). Enter the total estimated cost of 
in-house performance for the base year plus option years, in thousands 
of dollars, rounded to the nearest thousand. An entry is required 
although the activity remains in-house due to absence of a satisfactory 
commercial source (No entry required for a direct conversion).
    [36] Total Contract Cost ($000). Enter the total estimated cost of 
contract performance for the base year plus option years, in thousands 
of dollars, rounded to the nearest thousand.
    [37] Scheduled Contract or MEO Start Date. Date the contract and/or 
MEO was scheduled to start at the beginning of a conversion and/or 
comparison.

                              Section Five

                     Event: The Contract MEO Starts.

    The entries in this section identify the contract or MEO start date 
and the personnel actions taken as a result of the conversion and/or 
comparison.
    The DoD Component shall enter the following data elements in the 
first quarterly update subsequent to the start of the contract:
    [38] Contract and/or MEO Start Date. The actual date the contractor 
began operation

[[Page 729]]

of the contract or the Government implements the MEO.
    [39] Permanent Employees Reassigned to Equivalent Positions. The 
number of permanent employees who were reassigned to positions of 
equivalent grade as of the contract start date.
    [40] Permanent Employees Changed to Lower Positions. The number of 
permanent employees who were reassigned to lower grade positions as of 
the contract start date.
    [41] Employees Taking Early Retirement. The number of employees who 
took early retirement as of the contract start date.
    [42] Employees Taking Normal Retirement. The number of employees who 
took normal retirement as of the contract start date.
    [43] Permanent Employees Separated. The number of permanent 
employees who were separated from Federal employment as of the contract 
start date.
    [44] Temporary Employees Separated. The number of temporary 
employees who were separated from Federal employment as of the contract 
start date.
    [45] Employees Entitled to Severance Pay. The estimated number of 
employees entitled to severance pay on their separation from Federal 
employment as of the contract start date.
    [46] Total Amount of Severance Entitlements ($000). The total 
estimated amount of severance to be paid to all employees, in thousands 
of dollars, rounded to the nearest thousand, as of the contract start 
date.
    [47] Number of Employees Hired by the Contractor. The number of 
estimated DoD civilian employees (full-time or otherwise) that will be 
hired by the contractors, or their subcontractors, at the contract start 
date.

                          Administrative Appeal

    [48] Filed. Were administrative appeals filed?

N--No
Y--Yes
    [49] Source. Who filed the appeal?

B--Both
C--Contractor
I--In-House
    [50] Result. Were the appeals finally upheld? (if both appealed, 
explain result in data element [56] of this section).

N--No
P--Still in Progress
Y--Yes

                               GAO Protest

    [51] Filed. Was a protest filed with GAO?

N--No
Y--Yes
    [52] Source. Who filed the protest?

B--Both
C--Contractor
I--In-House
    [53] Result. Was the protest finally upheld? (explain result in data 
element [56], of this section).

N--No
P--Still in Progress
Y--Yes

                               Arbitration

    [54] Requested. Was there a request for arbitration?

N--No
Y--Yes
    [55] Result. Was the case found arbitrable? (explain result in data 
element [56], of this section).

N--No
P--Still in Progress
Y--Yes

                           General Information

    [56] DoD Component Comments. Enter comments, as required, to explain 
situations that affect the conduct of the conversion and/or comparison. 
Where appropriate, precede each comment with the CAMIS data element 
being referenced.
    [57] Effective Date. ``As of'' date of the most current update for 
the conversion and/or comparison. This data element will be completed by 
the DMDC.
    [58] (Leave blank, for DoD computer program use).

                               Section Six

         Event: Quarter Following Contract and/or Option Renewal

    The entries in this section identify information on subsequent 
performance periods and miscellaneous contract data. The DoD Component 
shall enter the following data elements in the first quarterly update 
annually:
    [59] Actual Contract Cost First Performance Period ($000). Enter the 
actual contractor cost for the first performance period, in thousands of 
dollars, rounded to the nearest thousand.
    [60] Actual Contract Cost Second Performance Period ($000). Enter 
the actual contractor cost for the second performance period, in 
thousands of dollars, rounded to the nearest thousand.
    [61] Actual Contract Cost Third Performance Period ($000). Enter the 
actual contractor cost for the third performance period, in thousands of 
dollars, rounded to the nearest thousand.
    [62] Contractor Change. Enter one of the following alpha designators 
to indicate whether the contractor for the second or third performance 
period has changed from the original contractor.


[[Page 730]]


N--No, the contractor has not changed
Y--Yes, the contractor has changed
    Data elements [63] through [64] of this section are not required if 
the answer to [62] of this section is no (N).
    [63] New Contractor Size. (If data element [64] of this section 
contains the alpha designator ``I'' or ``R,'' no entry is required)

L--New contractor is large business
S--New contractor is small and/or small disadvantaged business.
    [64] Reason For Change. DoD Components shall enter one of the 
following designators listed in the following, followed by the last two 
digits of the FY in which the change occurred.

C--Contract workload consolidated with other existing contract workload.
D--New contractor takes over because original contractor defaults.
I--Returned in-house because of original contractor defaults; etc., 
within 6 months of start date and in-house bid is the next lowest.
N--New contractor replaced original contractor because Government opted 
not to renew contract in option years.
R--Returned in-house temporarily pending resolicitation due to contract 
default, etc.
U--Contract workload consolidated with other existing contract workload.
X--Other-Function either returned in-house or eliminated because of base 
closure, realignment, budget reduction or other change in requirements.
    [65] Contract Administration Staffing. The actual number of contract 
administration personnel hired to administer the contract.

[50 FR 40805, Oct. 7, 1985, as amended at 57 FR 29212, July 1, 1992; 60 
FR 67329, Dec. 29, 1995]



PART 171_IMPLEMENTATION OF WILDFIRE SUPPRESSION AIRCRAFT TRANSFER ACT OF 

1996--Table of Contents



Sec.
171.1 Background and purpose.
171.2 Applicability.
171.3 Restrictions.
171.4 Qualifications.
171.5 Sale procedures.
171.6 Reutilization and transfer procedures.
171.7 Reporting requirements.
171.8 Expiration.

    Authority: 10 U.S.C. 2576 note.

    Source: 68 FR 8823, Feb. 26, 2003, unless otherwise noted.



Sec. 171.1  Background and purpose.

    The Wildfire Suppression Aircraft Transfer Act of 1996 (the 
``Act''), as amended, allows the Department of Defense (DOD), during the 
period 1 October 1996 through 30 September 2005, to sell aircraft and 
aircraft parts to entities that contract with the Federal Government for 
the delivery of fire retardant by air in order to suppress wildfire. 
This part implements the Act.



Sec. 171.2  Applicability.

    The regulations in this part apply to aircraft and aircraft parts 
determined to be DOD excess under the definition of the Federal Property 
Management Regulations (FPMR) and listed in Attachment 1 of Chapter 4 of 
DOD 4160.21-M as Category A aircraft authorized for commercial use.



Sec. 171.3  Restrictions.

    Aircraft and aircraft parts sold under the Act shall be used only 
for wildfire suppression purposes and shall not be flown or removed from 
the U.S. unless dispatched by the National Interagency Fire Center in 
support of an international agreement to assist in wildfire suppression, 
or for other purposes jointly approved in advance, in writing, by the 
Secretary of Defense and the Secretary of Agriculture.



Sec. 171.4  Qualifications.

    The Secretary of Agriculture must certify in writing to the 
Secretary of Defense prior to sale that the person or entity is capable 
of meeting the terms and conditions of a contract to deliver fire 
retardant by air.
    (a) Prior to sales offerings of aircraft or aircraft parts, the U.S. 
Department of Agriculture (USDA) must provide to the Defense 
Reutilization and Marketing Service (DRMS), in writing, a list of 
persons or entities eligible to bid under this Act, including expiration 
date of each USDA contract, and locations covered by the USDA contract.
    (b) This requirement may not be delegated to the U.S. Forest Service 
(USFS).



Sec. 171.5  Sale procedures.

    Disposal of aircraft and aircraft parts must be in accordance with 
the provisions of Chapter 4 of DOD 4160.21-M, paragraph B2, and with 
other pertinent parts of this manual, with the following changes and 
additions:
    (a) Sales shall be limited to the aircraft types listed in 
Attachment 1 of

[[Page 731]]

Chapter 4 of DOD 4160.21-M, and parts thereto (i.e., no aircraft or 
aircraft parts listed as Munitions List Items on the State Department's 
U.S. Munitions List).
    (b) Sales shall be made at fair market value (FMV), as determined by 
the Secretary of Defense and, to the extent practicable, on a 
competitive basis.
    (1) DRMS must conduct sales utilizing FMVs that are either provided 
by the Military Services on the Disposal Turn-In Documents (DTIDs) or 
based on DRMS' professional expertise and knowledge of the market. 
Advice regarding FMV shall be provided to DRMS by USDA, as appropriate.
    (2) If the high bid for a sale item does not equal or exceed the 
FMV, DRMS is vested with the discretion to reject all bids and reoffer 
the item:
    (i) On another wildfire suppression sale if there is indication that 
reoffer may be successful, or,
    (ii) With DLA concurrence, as normal surplus under the FPMR if there 
is no such indication.
    (3) Disposition of proceeds from sale of aircraft under the Act will 
be as prescribed in guidance from the Under Secretary of Defense 
(Comptroller).
    (c) Purchases shall certify that aircraft and aircraft parts will be 
used only in accordance with conditions stated in Sec. 171.3.
    (1) Sales solicitations will require bidders to submit end-use 
certificates with their bids, stating the intended use and proposed 
areas of operations.
    (2) The completed end-use certificates shall be used in the bid 
evaluation process.
    (d) Sales contracts shall include terms and conditions for verifying 
and enforcing the use of the aircraft and aircraft parts in accordance 
with provisions of this guidance.
    (1) The DRMS Sales Contracting Officer (SCO) is responsible for 
verifying and enforcing the use of aircraft and aircraft parts in 
accordance with the terms and conditions of the sales contract.
    (i) Sales contracts include provisions for on-site visits to the 
purchaser's place(s) of business and/or worksite(s).
    (ii) Sales contracts require the purchaser to make available to the 
SCO, upon his or her request, all records concerning the use of aircraft 
and aircraft parts.
    (2) USDA shall nominate in writing, and the SCO shall appoint, 
qualified Government employees (not contract employees) to serve as 
Contracting Officer's Representatives (CORs) for the purpose of 
conducting on-site verification and enforcement of the use of aircraft 
and aircraft parts for those purposes permitted by the sales contract.
    (i) COR appointments must be in writing and must state the COR's 
duties, the limitations of the appointment, and the reporting 
requirements.
    (ii) USDA bears all COR costs.
    (iii) The SCO may reject any COR nominee for cause, or terminate any 
COR appointment for cause.
    (3) Sales contracts require purchasers to comply with the Federal 
Aviation Agency (FAA) requirements in Chapter 4 of DOD 4160.21-M, 
paragraphs B 2 b (4)(d)2 through (40)(d)5.
    (4) Sales contracts require purchasers to comply with the Flight 
Safety Critical Aircraft Parts regime in Chapter 4 of DOD 4160.21-M, 
paragraph B 26 c and d, and in Attachment 3 of Chapter 4 of DOD 4160.21-
M.
    (5) Sales contracts require purchasers to obtain the prior written 
consent of the SCO for resale of aircraft or aircraft parts purchased 
from DRMS under this Act. Resales are only permitted to other entities 
which, at time of resale, meet the qualifications required of initial 
purchasers. The SCO must seek, and USDA must provide, written assurance 
as to the acceptability of a prospective repurchaser before approving 
resale. Resales will normally be approved for airtanker contracts which 
have completed their contracts, or which have had their contracts 
terminated, or which can provide other valid reasons for seeking resale 
which are acceptable to the SCO.
    (i) If it is determined by the SCO that there is no interest in the 
aircraft or aircraft parts being offered for resale among entities 
deemed qualified repurchasers by USDA, the SCO may permit resale to 
entities outside the airtanker industry.
    (ii) When an aircraft or aircraft parts are determined to be 
uneconomically

[[Page 732]]

repairable and suitable only for cannibalization and/or scrapping, the 
purchaser shall advise the SCO in writing and provide evidence in the 
form of a technical inspection document from a qualified FAA airframe 
and powerplant mechanic, or equivalent.
    (iii) The policy outlined in paragraph (d)(5) of this section also 
applies to resales by repurchasers, and to all other manner of proposed 
title transfer (including, but no limited to, exchange and barters).
    (iv) Sales of aircraft and aircraft parts under the Act are intended 
for principals only. Sales offerings will caution prospective purchasers 
not to buy with the expectation of acting as brokers, dealers, agents, 
or middlemen for other interested parties.
    (6) The failure of a purchaser to comply with the sales contract 
terms and conditions may be cause for suspension and/or debarment, in 
addition to other administrative, contractual, civil, and criminal 
(including, but not limited to, 18 U.S.C. 1001) remedies which may be 
available to DOD.
    (7) Aircraft parts will be made available in two ways:
    (i) DRMS may, based on availability and demand, offer for sale under 
the Act whole unflyable aircraft, aircraft carcasses for 
cannibalization, or aircraft parts, utilizing substantially the same 
provisions outlined in paragraphs (a) through (d)(6) of this section for 
flyable aircraft.
    (A) If USDA directs that DRMS set aside parts for sale under the 
Act, USDA must provide listings of parts required, by National Stock 
Number and Condition Code.
    (B) Only qualified airtanker operators which fly the end-term 
aircraft will be allowed to purchase unflyable aircraft, aircraft 
carcasses, or aircraft parts applicable to that end-item.
    (C) FMVs are not required for aircraft parts. DRMS must utilize 
historic prices received for similar parts in making sale 
determinations.
    (ii) As an agency of the Federal Government, USDA remains eligible 
to receive no-cost transfers of excess DOD aircraft parts under the 
FPMR.



Sec. 171.6  Reutilization and transfer procedures.

    Prior to any sales effort, the Secretary of Defense shall, to the 
maximum extent practicable, consult with the Administrator of GSA, and 
with the heads of other Federal departments and agencies as appropriate, 
regarding reutilization and transfer requirements for aircraft and 
aircraft parts under this Act (see Chapter 4 of DOD 4160.21-M, 
paragraphs B 2 b (1) through B 2 b (3)).
    (a) DOD reutilization:
    (1) USDA shall notify Army, Navy, and/or Air Force, in writing, of 
their aircraft requirements as they arise, by aircraft type listed in 
Attachment 1 of Chapter 4 of DOD 4160.21-M.
    (2) If a DOD requirement exists, the owning Military Service shall 
advise USDA, in writing, that it will be issuing the aircraft to satisfy 
the DOD reutilization requirement. If USDA disputes the validity of the 
DOD requirement, it shall send a written notice of dispute to the owning 
Military Service and ADUSD(L&MR/SCI) within thirty (30) days of its 
notice from the Military Service. ADUSD(L&MR/SCI) shall then resolve the 
dispute, in writing. The aircraft may not be issued until the dispute 
has been resolved.
    (b) Federal agency transfer:
    (1) The Military Service must report aircraft which survive 
reutilization screening to GSA Region 9 on a Standard Form 120. GSA 
shall screen for Federal agency transfer requirements in accordance with 
the FPMR.
    (2) If a Federal agency requirement exists, GSA shall advise USDA, 
in writing, that it will be issuing the aircraft to satisfy the Federal 
agency requirement. If USDA disputes the validity of the Federal 
requirement, it shall send a written notice of dispute to the owning 
Military Service and ADUSD(L&MR/SCI) within thirty (30) days of its 
notice from the Military Service. ADUSD(L&MR/SCI) shall then resolve the 
dispute, in writing. The aircraft cannot be issued until the dispute has 
been resolved.
    (c) The Military Services shall:
    (1) Report aircraft which survive transfer screening and are ready 
for sale to Headquarters, Defense Reutilization and Marketing Service, 
ATTN:

[[Page 733]]

DRMS-LMI, Federal Center, 74 Washington Avenue North, Battle Creek, 
Michigan 49017-3092. The Military Services must use a DD Form 1348-1A, 
DTID, for this purpose.
    (2) Transfer excess DOD aircraft to the Aerospace Maintenance and 
Regeneration Center (AMARC), Davis-Monthan AFB, AZ, and place the 
aircraft in an ``excess'' storage category while aircraft are undergoing 
screening and/or wildfire suppression aircraft sale. Aircraft shall not 
be available nor offered to airtanker operators from the Military 
Service's airfield. The Military Service shall be responsible for the 
AMARC aircraft induction charges. The gaining customer will be liable 
for all AMARC withdrawal charges, to include any aircraft preparation 
required from AMARC. Sale of parts required for aircraft preparation is 
limited to those not required for the operational mission forces, and 
only if authorized by specific authority of the respective Military 
Service's weapon system program manager.

[68 FR 8823, Feb. 26, 2003; 68 FR 11633, Mar. 11, 2003]



Sec. 171.7  Reporting requirements.

    Not later than 31 March 2000, the Secretary of Defense must submit 
to the Committee on Armed Services of the Senate and the Committee on 
National Security of the House of Representatives a report setting forth 
the following:
    (a) The number and type of aircraft sold under this authority, and 
the terms and conditions under which the aircraft were sold.
    (b) The persons or entities to which the aircraft were sold.
    (c) An accounting of the current use of the aircraft sold.
    (d) USDA must submit to Headquarters, Defense Reutilization and 
Marketing Service, ATTN: DRMS-LMI, Federal Center, 74 Washington Avenue 
North, Battle Creek, Michigan, 49017-3092, not later than 1 February 
2000, a report setting forth an accounting of the current disposition of 
all aircraft sold under the authority of the Act.
    (e) DRMS must compile the report, based on sales contract files and 
(for the third report element) input from the USDA. The report must be 
provided to HQ DLA not later than 1 March 2000. HQ DLA shall forward the 
report to DOD not later than 15 March 2000.



Sec. 171.8  Expiration.

    This part expires on 30 September 2005.



PART 172_DISPOSITION OF PROCEEDS FROM DOD SALES OF SURPLUS PERSONAL PROPERTY--

Table of Contents



Sec.
172.1 Purpose.
172.2 Applicability and scope.
172.3 Policy.
172.4 Responsibilities.
172.5 Procedures.
172.6 Information requirements.

Appendix A to Part 172--Efforts and Costs Associated With the Disposal 
          of Recyclable Material
Appendix B to Part 172--Disposition of Amounts Collected From Successful 
          Bidders

    Authority: 40 U.S.C. 484 and 485, 10 U.S.C. 2577.

    Source: 54 FR 35483, Aug. 28, 1989, unless otherwise noted.



Sec. 172.1  Purpose.

    This document provides revised and expanded instructions on the 
collection and disposition of cash and cash equivalents received by the 
DoD Components for the DoD sale of surplus personal property.



Sec. 172.2  Applicability and scope.

    This part:
    (a) Applies to the Office of the Secretary of Defense (OSD), the 
Military Departments, the Joint Chiefs of Staff (JCS) and the Joint 
Staff, the Unified and Specified Commands, the Inspector General of the 
Department of Defense (IG, DoD), the Defense Agencies, and DoD Field 
Activities (hereafter referred to collectively as ``DoD Components'').
    (b) Applies to the proceeds resulting from sales made under 
authority of Public Law 152 and to the following:
    (1) Personal property governed by DoD 4160.21-M.
    (2) Surplus Government-owned personal property in the possession of 
contractors, as described in FAR subpart 45.6.

[[Page 734]]

    (3) Recyclable material governed by 10 U.S.C. 2577. Such materials 
would otherwise be sold as scrap or discarded as waste, but are capable 
of being reused after undergoing some type of physical or chemical 
processing. The recycling of hazardous materials or hazardous waste 
shall be accomplished with due recognition of the types of materials 
being processed and the applicable regulation governing the handling and 
disposal of such materials. Qualified recyclable materials do not 
include the following:
    (i) Precious metal-bearing scrap and those items that may be used 
again for their original purposes or functions without any special 
processing; e.g., used vehicles, vehicle or machine parts, bottles (not 
scrap glass), electrical components, and unopened containers of oil or 
solvent.
    (ii) Ships, planes, or weapons that must undergo demilitarization or 
mutilation before sale.
    (iii) Scrap generated from DoD industrial fund (IF) operations that 
has been routinely sold with the proceeds being used to offset customer 
costs.
    (iv) Bones, fats, and meat trimmings generated by a commissary store 
or exchange.



Sec. 172.3  Policy.

    (a) Cash or cash equivalents in the prescribed amounts shall 
accompany bid deposits for a bid to be considered responsive. Similarly, 
cash or cash equivalents for the total sales price shall be received by 
the DoD Components or, in authorized cases, by contractors before the 
transfer of physical possession to the successful bidder.
    (b) Amounts collected by the DoD Components in connection with the 
sale of excess and surplus property shall be deposited promptly to the 
U.S. Treasury accounts prescribed in accordance with this instruction. 
The use of suspense accounts shall be minimal. If the account, 
ultimately to be credited with the proceeds of a sale, can be determined 
reasonably at the time funds are collected, the deposit shall be made 
immediately to that account.
    (c) The Secretary of each Military Department shall establish 
qualified recycling programs. The effort associated with the collecting, 
processing and selling of recyclable material is in appendix A to this 
part.
    (1) Proceeds from the sale of recyclable material shall be used to 
reimburse installation-level costs incurred in operation of the 
recyclable program.
    (2) After reimbursement of the cost incurred by the installation to 
operate the recycling program, installation commanders may use up to 50 
percent of remaining sale proceeds for pollution abatement, energy 
conservation, and occupational safety and health activities. A project 
may not be carried out for an amount greater than 50 percent of the 
amount established by law as the maximum amount for a minor construction 
project.
    (3) Any sale proceeds remaining after paragraphs (c)(1) and (2) of 
this section may be transferred to installation morale or welfare 
activities.



Sec. 172.4  Responsibilities.

    The Heads of DoD Components that sell surplus personal property 
shall implement the procedures prescribed in this part for the 
disposition of cash and cash equivalents received in connection with 
such sales.



Sec. 172.5  Procedures.

    (a) Required bid deposits. When a sale conducted by a DoD Component 
provides for bid deposit with subsequent removal, the following 
procedures shall apply:
    (1) Term bid. This type of bid deposit is applicable when the sale 
involves the purchase of scrap or disposable material that will be 
generated over time with periodic removal by the successful bidder. The 
amount of the bid deposit required to accompany such bids is the average 
estimated quantity of such material to be generated during a 3 month 
period multiplied by 20 percent of the bid price. The calculation is 
illustrated, as follows:

Estimated quantity of material to be        3,000
 generated each quarter (pounds).
Bid price--$1.00 per pound................  x $1.00
                                           -----------------------------
      Subtotal............................  $3,000
20 percent of bid price...................  20
                                           -----------------------------
      Amount to accompany bid.............  $600
 

    (2) Other than term bid. With the exception of term bids, payment in 
the

[[Page 735]]

amount of 20 percent of the bid shall accompany the bid.
    (b) Payment terms. When a sale conducted by a DoD Component provides 
for immediate pickup, the entire amount of the sales price shall be 
collected from the buyer at the conclusion of the sale. If the sale 
provides for a bid deposit, the balance of the bid price shall be paid 
before removal of the property.
    (c) Form of payment--(1) Cash and certified checks. When a sale is 
conducted by a DoD Component, cash or its equivalent shall be collected 
for bid deposits and for remaining amounts due. Guaranteed negotiable 
instruments, such as cashiers checks, certified checks, travelers 
checks, bank drafts, or postal money orders are acceptable as a cash 
equivalent.
    (2) Personal checks. Personal checks may be accepted by a DoD 
Component only when a performance bond or a bank letter of credit is on 
hand that will cover the amount due. If the check is dishonored, amounts 
due shall be collected from the issuer of the performance bond or letter 
of credit.
    (i) If a bidder intends to use a bond or letter of credit without an 
accompanying personal check, the claim against the performance bond or 
letter of credit shall be made for any amounts due.
    (ii) If personal checks are used, the bond or letter of credit shall 
be returned intact after the applicable personal checks are honored, 
unless other instructions have been received from the bidder.
    (2) Credit cards. Approved credit cards may be accepted by a DoD 
Component for payment.
    (i) Before initiating any credit card transactions, the selling DoD 
Component shall enter into an agreement with a network commercial bank. 
Currently, the Treasury has approved the use of ``Master Card'' and 
``Visa'' charge cards. Changes or additions to approved credit cards are 
announced in Comptroller of the Department of Defense (C, DoD) memoranda 
or in changes to the TFM. Except for equipment and communication costs, 
the Treasury pays any fees normally charged to sellers. If the Treasury 
policy of paying such charges is changed, any charges for the processing 
of approved credit card transactions shall be assessed to the buyer.
    (ii) If a credit card is used for the bid deposit and authorization 
is declined, the bid shall be rejected as nonresponsive and other 
bidders considered.
    (iii) Approval for charges against credit cards shall be processed 
as follows:
    (A) The credit card presented shall be passed through the DoD 
installation's credit card swiper. The swiper is connected 
electronically with the network commercial bank selected by the DoD 
Component, and keys are provided to enter the proposed charge amount. If 
the charge is approved, the swiper will provide an approval number that 
shall be recorded on the charge slip.

    Note: A swiper is an electronic device that is used to capture the 
magentic information contained on a credit card and transmit it to the 
network commercial bank for validation and authorization of a sale. The 
information captured normally includes the account number, issuing bank, 
date of expiration of the card, and any credit restrictions that may 
apply.

    (B) The bidder shall sign a standard credit card charge form at the 
sale contracting office. A copy of this form shall be returned to the 
card holder at that time. A copy of the charge slip shall be retained by 
the selling DoD activity as a record of the sale. On the following 
business day, the installation finance and accounting officer or the 
activity providing accounting support shall submit the signed credit 
card forms with a supporting cover sheet showing the total charges to 
the network commercial bank. Accounting control must be maintained over 
such in-transit deposits.
    (C) On receipt of the credit card charge forms, the network 
commercial bank shall charge the bidder's credit card account and 
deposit the funds to the Treasury general account. The network 
commercial bank also is required to forward a copy of the deposit slip 
to the DoD installation making the sale within 1 business day. On 
receipt of the deposit slip, the in-transit account shall be cleared and 
appropriate accounts credited following the procedures in paragraph (d) 
of this section:

[[Page 736]]

    (iv) If a contractor's bid is provided by message, mail, or 
telephone to the U.S. Government using a credit card instead of other 
forms of payment, the following information is required:
    (A) Account number.
    (B) Bidders name, as it appears on the credit card.
    (C) Date of expiration of the card.
    (D) Issuing bank.
    (E) Type of card.

Any additional cost incurred by the Department of Defense in connection 
with the use of the charge card, such as telephone calls to obtain 
approval from the network bank, shall be billed to the purchaser as an 
additive charge.
    (d) Disposition of proceeds. (1) Proceeds from the sale of surplus 
personal property shall be deposited by the collecting DoD Component 
promptly to the U.S. Treasury accounts prescribed in appendix B to this 
part. The use of suspense accounts shall be minimal. If the account 
ultimately to be credited with the proceeds of a sale can be determined 
reasonably at the time the funds are collected, the deposit shall be 
made immediately to that account.
    (2) See paragraph (f) of this section for special instructions on 
the processing of proceeds resulting from the sale of recyclable 
material.
    (e) Return of bid deposits to unsuccessful bidders. (1) Cash 
collected from unsuccessful bidders by a DoD Component shall be 
deposited to account X6875, ``Suspense,'' and a check shall be drawn on 
that account to reimburse unsuccessful bidders.
    (2) Normally, noncash bid deposits shall be returned to unsuccessful 
bidders by DoD Components through the mail. However, when a bidder has 
requested expedited return and has provided the name of a carrier and a 
charge account number, the designated carrier shall be called to pick up 
the deposit with the explicit condition that applicable carrier costs 
will be charged to the bidder's account.
    (f) Sales of recyclable material. The efforts associated with 
collection and processing of recyclable material are reflected in 
appendix A to this part. The following transactions for others (TFO) 
procedures apply:
    (1) Proceeds from the sale of recyclable material shall be deposited 
in F3875, ``Budget Clearing Account (Suspense).'' The deposit to F3875 
shall identify the fiscal station and the name of the installation (use 
the full name and do not abbreviate) that is to receive the proceeds. 
Deposits that do not provide the necessary information shall be referred 
formally to the property disposal cashier for the required information.
    (2) The Military Department's finance and accounting office 
receiving the sales proceeds shall mail a copy of the cash collection 
voucher to the fiscal station shown on the collection voucher. This 
advance copy shall be used by the fiscal station to record the 
collection of proceeds to its account and shall be used for followup 
purposes, as necessary. The copy received through the financial network 
shall be used to clear the undistributed collection. These vouchers 
shall be mailed in the weekly TFO cycle.
    (3) The Military Department's finance and accounting office shall:
    (i) Report weekly transactions to the responsible fiscal station 
cited on the collection voucher.
    (ii) Report the collections within the same month in the ``Statement 
of Transactions'' to the Treasury.
    (g) Contractor sales of surplus Government-furnished property. (1) 
DFARS Sec. 245.610 provides overall direction for crediting proceeds 
from contractor conducted sales of surplus Government furnished 
property. Paragraph (g)(5) of this section provides the procedures that 
shall be used to ensure proper accounting for such proceeds.
    (2) The contractor making the sale may follow normal company policy 
on bid deposits and form of payment. However, any loss associated with 
dishonored payment shall be the contractor's responsibility.
    (3) The plant clearance officer (PLCO) is responsible for notifying 
the appropriate accounting office of the amounts collected by the 
contractor. The PLCO shall also notify the accounting office whether 
such collections:
    (i) Represent an increase in the dollar value of the applicable 
contract(s).
    (ii) Were made instead of disbursements on the applicable 
contract(s).

[[Page 737]]

    (iii) Were returned to miscellaneous receipt account 972651, ``Sale 
of Scrap and Salvage, Materials, Defense.''
    (4) The accounting office for the contract is identified in the 
accounting classification code. See DoD 7220.9-M, chapter 17 for 
additional information.
    (5) The accounting office shall prepare the source documents 
necessary to account properly for the transaction. The value of 
applicable Government property general-ledger-asset accounts shall be 
reduced for each alternative set forth in paragraph (g)(3) of this 
section. Additionally, for alternatives (addressed in paragraph 
(g)(3)(i) or (g)(3)(ii) of this section, an accounting entry shall be 
made to reflect the creation of reimbursable obligational authority and 
the use of such authority.



Sec. 172.6  Information requirements.

    The reports cited in Sec. Sec. 172.5(f)(3) (i) and (ii) of this 
part are exempt from licensing in accordance with paragraph E.4g. of DoD 
7750.5-M.

[[Page 738]]



   Sec. Appendix A to Part 172--Efforts and Costs Associated With the 

                     Disposal of Recyclable Material

[GRAPHIC] [TIFF OMITTED] TC21OC91.060


[[Page 739]]





   Sec. Appendix B to Part 172--Disposition of Amounts Collected From 

                           Successful Bidders

------------------------------------------------------------------------
                                              Disposition of:
                                 ---------------------------------------
        Type of property                                (80%) remaining
                                   (20%) bid deposit        balance
------------------------------------------------------------------------
1. Scrap turned in by industrial  IF................  IF.
 fund (IF) activities.
2. Usable personal property       IF................  IF.
 purchased by and turned in by
 IF activities.
3. Property purchased with funds  -- X8420..........  -- X8420.
 from trust fund -- X8420,
 ``Surcharge Collections, Sales
 of Commissary Stores''.
4. Automatic data processing      -- F3875, Budget    -- F3875. Upon
 equipment owned by the General    Clearing Account    receipt of the
 Services Administration (GSA)     (Suspense).         entire amount due
 and leased to DoD.                                    from the bidder,
                                                       a check shall be
                                                       drawn on the
                                                       suspense account
                                                       and forwarded to
                                                       GSA at the
                                                       following
                                                       address: General
                                                       Services
                                                       Administration
                                                       Office of Finance
                                                       (WBCRC),
                                                       Collections and
                                                       Securities, 7th
                                                       and I Streets
                                                       NW., Washington,
                                                       DC 20407.
5. Section 605(d) the Foreign
 Assistance Act of 1965,
 provides that proceeds from the
 sale of defense articles shall
 be credited to the
 appropriation, fund or account
 used to procure the article or
 to the account currently
 available for the same general
 purpose.
  a. Pre-MAP merger (Pre FY 82)   11--1082,           11--1082.
   property issued under the       ``Foreign
   Military Assistance Program     Military
   (MAP) and returned as no        Financing
   longer needed, and all MAP      Program''
   funded personal property        (Effective 1
   belong to Security Assistance   October 1989 the
   Offices (SAO).                  11--1080,
                                   ``Military
                                   Assitance,''
                                   account is no
                                   longer available
                                   for the receipt
                                   of proceeds).
  b. Security Assistance Offices  978242 XDM--        978242 XDM--
   (SAO) personal property         S843000.            S843000.
   purchased with Foreign
   Military Sales Administrative
   Funds (11x8242).
6. Coast Guard property under     -- F3875..........  -- F3875. Upon
 the physical control of the                           receipt of the
 Coast Guard at the time of sale.                      entire amount due
                                                       from the bidder,
                                                       a check shall be
                                                       drawn on the
                                                       suspense account
                                                       and forwarded to
                                                       the Coast Guard
                                                       at the following
                                                       address:
                                                       Commandant, U.S.
                                                       Coast Guard
                                                       (GFAC),
                                                       Washington, DC
                                                       20593.
7. Property owned by              -- X6874,           -- X6875. Upon
 nonappropriated fund              ``Suspense''.       receipt of the
 instrumentalities, excluding                          entire amount due
 garbage suitable for animal                           from the bidder,
 consumption that is disposed of                       a check shall be
 under a multiple-pickup                               drawn on the
 contract.                                             suspense account
                                                       and forwarded to
                                                       the applicable
                                                       instrumentality.
8. Recyclable material..........  -- F3875 \1\......  -- F3875.\1\ Upon
                                                       receipt of the
                                                       entire amount due
                                                       from the bidder,
                                                       deposit total
                                                       proceeds to the
                                                       accounts
                                                       designated by the
                                                       DoD Military
                                                       Installation that
                                                       gave the material
                                                       up for disposal.
9. Lost, abandoned, or unclaimed  972651,``Sale of    -- X6001,
 privately owned personal          Scrap and Salvage   ``Proceeds of
 property.                         Materials,          Sales of Lost,
                                   Defense''.          Abandoned or
                                                       Unclaimed
                                                       Personal
                                                       Property.'' The
                                                       owner(s) of lost,
                                                       abandoned, or
                                                       unclaimed
                                                       property may
                                                       claim the net
                                                       proceeds from
                                                       sale of that
                                                       property within 5
                                                       years of the date
                                                       of the sale by
                                                       providing proof
                                                       of ownership to
                                                       the government.
                                                       After 5 years
                                                       from the date of
                                                       the sale, any
                                                       unclaimed net
                                                       proceeds shall be
                                                       transferred from
                                                       -- X6001 to
                                                       general fund
                                                       miscellaneous
                                                       receipt account --
                                                       1060,
                                                       ``Forfeitures of
                                                       Unclaimed Money
                                                       and Property.''

[[Page 740]]

 
10. Property owned by a country   Operation and       -- X6875. Upon
 or international organization.    maintenance         receipt of the
                                   appropriation of    entire amount due
                                   the DoD Component   from the bidder,
                                   that sells the      a check for 80%
                                   property. (This     of the sales
                                   is reimbursement    price shall be
                                   for selling         drawn on the
                                   expenses.).         suspense account
                                                       and forwarded to
                                                       the applicable
                                                       foreign country
                                                       or international
                                                       organization.
11. Bones, fats, and meat         Stock Fund........  Stock Fund.
 trimmings generated by a
 commissary store.
12. Government furnished          (\2\).............  (\2\).
 property sold by contractors.
13. All other property..........  972651............  972651.
------------------------------------------------------------------------
\1\ 10 U.S.C. 2577 limits the amounts which can be held in F3875 at the
  end of any fiscal year resulting from the program to $2 million.
  Amounts in excess of $2 million are to be transferred to Miscellaneous
  Receipts of the Treasury. This instruction provides for immediate
  distribution of all sales proceeds received from the recyclable
  program.
\2\ See subsection D.7. of the basic Instruction.


[55 FR 13903, Apr. 13, 1990]



PART 173_COMPETITIVE INFORMATION CERTIFICATE AND PROFIT REDUCTION CLAUSE--

Table of Contents



Sec.
173.1 Scope.
173.2 Competitive Information Certification.
173.3 Profit reduction clause.

Appendix to Part 173--List of Contractors for Whom Certification is 
          Required

    Authority: 10 U.S.C. 2202.

    Source: 53 FR 42948, Oct. 25, 1988, unless otherwise noted.



Sec. 173.1  Scope.

    (a) The purpose of the Competitive Information Certificate is to 
provide the Contracting Officer sufficient information and assurance to 
support award of a contract in those circumstances where certification 
is required.
    (b) Although a Competitive Information Certificate provides 
reasonable assurance to the Government, the possibility remains that 
even a diligent internal review by the contractor may fail to identify 
illegal or improper actions. The purpose of the Profit Reduction Clause 
is to ensure effective protection of the Government's interest in making 
contract awards when a Competitive Information Certification is 
required. The Profit Reduction Clause is required in all competitively 
awarded new contracts over $100,000 when a Competitive Information 
Certificate is required prior to award.



Sec. 173.2  Competitive Information Certification.

    (a) The Competitive Information Certificate is required prior to 
award of all competitively awarded new contracts of a value exceeding 
$100,000 to contractors subject to the requirement.
    (1) Corporate activities required to provide the Certificate are 
corporations or corporate divisions which have been the subject of 
search warrants, or as to which other official information indicates 
such certification should be required, and their subsidiaries and 
affiliates. A list of contractors from whom certification is required is 
maintained and published as required under authority of the Department 
of Defense Procurement Task Force.
    (2) The requirement to provide the Certificate may be further 
limited to certain divisions or subsidiaries, contracts or programs upon 
the basis of official information, furnished by the contractor or 
otherwise, sufficient to establish to the satisfaction of the Department 
of Defense that the investigation is so limited. Such information may 
include copies of search warrants, subpoenas and affidavits from 
corporate officials concerning the scope and conduct of the 
investigation. The sufficiency of such information is solely within the 
discretion of the Department of Defense.
    (3) Contractors from whom certification in certain instances is 
required

[[Page 741]]

will be relieved of the certification requirement when the Department of 
Defense determines that information developed in the ``Ill Wind'' 
investigation has been resolved in such a manner that certification is 
no longer required to protect the interests of the Government.
    (4) A Certificate will not be required prior to the exercise of 
options or noncompetitive award of contracts. This does not limit in any 
manner the Government's ability to inquire into, or require information 
concerning, the circumstances surrounding an underlying competitive 
award.
    (b) With respect to information disclosed under paragraph (1) of the 
Certificate, the offeror must attach to the Certificate a written 
statement detailing what information was obtained, and how, when, and 
from whom it was obtained. This information shall be evaluated at the 
levels prescribed by the contracting component to determine whether 
award of the contract should be made to the offeror. If during this 
review it is determined that the offeror may have obtained an unfair 
competitive advantage from the information and that there is no other 
reason for denying award to the offeror, the reviewing authority shall 
consider whether action may be taken to neutralize the potential unfair 
competitive advantage. Any decision to deny award to an offeror based 
upon information disclosed in the Certificate shall be reviewed and 
approved by the Service Acquisition Executive.
    (c) This certificate and any accompanying statements required, must 
be executed by the offeror's corporate president or his designee at no 
more than one level below the president's level.
    (d) If a contractor from whom certification is required is uncertain 
as to whether competitive information otherwise required to be disclosed 
was generally available to offerors, the uncertainty should be resolved 
by disclosure.
    (e) Contracting Officers may continue to accept Certificates of 
Business Ethics and Integrity complying with the Interim rule in lieu of 
Competitive Information Certificates.
    (f) The Competitive Information Certificate shall be in the 
following form:

                   Competitive Information Certificate

    (1) (Name of the offeror) certifies, to the best of its knowledge 
and belief, that
    (i) With the exception of any information described in an attachment 
to this certificate, and any information the offeror reasonably believes 
was made generally available to prospective offerors, the offeror has 
not knowingly obtained, directly or indirectly from the Government, any 
written information or oral extract or account thereof relating to this 
solicitation which was
    (A) Submitted to the Government by offerors or potential offerors in 
response to the Government's solicitation for bid or proposal;
    (B) Marked by an offeror or potential offeror to indicate the 
information was submitted to the Government subject to an assertion of 
privilege against disclosure;
    (C) Marked or otherwise identified by the Government pursuant to law 
or regulation as classified, source selection sensitive, or for official 
use only; or
    (D) The disclosure of which to the offeror or potential offeror by a 
Government employee would, under the circumstances, otherwise violate 
law or regulation.
    (ii) The offeror named above
    (A) Determined the prices in its offer independently, without, for 
the purpose of restricting competition, any consultation, 
communications, or agreement, directly or indirectly, with any other 
offeror or competitor relating to (1) those prices, (2) the intention to 
submit an offer, or (3), the methods or factors used to calculate the 
prices offered;
    (B) Has not knowingly disclosed the prices in its offer, directly or 
indirectly, to any other offeror or competitor before bid opening (in 
the case of a sealed bid solicitation) or contract award (in the case of 
a negotiated solicitation) unless otherwise required by law;
    (C) Has not attempted to induce any other concern to submit or not 
to submit an offer for the purpose of restricting competition.

[[Page 742]]

    (iii) The offeror has attached an accurate description of the 
internal review forming the basis for the certifications provided 
herein.

Corporate President or Designee.



Sec. 173.3  Profit reduction clause.

    The following profit reduction clause is required in all 
competitively awarded new contracts over $100,000 when a Competitive 
Information Certificate is required prior to award.
    Profit Reduction for Illegal or Improper Activity
    (a) The government, at its election, may reduce the contract price 
by the amount of any anticipated profit determined as set forth in 
paragraph (b) of this section; if
    (1) A person or business entity is convicted for violating 18 U.S.C. 
201-224 (bribery, graft, and conflicts of interest), 18 U.S.C. 371 
(conspiracy), 18 U.S.C. 641 (theft of public money, property, or 
records), 18 U.S.C. 1001 (false statements), 18 U.S.C. 1341 (fraud), 18 
U.S.C. 1343 (fraud by wire) for any act in connection with or related to 
the obtaining of this contract; or
    (2) The Secretary of Defense, or his designee, determines that the 
Competitive Information Certificate submitted by the offeror in 
connection with award of this contract
    (i) Was materially false at the time it was filed, or
    (ii) Notwithstanding the offeror's best knowledge and belief, was 
materially incomplete or inaccurate.

Prior to making such a determination, the Secretary or his designee, 
shall provide to the contractor a written statement of the action being 
considered and the basis therefor. The contractor shall have not less 
than 30 calendar days after receipt to submit in person, in writing, or 
through a representative, information and argument in opposition to the 
proposed reduction. The Secretary or his designee may, upon good cause 
shown, determine to reduce the contract price by less than the amount of 
any profit determined under paragraph (b) of this section.
    (b) The amount of anticipated profits referred to in Sec. 173.3(a) 
shall be:
    (1) In the case of a cost-plus-fixed-fee contract, the amount of the 
fee specified in the contract at the time of award;
    (2) In the case of fixed-price-incentive-profit or cost-plus-
incentive-fee contract, the amount of the target profit or fee specified 
in the contract at the time of award; or
    (3) In the case of a firm-fixed-price contract, the amount of 
anticipated profit determined by the contracting officer, after notice 
to the contractor and opportunity to comment, from records or documents 
in existence prior to the date of the award of the contract.
    (c) The rights and remedies of the government provided in this 
cluase shall not be exclusive and are in addition to any other rights 
and remedies provided by law or under this contract.



Sec. Appendix to Part 173--List of Contractors for Whom Certification Is 

                                Required

Armtec, Incorporated, 410 Highway 19 South, Palatka, FL 32077
Cubic Corporation, 9333 Balboa Avenue, San Diego, CA 92123 as to 
          contracts originating in the following division:
Cubic Defense Systems, Incorporated, San Diego, CA
Executive Resource Associates, 2011 Crystal Drive, suite 813, Arlington, 
VA 22202
Hazeltine Corporation, 500 Commack Road, Commack, NY 11725 and all 
          divisions and subsidiaries as follows:
Hazeltine Corporation, Electro-Acoustic Division, 115 Bay State Drive, 
Braintree, MA 02184
Hazeltine Corporation, Government Systems & Products Division, Cuba Hill 
Road, Greenlawn, NY 11740
Hazeltine Research, Incorporated, 188 Industrial Drive, Elmhurst, IL 
60126
Kane Paper Corporation, 2365 Milburn Avenue, Baldwin, NY 11510
Litton Data Systems, Incorporated, 8000 Woodley Ave., Van Nuys, CA 91408
Loral Defense Systems Akron, 1210 Massillon Rd., Akron, OH 44315
McDonnel Douglas Corporation, Banshee Rd., P.O. Box 516, St. Louis, MO 
          63166 as to contracts originating in the following division:
McDonnell Aircraft Company, St. Louis, MO
Northrop Corporation, Ventura Division, 1515 Rancho Conejo Boulevard, 
Newbury Park, CA 91320
Teledyne Electronics, 649 Lawrence Drive, Newbury Park, CA 91320

[[Page 743]]

Unisys Corporation, One Unisys Place, Detroit, MI 48232, as to contracts 
          originating in the following divisions or subsidiaries:
Unisys Corporation, Defense Systems Division, 3333 Pilot Knob Road, 
Eagan, MN
Unisys Corporation, Defense Systems Division, Neil Armstrong Boulevard, 
Eagan, MN
Unisys Shipboard & Ground Systems Group, Marquis Avenue, Great Neck, NY 
11020
United Technologies Corporation, UT Bldg., Hartford, CT 06101 as to 
          contracts originating in the following divisions or 
          subsidiaries:
Norden Systems, Incorporated
Pratt & Whitney
Varian Associates, Incorporated, 611 Hansen Way, Palo Alto, CA as to 
          contracts originating in the following division:
*Continental Electronics Manufacturing Company, Dallas, TX
---------------------------------------------------------------------------

    *Firm suspended as of July 6, 1988.
---------------------------------------------------------------------------

Whittaker Corporation (Lee Telecommunications Corporation (LTC), Route 
1, Farmington, AR 72730)
Zubier Enterprises, 6201 Pine Street, Harrisburg, PA.

[[Page 744]]



                  SUBCHAPTER H_CLOSURES AND REALIGNMENT



PART 174_REVITALIZING BASE CLOSURE COMMUNITIES AND ADDRESSING IMPACTS OF 

REALIGNMENT--Table of Contents



                            Subpart A_General

Sec.
174.1 Purpose.
174.2 Applicability.
174.3 Definitions.

                            Subpart B_Policy

174.4 Policy.
174.5 Responsibilities.

              Subpart C_Working with Communities and States

174.6 LRA and the redevelopment plan.

                         Subpart D_Real Property

174.7 Retention for DoD Component use and transfers to other Federal 
          agencies.
174.8 Screening for properties covered by the Base Closure Community 
          Redevelopment and Homeless Assistance Act of 1994, cross-
          reference.
174.9 Economic development conveyances.
174.10 Consideration for economic development conveyances.
174.11 Leasing of real property to non-Federal entities.
174.12 Leasing of transferred real property by Federal agencies.

                       Subpart E_Personal Property

174.13 Personal property.

                    Subpart F_Maintenance and Repair

174.14 Maintenance and repair.

                     Subpart G_Environmental Matters

174.15 Indemnification under Section 330 of the National Defense 
          Authorization Act for Fiscal Year 1993.
174.16 Real property containing explosive or chemical agent hazards.
174.17 NEPA.
174.18 Historic preservation.

    Authority: 10 U.S.C. 113 and 10 U.S.C. 2687 note.

    Source: 71 FR 9919, Feb. 28, 2006, unless otherwise noted.



                            Subpart A_General



Sec. 174.1  Purpose.

    This part:
    (a) Establishes policy, assigns responsibilities, and implements 
base closure laws and associated provisions of law relating to the 
closure and the realignment of installations. It does not address the 
process for selecting installations for closure or realignment.
    (b) Authorizes the publication of DoD 4165.66-M, ``Base 
Redevelopment and Realignment Manual,'' in accordance with DoD 5025.1-M 
\1\, ``DoD Directive System Procedures,'' March 2003.
---------------------------------------------------------------------------

    \1\ Copies may be obtained at http://www.dtic.mil/whs/directives/
corres/publ.html.
---------------------------------------------------------------------------



Sec. 174.2  Applicability.

    This part applies to:
    (a) The Office of the Secretary of Defense, the Military 
Departments, the Chairman of the Joint Chiefs of Staff and the Joint 
Staff, the Combatant Commands, the Office of the Inspector General of 
the Department of Defense, the Defense Agencies, the DoD Field 
Activities, and all other organizational entities in the Department of 
Defense (hereafter referred to collectively as the ``DoD Components'').
    (b) Installations in the United States selected for closure or 
realignment under a base closure law.
    (c) Federal agencies and non-Federal entities that seek to obtain 
real or personal property on installations selected for closure or 
realignment.



Sec. 174.3  Definitions.

    (a) Base closure law. This term has the same meaning as provided in 
10 U.S.C. Sec. 101(a)(17)(B) and (C).
    (b) Closure. An action that ceases or relocates all current missions 
of an installation and eliminates or relocates all current personnel 
positions (military, civilian, and contractor), except for personnel 
required for caretaking, conducting any ongoing environmental cleanup, 
or property disposal. Retention of a small enclave, not associated

[[Page 745]]

with the main mission of the base, is still a closure.
    (c) Consultation. Explaining and discussing an issue, considering 
objections, modifications, and alternatives; but without a requirement 
to reach agreement.
    (d) Date of approval. This term has the same meaning as provided in 
section 2910(8) of the Defense Base Closure and Realignment Act of 1990, 
Pub. L. 101-510.
    (e) Excess property. This term has the same meaning as provided in 
40 U.S.C. Sec. 102(3).
    (f) Installation. This term has the same meaning as provided in the 
definition for ``military installation'' in section 2910(4) of the 
Defense Base Closure and Realignment Act of 1990, Pub. L. 101-510.
    (g) Local Redevelopment Authority (LRA). This term has the same 
meaning as provided in the definition for ``redevelopment authority'' in 
section 2910(9) of the Defense Base Closure and Realignment Act of 1990, 
Pub. L. 101-510.
    (h) Military Department. This term has the same meaning as provided 
in 10 U.S.C. 101(a)(8).
    (i) National Environmental Policy Act (NEPA). The National 
Environmental Policy Act of 1969, Pub. L. 91-190, 42 U.S.C. 4321 et 
seq., as amended.
    (j) Realignment. This term has the same meaning as provided in 
section 2910(5) of the Defense Base Closure and Realignment Act of 1990, 
Pub. L. 101-510.
    (k) Secretary concerned. This term has the same meaning as provided 
in 10 U.S.C. 101(a)(9)(A), (B), and (C).
    (l) Surplus property. This term has the same meaning as provided in 
40 U.S.C. 102(10).
    (m) Transition coordinator. This term has the same meaning as used 
in section 2915 of the National Defense Authorization Act for Fiscal 
Year 1994, Public Law 103-160.



                            Subpart B_Policy



Sec. 174.4  Policy.

    It is DoD policy to:
    (a) Act expeditiously whether closing or realigning. Relocating 
activities from installations designated for closure will, when 
feasible, be accelerated to facilitate the transfer of real property for 
community reuse. In the case of realignments, the Department will pursue 
aggressive planning and scheduling of related facility improvements at 
the receiving location.
    (b) Fully utilize all appropriate means to transfer property. 
Federal law provides the Department with an array of legal authorities, 
including public benefit transfers, economic development conveyances at 
cost and no cost, negotiated sales to state or local government, 
conservation conveyances, and public sales, by which to transfer 
property on closed or realigned installations. Recognizing that the 
variety of types of facilities available for civilian reuse and the 
unique circumstances of the surrounding communities does not lend itself 
to a single universal solution, the Department will use this array of 
authorities in a way that considers individual circumstances.
    (c) Rely on and leverage market forces. Community redevelopment 
plans and military conveyance plans should be integrated to the extent 
practical and should take account of any anticipated demand for surplus 
military land and facilities.
    (d) Collaborate effectively. Experience suggests that collaboration 
is the linchpin to successful installation redevelopment. Only by 
collaborating with the local community can the Department close and 
transfer property in a timely manner and provide a foundation for solid 
economic redevelopment.
    (e) Speak with one voice. The Department of Defense, acting through 
the DoD Components, will provide clear and timely information and will 
encourage affected communities to do the same.
    (f) Work with communities to address growth. The Department will 
work with the surrounding community so that the public and private 
sectors can provide the services and facilities needed to accommodate 
new personnel and their families. The Department recognizes that 
installation commanders and local officials, as appropriate (e.g., 
State, county, and tribal), need to integrate and coordinate elements of 
their

[[Page 746]]

local and regional growth planning so that appropriate off-base 
facilities and services are available for arriving personnel and their 
families.



Sec. 174.5  Responsibilities.

    (a) The Under Secretary of Defense for Acquisition, Technology, and 
Logistics shall issue DoD Instructions as necessary to further implement 
applicable public laws affecting installation closure and realignment 
implementation and shall monitor compliance with this part. All 
authorities and responsibilities of the Secretary of Defense--
    (1) Vested in the Secretary of Defense by a base closure law, but 
excluding those provisions relating to the process for selecting 
installations for closure or realignment;
    (2) Delegated from the Administrator of General Services relating to 
base closure and realignment matters;
    (3) Vested in the Secretary of Defense by any other provision 
relating to base closure and realignment in a national defense 
authorization act, a Department of Defense appropriations act, or a 
military construction appropriations act, but excluding section 330 of 
the National Defense Authorization Act for Fiscal Year 1993; or
    (4) Vested in the Secretary of Defense by Executive Order or 
regulation and relating to base closure and realignment, are hereby 
delegated to the Under Secretary of Defense for Acquisition, Technology, 
and Logistics.
    (b) The authorities and responsibilities of the Secretary of Defense 
delegated to the Under Secretary of Defense for Acquisition, Technology, 
and Logistics under paragraph (a) of this section are hereby re-
delegated to the Deputy Under Secretary of Defense (Installations and 
Environment).
    (c) The Heads of the DoD Components shall ensure compliance with 
this part and any implementing guidance.
    (d) Subject to the delegations in paragraphs (a) and (b) of this 
section, the Secretaries concerned shall exercise those authorities and 
responsibilities specified in subparts C through G of this part.
    (e) The cost of recording deeds and other transfer documents is the 
responsibility of the transferee.



              Subpart C_Working with Communities and States



Sec. 174.6  LRA and the redevelopment plan.

    (a) The LRA should have broad-based membership, including, but not 
limited to, representatives from those jurisdictions with zoning 
authority over the property. Generally, there will be one recognized LRA 
per installation.
    (b) The LRA should focus primarily on developing a comprehensive 
redevelopment plan based upon local needs. The plan should recommend 
land uses based upon an exploration of feasible reuse alternatives. If 
applicable, the plan should consider notices of interest received under 
a base closure law. This section shall not be construed to require a 
plan that is enforceable under state and local land use laws, nor is it 
intended to create any exemption from such laws.
    (c)(1) The Secretary concerned will develop a disposal plan and, to 
the extent practicable, complete the appropriate environmental 
documentation no later than 12 months after receipt of the redevelopment 
plan. The redevelopment plan will be used as part of the proposed 
Federal action in conducting environmental analyses required under NEPA.
    (2) In the event there is no LRA recognized by DoD or if a 
redevelopment plan is not received from the LRA within 9 months from the 
date referred to in section 2905(b)(7)(F)(iv) of Pub. L. 101-510, 
(unless an extension of time has been granted by the Deputy Under 
Secretary of Defense (Installations and Environment)), the Secretary 
concerned shall, after required consultation with the governor and heads 
of local governments, proceed with the disposal of property under 
applicable property disposal and environmental laws and regulations.



                         Subpart D_Real Property



Sec. 174.7  Retention for DoD Component use and transfer to other Federal 

agencies.

    (a) To speed the economic recovery of communities affected by 
closures and

[[Page 747]]

realignments, the Department of Defense will identify DoD and Federal 
interests in real property at closing and realigning installations as 
quickly as possible. The Secretary concerned shall identify such 
interests. The Secretary concerned will keep the LRA informed of these 
interests. This section establishes a uniform process, with specified 
timelines, for identifying real property that is available for use by 
DoD Components (which for purposes of this section includes the United 
States Coast Guard) or is excess to the needs of the Department of 
Defense and available for use by other Federal agencies, and for the 
disposal of surplus property for various purposes.
    (b) The Secretary concerned should consider LRA input, if provided, 
in making determinations on the retention of property (location and size 
of cantonment area).
    (c) Within one week of the date of approval of the closure or 
realignment, the Secretary concerned shall issue a notice of 
availability to the DoD Components and other Federal agencies covering 
closing and realigning installation buildings and property available for 
transfer to the DoD Components and other Federal agencies. The notice of 
availability should describe the property and buildings available for 
transfer. Withdrawn public domain lands which the Secretary of the 
Interior has determined are suitable for return to the jurisdiction of 
the Department of the Interior (DoI) will not be included in the notice 
of availability.
    (d) To obtain consideration of a requirement for such available 
buildings and property, a DoD Component or Federal agency is required to 
provide a written, firm expression of interest for buildings and 
property within 30 days of the date of the notice of availability. An 
expression of interest must explain the intended use and the 
corresponding requirement for the buildings and property.
    (e)(1) Within 60 days of the date of the notice of availability, the 
DoD Component or Federal agency expressing interest in buildings or 
property must submit an application for transfer of such property to a 
Military Department or Federal agency. In the case of a DoD Component 
that would normally, under the circumstances, obtain its real property 
needs from the Military Department disposing of the real property, the 
application should indicate the property would not transfer to another 
Military Department but should be retained by the current Military 
Department for the use of the DoD Component. To the extent a different 
Military Department provides real property support for the requesting 
DoD Component, the application must indicate the concurrence of the 
supporting Military Department.
    (2) Within 90 days of the notice of availability, the Federal 
Aviation Administration (FAA) should survey the air traffic control and 
air navigation equipment at the installation to determine what is needed 
to support the air traffic control, surveillance, and communications 
functions supported by the Military Department, and to identify the 
facilities needed to support the National Airspace System. FAA requests 
for property to manage the National Airspace System will not be governed 
by paragraph (h) of this section. Instead, the FAA shall work directly 
with the Military Department to prepare an agreement to assume custody 
of the property necessary for control of the airspace being relinquished 
by the Military Department.
    (f) The Secretary concerned will keep the LRA informed of the 
progress in identifying interests. At the same time, the LRA is 
encouraged to contact Federal agencies which sponsor public benefit 
conveyances for information and technical assistance. The Secretary 
concerned will provide to the LRA points of contact at the Federal 
agencies.
    (g) DoD Components and Federal agencies are encouraged to discuss 
their plans and needs with the LRA, if an LRA exists. If an LRA does not 
exist, the consultation should be pursued with the governor or the heads 
of the local governments in whose jurisdiction the property is located. 
DoD Components and Federal agencies are encouraged to notify the 
Secretary concerned of the results of this consultation. The Secretary 
concerned, the Transition Coordinator, and the DoD Office of Economic 
Adjustment Project Manager are available to help

[[Page 748]]

facilitate communication between the DoD Components and Federal 
agencies, and the LRA, governor, and heads of local governments.
    (h) An application for property from a DoD Component or Federal 
agency must contain the following information:
    (1) A completed GSA Form 1334, Request for Transfer (for requests 
from DoD Components, a DD Form 1354 will be used). This must be signed 
by the head of the Component or agency requesting the property. If the 
authority to acquire property has been delegated, a copy of the 
delegation must accompany the form;
    (2) A statement from the head of the requesting Component or agency 
that the request does not establish a new program (i.e., one that has 
never been reflected in a previous budget submission or Congressional 
action);
    (3) A statement that the requesting Component or agency has reviewed 
its real property holdings and cannot satisfy its requirement with 
existing property. This review must include all property under the 
requester's accountability, including permits to other Federal agencies 
and outleases to other organizations;
    (4) A statement that the requested property would provide greater 
long-term economic benefits for the program than acquisition of a new 
facility or other property;
    (5) A statement that the program for which the property is requested 
has long-term viability;
    (6) A statement that considerations of design, layout, geographic 
location, age, state of repair, and expected maintenance costs of the 
requested property clearly demonstrate that the transfer will prove more 
economical over a sustained period of time than acquiring a new 
facility;
    (7) A statement that the size of the property requested is 
consistent with the actual requirement;
    (8) A statement that fair market value reimbursement to the Military 
Department will be made at the later of January of 2008, or at the time 
of transfer, unless this obligation is waived by the Office of 
Management and Budget and the Secretary concerned, or a public law 
specifically provides for a non-reimbursable transfer (this requirement 
does not apply to requests from DoD Components);
    (9) A statement that the requesting DoD Component or Federal agency 
agrees to accept the care and custody costs for the property on the date 
the property is available for transfer, as determined by the Secretary 
concerned; and
    (10) A statement that the requesting agency agrees to accept 
transfer of the property in its existing condition, unless this 
obligation is waived by the Secretary concerned.
    (i) The Secretary concerned will make a decision on an application 
from a DoD Component or Federal agency based upon the following factors:
    (1) The requirement must be valid and appropriate;
    (2) The proposed use is consistent with the highest and best use of 
the property;
    (3) The proposed transfer will not have an adverse impact on the 
transfer of any remaining portion of the installation;
    (4) The proposed transfer will not establish a new program or 
substantially increase the level of a Component's or agency's existing 
programs;
    (5) The application offers fair market value for the property, 
unless waived;
    (6) The proposed transfer addresses applicable environmental 
responsibilities to the satisfaction of the Secretary concerned; and
    (7) The proposed transfer is in the best interest of the Government.
    (j) When there is more than one acceptable application for the same 
building or property, the Secretary concerned shall consider, in the 
following order--
    (1) The need to perform the national defense missions of the 
Department of Defense and the Coast Guard;
    (2) The need to support the homeland defense mission; and
    (3) The LRA's comments as well as other factors in the determination 
of highest and best use.
    (k) If the Federal agency does not meet its commitment under 
paragraph (h)(8) of this section to provide the required reimbursement, 
and the requested property has not yet been

[[Page 749]]

transferred to the agency, the requested property will be declared 
surplus and disposed of in accordance with the provisions of this part.
    (l) Closing or realigning installations may contain ``public domain 
lands'' which have been withdrawn by the Secretary of the Interior from 
operation of the public land laws and reserved for use by the Department 
of Defense. Lands deemed suitable for return to the public domain are 
not real property governed by title 40, United States Code, and are not 
governed by the property management and disposal provisions of a base 
closure law. Public domain lands are under the jurisdiction of the 
Secretary of the Interior and administered by the Bureau of Land 
Management (BLM) unless the Secretary of the Interior has withdrawn the 
lands and reserved them for another Federal agency's use.
    (1) The Secretary concerned will provide the BLM with information 
about which, if any, public domain lands will be affected by the 
installation's closure or realignment.
    (2) The BLM will review the information to determine if any 
installations contain withdrawn public domain lands. The BLM will review 
its land records to identify any withdrawn public domain lands at the 
closing installations. Any records discrepancies between the BLM and 
Military Departments should be resolved. The BLM will notify the 
Secretary concerned as to the final agreed upon withdrawn and reserved 
public domain lands at an installation.
    (3) Upon agreement as to what withdrawn and reserved public domain 
lands are affected at closing installations, the BLM will initiate a 
screening of DoI agencies to determine if these lands are suitable for 
programs of the Secretary of the Interior.
    (4) The Secretary concerned will transmit a Notice of Intent to 
Relinquish (see 43 CFR Part 2370) to the BLM as soon as it is known that 
there is no DoD Component interest in reusing the public domain lands. 
The BLM will complete the suitability determination screening process 
within 30 days of receipt of the Secretary's Notice of Intent to 
Relinquish. If a DoD Component is approved to reuse the public domain 
lands, the BLM will be notified and BLM will determine if the current 
authority for military use of these lands needs to be modified or 
amended.
    (5) If BLM determines the land is suitable for return, it shall 
notify the Secretary concerned that the intent of the Secretary of the 
Interior is to accept the relinquishment of the land by the Secretary 
concerned.
    (6) If BLM determines the land is not suitable for return to the 
DoI, the land should be disposed of pursuant to base closure law.
    (m) The Secretary concerned should make a surplus determination 
within six (6) months of the date of approval of closure or realignment, 
and shall inform the LRA of the determination. If requested by the LRA, 
the Secretary may postpone the surplus determination for a period of no 
more than six (6) additional months after the date of approval if the 
Secretary determines that such postponement is in the best interests of 
the communities affected by the closure or realignment.
    (1) In unusual circumstances, extensions beyond six months can be 
granted by the Deputy Under Secretary of Defense (Installations and 
Environment).
    (2) Extensions of the surplus determination should be limited to the 
portions of the installation where there is an outstanding interest, and 
every effort should be made to make decisions on as much of the 
installation as possible, within the specified timeframes.
    (n) Once the surplus determination has been made, the Secretary 
concerned shall follow the procedures in part 176 of this title.
    (o) Following the surplus determination, but prior to the disposal 
of property, the Secretary concerned may, at the Secretary's discretion, 
withdraw the surplus determination and evaluate a Federal agency's late 
request for excess property.
    (1) Transfers under this paragraph shall be limited to special 
cases, as determined by the Secretary concerned.
    (2) Requests shall be made to the Secretary concerned, as specified 
under paragraphs (h) and (i) of this section, and the Secretary shall 
notify the LRA of such late request.

[[Page 750]]

    (3) Comments received from the LRA and the time and effort invested 
by the LRA in the planning process should be considered when the 
Secretary concerned is reviewing a late request.



Sec. 174.8  Screening for properties covered by the Base Closure Community 

Redevelopment and Homeless Assistance Act of 1994, cross-reference.

    The Departments of Defense and Housing and Urban Development have 
promulgated regulations to address state and local screening and 
approval of redevelopment plans for installations covered by the Base 
Closure Community Redevelopment and Homeless Assistance Act of 1994 
(Pub. L. 103-421). The Department of Defense regulations can be found at 
part 176 of this title. The Department of Housing and Urban Development 
regulations can be found at 24 CFR part 586.



Sec. 174.9  Economic development conveyances.

    (a) The Secretary concerned may transfer real property and personal 
property to the LRA for purposes of job generation on the installation. 
Such a transfer is an Economic Development Conveyance (EDC).
    (b) For installations having a date of approval for closure after 
January 1, 2005, the Secretary concerned shall seek to obtain 
consideration in connection with any transfer under this section in an 
amount equal to the fair market value of the property.
    (c) An LRA is the only entity able to receive property under an EDC.
    (d) A properly completed application will be used to decide whether 
an LRA will be eligible for an EDC. An LRA may submit an EDC application 
only after it adopts a redevelopment plan. The Secretary concerned shall 
establish a reasonable time period for submission of an EDC application 
after consultation with the LRA. The Secretary will review the 
application and make a decision whether to make an EDC based on the 
criteria specified in paragraph (g) of this section; such decision will 
only be made after the Secretary has notified and obtained the 
concurrence of the Deputy Under Secretary of Defense (Installations & 
Environment) of the proposed decision. The terms and conditions of the 
EDC will be negotiated between the Secretary and the LRA.
    (e) The application should explain why an EDC is necessary for job 
generation on the installation. In addition to the following elements, 
after the Secretary concerned reviews the application, additional 
information may be requested to allow for a better evaluation of the 
application:
    (1) A copy of the adopted redevelopment plan.
    (2) A project narrative including the following:
    (A) A general description of the property requested.
    (B) A description of the intended uses.
    (C) A description of the economic impact of closure or realignment 
on the local community.
    (D) A description of the financial condition of the community and 
the prospects for redevelopment of the property.
    (E) A statement of how the EDC is consistent with the overall 
redevelopment plan.
    (3) A description of how the EDC will contribute to short- and long-
term job generation on the installation, including the projected number 
and type of new jobs it will assist in generating.
    (4) A business/operational plan for the EDC parcel, including such 
elements as:
    (A) A development timetable, phasing schedule, and cash flow 
analysis.
    (B) A market and financial feasibility analysis describing the 
economic viability of the project, including an estimate of net proceeds 
over a fifteen-year period, the proposed consideration or payment to the 
Department of Defense, and the estimated present fair market value of 
the property.
    (C) A cost estimate and justification for infrastructure and other 
investments needed for the development of the EDC parcel.
    (D) Local investment and proposed financing strategies for the 
development.
    (5) A statement describing why other authorities, such as public or 
negotiated sales and public benefit conveyances for education, parks, 
public health, aviation, historic monuments,

[[Page 751]]

prisons, and wildlife conservation, cannot be used to accomplish the job 
generation goals.
    (6) Evidence of the LRA's legal authority to acquire and dispose of 
the property.
    (7) Evidence that the LRA has full authority to perform all of the 
actions required of it pursuant to the terms of the EDC, can demonstrate 
through agreements or assurances that the LRA has the appropriate local 
government approvals to implement the approved reuse plan, and that the 
officers executing the EDC documents on behalf of the LRA have full 
authority to do so.
    (8) Proof the LRA has obtained sufficient financing for acquiring 
the EDC property and carrying out the LRA's redevelopment objectives.
    (f) Upon receipt of an application for an EDC, the Secretary 
concerned will determine whether an EDC is needed for purposes of job 
generation and examine whether the terms and conditions proposed are 
fair and reasonable. The Secretary may also consider information 
independent of the application, such as views of other Federal agencies, 
appraisals, caretaker costs, and other relevant material. The Secretary 
may propose and negotiate any alternative terms or conditions that the 
Secretary considers necessary seeking always to obtain an amount equal 
to the fair market value.
    (g) The following factors will be considered, as appropriate, in 
evaluating the application and the terms and conditions of the proposed 
transfer, including price, time of payment, and other relevant methods 
of compensation to the Federal government.
    (1) Adverse economic impact of closure or realignment on the region 
and potential for economic recovery through an EDC.
    (2) Extent of short- and long-term job generation.
    (3) Consistency with the entire redevelopment plan.
    (4) Financial feasibility of the development, including market 
analysis and need and extent of proposed infrastructure and other 
investments.
    (5) Extent of state and local investment, level of risk incurred, 
and the LRA's ability to implement the plan.
    (6) Current local and regional real estate market conditions.
    (7) Incorporation of other Federal agency interests and concerns, 
and applicability of, and conflicts with, other Federal surplus property 
disposal authorities.
    (8) Relationship to the overall Military Department disposal plan 
for the installation.
    (9) Economic benefit to the Federal Government, including protection 
and maintenance cost savings and anticipated consideration from the 
transfer.
    (10) Compliance with applicable Federal, state, interstate, and 
local laws and regulations.
    (h) Before making an EDC, the Secretary concerned shall prepare an 
estimate of the fair market value of the property.
    (1) In preparing the estimate of fair market value, the Secretary 
concerned shall use the most recent edition of the Uniform Appraisal 
Standards for Federal Land Acquisitions, published by the Appraisal 
Institute in cooperation with the U.S. Department of Justice.
    (2) The Secretary concerned shall consult with the LRA on valuation 
assumptions, guidelines, and on instructions given to the appraiser.
    (3) The Secretary concerned is fully responsible for completion of 
the valuation. The Secretary, in preparing the estimate of fair market 
value shall consider the proposed uses identified in the redevelopment 
plan to the extent that they are not inconsistent with the highest and 
best use.



Sec. 174.10  Consideration for economic development conveyances.

    (a) For conveyances made pursuant to Sec. 174.9 of this part, the 
Secretary concerned will review the application for an EDC and negotiate 
the terms and conditions of each transaction with the LRA. The Secretary 
will have the discretion and flexibility to enter into agreements that 
specify the form of payment and the schedule. The consideration may be 
in cash or in-kind and may be paid over time.
    (b) The Secretary concerned shall seek to obtain consideration at 
least equal to the fair market value, as determined by the Secretary.

[[Page 752]]

    (c) Any amount paid in the future should take into account the time 
value of money and include repayment of interest.
    (d) Additional provisions may be incorporated in the conveyance 
documents to protect the Department's interest in obtaining the agreed 
upon consideration, including such items as predetermined release 
prices, or other appropriate clauses designed to ensure payment and 
protect against fraudulent transactions.
    (e)(1) An EDC without consideration may only be made if--
    (i) The LRA agrees that the proceeds from any sale or lease of the 
property (or any portion thereof) received by the LRA during at least 
the first seven years after the date of the initial transfer of property 
shall be used to support economic redevelopment of, or related to, the 
installation; and
    (ii) The LRA executes the agreement for transfer of the property and 
accepts control of the property within a reasonable time after the date 
of the property disposal record of decision.
    (2) The following purposes shall be considered a use to support 
economic redevelopment of, or related to, the installation--
    (i) Road construction;
    (ii) Transportation management facilities;
    (iii) Storm and sanitary sewer construction;
    (iv) Police and fire protection facilities and other public 
facilities;
    (v) Utility construction;
    (vi) Building rehabilitation;
    (vii) Historic property preservation;
    (viii) Pollution prevention equipment or facilities;
    (ix) Demolition;
    (x) Disposal of hazardous materials generated by demolition;
    (xi) Landscaping, grading, and other site or public improvements; 
and
    (xii) Planning for or the marketing of the development and reuse of 
the installation.
    (f) Every agreement for an EDC without consideration shall contain 
provisions allowing the Secretary concerned to recoup from the LRA such 
portion of the proceeds from its sale or lease as the Secretary 
determines appropriate if the LRA does not use the proceeds to support 
economic redevelopment of, or related to, the installation for the 
period specified in paragraph (e)(1) of this section.



Sec. 174.11  Leasing of real property to non-Federal entities.

    (a) Leasing of real property to non-Federal entities prior to the 
final disposition of closing and realigning installations may facilitate 
state and local economic adjustment efforts and encourage economic 
redevelopment, but the Secretary concerned will always concentrate on 
the final disposition of real and personal property.
    (b) In addition to leasing property at fair market value, to assist 
local redevelopment efforts the Secretary concerned may also lease real 
and personal property, pending final disposition, for less than fair 
market value if the Secretary determines that:
    (1) A public interest will be served as a result of the lease; and,
    (2) The fair market value of the lease is unobtainable or not 
compatible with such public benefit.
    (c) Pending final disposition of an installation, the Secretary 
concerned may grant interim leases which are short-term leases that make 
no commitment for future use or ultimate disposal. When granting an 
interim lease, the Secretary will generally lease to the LRA but can 
lease property directly to other entities. If the interim lease (after 
complying with NEPA) is entered into prior to completion of the final 
disposal decisions, the term may be for up to five years, including 
options to renew, and may contain restrictions on use. Leasing should 
not delay the final disposal of the property. After completion of the 
final disposal decisions, the term of the lease may be longer than five 
years.
    (d) If the property is leased for less than fair market value to the 
LRA and the interim lease permits the property to be subleased, the 
interim lease shall provide that rents from the subleases will be 
applied by the lessee to the protection, maintenance, repair, 
improvement, and costs related to the property at the installation 
consistent with 10 U.S.C. 2667.

[[Page 753]]



Sec. 174.12  Leasing of transferred real property by Federal agencies.

    (a) The Secretary concerned may transfer real property that is still 
needed by a Federal agency (which for purposes of this section includes 
DoD Components) to an LRA provided the LRA agrees to lease the property 
to the Federal agency in accordance with all statutory and regulatory 
guidance.
    (b) The decision whether to transfer property pursuant to such a 
leasing arrangement rests with the Secretary concerned. However, a 
Secretary shall only transfer property subject to such a leasing 
arrangement if the Federal agency that needs the property agrees to the 
leasing arrangement.
    (c) If the subject property cannot be transferred pursuant to such a 
leasing arrangement (e.g., the relevant Federal agency prefers 
ownership, the LRA and the Federal agency cannot agree on terms of the 
lease, or the Secretary concerned determines that such a lease would not 
be in the Federal interest), such property shall remain in Federal 
ownership unless and until the Secretary concerned determines that it is 
surplus.
    (d) If a building or structure is proposed for transfer pursuant to 
this section, that which is leased by the Federal agency may be all or a 
portion of that building or structure.
    (e) Transfers pursuant to this section must be to an LRA.
    (f) Either existing Federal tenants or Federal agencies desiring to 
locate onto the property after operational closure may make use of such 
a leasing arrangement. The Secretary concerned may not enter into such a 
leasing arrangement unless:
    (1) In the case of a Defense Agency, the Secretary concerned is 
acting in an Executive Agent capacity on behalf of the Agency that 
certifies that such a leasing arrangement is in the interest of that 
Agency; or,
    (2) In the case of a Military Department, the Secretary concerned 
certifies that such a leasing arrangement is in the best interest of the 
Military Department and that use of the property by the Military 
Department is consistent with the obligation to close or realign the 
installation in accordance with the recommendations of the Defense Base 
Closure and Realignment Commission.
    (g) Property eligible for such a leasing arrangement is not surplus 
because it is still needed by the Federal Government. Even though the 
LRA would not otherwise have to include such property in its 
redevelopment plan, it should include the property in its redevelopment 
plan anyway to take into account the planned Federal use of such 
property.
    (h) The terms of the LRA's lease to the Federal Government should 
afford the Federal agency rights as close to those associated with 
ownership of the property as is practicable. The requirements of the 
General Services Administration (GSA) Federal Acquisition Regulation (48 
CFR part 570) are not applicable to the lease, but provisions in that 
regulation may be used to the extent they are consistent with this part. 
The terms of the lease are negotiable subject to the following:
    (1) The lease shall be for a term of no more than 50 years, but may 
provide for options for renewal or extension of the term at the request 
of the Federal Government. The lease term should be based on the needs 
of the Federal agency.
    (2) The lease, or any renewals or extensions thereof, shall not 
require rental payments.
    (3) Notwithstanding paragraph (h)(2) of this section, if the lease 
involves a substantial portion of the installation, the Secretary 
concerned may obtain facility services for the leased property and 
common area maintenance from the LRA or the LRA's assignee as a 
provision of the lease.
    (A) Such services and common area maintenance shall be provided at a 
rate no higher than the rate charged to non-Federal tenants of the 
transferred property.
    (B) Such services and common area maintenance shall not include--
    (i) Municipal services that a State or local government is required 
by law to provide to all landowners in its jurisdiction without direct 
charge, including police protection; or
    (ii) Firefighting or security-guard functions.

[[Page 754]]

    (C) The Federal agency may be responsible for services such as 
janitorial, grounds keeping, utilities, capital maintenance, and other 
services normally provided by a landlord. Acquisition of such services 
by the Federal agency is to be accomplished through the use of Federal 
Acquisition Regulation procedures or otherwise in accordance with 
applicable statutory and regulatory requirements.
    (4) The lease shall include a provision prohibiting the LRA from 
transferring fee title to another entity during the term of the lease, 
other than one of the political jurisdictions that comprise the LRA, 
without the written consent of the Federal agency occupying the leased 
property.
    (5)(i) The lease shall include an option specifying that if the 
Federal agency no longer needs the property before the expiration of the 
term of the lease, the remainder of the lease term may be satisfied by 
the same or another Federal agency that needs property for a similar 
use. (``Similar use'' is a use that is comparable to or essentially the 
same as the use under the original lease, as determined by the Secretary 
concerned.)
    (ii)(B) If the tenant is a DoD Component, before notifying GSA of 
the availability of the leasehold, it shall determine whether any other 
DoD Component has a requirement for the leasehold; in doing so, it shall 
consult with the LRA. If another DoD Component has a requirement for the 
leasehold, that DoD Component shall be allowed to assume the leasehold 
for the remainder of its term. If no DoD Component has a requirement for 
the leasehold, the tenant shall notify GSA in accordance with paragraph 
(h)(5)(ii)(A) of this section.
    (A) The Federal tenant shall notify the GSA of the availability of 
the leasehold. GSA will then decide whether to exercise this option 
after consulting with the LRA or other property owner. The GSA shall 
have 60 days from the date of notification in which to identify a 
Federal agency to serve out the term of the lease and to notify the LRA 
or other property owner of the new tenant. If the GSA does not notify 
the LRA or other property owner of a new tenant within such 60 days, the 
leasehold shall terminate on a date agreed to by the Federal tenant and 
the LRA or other property owner.
    (B) If the GSA decides not to exercise this option after consulting 
with the LRA or other property owner, the leasehold shall terminate on a 
date agreed to by the Federal tenant and the LRA or other property 
owner.
    (6) The terms of the lease shall provide that the Federal agency may 
repair and improve the property at its expense after consultation with 
the LRA.
    (i) Property subject to such a leasing arrangement shall be conveyed 
in accordance with the existing EDC procedures. The LRA shall submit the 
following in addition to the application requirements outlined in Sec. 
174.9(e) of this part:
    (1) A description of the parcel or parcels the LRA proposes to have 
transferred to it and then to lease to a Federal agency;
    (2) A written statement signed by an authorized representative of 
the Federal agency that it agrees to accept the lease of the property; 
and,
    (3) A statement explaining why such a leasing arrangement is 
necessary for the long-term economic redevelopment of the installation 
property.
    (j) The exact amount of consideration, or the formula to be used to 
determine that consideration, as well as the schedule for payment of 
consideration must be agreed upon in writing before transfer pursuant to 
this section.



                       Subpart E_Personal Property



Sec. 174.13  Personal property.

    (a) This section outlines procedures to allow transfer of personal 
property to the LRA for the effective implementation of a redevelopment 
plan. Personal property does not include fixtures.
    (b) The Secretary concerned, supported by DoD Components with 
personal property on the installation, will take an inventory of the 
personal property, including its condition, within 6 months after the 
date of approval of closure or realignment. This inventory will be 
limited to the personal property

[[Page 755]]

located on the real property to be disposed of by the Military 
Department. The inventory will be taken in consultation with LRA 
officials. If there is no LRA, the Secretary concerned shall consult 
with the local government in whose jurisdiction the installation is 
wholly located, or a local government agency or a State government 
agency designated for that purpose by the Governor of the State. Based 
on these consultations, the installation commander will determine the 
items or category of items that have the potential to enhance the reuse 
of the real property.
    (c) Except for property subject to the exemptions in paragraph (e) 
of this section, personal property with potential to enhance the reuse 
of the real property shall remain at an installation being closed or 
realigned until the earlier of:
    (1) One week after the Secretary concerned receives the 
redevelopment plan;
    (2) The date notified by the LRA that there will be no redevelopment 
plan;
    (3) 24 months after the date of approval of the closure or 
realignment of the installation; or
    (4) 90 days before the date of the closure or realignment of the 
installation.
    (d) National Guard property under the control of the United States 
Property and Fiscal Officer is subject to inventory and may be made 
available for redevelopment planning purposes.
    (e) Personal property may be removed upon approval of the 
installation commander or higher authority, as prescribed by the 
Secretary concerned, after the inventory required in paragraph (b) of 
this section has been sent to the LRA, when:
    (1) The property is required for the operation of a unit, function, 
component, weapon, or weapons system at another installation;
    (2) The property is uniquely military in character and is likely to 
have no civilian use (other than use for its material content or as a 
source of commonly used components). This property consists of 
classified items; nuclear, biological, and chemical items; weapons and 
munitions; museum property or items of significant historic value that 
are maintained or displayed on loan; and similar military items;
    (3) The property is not required for the reutilization or 
redevelopment of the installation (as jointly determined by the 
Secretary concerned and the LRA);
    (4) The property is stored at the installation for purposes of 
distribution (including spare parts or stock items) or redistribution 
and sale (DoD excess/surplus personal property). This property includes 
materials or parts used in a manufacturing or repair function but does 
not include maintenance spares for equipment to be left in place;
    (5) The property meets known requirements of an authorized program 
of a DoD Component or another Federal agency that would have to purchase 
similar items, and is the subject of a written request by the head of 
the DoD Component or other Federal agency. If the authority to acquire 
personal property has been delegated, a copy of the delegation must 
accompany the request. (For purposes of this paragraph, ``purchase'' 
means the DoD Component or Federal agency intends to obligate funds in 
the current quarter or next six fiscal quarters.) The DoD Component or 
Federal agency must pay packing, crating, handling, and transportation 
charges associated with such transfers of personal property;
    (6) The property belongs to a nonappropriated fund instrumentality 
(NAFI) of the Department of Defense; separate arrangements for 
communities to purchase such property are possible and may be negotiated 
with the Secretary concerned;
    (7) The property is not owned by the Department of Defense, i.e., it 
is owned by a Federal agency outside the Department of Defense or by 
non-Federal persons or entities such as a State, a private corporation, 
or an individual; or,
    (8) The property is needed elsewhere in the national security 
interest of the United States as determined by the Secretary concerned. 
This authority may not be re-delegated below the level of an Assistant 
Secretary. In exercising this authority, the Secretary may transfer the 
property to any DoD Component or other Federal agency.
    (f) Personal property not subject to the exemptions in paragraph (e) 
of this section may be conveyed to the LRA as

[[Page 756]]

part of an EDC for the real property if the Secretary concerned makes a 
finding that the personal property is necessary for the effective 
implementation of the redevelopment plan.
    (g) Personal property may also be conveyed separately to the LRA 
under an EDC for personal property. This type of EDC can be made if the 
Secretary concerned determines that the transfer is necessary for the 
effective implementation of a redevelopment plan with respect to the 
installation. Such determination shall be based on the LRA's timely 
application for the property, which should be submitted to the Secretary 
upon completion of the redevelopment plan. The application must include 
the LRA's agreement to accept the personal property after a reasonable 
period and will otherwise comply with the requirements of Sec. Sec. 
174.9 and 174.10 of this part. The transfer will be subject to 
reasonable limitations and conditions on use.
    (h) Personal property that is not needed by a DoD Component or a 
tenant Federal agency or conveyed to an LRA (or a state or local 
jurisdiction in lieu of an LRA), or conveyed as related personal 
property together with the real property, will be transferred to the 
Defense Reutilization and Marketing Office for disposal in accordance 
with applicable regulations.
    (i) Useful personal property not needed by the Federal Government 
and not qualifying for transfer to the LRA under an EDC may be donated 
to the community or LRA through the appropriate State Agency for Surplus 
Property (SASP) under 41 CFR part 102-37 surplus program guidelines. 
Personal property donated under this procedure must meet the usage and 
control requirements of the applicable SASP.



                    Subpart F_Maintenance and Repair



Sec. 174.14  Maintenance and repair.

    (a) Facilities and equipment located on installations being closed 
are often important to the eventual reuse of the installation. This 
section provides maintenance procedures to preserve and protect those 
facilities and items of equipment needed for reuse in an economical 
manner that facilitates installation redevelopment.
    (b) In order to ensure quick reuse, the Secretary concerned, in 
consultation with the LRA, will establish initial levels of maintenance 
and repair needed to aid redevelopment and to protect the property for 
the time periods set forth in paragraph (c) of this section. Where 
agreement between the Secretary and the LRA cannot be reached, the 
Secretary will determine the required levels of maintenance and repair 
and its duration. In no case will these initial levels of maintenance:
    (1) Exceed the standard of maintenance and repair in effect on the 
date of approval of closure or realignment;
    (2) Be less than maintenance and repair required to be consistent 
with Federal Government standards for excess and surplus properties as 
provided in the Federal Management Regulations of the GSA, 41 CFR part 
102;
    (3) Be less than the minimum levels required to support the use of 
such facilities or equipment for nonmilitary purposes; or,
    (4) Require any property improvements, including construction, 
alteration, or demolition, except when the demolition is required for 
health, safety, or environmental purposes, or is economically justified 
in lieu of continued maintenance expenditures.
    (c) Unless the Secretary concerned determines that it is in the 
national security interest of the United States, the levels of 
maintenance and repair specified in paragraph (b) of this section shall 
not be changed until the earlier of:
    (1) One week after the Secretary concerned receives the 
redevelopment plan;
    (2) The date notified by the LRA that there will be no redevelopment 
plan;
    (3) 24 months after the date of approval of the closure or 
realignment of the installation; or
    (4) 90 days before the date of the closure or realignment of the 
installation.
    (d) The Secretary concerned may extend the time period for the 
initial levels of maintenance and repair for property still under the 
Secretary's control for an additional period, if the Secretary 
determines that the LRA is actively implementing its redevelopment

[[Page 757]]

plan, and such levels of maintenance are justified.
    (e) Once the time period for the initial or extended levels of 
maintenance and repair expires, the Secretary concerned will reduce the 
levels of maintenance and repair to levels consistent with Federal 
Government standards for excess and surplus properties as provided in 
the Federal Management Regulations of the GSA, except in the case of 
facilities still being used to perform a DoD mission.



                     Subpart G_Environmental Matters



Sec. 174.15  Indemnification under Section 330 of the National Defense 

Authorization Act for Fiscal Year 1993.

    Section 330 of the National Defense Authorization Act for Fiscal 
Year 1993, Pub. L. 102-484, as amended, provides for indemnification of 
transferees of closing Department of Defense properties under 
circumstances specified in that statute. The authority to implement this 
provision of law has been delegated by the Secretary of Defense to the 
General Counsel of the Department of Defense; therefore, this provision 
of law shall only be referred to or recited in any deed, sales 
agreement, bill of sale, lease, license, easement, right-of-way, or 
transfer document for real or personal property after obtaining the 
written concurrence of the Deputy General Counsel (Environment and 
Installations), Office of the General Counsel, Department of Defense.



Sec. 174.16  Real property containing explosive or chemical agent hazards.

    The DoD Component controlling real property known to contain or 
suspected of containing explosive or chemical agent hazards from past 
DoD military munitions-related or chemical warfare-related activities 
shall, prior to transfer of the property out of Department of Defense 
control, obtain the DoD Explosives Safety Board's approval of measures 
planned to ensure protectiveness from such hazards, in accordance with 
DoD Directive 6055.9E, Explosives Safety Management and the DoD 
Explosives Safety Board.



Sec. 174.17  NEPA.

    At installations subject to this part, NEPA analysis shall comply 
with the promulgated NEPA regulations of the Military Department 
exercising real property accountability for the installation, including 
any requirements relating to responsibility for funding the analysis. 
See 32 CFR parts 651 (for the Army), 775 (for the Navy), and 989 (for 
the Air Force). Nothing in this section shall be interpreted as 
releasing a Military Department from complying with its own NEPA 
regulation.



Sec. 174.18  Historic preservation.

    (a) The transfer, lease, or sale of National Register-eligible 
historic property to a non-Federal entity at installations subject to 
this part may constitute an ``adverse effect'' under the regulations 
implementing the National Historic Preservation Act (36 CFR 
800.5(a)(2)(vii)). One way of resolving this adverse effect is to 
restrict the use that may be made of the property subsequent to its 
transfer out of Federal ownership or control through the imposition of 
legally enforceable restrictions or conditions. The Secretary concerned 
may include such restrictions or conditions (typically a real property 
interest in the form of a restrictive covenant or preservation easement) 
in any deed or lease conveying an interest in historic property to a 
non-Federal entity. Before doing so, the Secretary should first consider 
whether the historic character of the property can be protected 
effectively through planning and zoning actions undertaken by units of 
State or local government; if so, working with such units of State or 
local government to protect the property through these means is 
preferable to encumbering the property with such a covenant or easement.
    (b) Before including such a covenant or easement in a deed or lease, 
the Secretary concerned shall consider--
    (1) Whether the jurisdiction that encompasses the property 
authorizes such a covenant or easement; and
    (2) Whether the Secretary can give or assign to a third party the 
responsibility for monitoring and enforcing such a covenant or easement.

[[Page 758]]

                           PART 175 [RESERVED]



PART 176_REVITALIZING BASE CLOSURE COMMUNITIES AND COMMUNITY 

ASSISTANCE_COMMUNITY REDEVELOPMENT AND HOMELESS ASSISTANCE--Table of Contents



Sec.
176.1 Purpose.
176.5 Definitions.
176.10 Applicabiity.
176.15 Waivers and extensions of deadlines.
176.20 Overview of the process.
176.25 HUD's negotiations and consultations with the LRA.
176.30 LRA application.
176.35 HUD's review of the application.
176.40 Adverse determinations.
176.45 Disposal of buildings and property.

    Authority: 10 U.S.C. 2687 note.

    Source: 62 FR 35346, July 1, 1997, unless otherwise noted.



Sec. 176.1  Purpose.

    This part implements the Base Closure Community Redevelopment and 
Homeless Assistance Act, as amended (10 U.S.C. 2687 note), which 
instituted a new community-based process for addressing the needs of the 
homeless at base closure and realignment sites. In this process, Local 
Redevelopment Authorities (LRAs) identify interest from homeless 
providers in installation property and develop a redevelopment plan for 
the installation that balances the economic redevelopment and other 
development needs of the communities in the vicinity of the installation 
with the needs of the homeless in those communities. The Department of 
Housing and Urban Development (HUD) reviews the LRA's plan to see that 
an appropriate balance is achieved. This part also implements the 
process for identifying interest from State and local entities for 
property under a public benefit transfer. The LRA is responsible for 
concurrently identifying interest from homeless providers and State and 
local entities interested in property under a public benefit transfer.



Sec. 176.5  Definitions.

    As used in this part:
    CERCLA. Comprehensive Environmental Response, Compensation, and 
Liability Act (42 U.S.C. 9601 et seq.).
    Communities in the vicinity of the installation. The communities 
that constitute the political jurisdictions (other than the State in 
which the installation is located) that comprise the LRA for the 
installation. If no LRA is formed at the local level, and the State is 
serving in that capacity, the communities in the vicinity of the 
installation are deemed to be those political jurisdiction(s) (other 
than the State) in which the installation is located.
    Continuum of care system.
    (1) A comprehensive homeless assistance system that includes:
    (i) A system of outreach and assessment for determining the needs 
and condition of an individual or family who is homeless, or whether 
assistance is necessary to prevent an individual or family from becoming 
homeless;
    (ii) Emergency shelters with appropriate supportive services to help 
ensure that homeless individuals and families receive adequate emergency 
shelter and referral to necessary service providers or housing finders;
    (iii) Transitional housing with appropriate supportive services to 
help those homeless individuals and families who are not prepared to 
make the transition to independent living;
    (iv) Housing with or without supportive services that has no 
established limitation on the amount of time of residence to help meet 
long-term needs of homeless individuals and families; and,
    (v) Any other activity that clearly meets an identified need of the 
homeless and fills a gap in the continuum of care.
    (2) Supportive services are services that enable homeless persons 
and families to move through the continuum of care toward independent 
living. These services include, but are not limited to, case management, 
housing counseling, job training and placement, primary health care, 
mental health services, substance abuse treatment, child care, 
transportation, emergency food and clothing family violence services, 
education services, moving services, assistance in obtaining 
entitlements, and referral to veterans services and legal services.

[[Page 759]]

    Consolidated Plan. The plan prepared in accordance with the 
requirements of 24 CFR part 91.
    Day. One calendar day including weekends and holidays.
    DoD. Department of Defense.
    HHS. Department of Health and Human Services.
    Homeless person.
    (1) An individual or family who lacks a fixed, regular, and adequate 
nighttime residence; and
    (2) An individual or family who has a primary nighttime residence 
that is:
    (i) A supervised publicly or privately operated shelter designed to 
provide temporary living accommodations (including welfare hotels, 
congregate shelters and transitional housing for the mentally ill);
    (ii) An institution that provides a temporary residence for 
individuals intended to be institutionalized; or,
    (iii) A public or private place not designed for, or ordinarily used 
as, a regular sleeping accommodation for human beings.
    (3) This term does not include any individual imprisoned or 
otherwise detained under an Act of the Congress or a State law.
    HUD. Department of Housing and Urban Development.
    Installation. A base, camp, post, station, yard, center, homeport 
facility for any ship or other activity under the jurisdiction of DoD, 
including any leased facility, that is approved for closure or 
realignment under the Base Closure and Realignment Act of 1988 (Pub. L. 
100-526). as amended, or the Defense Base Closure and Realignment Act of 
1990 (Pub. L. 101-510), as amended (both at 10 U.S.C. 2687, note).
    Local redevelopment authority (LRA). Any authority or 
instrumentality established by State or local government and recognized 
by the Secretary of Defense, through the Office of Economic Adjustment, 
as the entity responsible for developing the redevelopment plan with 
respect to the installation or for directing implementation of the plan.
    NEPA. National Environmental Policy Act of 1969 (42 U.S.C. 4320).
    OEA. Office of Economic Adjustment, Department of Defense.
    Private nonprofit organization. An organization, no part of the net 
earnings of which inures to the benefit of any member, founder, 
contributor, or individual; that has a voluntary board; that has an 
accounting system or has designated an entity that will maintain a 
functioning accounting system for the organization in accordance with 
generally accepted accounting procedures; and that practices 
nondiscrimination in the provision of assistance.
    Public benefit transfer. The transfer of surplus military property 
for a specified public purpose at up to a 100-percent discount in 
accordance with 40 U.S.C. 471 et seq. or 49 U.S.C. 47151-47153.
    Redevelopment plan. A plan that is agreed by the LRA with respect to 
the installation and provides for the reuse or redevelopment of the real 
property and personal property of the installation that is available for 
such reuse and redevelopment as a result of the closure of the 
installation.
    Representative(s) of the homeless. A State or local government 
agency or private nonprofit organization, including a homeless 
assistance planning board, that provides or proposes to provide services 
to the homeless.
    Substantially equivalent. Property that is functionally suitable to 
substitute for property referred to in an approved Title V application. 
For example, if the representative of the homeless had an approved Title 
V application for a building that would accommodate 100 homeless persons 
in an emergency shelter, the replacement facility would also have to 
accommodate 100 at a comparable cost for renovation.
    Substantially equivalent funding. Sufficient funding to acquire a 
substantially equivalent facility.
    Surplus property. Any excess property not required for the needs and 
the discharge of the responsibilities of all Federal Agencies. Authority 
to make this determination, after screening with all Federal Agencies, 
rests with the Military Departments.
    Title V. Title V of the Steward B. McKinney Homeless Assistance Act 
of 1987 (42 U.S.C. 11411) as amended by the National Defense 
Authorization Act for Fiscal Year 1994 (Pub. L. 103-160).

[[Page 760]]

    Urban county. A county within a metropolitan area as defined at 24 
CFR 570.3.



Sec. 176.10  Applicability.

    (a) General. This part applies to all installations that are 
approved for closure/realignment by the President and Congress under 
Pub. L. 101-510 after October 25, 1994.
    (b) Request for inclusion under this process. This part also applies 
to installations that were approved for closure/realignment under either 
Public Law 100-526 or Public Law 101-510 prior to October 25, 1994 and 
for which an LRA submitted a request for inclusion under this part to 
DoD by December 24, 1994. A list of such requests was published in the 
Federal Register on May 30, 1995 (60 FR 28089).
    (1) For installations with Title V applications pending but not 
approved before October 25, 1994, the LRA shall consider and 
specifically address any application for use of buildings and property 
to assist the homeless that were received by HHS prior to October 25, 
1994, and were spending with the Secretary of HHS on that date. These 
pending requests shall be addressed in the LRA's homeless assistance 
submission.
    (2) For installations with Title V applications approved before 
October 25, 1994 where there is an approved Title V application, but 
property has not been assigned or otherwise disposed of by the Military 
Department, the LRA must ensure that its homeless assistance submission 
provides the Title V applicant with:
    (i) The property requested;
    (ii) Properties, on or off the installation, that are substantially 
equivalent to those requested;
    (iii) Sufficient funding to acquire such substantially equivalent 
properties;
    (iv) Services and activities that meet the needs identified in the 
application; or,
    (v) A combination of the properties, funding, and services and 
activities described in Sec. 176.10(b)(2)(i)-(iv) of this part.
    (c) Revised Title V process. All other installations approved for 
closure or realignment under either Public Law 100-526 or Public Law 
101-510 prior to October 25, 1994, for which there was no request for 
consideration under this part, are covered by the process stipulated 
under Title V. Buildings or property that were transferred or leased for 
homeless use under Title V prior to October 25, 1994, may not be 
reconsidered under this part.



Sec. 176.15  Waivers and extensions of deadlines.

    (a) After consultation with the LRA and HUD, and upon a finding that 
it is in the interest of the communities affected by the closure/
realignment of the installation, DoD, through the Director of the Office 
of Economic Adjustment, may extend or postpone any deadline contained in 
this part.
    (b) Upon completion of a determination and finding of good cause, 
and except for deadlines and actions required on the part of DoD, HUD 
may waive any provision of Sec. Sec. 176.20 through 176.45 of this part 
in any particular case, subject only to statutory limitations.



Sec. 176.20  Overview of the process.

    (a) Recognition of the LRA. As soon as practicable after the list of 
installations recommended for closure or realignment is approved, DoD, 
through OEA, will recognize an LRA for the installation. Upon 
recognition, OEA shall publish the name, address, and point of contact 
for the LRA in the Federal Register and in a newspaper of general 
circulation in the communities in the vicinity of the installation.
    (b) Responsibilities of the Military Department. The Military 
Department shall make installation properties available to other DoD 
components and Federal agencies in accordance with the procedures set 
out at 32 CFR part 174. The Military Department will keep the LRA 
informed of other Federal interest in the property during this process. 
Upon completion of this process the Military Department will notify HUD 
and either the LRA or the Chief Executive Officer of the State, as 
appropriate, and publish a list of surplus property on the installation 
that will be available for reuse in the Federal Register and a newspaper 
of general circulation in the communities in the vicinity of the 
installation.

[[Page 761]]

    (c) Responsibilities of the LRA. The LRA should begin to conduct 
outreach efforts with respect to the installation as soon as is 
practicable after the date of approval of closure/realignment of the 
installation. The local reuse planning process must begin no later than 
the date of the Military Department's Federal Register publication of 
available property described at Sec. 176.20(b). For those installations 
that began the process described in this part prior to August 17, 1995, 
HUD will, on a case-by-case basis, determine whether the statutory 
requirements have been fulfilled and whether any additional requirements 
listed in this part should be required. Upon the Federal Register 
publication described in Sec. 176.20(b), the LRA shall:
    (1) Publish, within 30 days, in a newspaper of general circulation 
in the communities in the vicinity of the installation, the time period 
during which the LRA will receive notices of interest from State and 
local governments, representatives of the homeless, and other interested 
parties. This publication shall include the name, address, telephone 
number and the point of contact for the LRA who can provide information 
on the prescribed form and contents of the notices of interest. The LRA 
shall notify DoD of the deadline specified for receipt of notices of 
interest. LRAs are strongly encouraged to make this publication as soon 
as possible within the permissible 30 day period in order to expedite 
the closure process.
    (i) In addition, the LRA has the option to conduct an informal 
solicitation of notices of interest from public and non-profit entities 
interested in obtaining property via a public benefit transfer other 
than a homeless assistance conveyance under either 40 U.S.C. 471 et. 
seq. or 49 U.S.C. 47151-47153. As part of such a solicitation, the LRA 
may wish to request that interested entities submit a description of the 
proposed use to the LRA and the sponsoring Federal agency.
    (ii) For all installations selected for closure or realignment prior 
to 1995 that elected to proceed under Public Law 103-421, the LRA shall 
accept notices of interest for not less than 30 days.
    (iii) For installations selected for closure or realignment in 1995 
or thereafter, notices of interest shall be accepted for a minimum of 90 
days and not more than 180 days after the LRA's publication under Sec. 
176.20(c)(1).
    (2) Prescribe the form and contents of notices of interest.
    (i) The LRA may not release to the public any information regarding 
the capacity of the representative of the homeless to carry out its 
program, a description of the organization, or its financial plan for 
implementing the program, without the consent of the representative of 
the homeless concerned, unless such release is authorized under Federal 
law and under the law of the State and communities in which the 
installation concerned is located. The identity of the representative of 
the homeless may be disclosed.
    (ii) The notices of interest from representatives of the homeless 
must include:
    (A) A description of the homeless assistance program proposed, 
including the purposes to which the property or facility will be put, 
which may include uses such as supportive services, job and skills 
training, employment programs, shelters, transitional housing or housing 
with no established limitation on the amount of time of residence, food 
and clothing banks, treatment facilities, or any other activity which 
clearly meets an identified need of the homeless and fills a gap in the 
continuum of care;
    (B) A description of the need for the program;
    (C) A description of the extent to which the program is or will be 
coordinated with other homeless assistance programs in the communities 
in the vicinity of the installation;
    (D) Information about the physical requirements necessary to carry 
out the program including a description of the buildings and property at 
the installation that are necessary to carry out the program;
    (E) A description of the financial plan, the organization, and the 
organizational capacity of the representative of the homeless to carry 
out the program; and,

[[Page 762]]

    (F) An assessment of the time required to start carrying out the 
program.
    (iii) The notices of interest from entities other than 
representatives of the homeless should specify the name of the entity 
and specific interest in property or facilities along with a description 
of the planned use.
    (3) In addition to the notice required under Sec. 176.20(c)(1), 
undertake outreach efforts to representatives of the homeless by 
contacting local government officials and other persons or entities that 
may be interested in assisting the homeless within the vicinity of the 
installation.
    (i) The LRA may invite persons and organizations identified on the 
HUD list of representatives of the homeless and any other 
representatives of the homeless with which the LRA is familiar, 
operating in the vicinity of the installation, to the workshop described 
in Sec. 176.20(c)(3)(ii).
    (ii) The LRA, in coordination with the Military Department and HUD, 
shall conduct at least one workshop where representatives of the 
homeless have an opportunity to:
    (A) Learn about the closure/realignment and disposal process;
    (B) Tour the buildings and properties available either on or off the 
installation;
    (C) Learn about the LRA's process and schedule for receiving notices 
of interest as guided by Sec. 176.20(c)(2); and,
    (D) Learn about any known land use constraints affecting the 
available property and buildings.
    (iii) The LRA should meet with representatives of the homeless that 
express interest in discussing possible uses for these properties to 
alleviate gaps in the continuum of care.
    (4) Consider various properties in response to the notices of 
interest. The LRA may consider property that is located off the 
installation.
    (5) Develop an application, including the redevelopment plan and 
homeless assistance submission, explaining how the LRA proposes to 
address the needs of the homeless. This application shall consider the 
notices of interest received from State and local governments, 
representatives of the homeless, and other interested parties. This 
shall include, but not be limited to, entities eligible for public 
benefit transfers under either 40 U.S.C. 471 et. seq., or 49 U.S.C. 
47151-47153; representatives of the homeless; commercial, industrial, 
and residential development interests; and other interests. From the 
deadline date for receipt of notices of interest described at Sec. 
176.20(c)(1), the LRA shall have 270 days to complete and submit the LRA 
application to the appropriate Military Department and HUD. The 
application requirements are described at Sec. 176.30.
    (6) Make the draft application available to the public for review 
and comment periodically during the process of developing the 
application. The LRA must conduct at least one public hearing on the 
application prior to its submission to HUD and the appropriate Military 
Department. A summary of the public comments received during the process 
of developing the application shall be included in the application when 
it is submitted.
    (d) Public benefit transfer screening. The LRA should, while 
conducting its outreach efforts, work with the Federal agencies that 
sponsor public benefit transfers under either 40 U.S.C. 471 et. seq. or 
49 U.S.C. 47151-47153. Those agencies can provide a list of parties in 
the vicinity of the installation that might be interested in and 
eligible for public benefit transfers. The LRA should make a reasonable 
effort to inform such parties of the availability of the property and 
incorporate their interests within the planning process. Actual 
recipients of property are to be determined by sponsoring Federal 
agency. The Military Departments shall notify sponsoring Federal 
agencies about property that is available based on the community 
redevelopment plan and keep the LRA apprised of any expressions of 
interest. Such expressions of interest are not required to be 
incorporated into the redevelopment plan, but must be considered.

[62 FR 35346, July 1, 1997, as amended at 71 FR 9927, Feb. 28, 2006]



Sec. 176.25  HUD's negotiations and consultations with the LRA.

    HUD may negotiate and consult with the LRA before and during the 
course of preparation of the LRA's application

[[Page 763]]

and during HUD's review thereof with a view toward avoiding any 
preliminary determination that the application does not meet any 
requirement of this part. LRAs are encouraged to contact HUD for a list 
of persons and organizations that are representatives of the homeless 
operating in the vicinity of the installation.



Sec. 176.30  LRA application.

    (a) Redevelopment plan. A copy of the redevelopment plan shall be 
part of the application.
    (b) Homeless assistance submission. This component of the 
application shall include the following:
    (1) Information about homelessness in the communities in the 
vicinity of the installation.
    (i) A list of all the political jurisdictions which comprise the 
LRA.
    (ii) A description of the unmet need in the continuum of care system 
within each political jurisdiction, which should include information 
about any gaps that exist in the continuum of care for particular 
homeless subpopulations. The source for this information shall depend 
upon the size and nature of the political jurisdictions(s) that comprise 
the LRA. LRAs representing:
    (A) Political jurisdictions that are required to submit a 
Consolidated Plan shall include a copy of their Homeless and Special 
Needs Population Table (Table 1), Priority Homeless Needs Assessment 
Table (Table 2), and narrative description thereof from that 
Consolidated Plan, including the inventory of facilities and services 
that assist the homeless in the jurisdiction.
    (B) Political jurisdictions that are part of an urban county that is 
required to submit a Consolidated Plan shall include a copy of their 
Homeless and Special Needs Population Table (Table 1), Priority Homeless 
Needs Assessment Table (Table 2), and narrative description thereof from 
that Consolidated Plan, including the inventory of facilities and 
services that assist the homeless in the jurisdiction. In addition, the 
LRA shall explain what portion of the homeless population and 
subpopulations described in the Consolidated Plan are attributable to 
the political jurisdiction it represents.
    (C) A political jurisdiction not described by Sec. 
176.30(b)(1)(ii)(A) or Sec. 176.30(b)(1)(ii)(B) shall submit a 
narrative description of what it perceives to be the homeless population 
within the jurisdiction and a brief inventory of the facilities and 
services that assist homeless persons and families within the 
jurisdiction. LRAs that represent these jurisdictions are not required 
to conduct surveys of the homeless population.
    (2) Notices of interest proposing assistance to homeless persons 
and/or families.
    (i) A description of the proposed activities to be carried out on or 
off the installation and a discussion of how these activities meet a 
portion or all of the needs of the homeless by addressing the gaps in 
the continuum of care. The activities need not be limited to expressions 
of interest in property, but may also include discussions of how 
economic redevelopment may benefit the homeless;
    (ii) A copy of each notice of interest from representatives of the 
homeless for use of buildings and property and a description of the 
manner in which the LRA's application addresses the need expressed in 
each notice of interest. If the LRA determines that a particular notice 
of interest should not be awarded property, an explanation of why the 
LRA determined not to support that notice of interest, the reasons for 
which may include the impact of the program contained in the notice of 
interest on the community as described in Sec. 176.30(b)(2)(iii); and,
    (iii) A description of the impact that the implemented redevelopment 
plan will have on the community. This shall include information on how 
the LRA's redevelopment plan might impact the character of existing 
neighborhoods adjacent to the properties proposed to be used to assist 
the homeless and should discuss alternative plans. Impact on schools, 
social services, transportation, infrastructure, and concentration of 
minorities and/or low income persons shall also be discussed.
    (3) Legally binding agreements for buildings, property, funding, 
and/or services.
    (i) A copy of the legally binding agreements that the LRA proposes 
to

[[Page 764]]

enter into with the representative(s) of the homeless selected by the 
LRA to implement homeless programs that fill gaps in the existing 
continuum of care. The legally binding agreements shall provide for a 
process for negotiating alternative arrangements in the event that an 
environmental analysis conducted under Sec. 176.45(b) indicates that 
any property identified for transfer in the agreement is not suitable 
for the intended purpose. Where the balance determined in accordance 
with Sec. 176.30(b)(4) provides for the use of installation property as 
a homeless assistance facility, legally binding agreements must provide 
for the reversion or transfer, either to the LRA or to another entity or 
entities, of the buildings and property in the event they cease to be 
used for the homeless. In cases where the balance proposed by the LRA 
does not include the use of buildings or property on the installation, 
the legally binding agreements need not be tied to the use of specific 
real property and need not include a reverter clause. Legally binding 
agreements shall be accompanied by a legal opinion of the chief legal 
advisor of the LRA or political jurisdiction or jurisdictions which will 
be executing the legally binding agreements that the legally binding 
agreements, when executed, will constitute legal, valid, binding, and 
enforceable obligations on the parties thereto;
    (ii) A description of how buildings, property, funding, and/or 
services either on or off the installation will be used to fill some of 
the gaps in the current continuum of care system and an explanation of 
the suitability of the buildings and property for that use; and,
    (iii) Information on the availability of general services such as 
transportation, police, and fire protection, and a discussion of 
infrastructure such as water, sewer, and electricity in the vicinity of 
the proposed homeless activity at the installation.
    (4) An assessment of the balance with economic and other development 
needs.
    (i) An assessment of the manner in which the application balances 
the expressed needs of the homeless and the needs of the communities 
comprising the LRA for economic redevelopment and other development; and
    (ii) An explanation of how the LRA's application is consistent with 
the appropriate Consolidated Plan(s) or any other existing housing, 
social service, community, economic, or other development plans adopted 
by the jurisdictions in the vicinity of the installation.
    (5) A description of the outreach undertaken by the LRA. The LRA 
shall explain how the outreach requirements described at Sec. 
176.20(c)(1) and Sec. 176.20(c)(3) have been fulfilled. This 
explanation shall include a list of the representatives of the homeless 
the LRA contacted during the outreach process.
    (c) Public comments. The LRA application shall include the materials 
described at Sec. 176.20(c)(6). These materials shall be prefaced with 
an overview of the citizen participation process observed in preparing 
the application.



Sec. 176.35  HUD's review of the application.

    (a) Timing. HUD shall complete a review of each application no later 
than 60 days after its receipt of a completed application.
    (b) Standards of review. The purpose of the review is to determine 
whether the application is complete and, with respect to the expressed 
interest and requests of representatives of the homeless, whether the 
application:
    (1) Need. Takes into consideration the size and nature of the 
homeless population in the communities in the vicinity of the 
installation, the availability of existing services in such communities 
to meet the needs of the homeless in such communities, and the 
suitability of the buildings and property covered by the application for 
use and needs of the homeless in such communities. HUD will take into 
consideration the size and nature of the installation in reviewing the 
needs of the homeless population in the communities in the vicinity of 
the installation.
    (2) Impact of notices of interest. Takes into consideration any 
economic impact of the homeless assistance under the plan on the 
communities in the vicinity of the installation, including:

[[Page 765]]

    (i) Whether the plan is feasible in light of demands that would be 
placed on available social services, police and fire protection, and 
infrastructure in the community; and,
    (ii) Whether the selected notices of interest are consistent with 
the Consolidated Plan(s) of any other existing housing, social service, 
community economic, or other development plans adopted by the political 
jurisdictions in the vicinity of the installation.
    (3) Legally binding agreements. Specifies the manner in which the 
buildings, property, funding, and/or services on or off the installation 
will be made available for homeless assistance purposes. HUD will review 
each legally binding agreement to verify that:
    (i) They include all the documents legally required to complete the 
transactions necessary to realize the homeless use(s) described in the 
application;
    (ii) They include all appropriate terms and conditions;
    (iii) They address the full range of contingencies including those 
described at Sec. 176.30(b)(3)(i);
    (iv) They stipulate that the buildings, property, funding, and/or 
services will be made available to the representatives of the homeless 
in a timely fashion; and,
    (v) They are accompanied by a legal opinion of the chief legal 
advisor of the LRA or political jurisdiction or jurisdictions which will 
be executing the legally binding agreements that the legally binding 
agreements will, when executed, constitute legal, valid, binding, and 
enforceable obligations on the parties thereto.
    (4) Balance. Balances in an appropriate manner a portion or all of 
the needs of the communities in the vicinity or the installation for 
economic redevelopment and other development with the needs of the 
homeless in such communities.
    (5) Outreach. Was developed in consultation with representatives of 
the homeless and the homeless assistance planning boards, if any, in the 
communities in the vicinity of the installation and whether the outreach 
requirements described at Sec. 176.20(c)(1) and Sec. 176.20(c)(3) have 
been fulfilled by the LRA.
    (c) Notice of determination. (1) HUD shall, no later than the 60th 
day after its receipt of the application, unless such deadline is 
extended pursuant to Sec. 176.15(a), send written notification both to 
DoD and the LRA of its preliminary determination that the application 
meets or fails to meet the requirements of Sec. 176.35(b). If the 
application fails to meet the requirements, HUD will send the LRA:
    (i) A summary of the deficiencies in the application;
    (ii) An explanation of the determination; and,
    (iii) A statement of how the LRA must address the determinations.
    (2) In the event that no application is submitted and no extension 
is requested as of the deadline specified in Sec. 176.20(c)(5), and the 
State does not accept within 30 days a DoD written request to become 
recognized as the LRA, the absence of such application will trigger an 
adverse determination by HUD effective on the date of the lapsed 
deadline. Under these conditions, HUD will follow the process described 
at Sec. 176.40.
    (d) Opportunity to cure. (1) The LRA shall have 90 days from its 
receipt of the notice of preliminary determination under Sec. 
176.35(c)(1) within which to submit to HUD and DoD a revised application 
which addresses the determinations listed in the notice. Failure to 
submit a revised application shall result in a final determination, 
effective 90 days from the LRA's receipt of the preliminary 
determination, that the redevelopment plan fails to meet the 
requirements of Sec. 176.35(b).
    (2) HUD shall, within 30 days of its receipt of the LRA's 
resubmission send written notification of its final determination of 
whether the application meets the requirements of Sec. 176.35(b) to 
both DOD and the LRA.



Sec. 176.40  Adverse determinations.

    (a) Review and consultation. If the resubmission fails to meet the 
requirements of Sec. 176.35(b) or if no resubmission is received, HUD 
will review the original application, including the notices of interest 
submitted by representatives of the homeless. In addition, in such 
instances or when no

[[Page 766]]

original application has been submitted, HUD:
    (1) Shall consult with the representatives of the homeless, if any, 
for purposes of evaluation the continuing interest of such 
representatives in the use of buildings or property at the installation 
to assist the homeless;
    (2) May consult with the applicable Military Department regarding 
the suitability of the buildings and property at the installation for 
use to assist the homeless; and,
    (3) May consult with representatives of the homeless and other 
parties as necessary.
    (b) Notice of decision. (1) Within 90 days of receipt of an LRA's 
revised application which HUD determines does not meet the requirements 
of Sec. 176.35(b), HUD shall, based upon its reviews and consultations 
under Sec. 176.40(a):
    (i) Notify DoD and the LRA of the buildings and property at the 
installation that HUD determines are suitable for use to assist the 
homeless, and;
    (ii) Notify DoD and the LRA of the extent to which the revised 
redevelopment plan meets the criteria set forth in Sec. 176.35(b).
    (2) In the event that an LRA does not submit a revised redevelopment 
plan under Sec. 176.35(d), HUD shall, based upon its reviews and 
consultations under Sec. 176.40(a), notify DoD and the LRA of the 
buildings and property at the installation that HUD determines are 
suitable for use to assist the homeless, either
    (i) Within 190 days after HUD sends its notice of preliminary 
adverse determination under Sec. 176.35(c)(1), if an LRA has not 
submitted a revised redevelopment plan; or
    (ii) Within 390 days after the Military Department's Federal 
Register publication of available property under Sec. 176.20(b), if no 
redevelopment plan has been received and no extension has been approved.



Sec. 176.45  Disposal of buildings and property.

    (a) Puglic benefit transfer screening. Not later than the LRA's 
submission of its redevelopment plan to DoD and HUD, the Military 
Development will conduct an official public benefit transfer screening 
in accordance with the Federal Property Management Regulations (41 CFR 
101-47.303-2) based upon the uses identified in the redevelopment plan. 
Federal sponsoring agencies shall notify eligible applicants that any 
request for property must be consistent with the uses identified in the 
redevelopment plan. At the request of the LRA, the Military Department 
may conduct the official State and local public benefit screening at any 
time after the publication of available property described at Sec. 
176.20(b).
    (b) Environmental analysis. Prior to disposal of any real property, 
the Military Department shall, consistent with NEPA and section 2905 of 
the Defense Base Closure and Realignment Act of 1990, as amended (10 
U.S.C. 2687 note), complete an environmental impact analysis of all 
reasonable disposal alternatives. The Military Department shall consult 
with the LRA throughout the environmental impact analysis process to 
ensure both that the LRA is provided the most current environmental 
information available concerning the installation, and that the Military 
Department receives the most current information available concerning 
the LRA's redevelopment plans for the installation.
    (c) Disposal. Upon receipt of a notice of approval of an application 
from HUD under Sec. 176.35(c)(1) or Sec. 176.35(d)(2), DoD shall 
dispose of buildings and property in accordance with the record of 
decision or other decision document prepared under Sec. 176.45(b). 
Disposal of buildings and property to be used as homeless assistance 
facilities shall be to either the LRA or directly to the 
representative(s) of the homeless and shall be without consideration. 
Upon receipt of a notice from HUD under Sec. 176.40(b), DoD will 
dispose of the buildings and property at the installation in 
consultation with HUD and the LRA.
    (d) LRA's responsibility. The LRA shall be responsible for the 
implementation of and compliance with legally binding agreements under 
the application.
    (e) Reversions to the LRA. If a building or property reverts to the 
LRA under a legally binding agreement under the

[[Page 767]]

application, the LRA shall take appropriate actions to secure, to the 
maximum extent practicable, the utilization of the building or property 
by other homeless representatives to assist the homeless. An LRA may not 
be required to utilize the building or property to assist the homeless.



PART 179_MUNITIONS RESPONSE SITE PRIORITIZATION PROTOCOL (MRSPP)--Table of 

Contents



Sec.
179.1 Purpose.
179.2 Applicability and scope.
179.3 Definitions.
179.4 Policy.
179.5 Responsibilities.
179.6 Procedures.
179.7 Sequencing.

Appendix A to Part 179--Tables of the Munitions Response Site 
          Prioritization Protocol (MRSPP).

    Authority: 10 U.S.C. 2710 et seq.

    Source: 70 FR 58028, Oct. 5, 2005, unless otherwise noted.



Sec. 179.1  Purpose.

    The Department of Defense (the Department) is adopting this 
Munitions Response Site Prioritization Protocol (MRSPP) (hereinafter 
referred to as the ``rule'') under the authority of 10 U.S.C. 2710(b). 
Provisions of 10 U.S.C. 2710(b) require that the Department assign to 
each defense site in the inventory required by 10 U.S.C. 2710(a) a 
relative priority for response activities based on the overall 
conditions at each location and taking into consideration various 
factors related to safety and environmental hazards.



Sec. 179.2  Applicability and scope.

    (a) This part applies to the Office of the Secretary of Defense, the 
Military Departments, the Defense Agencies and the Department Field 
Activities, and any other Department organizational entity or 
instrumentality established to perform a government function (hereafter 
referred to collectively as the ``Components'').
    (b) The rule in this part shall be applied at all locations:
    (1) That are, or were, owned by, leased to, or otherwise possessed 
or used by the Department, and
    (2) That are known to, or suspected of, containing unexploded 
ordnance (UXO), discarded military munitions (DMM), or munitions 
constituents (MC), and
    (3) That are included in the inventory established pursuant to 10 
U.S.C. 2710(a).
    (c) The rule in this part shall not be applied at the locations not 
included in the inventory required under 10 U.S.C. 2710(a). The 
locations not included in the inventory are:
    (1) Locations that are not, or were not, owned by, leased to, or 
otherwise possessed or used by the Department,
    (2) Locations neither known to contain, or suspected of containing, 
UXO, DMM, or MC,
    (3) Locations outside the United States,
    (4) Locations where the presence of military munitions results from 
combat operations,
    (5) Currently operating military munitions storage and manufacturing 
facilities,
    (6) Locations that are used for, or were permitted for, the 
treatment or disposal of military munitions, and
    (7) Operational ranges.



Sec. 179.3  Definitions.

    This part includes definitions for many terms that clarify its scope 
and applicability. Many of the terms relevant to this part are already 
defined, either in 10 U.S.C. 101, 10 U.S.C. 2710(e), or the Code of 
Federal Regulations. Where this is the case, the statutory and 
regulatory definitions are repeated here strictly for ease of reference. 
Citations to the U.S. Code or the Code of Federal Regulations are 
provided with the definition, as applicable. Unless used elsewhere in 
the U.S. Code or the Code of Federal Regulations, these terms are 
defined only for purposes of this part.
    Barrier means a natural obstacle or obstacles (e.g., difficult 
terrain, dense vegetation, deep or fast-moving water), a man-made 
obstacle or obstacles (e.g., fencing), and combinations of natural and 
man-made obstacles.
    Chemical agent (CA) means a chemical compound (to include 
experimental compounds) that, through its chemical properties produces 
lethal or other

[[Page 768]]

damaging effects on human beings, is intended for use in military 
operations to kill, seriously injure, or incapacitate persons through 
its physiological effects. Excluded are research, development, testing 
and evaluation (RDTE) solutions; riot control agents; chemical 
defoliants and herbicides; smoke and other obscuration materials; flame 
and incendiary materials; and industrial chemicals. (This definition is 
based on the definition of ``chemical agent and munition'' in 50 U.S.C. 
1521(j)(1).)
    Chemical Agent (CA) Hazard is a condition where danger exists 
because CA is present in a concentration high enough to present 
potential unacceptable effects (e.g., death, injury, damage) to people, 
operational capability, or the environment.
    Chemical Warfare Materiel (CWM) means generally configured as a 
munition containing a chemical compound that is intended to kill, 
seriously injure, or incapacitate a person through its physiological 
effects. CWM includes V- and G-series nerve agents or H-series (mustard) 
and L-series (lewisite) blister agents in other-than-munition 
configurations; and certain industrial chemicals (e.g., hydrogen cyanide 
(AC), cyanogen chloride (CK), or carbonyl dichloride (called phosgene or 
CG)) configured as a military munition. Due to their hazards, 
prevalence, and military-unique application, chemical agent 
identification sets (CAIS) are also considered CWM. CWM does not include 
riot control devices; chemical defoliants and herbicides; industrial 
chemicals (e.g., AC, CK, or CG) not configured as a munition; smoke and 
other obscuration-producing items; flame and incendiary-producing items; 
or soil, water, debris, or other media contaminated with low 
concentrations of chemical agents where no CA hazards exist. For the 
purposes of this Protocol, CWM encompasses four subcategories of 
specific materials:
    (1) CWM, explosively configured are all munitions that contain a CA 
fill and any explosive component. Examples are M55 rockets with CA, the 
M23 VX mine, and the M360 105-mm GB artillery cartridge.
    (2) CWM, nonexplosively configured are all munitions that contain a 
CA fill, but that do not contain any explosive components. Examples are 
any chemical munition that does not contain explosive components and VX 
or mustard agent spray canisters.
    (3) CWM, bulk container are all non-munitions-configured containers 
of CA (e.g., a ton container) and CAIS K941, toxic gas set M-1 and K942, 
toxic gas set M-2/E11.
    (4) CAIS are military training aids containing small quantities of 
various CA and other chemicals. All forms of CAIS are scored the same in 
this rule, except CAIS K941, toxic gas set M-1; and CAIS K942, toxic gas 
set M-2/E11, which are considered forms of CWM, bulk container, due to 
the relatively large quantities of agent contained in those types of 
sets.
    Components means the Office of the Secretary of Defense, the 
Military Departments, the Defense Agencies, the Department Field 
Activities, and any other Department organizational entity or 
instrumentality established to perform a government function.
    Defense site means locations that are or were owned by, leased to, 
or otherwise possessed or used by the Department. The term does not 
include any operational range, operating storage or manufacturing 
facility, or facility that is used for or was permitted for the 
treatment or disposal of military munitions. (10 U.S.C. 2710(e)(1))
    Discarded military munitions (DMM) means military munitions that 
have been abandoned without proper disposal or removed from storage in a 
military magazine or other storage area for the purpose of disposal. The 
term does not include UXO, military munitions that are being held for 
future use or planned disposal, or military munitions that have been 
properly disposed of consistent with applicable environmental laws and 
regulations. (10 U.S.C. 2710(e)(2))
    Explosive hazard means a condition where danger exists because 
explosives are present that may react (e.g., detonate, deflagrate) in a 
mishap with potential unacceptable effects (e.g., death, injury, damage) 
to people, property, operational capability, or the environment.
    Military munitions means all ammunition products and components 
produced for or used by the armed forces

[[Page 769]]

for national defense and security, including ammunition products or 
components under the control of the Department of Defense, the Coast 
Guard, the Department of Energy, and the National Guard. The term 
includes confined gaseous, liquid, and solid propellants; explosives, 
pyrotechnics, chemical and riot control agents, smokes, and 
incendiaries, including bulk explosives and chemical warfare agents; 
chemical munitions, rockets, guided and ballistic missiles, bombs, 
warheads, mortar rounds, artillery ammunition, small arms ammunition, 
grenades, mines, torpedoes, depth charges, cluster munitions and 
dispensers, and demolition charges; and devices and components of any 
item thereof. The term does not include wholly inert items, improvised 
explosive devices, and nuclear weapons, nuclear devices, and nuclear 
components, other than nonnuclear components of nuclear devices that are 
managed under the nuclear weapons program of the Department of Energy 
after all required sanitization operations under the Atomic Energy Act 
of 1954 (42 U.S.C. 2011 et seq.) have been completed. (10 U.S.C. 
101(e)(4))
    Military range means designated land and water areas set aside, 
managed, and used to research, develop, test, and evaluate military 
munitions, other ordnance, or weapon systems, or to train military 
personnel in their use and handling. Ranges include firing lines and 
positions, maneuver areas, firing lanes, test pads, detonation pads, 
impact areas, and buffer zones with restricted access and exclusionary 
areas. (40 CFR 266.201)
    Munitions and explosives of concern distinguishes specific 
categories of military munitions that may pose unique explosives safety 
risks, such as UXO, as defined in 10 U.S.C. 101(e)(5); discarded 
military munitions, as defined in 10 U.S.C. 2710(e)(2); or munitions 
constituents (e.g., TNT, RDX), as defined in 10 U.S.C. 2710(e)(3), 
present in high enough concentrations to pose an explosive hazard.
    Munitions constituents means any materials originating from UXO, 
discarded military munitions, or other military munitions, including 
explosive and nonexplosive materials, and emission, degradation, or 
breakdown elements of such ordnance or munitions. (10 U.S.C. 2710(e)(3))
    Munitions response means response actions, including investigation, 
removal actions, and remedial actions, to address the explosives safety, 
human health, or environmental risks presented by UXO, discarded 
military munitions (DMM), or munitions constituents (MC), or to support 
a determination that no removal or remedial action is required.
    Munitions response area (MRA) means any area on a defense site that 
is known or suspected to contain UXO, DMM, or MC. Examples are former 
ranges and munitions burial areas. An MRA comprises one or more 
munitions response sites.
    Munitions response site (MRS) means a discrete location within an 
MRA that is known to require a munitions response.
    Operational range means a range that is under the jurisdiction, 
custody, or control of the Secretary of Defense and that is used for 
range activities, or although not currently being used for range 
activities, that is still considered by the Secretary to be a range and 
has not been put to a new use that is incompatible with range 
activities. (10 U.S.C. 101(e)(3))
    Range means a designated land or water area that is set aside, 
managed, and used for range activities of the Department of Defense. The 
term includes firing lines and positions, maneuver areas, firing lanes, 
test pads, detonation pads, impact areas, electronic scoring sites, 
buffer zones with restricted access, and exclusionary areas. The term 
also includes airspace areas designated for military use in accordance 
with regulations and procedures prescribed by the Administrator of the 
Federal Aviation Administration. (10 U.S.C. 101(e)(1)(A) and (B))
    Range activities means research, development, testing, and 
evaluation of military munitions, other ordnance, and weapons systems; 
and the training of members of the armed forces in the use and handling 
of military munitions, other ordnance, and weapons systems. (10 U.S.C. 
101(3)(2))
    Unexploded ordnance (UXO) means military munitions that:

[[Page 770]]

    (1) Have been primed, fuzed, armed, or otherwise prepared for 
action;
    (2) Have been fired, dropped, launched, projected, or placed in such 
a manner as to constitute a hazard to operations, installations, 
personnel, or material; and
    (3) Remain unexploded, whether by malfunction, design, or any other 
cause. (10 U.S.C. 101(e)(5))
    United States means, in a geographic sense, the states, territories, 
and possessions and associated navigable waters, contiguous zones, and 
ocean waters of which the natural resources are under the exclusive 
management authority of the United States. (10 U.S.C. 2710(e)(10))



Sec. 179.4  Policy.

    (a) In assigning a relative priority for response activities, the 
Department generally considers those MRSs posing the greatest hazard as 
being the highest priority for action. The priority assigned should be 
based on the overall conditions at each MRS, taking into consideration 
various factors relating to safety and environmental hazard potential.
    (b) In addition to the priority assigned to an MRS, other 
considerations (e.g., availability of specific equipment, intended 
reuse, stakeholder interest) can affect the sequence in which munitions 
response actions at a specific MRS are funded.
    (c) It is Department policy to ensure that U.S. EPA, other federal 
agencies (as appropriate or required), state regulatory agencies, tribal 
governments, local restoration advisory boards or technical review 
committees, and local stakeholders are offered opportunities to 
participate in the application of the rule in this part and making 
sequencing recommendations.



Sec. 179.5  Responsibilities.

    Each Component shall:
    (a) Apply the rule in this part to each MRS under its administrative 
control when sufficient data are available to populate all the data 
elements within any or all of the three hazard evaluation modules that 
comprise the rule. Upon further delineation and characterization of an 
MRA into more than one MRS, Components shall reapply the rule to all 
MRSs within the MRA. In such cases where data are not sufficient to 
populate one or two of the hazard evaluation modules (e.g., there are no 
constituent sampling data for the Health Hazard Evaluation [HHE] 
module), Components will assign a priority based on the hazard 
evaluation modules evaluated and reapply the rule once sufficient data 
are available to apply the remaining hazard evaluation modules.
    (b) Ensure that the total acreage of each MRA is evaluated using 
this rule (i.e., ensure the all MRSs within the MRA are evaluated).
    (c) Ensure that EPA, other federal agencies (as appropriate or 
required), state regulatory agencies, tribal governments, local 
restoration advisory boards or technical review committees, local 
community stakeholders, and the current landowner (if the land is 
outside Department control) are offered opportunities as early as 
possible and throughout the process to participate in the application of 
the rule and making sequencing recommendations.
    (1) To ensure EPA, other federal agency, state regulatory agencies, 
tribal governments, and local government officials are aware of the 
opportunity to participate in the application of the rule, the Component 
organization responsible for implementing a munitions response at the 
MRS shall notify the heads of these organizations (or their designated 
point of contact), as appropriate, seeking their involvement prior to 
beginning prioritization. Records of the notification will be placed in 
the Administrative Record and Information Repository for the MRS.
    (2) Prior to beginning prioritization, the Component organization 
responsible for implementing a munitions response at the MRS shall 
publish an announcement in local community publications requesting 
information pertinent to prioritization or sequencing decisions to 
ensure the local community is aware of the opportunity to participate in 
the application of the rule.
    (d) Establish a quality assurance panel of Component personnel to 
review, initially, all MRS prioritization

[[Page 771]]

decisions. Once the Department determines that its Components are 
applying the rule in a consistent manner and the rule's application 
leads to decisions that are representative of site conditions, the 
Department may establish a sampling-based approach for its Components to 
use for such reviews. This panel reviewing the priority assigned to an 
MRS shall not include any participant involved in applying the rule to 
that MRS. If the panel recommends a change that results in a different 
priority, the Component shall report, in the inventory data submitted to 
the Office of the Deputy Under Secretary of Defense (Installations & 
Environment) (ODUSD[I&E]), the rationale for this change. The Component 
shall also provide this rationale to the appropriate regulatory agencies 
and involved stakeholders for comment before finalizing the change.
    (e) Following the panel review, submit the results of applying the 
rule along with the other inventory data that 10 U.S.C. 2710(c) requires 
be made publicly available, to the ODUSD(I&E). The ODUSD(I&E) shall 
publish this information in the report on environmental restoration 
activities for that fiscal year. If sequencing decisions result in 
action at an MRS with a lower MRS priority ahead of an MRS with a higher 
MRS priority, the Component shall provide specific justification to the 
ODUSD(I&E).
    (f) Document in a Management Action Plan (MAP) or its equivalent all 
aspects of the munitions responses required at all MRSs for which that 
MAP is applicable. Department guidance requires that MAP be developed 
and maintained at an installation (or Formerly Used Defense Site [FUDS] 
property) level and address each site at that installation or FUDS. For 
the FUDS program, a statewide MAP may also be developed.
    (g) Develop sequencing decisions at installations and FUDS with 
input from appropriate regulators and stakeholders (e.g., community 
members of an installation's restoration advisory board or technical 
review committee), and document this development in the MAP. Final 
sequencing may be impacted by Component program management 
considerations. If the sequencing of any MRS is changed from the 
sequencing reflected in the current MAP, the Component shall provide 
information to the appropriate regulators and stakeholders documenting 
the reasons for the sequencing change, and shall request their review 
and comment on that decision.
    (h) Ensure that information provided by regulators and stakeholders 
that may influence the priority assigned to an MRS or sequencing 
decision concerning an MRS is included in the Administrative Record and 
the Information Repository.
    (i) Review each MRS priority at least annually and update the 
priority as necessary to reflect new information. Reapplication of the 
rule is required under any of the following circumstances:
    (1) Upon completion of a response action that changes site 
conditions in a manner that could affect the evaluation under this rule.
    (2) To update or validate a previous evaluation at an MRS when new 
information is available.
    (3) To update or validate the priority assigned where that priority 
has been previously assigned based on evaluation of only one or two of 
the three hazard evaluation modules.
    (4) Upon further delineation and characterization of an MRA into 
MRSs.
    (5) To categorize any MRS previously classified as ``evaluation 
pending.''



Sec. 179.6  Procedures.

    The rule in this part comprises the following three hazard 
evaluation modules.
    (a) Explosive Hazard Evaluation (EHE) module.
    (1) The EHE module provides a single, consistent, Department-wide 
approach for the evaluation of explosive hazards. This module is used 
when there is a known or suspected presence of an explosive hazard. The 
EHE module is composed of three factors, each of which has two to four 
data elements that are intended to assess the specific conditions at an 
MRS. These factors are:
    (i) Explosive hazard, which has the data elements Munitions Type and

[[Page 772]]

Source of Hazard and constitutes 40 percent of the EHE module score. 
(See appendix A to this part, tables 1 and 2.)
    (ii) Accessibility, which has the data elements Location of 
Munitions, Ease of Access, and Status of Property and constitutes 40 
percent of the EHE module score. (See appendix A, tables 3, 4, and 5.)
    (iii) Receptors, which has the data elements Population Density, 
Population Near Hazard, Types of Activities/Structures, and Ecological 
and/or Cultural Resources and constitutes 20 percent of the EHE module 
score. (See appendix A, tables 6, 7, 8, and 9.)
    (2) Based on MRS-specific information, each data element is assigned 
a numeric score, and the sum of these score is the EHE module score. The 
EHE module score results in an MRS being placed into one of the 
following ratings. (See appendix A, table 10.)
    (i) EHE Rating A (Highest) is assigned to MRSs with an EHE module 
score from 92 to 100.
    (ii) EHE Rating B is assigned to MRSs with an EHE module score from 
82 to 91.
    (iii) EHE Rating C is assigned to MRSs with an EHE module score from 
71 to 81.
    (iv) EHE Rating D is assigned to MRSs with an EHE module score from 
60 to 70.
    (v) EHE Rating E is assigned to MRSs with an EHE module score from 
48 to 59.
    (vi) EHE Rating F is assigned to MRSs with an EHE module score from 
38 to 47.
    (vii) EHE Rating G (Lowest) is assigned to MRSs with an EHE module 
score less than 38.
    (3) There are also three other possible outcomes for the EHE module:
    (i) Evaluation pending. This category is used when there are known 
or suspected UXO or DMM, but sufficient information is not available to 
populate the nine data elements of the EHE module.
    (ii) No longer required. This category is reserved for MRSs that no 
longer require an assigned priority because the Department has conducted 
a response, all objectives set out in the decision document for the MRS 
have been achieved, and no further action, except for long-term 
management and recurring reviews, is required.
    (iii) No known or suspected explosive hazard. This category is 
reserved for MRSs that do not require evaluation under the EHE module.
    (4) The EHE module rating shall be considered with the CHE and HHE 
module ratings to determine the MRS priority.
    (5) MRSs lacking information for determining an EHE module rating 
shall be programmed for additional study and evaluated as soon as 
sufficient data are available. Until an EHE module rating is assessed, 
MRSs shall be rated as ``evaluation pending'' for the EHE module.
    (b) Chemical Warfare Materiel Hazard Evaluation (CHE) module. (1) 
The CHE module provides an evaluation of the chemical hazards associated 
with the physiological effects of CWM. The CHE module is used only when 
CWM are known or suspected of being present at an MRS. Like the EHE 
module, the CHE module has three factors, each of which has two to four 
data elements that are intended to assess the conditions at an MRS.
    (i) CWM hazard, which has the data elements CWM Configuration and 
Sources of CWM and constitutes 40 percent of the CHE score. (See 
appendix A to this part, tables 11 and 12.)
    (ii) Accessibility, which focuses on the potential for receptors to 
encounter the CWM known or suspected to be present on an MRS. This 
factor consists of three data elements, Location of CWM, Ease of Access, 
and Status of Property, and constitutes 40 percent of the CHE score. 
(See appendix A, tables 13, 14, and 15.)
    (iii) Receptor, which focuses on the human and ecological 
populations that may be impacted by the presence of CWM. It has the data 
elements Population Density, Population Near Hazard, Types of 
Activities/Structures, and Ecological and/or Cultural Resources and 
constitutes 20 percent of the CHE score. (See appendix A, tables 16, 17, 
18, and 19.)
    (2) Similar to the EHE module, each data element is assigned a 
numeric score, and the sum of these scores (i.e., the CHE module score) 
is used to determine the CHE rating. The CHE module

[[Page 773]]

score results in an MRS being placed into one of the following ratings. 
(See appendix A, table 20.)
    (i) CHE Rating A (Highest) is assigned to MRSs with a CHE score from 
92 to 100.
    (ii) CHE Rating B is assigned to MRSs with a CHE score from 82 to 
91.
    (iii) CHE Rating C is assigned to MRSs with a CHE score from 71 to 
81.
    (iv) CHE Rating D is assigned to MRSs with a CHE score from 60 to 
70.
    (v) CHE Rating E is assigned to MRSs with a CHE score from 48 to 59.
    (vi) CHE Rating F is assigned to MRSs with a CHE score from 38 to 
47.
    (vii) CHE Rating G (Lowest) is assigned to MRSs with a CHE score 
less than 38.
    (3) There are also three other potential outcomes for the CHE 
module:
    (i) Evaluation pending. This category is used when there are known 
or suspected CWM, but sufficient information is not available to 
populate the nine data elements of the CHE module.
    (ii) No longer required. This category is reserved for MRSs that no 
longer require an assigned priority because the Department has conducted 
a response, all objectives set out in the decision document for the MRS 
have been achieved, and no further action, except for long-term 
management and recurring reviews, is required.
    (iii) No known or suspected CWM hazard. This category is reserved 
for MRSs that do not require evaluation under the CHE module.
    (4) The CHE rating shall be considered with the EHE module and HHE 
module ratings to determine the MRS priority.
    (5) MRSs lacking information for assessing a CHE module rating shall 
be programmed for additional study and evaluated as soon as sufficient 
data are available. Until a CHE module rating is assigned, the MRS shall 
be rated as ``evaluation pending'' for the CHE module.
    (c) Health Hazard Evaluation (HHE) module.
    (1) The HHE provides a consistent Department-wide approach for 
evaluating the relative risk to human health and the environment posed 
by MC. The HHE builds on the RRSE framework that is used in the 
Installation Restoration Program (IRP) and has been modified to address 
the unique requirements of MRSs. The HHE module shall be used for 
evaluating the potential hazards posed by MC and other chemical 
contaminants. The HHE module is intended to evaluate MC at sites. Any 
incidental nonmunitions-related contaminants may be addressed incidental 
to a munitions response under the MMRP.
    (2) The module has three factors:
    (i) Contamination Hazard Factor (CHF), which indicates MC, and any 
nonmunitions-related incidental contaminants present; this factor 
contributes a level of High (H), Middle (M), or Low (L) based on 
Significant, Moderate, or Minimal contaminants present, respectively. 
(See appendix A to this part, table 21.)
    (ii) Receptor Factor (RF), which indicates the receptors; this 
factor contributes a level of H, M, or L based on Identified, Potential, 
or Limited receptors, respectively. (See appendix A, table 21.)
    (iii) Migration Pathway Factor (MPF), which indicates environmental 
migration pathways, and contributes a level of H, M, or L based on 
Evident, Potential or Confined pathways, respectively. (See appendix A, 
table 21.)
    (3) The H, M, and L levels for the CHF, RF, and MPF are combined in 
a matrix to obtain composite three-letter combination levels that 
integrate considerations of all three factors. (See appendix A, table 
22.)
    (4) The three-letter combination levels are organized by frequency, 
and the resulting frequencies result in seven HHE ratings. (See appendix 
A, table 23.)
    (i) HHE Rating A (Highest) is assigned to MRSs with an HHE 
combination level of high for all three factors.
    (ii) HHE Rating B is assigned to MRSs with a combination level of 
high for CHF and RF and medium for MPF (HHM).
    (iii) HHE Rating C is assigned to MRSs with a combination level of 
high for the CHF and RF and low for MPF (HHL), or high for CHF and 
medium for the RF and MPF (HMM).
    (iv) HHE Rating D is assigned to MRSs with a combination level of 
high for the CHF, medium for the RF, and

[[Page 774]]

low for the MPF (HML), or medium for all three factors (MMM).
    (v) HHE Rating E is assigned to MRSs with a combination level of 
high for the CHF and low for the RF and MPF (HLL), or medium for the CHF 
and RF and low for the MPF (MML).
    (vi) HHE Rating F is assigned to MRSs with a combination level of 
medium for the CHF and low for the RF and MPF (MLL).
    (vii) HHE Rating G (Lowest) is assigned to MRSs with a combination 
level of low for all three factors (LLL).
    (5) The HHE three-letter combinations are replaced by the seven HHE 
ratings. (See appendix A, table 24.)
    (6) There are also three other potential outcomes for the HHE 
module:
    (i) Evaluation pending. This category is used when there are known 
or suspected MC, and any incidental nonmunitions-related contaminants 
present, but sufficient information is not available to determine the 
HHE module rating.
    (ii) No longer required. This category is reserved for MRSs that no 
longer require an assigned MRS priority because the Department has 
conducted a response, all objectives set out in the decision document 
for the MRS have been achieved, and no further action, except for long-
term management and recurring reviews, is required.
    (iii) No known or suspected munitions constituent hazard. This 
rating is reserved for MRSs that do not require evaluation under the HHE 
module.
    (7) The HHE module rating shall be considered with the EHE and CHE 
module ratings to determine the MRS priority.
    (8) MRSs lacking information sufficient for assessing an HHE module 
rating shall be programmed for additional study and evaluated as soon as 
sufficient data are available. Until an HHR module rating is assigned, 
the MRS shall be classified as ``evaluation pending'' for the HHE 
module.
    (d) Determining the MRS priority. (1) An MRS priority is determined 
based on integrating the ratings from the EHE, CHE, and HHE modules. 
Until all three hazard evaluation modules have been evaluated, the MRS 
priority shall be based on the results of the modules completed.
    (2) Each MRS is assigned to one of eight MRS priorities based on the 
ratings of the three hazard evaluation modules, where Priority 1 
indicates the highest potential hazard and Priority 8 the lowest 
potential hazard. Under the rule in this part, only MRSs with CWM can be 
assigned to Priority 1 and no MRS with CWM can be assigned to Priority 
8. (See appendix A to this part, table 25.)
    (3) An ``evaluation pending'' rating is used to indicate that an MRS 
requires further evaluation. This designation is only used when none of 
the three modules has a numerical rating (i.e., 1 through 8) and at 
least one module is rated ``evaluation pending.'' The Department shall 
develop program metrics focused on reducing the number of MRSs with a 
status of ``evaluating pending'' for any of the three modules. (See 
appendix A, table 25.)
    (4) A ``no longer required'' rating is used to indicate that an MRS 
no longer requires prioritization. The MRS will receive this rating when 
none of the three modules has a numerical (i.e., 1 through 8) or an 
``evaluation pending'' designation, and at least one of the modules is 
rated ``no longer required.''
    (5) A rating of ``no known or suspected hazard'' is used to indicate 
that an MRS has no known or expected hazard. This designation is used 
only when the hazard evaluation modules are rated as ``no known or 
suspected explosive hazard,'' ``no known or suspected CWM hazard,'' and 
``no known or suspected MC hazard.'' (See appendix A, table 25.)



Sec. 179.7  Sequencing.

    (a) Sequencing considerations. The sequencing of MRSs for action 
shall be based primarily on the MRS priority determined through applying 
the rule in this part. Generally, an MRS that presents a greater 
relative risk to human health, safety, or the environment will be 
addressed before an MRS that presents a lesser relative risk. Other 
factors, however, may warrant consideration when determining the 
sequencing for specific MRSs. In evaluating other factors in sequencing 
decisions, the Department will consider a broad range of issues. These 
other, or risk-plus factors, do not influence or

[[Page 775]]

change the MRS priority, but may influence the sequencing for action. 
Examples of factors that the Department may consider are:
    (1) Concerns expressed by regulators or stakeholders.
    (2) Cultural and social factors.
    (3) Economic factors, including economic considerations pertaining 
to environmental justice issues, economies of scale, evaluation of total 
life cycle costs, and estimated valuations of long-term liabilities.
    (4) Findings of health, safety, or ecological risk assessments or 
evaluations based on MRS-specific data.
    (5) Reasonably anticipated future land use, especially when planning 
response actions, conducting evaluations of response alternatives, or 
establishing specific response action objectives.
    (6) A community's reuse requirements at Base Realignment and Closure 
(BRAC) installations.
    (7) Specialized considerations of tribal trust lands (held in trust 
by the United States for the benefit of any tribe or individual). The 
United States holds the legal title to the land and the tribe holds the 
beneficial interest.
    (8) Implementation and execution considerations (e.g., funding 
availability; the availability of the necessary equipment and people to 
implement a particular action; examination of alternatives to responses 
that entail significant capital investments, a lengthy period of 
operation, or costly maintenance; alternatives to removal or treatment 
of contamination when existing technology cannot achieve established 
standards [e.g., maximum contaminant levels]).
    (9) Mission-driven requirements.
    (10) The availability of appropriate technology (e.g., technology to 
detect, discriminate, recover, and destroy UXO).
    (11) Implementing standing commitments, including those in formal 
agreements with regulatory agencies, requirements for continuation of 
remedial action operations until response objectives are met, other 
long-term management activities, and program administration.
    (12) Established program goals and initiatives.
    (13) Short-term and long-term ecological effects and environmental 
impacts in general, including injuries to natural resources.
    (b) Procedures and documentation for sequencing decisions. (1) Each 
installation or FUDS is required to develop and maintain a Management 
Action Plan (MAP) or its equivalent. Sequencing decisions, which will be 
documented in the MAP at military installations and FUDS, shall be 
developed with input from appropriate regulators and stakeholders (e.g., 
community members of an installation's restoration advisory board or 
technical review committee). If the sequencing of an MRS is changed from 
the sequencing reflected in the current MAP, information documenting the 
reasons for the sequencing change will be provided for inclusion in the 
MAP. Notice of the change in the sequencing shall be provided to those 
regulators and stakeholders that provided input to the sequencing 
process.
    (2) In addition to the information on prioritization, the Components 
shall ensure that information provided by regulators and stakeholders 
that may influence the sequencing of an MRS is included in the 
Administrative Record and the Information Repository.
    (3) Components shall report the results of sequencing to ODUSD(I&E) 
(or successor organizations). ODUSD(I&E) shall compile the sequencing 
results reported by each Component and publish the sequencing in the 
report on environmental restoration activities for that fiscal year. If 
sequencing decisions result in action at an MRS with a lower MRS 
priority ahead of an MRS with a higher priority, specific justification 
shall be provided to the ODUSD(I&E).



   Sec. Appendix A to Part 179--Tables of the Munitions Response Site 

                         Prioritization Protocol

    The tables in this Appendix are solely for use in implementing 32 
CFR part 179.

[[Page 776]]

[GRAPHIC] [TIFF OMITTED] TR05OC05.000


[[Page 777]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.001


[[Page 778]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.002


[[Page 779]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.003


[[Page 780]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.004


[[Page 781]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.005


[[Page 782]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.006


[[Page 783]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.007


[[Page 784]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.008


[[Page 785]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.009


[[Page 786]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.010


[[Page 787]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.011


[[Page 788]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.012


[[Page 789]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.013


[[Page 790]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.014


[[Page 791]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.015


[[Page 792]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.016


[[Page 793]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.017


[[Page 794]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.018


[[Page 795]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.019


[[Page 796]]


[GRAPHIC] [TIFF OMITTED] TR05OC05.020


[[Page 797]]



                       SUBCHAPTER I_CIVIL DEFENSE



PART 185_DEFENSE SUPPORT OF CIVIL AUTHORITIES (DSCA)--Table of Contents



Sec.
185.1 Purpose.
185.2 Applicability and scope.
185.3 Definitions.
185.4 Policy.
185.5 Responsibilities.

    Authority: Legal authority includes, 10 U.S.C. sections 113, 331-
335, 371-382, 2553, 2554, 2555, and 2564; 31 U.S.C. 1535-1536 (Economy 
Act); 42 U.S.C. section 5121 et seq. (Robert T. Stafford Disaster Relief 
and Emergency Assistance Act, as amended (Stafford Act)); and Public Law 
94-524, as amended (Presidential Protection Assistance Act of 1976).

    Source: 76 FR 2248, Jan. 13, 2011, unless otherwise noted.



Sec. 185.1  Purpose.

    This part:
    (a) Establishes policy and assigns responsibilities for DSCA, also 
referred to as civil support.
    (b) Supplements the regulations (in DoD Directive 5525.5) \1\ 
required by section 375 of title 10, United States Code (U.S.C.), 
regarding military support for civilian law enforcement.
---------------------------------------------------------------------------

    \1\ Available for downloading at http://www.dtic.mil/whs/directives/
corres/pdf/552505p.pdf
---------------------------------------------------------------------------

    (c) Sets forth policy guidance for the execution and oversight of 
DSCA when requested by civil authorities or by qualifying entities and 
approved by the appropriate DoD official, or as directed by the 
President, within the United States, including the District of Columbia, 
the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American 
Samoa, the Commonwealth of the Northern Mariana Islands, and any 
territory or possession of the United States or any political 
subdivision thereof.
    (d) Authorizes immediate response authority for providing DSCA, when 
requested.
    (e) Authorizes emergency authority for the use of military force, 
under dire situations, as described in Sec. 185.4(i) of this part.



Sec. 185.2  Applicability and scope.

    This part:
    (a) Applies to the Office of the Secretary of Defense, the Military 
Departments, the Office of the Chairman of the Joint Chiefs of Staff and 
the Joint Staff, the Combatant Commands, the Office of the Inspector 
General of the Department of Defense, the Defense Agencies, the DoD 
Field Activities, and all other organizational entities within the 
Department of Defense (hereafter referred to collectively as the ``DoD 
Components'').
    (b) Applies to the Army National Guard and the Air National Guard 
(hereafter referred to collectively as the ``National Guard'') personnel 
when under Federal command and control. Also applies to National Guard 
personnel when the Secretary of Defense determines that it is 
appropriate to employ National Guard personnel in title 32, U.S.C., 
status to fulfill a request for DSCA, the Secretary of Defense requests 
the concurrence of the Governors of the affected States, and those 
Governors concur in the employment of National Guard personnel in such a 
status.
    (c) Applies to all DSCA (except the specific forms of DSCA listed in 
paragraph (d) of this section), including but not limited to:
    (1) Mutual or automatic aid, also known as reciprocal fire 
protection agreements (see chapter 15A of title 42 U.S.C.).
    (2) DoD fire and emergency services programs (see DoD Instruction 
6055.06) \2\.
---------------------------------------------------------------------------

    \2\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/605506p.pdf.
---------------------------------------------------------------------------

    (3) Support of special events in accordance with applicable laws and 
DoD policy (see DoD Directive 2000.15) \3\.
---------------------------------------------------------------------------

    \3\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/200015p.pdf.
---------------------------------------------------------------------------

    (4) United States Army Corps of Engineers (USACE) activities as the 
DoD Coordinating and Primary Agency for

[[Page 798]]

Emergency Support Function 3, Public Works and Engineering, of 
the National Response Framework.
    (5) Defense support to civilian law enforcement agencies (see DoDD 
3025.12 \4\ and DoD Directive 5525.5).
---------------------------------------------------------------------------

    \4\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/302512p.pdf.
---------------------------------------------------------------------------

    (d) Does not apply to the following:
    (1) Support in response to foreign disasters provided in accordance 
with DoD Directive 5100.46 \5\.
---------------------------------------------------------------------------

    \5\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/510046p.pdf.
---------------------------------------------------------------------------

    (2) Joint investigations conducted by the Inspector General of the 
Department of Defense, the Defense Criminal Investigative Service, and 
the military criminal investigative organizations with civil law 
enforcement agencies on matters within their respective jurisdictions 
using their own forces and equipment.
    (3) Detail of DoD personnel to duty outside the Department of 
Defense in accordance with DoD Instruction 1000.17 \6\.
---------------------------------------------------------------------------

    \6\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/100017p.pdf.
---------------------------------------------------------------------------

    (4) Counternarcotics operations conducted under the authority of 
section 1004 of Public Law 101-510 (1991).
    (5) Support provided by the USACE when accomplishing missions and 
responsibilities under the authority of section 701n of title 33, U.S.C. 
and Executive Order 12656.
    (6) Assistance provided by DoD intelligence and counterintelligence 
components in accordance with DoD Directive 5240.01 \7\, Executive 
Orders 12333 and 13388, DoD 5240.1-R \8\, and other applicable laws and 
regulations.
---------------------------------------------------------------------------

    \7\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/524001p.pdf.
    \8\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/524001r.pdf.
---------------------------------------------------------------------------

    (7) Military community relations programs and activities 
administered by the Assistant Secretary of Defense for Public Affairs 
(see DoD Directive 5410.18 \9\ and DoD Instruction 5410.19 \10\).
---------------------------------------------------------------------------

    \9\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/541018p.pdf.
    \10\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/541019p.pdf.
---------------------------------------------------------------------------

    (8) Sensitive support in accordance with DoD Directive S-5210.36 
\11\.
---------------------------------------------------------------------------

    \11\ Document is classified and copies maybe requested by contacting 
USD(I), [email protected]
---------------------------------------------------------------------------

    (9) Activities performed by the Civil Air Patrol in support of civil 
authorities or qualifying entities when approved by the Air Force as 
auxiliary missions in accordance with section 9442 of title 10, U.S.C. 
and DoD 3025.1-M \12\ except as restricted by Sec. 185.4(j) of this 
part.
---------------------------------------------------------------------------

    \12\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/302501m.pdf.
---------------------------------------------------------------------------

    (10) Innovative readiness training (formerly called ``civil-military 
cooperative action programs'') (see DoD Directive 1100.20) \13\.
---------------------------------------------------------------------------

    \13\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/110020p.pdf.
---------------------------------------------------------------------------



Sec. 185.3  Definitions.

    Civil Authorities. See Joint Publication 1-02 \14\.
---------------------------------------------------------------------------

    \14\ Available by downloading at http://www.dtic.mil/doctrine/new--
pubs/jp1--02.pdf.
---------------------------------------------------------------------------

    Civil Disturbances. See Joint Publication 1-02.
    Defense Domestic Crisis Manager. The lead DoD official responsible 
for DoD's domestic crisis management response, ensuring the information 
needs and other requirements of the Secretary of Defense are met, and 
developing, coordinating, and overseeing the implementation of DoD 
policy for crisis management to ensure DoD capability to develop and 
execute options to prevent, mitigate, or respond to a potential or 
actual domestic crisis. The Assistant Secretary of Defense for Homeland 
Defense and Americas' Security Affairs (ASD(HD&ASA)) serves as the 
Defense Domestic Crisis Manager.
    Defense Support of Civil Authorities (DSCA). Support provided by 
U.S. Federal military forces, DoD civilians, DoD contract personnel, DoD 
Component assets, and National Guard forces

[[Page 799]]

(when the Secretary of Defense, in coordination with the Governors of 
the affected States, elects and requests to use those forces in title 
32, U.S.C., status) in response to requests for assistance from civil 
authorities for domestic emergencies, law enforcement support, and other 
domestic activities, or from qualifying entities for special events. 
Also known as civil support.
    Direct Liaison. An authority for Federal military forces to consult 
with, coordinate with, and respond to State authorities (including 
National Guard units and personnel operating in Title 32 status or in 
State Active Duty status) or Federal civilian authorities in the 
tactical-level execution of assigned tasks, pursuant to an order by the 
Secretary of Defense or the President to provide support to those 
authorities.
    Emergency Authority. A Federal military commander's authority, in 
extraordinary emergency circumstances where prior authorization by the 
President is impossible and duly constituted local authorities are 
unable to control the situation, to engage temporarily in activities 
that are necessary to quell large-scale, unexpected civil disturbances 
because (1) such activities are necessary to prevent significant loss of 
life or wanton destruction of property and are necessary to restore 
governmental function and public order or (2) duly constituted Federal, 
State, or local authorities are unable or decline to provide adequate 
protection for Federal property or Federal governmental functions.
    Federal Military Forces. Army, Navy, Marine Corps and Air Force 
personnel (including Reserve Component personnel) on Federal active duty 
and National Guard personnel when under Federal command and control.
    Immediate Response Authority. A Federal military commander's, DoD 
Component Head's, and/or responsible DoD civilian official's authority 
temporarily to employ resources under their control, subject to any 
supplemental direction provided by higher headquarters, and provide 
those resources to save lives, prevent human suffering, or mitigate 
great property damage in response to a request for assistance from a 
civil authority, under imminently serious conditions when time does not 
permit approval from a higher authority within the United States. 
Immediate response authority does not permit actions that would subject 
civilians to the use of military power that is regulatory, prescriptive, 
proscriptive, or compulsory. State immediate response is addressed in 
Sec. 185.4(h) of this part.
    Qualifying Entity. A non-Governmental organization to which the 
Department of Defense may provide assistance for special events by 
virtue of statute, regulation, policy, or other approval by the 
Secretary of Defense or his or her authorized designee.
    Responsible DoD Civilian. For purposes of DSCA, the Head of a DoD 
Component or other DoD civilian official who has authority over DoD 
assets that may be used for a DSCA response.
    Special Event. An international or domestic event, contest, 
activity, or meeting, which by its very nature, or by specific statutory 
or regulatory authority, may warrant security, safety, and/or other 
logistical support or assistance from the Department of Defense.
    Total Force. See DoD Directive 1200.17 \15\.
---------------------------------------------------------------------------

    \15\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/120017p.pdf.
---------------------------------------------------------------------------



Sec. 185.4  Policy.

    It is DoD policy that:
    (a) This part shall be implemented consistent with national security 
objectives and military readiness.
    (b) Unless expressly stated otherwise, the provisions of this part 
should not be construed to rescind any existing authorities of the Heads 
of DoD Components, commanders, and/or responsible DoD civilians to 
provide DSCA in accordance with existing laws, DoD issuances, and 
Secretary of Defense-approved orders.
    (c) DSCA is initiated by a request for DoD assistance from civil 
authorities or qualifying entities or is authorized by the President or 
Secretary of Defense.
    (d) All requests for DSCA shall be written, and shall include a 
commitment to reimburse the Department of

[[Page 800]]

Defense in accordance with the Stafford Act, Economy Act, or other 
authorities except requests for support for immediate response, and 
mutual or automatic aid, in accordance with Sec. 185.4(g) and (m) of 
this part. Unless approval authority is otherwise delegated by the 
Secretary of Defense, all DSCA requests shall be submitted to the office 
of the Executive Secretary of the Department of Defense. For assistance 
provided according to Sec. 185.4(g) of this part, civil authorities 
shall be informed that oral requests for assistance in an emergency must 
be followed by a written request that includes an offer to reimburse the 
Department of Defense at the earliest available opportunity. States also 
must reimburse the United States Treasury in accordance with section 
9701 of title 31, U.S.C. Support may be provided on a non-reimbursable 
basis only if required by law or if both authorized by law and approved 
by the appropriate DoD official.
    (e) All requests from civil authorities and qualifying entities for 
assistance shall be evaluated for:
    (1) Legality (compliance with laws).
    (2) Lethality (potential use of lethal force by or against DoD 
Forces).
    (3) Risk (safety of DoD Forces).
    (4) Cost (including the source of funding and the effect on the DoD 
budget).
    (5) Appropriateness (whether providing the requested support is in 
the interest of the Department).
    (6) Readiness (impact on the Department of Defense's ability to 
perform its primary mission).
    (f) DSCA plans shall be compatible with the National Response 
Framework; the National Incident Management System; all contingency 
plans for operations in the locations listed in Sec. 185.1(c) of this 
part; and any other national plans (approved by the President or 
Secretary of Defense) or DoD issuances governing DSCA operations. DSCA 
planning will consider command and control options that will emphasize 
unity of effort, and authorize direct liaison if authorized by the 
Secretary of Defense.
    (g) Federal military commanders, Heads of DoD Components, and/or 
responsible DoD civilian officials (hereafter referred to collectively 
as ``DoD officials'') have immediate response authority as described in 
this part. In response to a request for assistance from a civil 
authority, under imminently serious conditions and if time does not 
permit approval from higher authority, DoD officials may provide an 
immediate response by temporarily employing the resources under their 
control, subject to any supplemental direction provided by higher 
headquarters, to save lives, prevent human suffering, or mitigate great 
property damage within the United States. Immediate response authority 
does not permit actions that would subject civilians to the use of 
military power that is regulatory, prescriptive, proscriptive, or 
compulsory.
    (1) The DoD official directing a response under immediate response 
authority shall immediately notify the National Joint Operations and 
Intelligence Center (NJOIC), through the chain of command, of the 
details of the response. The NJOIC will inform appropriate DoD 
Components to including the geographic Combatant Command.
    (2) An immediate response shall end when the necessity giving rise 
to the response is no longer present (e.g., when there are sufficient 
resources available from State, local, and other Federal agencies to 
respond adequately and that agency or department has initiated response 
activities) or when the initiating DoD official or a higher authority 
directs an end to the response. The DoD official directing a response 
under immediate response authority shall reassess whether there remains 
a necessity for the Department of Defense to respond under this 
authority as soon as practicable but, if immediate response activities 
have not yet ended, not later than 72 hours after the request of 
assistance was received.
    (3) Support provided under immediate response authority should be 
provided on a cost-reimbursable basis, where appropriate or legally 
required, but will not be delayed or denied based on the inability or 
unwillingness of the requester to make a commitment to reimburse the 
Department of Defense.
    (h) The authority of State officials is recognized to direct a State 
immediate response using National Guard personnel under State command 
and control (including personnel in a title 32, U.S.C. (hereafter 
referred to as ``Title

[[Page 801]]

32'') status) in accordance with State law, but National Guard personnel 
will not be placed in or extended in Title 32 status to conduct State 
immediate response activities.
    (i) Federal military commanders are provided emergency authority 
under this part. Federal military forces shall not be used to quell 
civil disturbances unless specifically authorized by the President in 
accordance with applicable law (e.g., chapter 15 of title 10, U.S.C.) or 
permitted under emergency authority, as described below (See DoD 
Directive 3025.12 \16\ and DoD Directive 5525.5 \17\.) In these 
circumstances, those Federal military commanders have the authority, in 
extraordinary emergency circumstances where prior authorization by the 
President is impossible and duly constituted local authorities are 
unable to control the situation, to engage temporarily in activities 
that are necessary to quell large-scale, unexpected civil disturbances 
because:
---------------------------------------------------------------------------

    \16\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/302512p.pdf.
    \17\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/552505p.pdf.
---------------------------------------------------------------------------

    (1) Such activities are necessary to prevent significant loss of 
life or wanton destruction of property and are necessary to restore 
governmental function and public order, or,
    (2) When duly constituted Federal, State, or local authorities are 
unable or decline to provide adequate protection for Federal property or 
Federal governmental functions. Federal action, including the use of 
Federal military forces, is authorized when necessary to protect the 
Federal property or functions.
    (j) Except for immediate response and emergency authority as 
described in Sec. 185.4(g) and Sec. 185.4(i) of this part, only the 
Secretary of Defense may approve requests from civil authorities or 
qualifying entities for Federal military support for:
    (1) Defense assistance in responding to civil disturbances (requires 
Presidential authorization) in accordance with DoD Directive 3025.12.
    (2) Defense response to CBRNE events (see DoD Instruction 2000.18) 
\18\.
---------------------------------------------------------------------------

    \18\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/200018p.pdf.
---------------------------------------------------------------------------

    (3) Defense assistance to civilian law enforcement organizations, 
except as authorized in DoD Directive 5525.5.
    (4) Assistance in responding with assets with potential for 
lethality. This support includes loans of arms; vessels or aircraft; or 
ammunition. It also includes assistance under section 382 of title 10, 
U.S.C., and section 831 of title 18, U.S.C.; all support to 
counterterrorism operations; and all support to civilian law enforcement 
authorities in situations where a confrontation between civilian law 
enforcement and civilian individuals or groups is reasonably 
anticipated.
    (k) Federal military forces employed for DSCA activities shall 
remain under Federal military command and control at all times.
    (l) Special event support to a qualifying entity shall be treated as 
DSCA.
    (m) All requests for DSCA mutual and automatic aid via the DoD Fire 
& Emergency Services programs shall be in accordance with DoD 
Instruction 6055.06.
    (n) DSCA is a total force mission (see DoD Directive 1200.17).
    (o) No DoD unmanned aircraft systems (UAS) will be used for DSCA 
operations, including support to Federal, State, local, and tribal 
government organizations, unless expressly approved by the Secretary of 
Defense. Use of armed UAS for DSCA operations is not authorized. (See 
DoD Directive 5240.01, Executive Orders 12333 and 13388, and DoD 5240.1-
R.)
    (p) Direct liaison between DoD Components and the States should 
occur only when time does not permit compliance with Sec. 185.5(m)(1) 
of this part. In each such instance, the Chief, National Guard Bureau, 
will be informed of the direct liaison.



Sec. 185.5  Responsibilities.

    (a) The Under Secretary of Defense for Policy (USD(P)) shall:

[[Page 802]]

    (1) Coordinate DSCA policy with other Federal departments and 
agencies, State agencies, and the DoD Components, as appropriate.
    (2) Establish DoD policy governing DSCA.
    (b) The Assistant Secretary of Defense for Homeland Defense and 
Americas' Security Affairs (ASD(HD&ASA)), under the authority, 
direction, and control of the USD(P) shall:
    (1) Serve as the principal civilian advisor to the Secretary of 
Defense and the USD(P) for DSCA.
    (2) Serve as the Defense Domestic Crisis Manager.
    (3) As delegated by the Secretary of Defense in accordance with DoD 
Directive 5111.13 \19\, serve as approval authority for requests for 
assistance from civil authorities or qualifying entities sent to the 
Secretary of Defense, except for those items retained in Sec. 185.4(j) 
and (o) of this part, or delegated to other officials. This authority 
may not be delegated further than the Principal Deputy Assistant 
Secretary of Defense for Homeland Defense and Americas' Security 
Affairs. When carrying out this authority, the ASD(HD&ASA) shall:
---------------------------------------------------------------------------

    \19\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/511113p.pdf.
---------------------------------------------------------------------------

    (i) Coordinate requests with the Chairman of the Joint Chiefs of 
Staff, the Commanders of the Combatant Commands with DSCA 
responsibilities in the matter, and Military Department Secretaries and 
other DoD officials as appropriate.
    (ii) Immediately notify the Secretary of Defense of the use of this 
authority.
    (4) Develop, coordinate, and oversee the implementation of DoD 
policy for DSCA plans and activities, including:
    (i) Requests for assistance during domestic crises, emergencies, or 
civil disturbances.
    (ii) Domestic consequence management.
    (iii) Coordination or consultation, as appropriate, with the 
Department of Homeland Security and other Federal agencies on the 
development and validation of DSCA requirements.
    (iv) DoD support for national special security events.
    (v) DoD support for national and international sporting events, in 
accordance with section 2564 of title 10, U.S.C.
    (vi) Direct the fullest appropriate dissemination of information 
relating to all aspects of DSCA, using all approved media and in 
accordance with DoD Directive 8320.02 \20\.
---------------------------------------------------------------------------

    \20\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/832002p.pdf.
---------------------------------------------------------------------------

    (5) Exercise staff cognizance over DoD Directive 5525.5.
    (c) The Assistant Secretary of Defense for Special Operations and 
Low Intensity Conflict and Interdependent Capabilities, under the 
authority, direction, and control of the USD(P), shall support planning 
by the Defense Domestic Crisis Manager during DSCA operations, as 
required.
    (d) The Under Secretary of Defense (Comptroller)/Chief Financial 
Officer shall:
    (1) Establish policies and procedures to ensure timely reimbursement 
to the Department of Defense for reimbursable DSCA activities.
    (2) Assist in management of statutory resources for DSCA in support 
of appropriate international and domestic sporting events.
    (e) The Under Secretary of Defense for Personnel and Readiness 
(USD(P&R)) shall identify, monitor, and oversee the development of 
integrated DSCA training capabilities and the integration of these 
training capabilities into exercises and training to build, sustain, and 
assess DSCA readiness in accordance with DoD Directive 1322.18 \21\.
---------------------------------------------------------------------------

    \21\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/132218p.pdf.
---------------------------------------------------------------------------

    (f) The Assistant Secretary of Defense for Health Affairs (ASD(HA)), 
under the authority, direction, and control of the USD(P&R), as the 
principal advisor to the Secretary of Defense for all DoD health policy 
shall:
    (1) Provide guidance and support for all domestic crisis situations 
or emergencies that require health or medical-related DSCA to 
ASD(HD&ASA).
    (2) Exercise authority in accordance with section 300hh-11 of title 
42, U.S.C., and according to DoD Directive

[[Page 803]]

6010.22 \22\, for participation in the National Disaster Medical System.
---------------------------------------------------------------------------

    \22\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/601022p.pdf.
---------------------------------------------------------------------------

    (g) The Assistant Secretary of Defense for Reserve Affairs, under 
the authority, direction, and control of USD(P&R), shall provide 
recommendations, guidance, and support on the use of the Reserve 
Components to perform DSCA missions to ASD(HD&ASA).
    (h) The Under Secretary of Defense for Acquisition, Technology, and 
Logistics (USD(AT&L)) shall establish policies and procedures, in 
coordination with ASD(HD&ASA), to implement DSCA requirements for DoD 
Fire and Emergency Services programs and mutual or automatic aid that 
may be part of that program.
    (i) The Heads of the DoD Components shall:
    (1) Direct that any DSCA-related DoD issuances, concept plans, 
interagency agreements, and memorandums of understanding or agreement 
with external agencies are in full compliance with this part.
    (2) Direct Component compliance with financial management guidance 
related to support provided for DSCA operations, including guidance 
related to tracking costs and seeking reimbursement.
    (3) When approved by the Secretary of Defense, plan, program, and 
budget for DSCA capabilities in accordance with law, policy, and 
assigned missions.
    (j) The Secretaries of the Military Departments in addition to the 
responsibilities in Sec. 185.5(i) of this part, shall:
    (1) Establish the necessary policies and procedures to ensure the 
appropriate personnel are trained to execute DSCA plans as directed by 
the Secretary of Defense.
    (2) Direct that requests for reimbursement of actual DSCA 
expenditures (performance of work or services, payments to contractors, 
or delivery from inventory) begin within 30 calendar days after the 
month in which performance occurred. Final billing invoices shall be 
submitted to supported departments and agencies within 90 calendar days 
of the termination of the supported event.
    (k) The Chairman of the Joint Chiefs of Staff in addition to the 
responsibilities in Sec. 185.5(i) of this part, shall:
    (1) Advise the Secretary of Defense on the effects of requests for 
DSCA on national security and military readiness.
    (2) Identify available resources for support in response to DSCA 
requests and release related orders when approved by the Secretary of 
Defense.
    (3) Incorporate DSCA into joint training and exercise programs in 
consultation with the USD(P&R), the Chief, National Guard Bureau (NGB), 
and appropriate officials from the Department of Homeland Security and 
other appropriate Federal departments and agencies.
    (4) Advocate for needed DSCA capabilities.
    (l) The Commanders of Combatant Commands with DSCA responsibilities, 
in addition to the responsibilities in Sec. 185.5(i) of this part and 
in accordance with the Unified Command Plan shall:
    (1) In coordination with the Chairman of the Joint Chiefs of Staff, 
plan and execute DSCA operations in their areas of responsibility in 
accordance with this part, the Unified Command Plan and the Global Force 
Management Implementation Guidance.
    (2) In coordination with the Chairman of the Joint Chiefs of Staff, 
incorporate DSCA into joint training and exercise programs in 
consultation with the Department of Homeland Security, other appropriate 
Federal departments and agencies, and the NGB.
    (3) Advocate for needed DSCA capabilities and requirements through 
the Joint Requirements Oversight Council, subject to Sec. 185.5(i) of 
this part, and the planning, programming, budgeting, and execution 
process.
    (4) Work closely with subordinate commands to ensure that they are 
appropriately reimbursed for DSCA in accordance with Sec. 185.5(j) of 
this part.
    (5) Exercise Training Readiness Oversight (TRO) over assigned 
Reserve Component forces when not on active

[[Page 804]]

duty or when on active duty for training in accordance with DoD 
Instruction 1215.06 \23\.
---------------------------------------------------------------------------

    \23\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/121506p.pdf.
---------------------------------------------------------------------------

    (m) The Chief, NGB, under the authority, direction, and control of 
the Secretary of Defense, normally through the Secretary of the Army and 
the Secretary of the Air Force, shall:
    (1) Serve as the channel of communications for all matters 
pertaining to the National Guard between DoD Components and the States 
in accordance with DoD Directive 5105.77 \24\.
---------------------------------------------------------------------------

    \24\ Available by downloading at http://www.dtic.mil/whs/directives/
corres/pdf/510577p.pdf.
---------------------------------------------------------------------------

    (2) Annually assess the readiness of the National Guard of the 
States to conduct DSCA activities and report on this assessment to the 
Secretaries of the Army and the Air Force; the USD(P&R), ASD(HD&ASA), 
and ASD(RA); and, through the Chairman of the Joint Chiefs of Staff, to 
the Secretary of Defense and appropriate Combatant Commanders.
    (3) Report National Guard support of civil authorities or qualifying 
entities when using Federal resources, equipment, and/or funding to the 
NJOIC.
    (4) Serve as an advisor to the Combatant Commanders on National 
Guard matters pertaining to the combatant command missions, and support 
planning and coordination for DSCA activities as requested by the 
Chairman of the Joint Chiefs of Staff or the Combatant Commanders.
    (5) Ensure that National Guard appropriations are appropriately 
reimbursed for DSCA activities.
    (6) Advocate for needed DSCA capabilities.
    (7) Develop and promulgate, in accordance with DoD Directive 5105.77 
and in coordination with the Secretaries of the Army and Air Force and 
the ASD(HD&ASA), guidance regarding this part as it relates to National 
Guard matters.



                       SUBCHAPTERS J-K [RESERVED]


[[Page 805]]



                        SUBCHAPTER L_ENVIRONMENT



PART 187_ENVIRONMENTAL EFFECTS ABROAD OF MAJOR DEPARTMENT OF DEFENSE ACTIONS--

Table of Contents



Sec.
187.1 Purpose.
187.2 Applicability.
187.3 Definitions.
187.4 Policy.
187.5 Responsibilities.
187.6 Information requirements.

Enclosure 1 to Part 187--Requirements for Environmental Considerations--
          Global Commons
Enclosure 2 to Part 187--Requirements for Environmental Considerations--
          Foreign Nations and Protected Global Resources

    Authority: Title 10 U.S.C. 131.

    Source: 44 FR 21786, Apr. 14, 1979, unless otherwise noted. 
Redesignated at 56 FR 64481, Dec. 10, 1991.



Sec. 187.1  Purpose.

    Executive Order 12114 provides the exclusive and complete 
requirement for taking account of considerations with respect to actions 
that do significant harm to the environment of places outside the United 
States. This part provides policy and procedures to enable Department of 
Defense (DoD) officials to be informed and take account of environmental 
considerations when authorizing or approving certain major Federal 
actions that do significant harm to the environment of places outside 
the United States. Its sole objective is to establish internal 
procedures to achieve this purpose, and nothing in it shall be construed 
to create a cause of action. Guidance for taking account of 
considerations with respect to the environment of places within the 
United States is set out in 32 CFR part 188 (under rev.) That guidance 
is grounded on legal and policy requirements different from those 
applicable to this part.

[44 FR 21786, Apr. 14, 1979. Redesignated and amended at 56 FR 64481, 
Dec. 10, 1991]



Sec. 187.2  Applicability.

    The provisions of this part apply to the Office of the Secretary of 
Defense, the Military Departments, the Organization of the Joint Chiefs 
of Staff, the Unified and Specified Commands, and the Defense Agencies 
(hereafter referred to as ``DoD components'').



Sec. 187.3  Definitions.

    (a) Environment means the natural and physical environment, and it 
excludes social, economic, and other environments. Social and economic 
effects do not give rise to any requirements under this part.
    (b) Federal Action means an action that is implemented or funded 
directly by the United States Government. It does not include actions in 
which the United States participates in an advisory, information-
gathering, representational, or diplomatic capacity but does not 
implement or fund the action; actions taken by a foreign government or 
in a foreign country in which the United States is a beneficiary of the 
action, but does not implement or fund the action; or actions in which 
foreign governments use funds derived indirectly from United States 
funding.
    (c) Foreign Nation means any geographic area (land, water, and 
airspace) that is under the jurisdiction of one or more foreign 
governments; any area under military occupation by the United States 
alone or jointly with any other foreign government; and any area that is 
the responsibility of an international organization of governments. 
``Foreign nation'' includes contiguous zones and fisheries zones of 
foreign nations. ``Foreign government'' in this context includes 
governments regardless of whether recognized by the United States, 
political factions, and organizations that exercise governmental power 
outside the United States.
    (d) Global Commons are geographical areas that are outside the 
jurisdiction of any nation, and include the oceans outside territorial 
limits and Antarctica. Global commons do not include contiguous zones 
and fisheries zones of foreign nations.
    (e) Major Action means an action of considerable importance 
involving substantial expenditures of time, money,

[[Page 806]]

and resources, that affects the environment on a large geographic scale 
or has substantial environmental effects on a more limited geographical 
area, and that is substantially different or a significant departure 
from other actions, previously analyzed with respect to environmental 
considerations and approved, with which the action under consideration 
may be associated. Deployment of ships, aircraft, or other mobile 
military equipment is not a major action for purposes of this part.
    (f) United States means all States, territories, and possessions of 
the United States; and all waters and airspace subject to the 
territorial jurisdiction of the United States. The territories and 
possessions of the United States include the Virgin Islands, American 
Samoa, Wake Island, Midway Island, Guam, Palmyra Island, Johnston Atoll, 
Navassa Island, and Kingman Reef.



Sec. 187.4  Policy.

    (a) Executive Order 12114 is based on the authority vested in the 
President by the Constitution and the laws of the United States. The 
objective of the Order is to further foreign policy and national 
security interests while at the same time taking into consideration 
important environmental concerns.
    (b) The Department of Defense acts with care in the global commons 
because the stewardship of these areas is shared by all the nations of 
the world. The Department of Defense will take account of environmental 
considerations when it acts in the global commons in accordance with 
procedures set out in Enclosure 1 and its attachment.
    (c) The Department of Defense also acts with care within the 
jurisdiction of a foreign nation. Treaty obligations and the sovereignty 
of other nations must be respected, and restraint must be exercised in 
applying United States laws within foreign nations unless Congress has 
expressly provided otherwise. The Department of Defense will take 
account of environmental considerations in accordance with Enclosure 2 
and its attachments when it acts in a foreign nation.
    (d) Foreign policy considerations require coordination with the 
Department of State on communications with foreign governments 
concerning environmental agreements and other formal arrangements with 
foreign governments concerning environmental matters under this part.

Informal working-level communications and arrangements are not included 
in this coordination requirement. Consultation with the Department of 
State also is required in connection with the utilization of additional 
exemptions from this part as specified in paragraph C.3.b. of Enclosure 
2. Coordination and consultation with the Department of State will be 
through the Assistant Secretary of Defense (International Security 
Affairs).
    (e) Executive Order 12114, implemented by this part prescribes the 
exclusive and complete procedural measures and other actions to be taken 
by the Department of Defense to further the purpose of the National 
Environmental Policy Act with respect to the environment outside the 
United States.



Sec. 187.5  Responsibilities.

    (a) The Assistant Secretary of Defense (Manpower, Reserve Affairs, 
and Logistics) shall:
    (1) Serve as the responsible Department of Defense official for 
policy matters under Executive Order 12114 and this part;
    (2) Modify or supplement any of the enclosures to this part in a 
manner consistent with the policies set forth in this part;
    (3) Maintain liaison with the Council on Environmental Quality with 
respect to environmental documents;
    (4) Participate in determining whether a recommendation should be 
made to the President that a natural or ecological resource of global 
importance be designated for protection; and
    (5) Consult with the Assistant Secretary of Defense (International 
Security Affairs) on significant or sensitive actions or decisions 
affecting relations with another nation.
    (b) The Assistant Secretary of Defense (International Security 
Affairs) shall:
    (1) Maintain liaison and conduct consultations with the Department 
of State as required under this part; and
    (2) Serve as the responsible official, in consultation with the 
Assistant Secretary of Defense (Manpower, Reserve

[[Page 807]]

Affairs, and Logistics), for monitoring the continuing cooperation and 
the exchange of information with other nations concerning the 
environment.
    (c) The General Counsel, DoD, shall provide advice and assistance 
concerning the requirements of Executive Order 12114 and this part.
    (d) The Secretaries of the Military Departments, Directors of the 
Defense Agencies, and Commanders of the Unified and Specified Commands, 
for operations under their jurisdiction, shall:
    (1) Prepare and consider environmental documents when required by 
this directive for proposed actions within their respective DoD 
component (this reporting requirement has been assigned Report Control 
Symbol DD-M(AR) 1327 (Sec. 187.6));
    (2) Insure that regulations and other major policy issuances are 
reviewed for consistency with Executive Order 12114 and this part;
    (3) Designate a single point-of-contact for matters pertaining to 
this part; and
    (4) Consult with the Assistant Secretary of Defense (International 
Security Affairs) on significant or sensitive actions or decisions 
affecting relations with another nation.

[44 FR 21786, Apr. 14, 1979. Redesignated and amended at 56 FR 64481, 
Dec. 10, 1991]



Sec. 187.6  Information requirements.

    The documents to be prepared under Sec. 187.5(d) and Enclosures 1 
and 2, ``Requirements for Environmental Considerations--Global 
Commons,'' and ``Requirements for Environmental Considerations--Foreign 
Nations and Protected Global Resources,'' respectively, are assigned 
Report Control Symbol DD-M(AR) 1327.

[44 FR 21786, Apr. 14, 1979. Redesignated and amended at 56 FR 64481, 
Dec. 10, 1991]



Sec. Enclosure 1--Requirements for Environmental Considerations--Global 

                                 Commons

    A. General. This enclosure implements the requirements of Executive 
Order 12114 with respect to major Department of Defense actions that do 
significant harm to the environment of the global commons. The focus is 
not the place of the action, but the location of the environment with 
respect to which there is significant harm. The actions prescribed by 
this enclosure are the exclusive and complete requirement for taking 
account of environmental considerations with respect to Department of 
Defense activities that affect the global commons.
    B. Actions included. The requirements of this enclosure apply only 
to major Federal actions that do significant harm to the environment of 
the global commons.
    C. Environmental Document Requirements--1. General. When an action 
is determined to be a major Federal action that significantly harms the 
environment of the global commons, an environmental impact statement, as 
described below, will be prepared to enable the responsible decision-
making official to be informed of pertinent environmental 
considerations. The statement may be a specific statement for the 
particular action, a generic statement covering the entire class of 
similar actions, or a program statement.
    2. Limitations on Actions. Until the requirements of this enclosure 
have been met with respect to actions involving the global commons, no 
action concerning the proposal may be taken that does significant harm 
to the environment or limits the choice of reasonable alternatives.
    3. Emergencies. Where emergency circumstances make it necessary to 
take an action that does significant harm to the environment without 
meeting the requirements of this enclosure, the DoD component concerned 
shall consult with the Assistant Secretary of Defense (Manpower, Reserve 
Affairs, and Logistics). This includes actions that must be taken to 
promote the national defense or security and that cannot be delayed, and 
actions necessary for the protection of life or property.
    4. Combining Documents. Environmental documents may be combined with 
other agency documents to reduce duplication. If an environmental impact 
statement for a particular action already exists, regardless of what 
Federal agency prepared it, no new statement is required by this part.
    5. Collective Statements. Consideration should be given to the use 
of generic and program statements. Generic statements may include 
actions with relevant similarities such as common timing, environmental 
effects, alternatives, methods of implementation, or subject matter.
    6. Tiering. Consideration should be given to tiering of 
environmental impact statements to eliminate repetitive discussions of 
the same issue and to focus the issues. Tiering refers to the coverage 
of general matters in broader environmental impact statements, with 
succeeding narrower statements or environmental analyses that 
incorporate by reference the general discussion and concentrate only on 
the issues specific to the statement subsequently prepared.

[[Page 808]]

    7. Lead Agency. When one or more other Federal agencies are involved 
with the Department of Defense in an action or program, a lead agency 
may be designated to supervise the preparation of the environmental 
impact statement. In appropriate cases, more than one agency may act as 
joint lead agencies. The following factors should be considered in 
making the lead agency designation:
    a. The magnitude of agency involvement;
    b. Which agency or agencies have project approval and disapproval 
authority;
    c. The expert capabilities concerning the environmental effects of 
the action;
    d. The duration of agency involvement; and
    e. The sequence of agency involvement.
    8. Categorical Exclusions. The Department of Defense may provide 
categorical exclusions for actions that normally do not, individually or 
cumulatively, do significant harm to the environment. If an action is 
covered by a categorical exclusion no environmental assessment or 
environmental impact statement is required. Categorical exclusions will 
be established by the Assistant Secretary of Defense (Manpower, Reserve 
Affairs, and Logistics) and will be identified in Attachment 1 to this 
enclosure, to be entitled, ``Categorical Exclusions--Global commons. 
``DoD components identifying recurring actions that have been 
determined, after analysis, not to do significant harm to the 
environment should submit recommendations for cateorical exclusions and 
accompanying justification to the Assistant Secretary of Defense 
(Manpower, Reserve Affairs, and Logistics).
    9. Environmental Assessments. The purpose of an environmental 
assessment is to assist DoD components in determining whether an 
environmental impact statement is required for a particular action. The 
assessment should be brief and concise but should include sufficient 
information on which a determination can be made whether the proposed 
action is major and Federal, and whether it significantly harms the 
environment of the global commons. As a minimum, the assessment should 
include consideration of the need for the proposed action and the 
environmental effect of the proposed action. The environmental 
assessment will be made available to the public in the United States 
upon request, but there is no requirement that it be distributed for 
public comment.
    D. Environmental Impact Statements. 1. General. Environmental impact 
statements will be concise and no longer than necessary to permit an 
informed consideration of the environmental effects of the proposed 
action on the global commons and the reasonable alternatives. If an 
action requiring an environmental impact statement also has effects on 
the environment of a foreign nation or on a resource designated as one 
of global importance, the statement need not consider or be prepared 
with respect to these effects. The procedures for considering these 
effects are set out in Enclosure 2, of this part.
    2. Draft Statement. Environmental impact statements will be prepared 
in two stages and may be supplemented. The first, or draft statement, 
should be sufficiently complete to permit meaningful analysis and 
comment. The draft statement will be made available to the public, in 
the United States, for comment. The Department of State, the council on 
environmental Quality, and other interested Federal agencies will be 
informed of the availability of the draft statement and will be afforded 
an opportunity to comment. Contacts with foreign governments are 
discussed in Sec. 187.4(d) and subsection D.11. of this enclosure.
    3. Final statement. Final statements will consider, either 
individually or collectively, substantive comments received on the draft 
statement. The final statement will be made available to the public in 
the United States.
    4. Supplemental statement. Supplements to the draft or final 
statement should be used when substantial changes to the proposed action 
are made relative to the environment of the global commons or when 
significant new information or circumstances, relevant to environmental 
concerns, bears on the proposed action or its environmental effects on 
the global commons. Supplemental statements will be circulated for 
comment as in subsection 2. of this enclosure unless alternative 
procedures are approved by the Assistant Secretary of Defense (Manpower, 
Reserve Affairs, and Logistics).
    5. Statement content. The statement will include: A section on 
consideration of the purpose of and need for the proposed action; a 
section on the environmental consequences of the proposed action and 
reasonable alternatives; a section that provides a succinct description 
of the environment of the global commons affected by the proposed action 
and reasonable alternatives; and a section that analyzes, in comparative 
form, the environmental effects on the global commons of the proposed 
action and reasonable alternatives.
    6. Incomplete Information. The statement should indicate when 
relevant information is missing due to unavailability or scientific 
uncertainty.
    7. Hearings. Public hearings are not required. consideration should 
be given in appropriate cases to holding or sponsoring public hearings. 
Factors in this consideration include: Foreign relations sensitivities; 
whether the hearings would be an infringement or create the appearance 
of infringement on the sovereign responsibilities of another government; 
requirements of domestic and foreign governmental confidentiality; 
requirements of national security; whether meaningful information could 
be obtained through hearings; time considerations; and

[[Page 809]]

requirements for commercial confidentiality. There is no requirement 
that all factors listed in this section be considered when one or more 
factors indicate that public hearings would not produce a substantial 
net benefit to those responsible for authorizing or approving the 
proposed action.
    8. Decision. Relevant environmental documents developed in 
accordance with this enclosure will accompany the proposal for action 
through the review process to enable officials responsible for 
authorizing or approving the proposed action to be informed and to take 
account of environmental considerations. One means of making an 
appropriate record with respect to this requirement is for the decision-
maker to sign and date a copy of the environmental impact statement 
indicating that it has been considered in the decision-making process. 
Other means of making an appropriate record are also acceptable.
    9. Timing. No decision on the proposed action may be made until the 
later of 90 days after the draft statement has been made available and 
notice thereof published in the Federal Register, or 30 days after the 
final statement has been made available and notice thereof published in 
the Federal Register. The 90-day period and the 30-day period may run 
concurrently. Not less than 45 days may be allowed for public comment. 
The Assistant Secretary of Defense (Manpower, Reserve Affairs, and 
Logistics) may, upon a showing of probable important adverse effect on 
national security or foreign policy, reduce the 30-day, 45-day, and 90-
day periods.
    10. Classified Information. Environmental assessments and impact 
statements that address classified proposals will be safeguarded and 
classified information will be restricted from public dissemination in 
accordance with Department of Defense procedures (32 CFR part 159) 
established for such information under Executive Order 12065. The 
requirements of that Executive Order take precedence over any 
requirement of disclosure in this part. Only unclassified portions of 
environmental documents may be disseminated to the public.
    11. Foreign Governments. Consideration will be given to whether any 
foreign government should be informed of the availability of 
environmental documents. Communications with foreign governments 
concerning environmental agreements and other formal arrangements with 
foreign governments concerning environmental matters under this part 
will be coordinated with the Department of State. Informal, working-
level communications and arrangements are not included in this 
coordination requirement. Coordination with the Department of State will 
be through the Assistant Secretary of Defense (International Security 
Affairs).

[44 FR 21786, Apr. 14, 1979. Redesignated and amended at 56 FR 64481, 
Dec. 10, 1991]



Sec. Enclosure 2--Requirements for Environmental Considerations--Foreign 

                 Nations and Protected Global Resources

    A. General. This enclosure implements the requirements of Executive 
Order 12114 to provide for procedural and other actions to be taken to 
enable officials to be informed of pertinent environmental 
considerations when authorizing or approving certain major Department of 
Defense actions that do significant harm to the environment of a foreign 
nation or to a protected global resource.
    B. Actions included. 1. The requirements of this enclosure apply 
only to the following actions:
    a. Major Federal actions that significantly harm the environment of 
a foreign nation that is not involved in the action. The involvement of 
the foreign nation may be directly by participation with the United 
States in the action, or it may be in conjunction with another 
participating nation. The focus of this category is on the geographical 
location of the environmental harm and not on the location of the 
action.
    b. Major Federal actions that are determined to do significant harm 
to the environment of a foreign nation because they provide to that 
nation: (1) A product, or involve a physical project that produces a 
principal product, emission, or effluent, that is prohibited or strictly 
regulated by Federal law in the United States because its toxic effects 
on the environment create a serious public health risk; or (2) a 
physical project that is prohibited or strictly regulated in the United 
States by Federal law to protect the environment against radioactive 
substances. Included in the category of ``prohibited or strictly 
regulated'' are the following: asbestos, vinyl chloride, acrylonitrile, 
isocyanates, polychlorinated biphenyls, mercury, beryllium, arsenic, 
cadmium, and benzene.
    c. Major Federal actions outside the United States that 
significantly harm natural or ecological resources of global importance 
designated for protection by the President or, in the case of such a 
resource protected by international agreement binding on the United 
States, designated for protection by the Secretary of State. Such 
determinations by the President or the Secretary of State to be listed 
in Attachment 1 to this enclosure, entitled, ``Protected Global 
Resources''.
    2. The actions prescribed by this enclosure are the exclusive and 
complete requirement

[[Page 810]]

for taking account of environmental considerations with respect to 
Federal actions that do significant harm to the environment of foreign 
nations and protected global resources as described in subsection B.1., 
of this enclosure. No action is required under this enclosure with 
respect to Federal actions that affect only the environment of a 
participating or otherwise involved foreign nation and that do not 
involve providing products or physical projects producing principal 
products, emissions, or effluents that are prohibited or strictly 
regulated by Federal law in the United States, or resources of global 
importance that have been designated for protection.
    C. Environmental Document Requirements.
    1. General. a. There are two types of environmental documents 
officials shall use in taking account of environmental considerations 
for actions covered by this enclosure:
    (1) Environmental studies--bilateral or multilateral environmental 
studies, relevant or related to the proposed action, by the United 
States and one or more foreign nations or by an international body or 
organization in which the United States is a member or participant; and
    (2) Environmental reviews--concise reviews of the environmental 
issues involved that are prepared unilaterally by the United States.
    b. This section identifies the procedures for the preparation of 
environmental studies or reviews when required by this enclosure and the 
exceptions from the requirement to prepare environmental studies or 
reviews. If an environmental document already exists for a particular 
action, regardless of what Federal agency prepared it, no new document 
is required by this enclosure.
    2. Lead Agency. When one or more other Federal agencies are involved 
with the Department of Defense in an action or program, a lead agency 
may be designated to supervise the preparation of environmental 
documentation. In appropriate cases, more than one agency may act as 
joint lead agencies. The following factors should be considered in 
making the lead agency designation:
    a. The magnitude of agency involvement;
    b. Which agency or agencies have project approval and disapproval 
authority;
    c. The expert capabilities concerning the environmental effects of 
the action;
    d. The duration of agency involvement; and
    e. The sequence of agency involvement.
    3. Exemptions. There are general exemptions from the requirements of 
this enclosure provided by Executive Order 12114, and the Secretary of 
Defense has the authority to approve additional exemptions.
    a. General Exemptions. The following actions are exempt from the 
procedural and other requirements of this enclosure under general 
exemptions established for all agencies by Executive Order 12114:
    (1) Actions that the DoD component concerned determines do not do 
significant harm to the environment outside the United States or to a 
designated resource of global importance.
    (2) Actions taken by the President. These include: Signing bills 
into law; signing treaties and other international agreements; the 
promulgation of Executive Orders; Presidential proclamations; and the 
issuance of Presidental decisions, instructions, and memoranda. This 
includes actions taken within the Department of Defense to prepare or 
assist in preparing recommendations, advice, or information for the 
President in connection with one of these actions by the President. It 
does not include actions taken within the Department of Defense to 
implement or carry out these instruments and issuances after they are 
promulgated by the President.
    (3) Actions taken by or pursuant to the direction of the President 
or a cabinet officer in the course of armed conflict. The term ``armed 
conflict'' refers to: hostilities for which Congress has declared war or 
enacted a specific authorization for the use of armed forces; 
hostilities or situations for which a report is prescribed by section 
4(a)(1) of the War Powers Resolution, 50 U.S.C.A. 1543(a)(1) (Supp. 
1978); and other actions by the armed forces that involve defensive use 
or introduction of weapons in situations where hostilities occur or are 
expected. This exemption applies as long as the armed conflict 
continues.
    (4) Actions taken by or pursuant to the direction of the President 
or a cabinet officer when the national security or national interest is 
involved. The determination that the national security or national 
interest is involved in actions by the Department of Defense must be 
made in writing by the Assistant Secretary of Defense (Manpower, Reserve 
Affairs, and Logistics).
    (5) The activities of the intelligence components utilized by the 
Secretary of Defense under Executive Order 12036, 43 FR 3674 (1978). 
These components include the Defense Intelligence Agency, the National 
Security Agency, the offices for the collection of specialized 
intelligence through reconnaissance programs, the Army Office of the 
Assistant Chief of Staff for Intelligence, the Office of Naval 
Intelligence, and the Air Force Office of the Assistant Chief of Staff 
for Intelligence.
    (6) The decisions and actions of the Office of the Assistant 
Secretary of Defense (International Security Affairs), the Defense 
Security Assistance Agency, and the other responsible offices within DoD 
components with respect to arms transfers to foreign nations. The term 
``arms transfers'' includes the grant, loan, lease, exchange, or sale of

[[Page 811]]

defense articles or defense services to foreign governments or 
international organizations, and the extension or guarantee of credit in 
connection with these transactions.
    (7) Votes and other actions in international conferences and 
organizations. This includes all decisions and actions of the United 
States with respect to representation of its interests at international 
organizations, and at multilateral conferences, negotiations, and 
meetings.
    (8) Disaster and emergency relief actions.
    (9) Actions involving export licenses, export permits, or export 
approvals, other than those relating to nuclear activities. This 
includes: Advice provided by DoD components to the Department of State 
with respect to the issuance of munitions export licenses under section 
38 of the Arms Export Control Act, 22 U.S.C. 2778 (1976); advice 
provided by DoD components to the Department of Commerce with respect to 
the granting of export licenses under the Export Administration Act of 
1969, 50 U.S.C. App. 2401-2413 (1970 & Supp. V 1975); and direct exports 
by the Department of Defense of defense articles and services to foreign 
governments and international organizations that are exempt from 
munitions export licenses under section 38 of the Arms Export Control 
Act, 22 U.S.C. 2778 (1976). The term ``export approvals'' does not mean 
or include direct loans to finance exports.
    (10) Actions relating to nuclear activities and nuclear material, 
except actions providing to a foreign nation a nuclear production or 
utilization facility, as defined in the Atomic Energy Act of 1954, as 
amended, or a nuclear waste management facility.
    b. Additional Exemptions. The Department of Defense is authorized 
under Executive Order 12114 to establish additional exemptions that 
apply only to the Department's operations. There are two types of 
additional exemptions: Case-by-case and class.
    (1) Case-by-Case Exemptions. Exemptions other than those specified 
above may be required because emergencies, national security 
considerations, exceptional foreign policy requirements, or other 
special circumstances preclude or are inconsistent with the preparation 
of environmental documentation and the taking of other actions 
prescribed by this enclosure. The following procedures apply for 
approving these exemptions:
    (a) Emergencies. This category includes actions that must be taken 
to promote the national defense or security and that cannot be delayed, 
and actions necessary for the protection of life or property. The heads 
of the DoD components are authorized to approve emergency exemptions on 
a case-by-case basis. The Department of Defense is required to consult 
as soon as feasible with the Department of State and the Council on 
Environmental Quality with respect to emergency exemptions. The 
requirement to consult as soon as feasible is not a requirement of prior 
consultation. A report of the emergency action will be made by the DoD 
component head to the Assistant Secretary of Defense (Manpower, Reserve 
Affairs, and Logistics), who, with the Assistant Secretary of Defense 
(International Security Affairs), shall undertake the necessary 
consultations.
    (b) Other Circumstances. National security considerations, 
exceptional foreign policy requirements, and other special circumstances 
not identified in paragraph C.3.a. of this enclosure, may preclude or be 
inconsistent with the preparation of environmental documentation. In 
these circumstances, the head of the DoD component concerned is 
authorized to exempt a particular action from the environmental 
documentation requirements of this enclosure after obtaining the prior 
approval of the Assistant Secretary of Defense (Manpower, Reserve 
Affairs, and Logistics), who, with the Assistant Secretary of Defense 
(International Security Affairs), shall consult, before approving the 
exemption, with the Department of State and the Council on Environmental 
Quality. The requirement for prior consultation is not a requirement for 
prior approval.
    (2) Class Exemptions. Circumstances may exist where a class 
exemption for a group of related actions is more appropriate than a 
specific exemption. Class exemptions may be established by the Assistant 
Secretary of Defense (Manpower, Reserve Affairs, and Logistics), who, 
with the Assistant Secretary of Defense (International Security 
Affairs), shall consult, before approving the exemption, with the 
Department of State and the Council on Environmental Quality. The 
requirement for prior consultation is not a requirement for prior 
approval. Requests for class exemptions will be submitted by the head of 
the DoD component concerned to the Assistant Secretary of Defense 
(Manpower, Reserve Affairs, and Logistics) after coordination with other 
interested DoD components. Notice of the establishment of a class 
exemption will be issued as Attachment 2 to this enclosure to be 
entitled, ``Class Exemptions--Foreign Nations and Protected Global 
Resources.''
    4. Categorical Exclusions. The Department of Defense is authorized 
by Executive Order 12114 to provide for categorical exclusions. A 
categorical exclusion is a category of actions that normally do not, 
individually or cumulatively, do significant harm to the environment. If 
an action is covered by a categorical exclusion, no environmental 
document is required. Categorical exclusions will be established by the 
Assistant Secretary of Defense (Manpower, Reserve Affairs, and 
Logistics), and will be identified in Attachment 3 to this enclosure to 
be entitled, ``Categorical Exclusions--Foreign Nations and Protected 
Global

[[Page 812]]

Resources.'' DoD components identifying recurring actions that have been 
determined, after analysis, not to do significant harm to the 
environment should submit requests for categorical exclusions and 
accompanying justification to the Assistant Secretary of Defense 
(Manpower, Reserve Affairs, and Logistics).
    D. Environmental studies. 1. General. Environmental studies are one 
of two alternative types of documents to be used for actions described 
by section B. of this enclosure.
    a. An environmental study is an analysis of the likely environmental 
consequences of the action that is to be considered by DoD components in 
the decision-making process. It includes a review of the affected 
environment, significant actions taken to avoid environmental harm or 
otherwise to better the environment, and significant environmental 
considerations and actions by the other participating nations, bodies, 
or organizations.
    b. An environmental study is a cooperative action and not a 
unilateral action undertaken by the United States. It may be bilateral 
or multilateral, and it is prepared by the United States in conjunction 
with one or more foreign nations, or by an international body or 
organization in which the United States is a member or participant. The 
environmental study, because it is prepared as a cooperative 
undertaking, may be best suited for use with respect to actions that 
provide strictly regulated or prohibited products or projects to a 
foreign nation (B.l.b.) and actions that affect a protected global 
resource (B.l.c.).
    2. Department of State Coordination. Communications with foreign 
governments concerning environmental studies and other formal 
arrangements with foreign governments concerning environmental matters 
under this directive will be coordinated with the Department of State. 
Informal, working-level communications and arrangements are not included 
in this coordination requirement. Coordination with the Department of 
State will be through the Assistant Secretary of Defense (International 
Security Affairs).
    3. Whether to Prepare an Environmental Study. The judgment whether 
the action is one that would do significant harm to one of the 
environments covered by this enclosure normally will be made in 
consultation with concerned foreign governments or organizations. If a 
negative decision is made, the file will be documented with a record of 
that decision and the decision-makers who participated. If a decision is 
made to prepare a study then, except as provided by this enclosure, no 
action concerning the proposal may be taken that would do significant 
harm to the environment until the study has been completed and the 
results considered.
    4. Content of the Study. The document is a study of the 
environmental aspects of the proposed action to be considered in the 
decision-making process. The precise content of each study must be 
flexible because of such considerations as the sensitivity of obtaining 
information from foreign governments, the availability of useful and 
understandable information, and other factors identified under 
``Limitations,'' (subsection D.6., of this enclosure). The study should, 
however, include consideration of the following:
    a. A general review of the affected environment;
    b. The predicted effect of the action on the environment;
    c. Significant known actions taken by governmental entities with 
respect to the proposed action to protect or improve the environment; 
and
    d. If no actions are being taken to protect or enhance the 
environment, whether the decision not to do so was made by the affected 
foreign government or international organization.
    5. Distribution of the Study. Except as provided under 
``Limitations,'' (subsection D.6., of this enclosure), and except where 
classified information is involved, environmental studies will be made 
available to the Department of State, the Council on Environmental 
Quality, other interested Federal agencies, and, on request, to the 
public in the United States. Interested foreign governments also may be 
informed of the studies, subject to the ``Limitations'' (subsection 
D.6., of this enclosure) and controls on classified information, and 
furnished copies of the documents. No distribution is required prior to 
the preparation of the final version of the study or prior to taking the 
action that caused the study to be prepared.
    6. Limitations. The requirements with respect to the preparation, 
content, and distribution of environmental studies in the international 
context must remain flexible. The specific procedures must be determined 
on a case-by-case basis and may be modified where necessary to:
    a. Enable the component to act promptly. Considerations such as 
national security and foreign government involvement may require prompt 
action that must take precedence in the environmental review process;
    b. Avoid adverse impacts on relations between the United States and 
foreign governments and international organizations;
    c. Avoid infringement or the appearance of infringement on the 
sovereign responsibilities of another government. The collection of 
information and the preparation and distribution of environmental 
documentation for actions in which another nation is involved, or with 
respect to the environment and resources of another nation, unless done 
with proper regard to the sovereign authority of that nation, may be 
viewed by that nation as an interference in its internal affairs

[[Page 813]]

and its responsibility to evaluate requirements with respect to the 
environment;
    d. Ensure consideration of:
    (1) Requirements of governmental confidentiality. This refers to the 
need to protect sensitive foreign affairs information and information 
received from another government with the understanding that it will be 
protected from disclosure regardless of its classification;
    (2) National security requirements. This refers to the protection of 
classified information and other national security interests;
    (3) Availability of meaningful information. Information on the 
environment of foreign nations may be unavailable, incomplete, or not 
susceptible to meaningful evaluation, particularly where the affected 
foreign nation is not a participant in the analysis. This may reduce or 
change substantially the normal content of the environmental study;
    (4) The extent of the participation of the DoD component concerned 
and its ability to affect the decision made. The utility of the 
environmental analysis and the need for an in-depth review diminishes as 
DoD's role and control over the decision lessens; and
    (5) International commercial, commercial confidentiality, 
competitive, and export promotion factors. This refers to the 
requirement to protect domestic and foreign trade secrets and 
confidential business information from disclosure. Export promotion 
factors includes the concept of not unnecessarily hindering United 
States exports.
    7. Classified Information. Classified information will be 
safeguarded from disclosure in accordance with the Department of Defense 
procedures (32 CFR 159) established for such information under Executive 
Order 12065. The requirements of that Executive Order take precedence 
over any requirement of disclosure in this directive.
    E. Environmental Reviews. 1. General. Environmental reviews are the 
second of the two alternative types of documents to be used for actions 
covered by section B. of this enclosure.
    a. An environmental review is a survey of the important 
environmental issues involved. It includes identification of these 
issues, and a review of what if any consideration has been or can be 
given to the environmental aspects by the United States and by any 
foreign government involved in taking the action.
    b. An environmental review is prepared by the DoD component 
concerned either unilaterally or in conjunction with another Federal 
agency. While an environmental review may be used for any of the actions 
identified by section B., it may be uniquely suitable, because it is 
prepared unilaterally by the United States, to actions that affect the 
environment of a nation not involved in the undertaking (B.l.a.).
    2. Department of State Coordination. Communications with foreign 
governments concerning environmental agreements and other formal 
arrangements with foreign governments concerning environmental matters 
under this enclosure will be coordinated with the Department of State. 
Informal working-level communications and arrangements are not included 
in this coordination requirement. Coordination with the Department of 
State will be through the Assistant Secretary of Defense (International 
Security Affairs).
    3. Whether to Prepare an Environmental Review. Sufficient 
information will be gathered, to the extent it is reasonably available, 
to permit an informed judgment as to whether the proposed action would 
do significant harm to the environments covered by this enclosure. If a 
negative decision is made, a record will be made of that decision and 
its basis. If a decision is made to prepare a review, then, except as 
provided by this enclosure, no action concerning the proposal may be 
taken that would do significant environmental harm until the review has 
been completed.
    4. Content of the Review. An environmental review is a survey of the 
important environmental issues associated with the proposed action that 
is to be considered by the DoD component concerned in the decision-
making process. It does not include all possible environmental issues 
and it does not include the detailed evaluation required in an 
environmental impact statement under Enclosure 1 of this part. There is 
no foreign government or international organization participation in its 
preparation, and the content therefore may be circumscribed because of 
the availability of information and because of foreign relations 
sensitivities. Other factors affecting the content are identified under 
``Limitations,'' (subsection E.6., of this enclosure). To the extent 
reasonably practical the review should include consideration of the 
following:
    a. A statement of the action to be taken including its timetable, 
physical features, general operating plan, and other similar broad-guage 
descriptive factors;
    b. Identification of the important environmental issues involved;
    c. The aspects of the actions taken or to be taken by the DoD 
component that ameliorate or minimize the impact on the environment; and
    d. The actions known to have been taken or to be planned by the 
government of any participating and affected foreign nations that will 
affect environmental considerations.
    5. Distribution. Except as provided under ``Limitations,'' 
(subsection E.6., of this enclosure), and except where classified 
information is involved, environmental reviews will be made available to 
the Department of

[[Page 814]]

State, the Council on Environmental Quality, other interested Federal 
agencies, and, on request, to the public in the United States. 
Interested foreign governments also may be informed of the reviews and, 
subject to the ``Limitations'' (subsection E.6., of this enclosure) and 
controls on classified information, will be furnished copies of the 
documents on request. This provision for document distribution is not a 
requirement that distribution be made prior to taking the action that is 
the subject of the review.
    6. Limitations. The requirements with respect to the preparation, 
content, and distribution of environmental reviews in the international 
context must remain flexible. The specific procedures must be determined 
on a case-by-case basis and may be modified where necessary to:
    a. Enable the component to act promptly. Considerations such as 
national security and foreign government involvement may require prompt 
action that must take precedence in the environmental review process;
    b. Avoid adverse impacts on relations between the United States and 
foreign governments and international organizations;
    c. Avoid infringement or the appearance of infringement on the 
sovereign responsibilities of another government. The collection of 
information and the preparation and distribution of environmental 
documentation for actions in which another nation is involved or with 
respect to the environment and resources of another nation, unless done 
with proper regard to the sovereign authority of that nation, may be 
viewed by that nation as an interference in its internal affairs and its 
prerogative to evaluate requirements with respect to the environment; 
and
    d. Ensure consideration of:
    (1) Requirements of governmental confidentiality. This refers to the 
need to protect sensitive foreign affairs information and information 
received from another government with the understanding that it will be 
protected from disclosure regardless of its classification;
    (2) National security requirements. This refers to the protection of 
classified information;
    (3) Availability of meaningful information. Information on the 
environment of foreign nations may be unavailable, incomplete, or not 
susceptable to meaningful evaluation, and this may reduce or change 
substantially the normal content of the environmental review;
    (4) The extent of the participation of the DoD component concerned 
and its ability to affect the decision made. The utility of the 
environmental analysis and the need for an in-depth review diminishes as 
the role of the Department of Defense and control over the decision 
lessens; and
    (5) International commercial, commercial confidentiality, 
competitive, and export promotion factors. This refers to the 
requirements to protect domestic and foreign trade secrets and 
confidential business information from disclosure. Export promotion 
factors includes the concept of not unnecessarily hindering United 
States exports.
    7. Classified Information. Classified information will be 
safeguarded from disclosure in accordance with the DoD procedures (32 
CFR 159) established for such information under Executive Order 12065. 
The requirements of that Executive Order take precedence over any 
requirement of disclosure in this part.

                         PART 188-190 [RESERVED]


[[Page 815]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 817]]



                    Table of CFR Titles and Chapters




                      (Revised as of July 1, 2011)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 100--
                199)
        II  Office of Management and Budget Circulars and Guidance 
                (200--299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300-- 
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1880--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Housing and Urban Development (Parts 2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)
     XXVII  Small Business Administration (Parts 2700--2799)
    XXVIII  Department of Justice (Parts 2800--2899)

[[Page 818]]

       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--99)
        II  Recovery Accountability and Transparency Board (Parts 
                200--299)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600-- 3699)
    XXVIII  Department of Justice (Parts 3800--3899)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Parts 4300--
                4399)

[[Page 819]]

     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)
     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)
     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 8700--8799)
    LXXXII  Special Inspector General for Iraq Reconstruction 
                (Parts 9200--9299)

[[Page 820]]

     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)
      XCIX  Department of Defense Human Resources Management and 
                Labor Relations Systems (Department of Defense--
                Office of Personnel Management) (Parts 9900--9999)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 0--99)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)

[[Page 821]]

     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  National Institute of Food and Agriculture (Parts 
                3400--3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)
         L  Rural Business-Cooperative Service, Rurual Housing 
                Service, and Rural Utilities Service, Department 
                of Agriculture (Parts 5000--5099)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)

[[Page 822]]

       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1303--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)

[[Page 823]]

        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

[[Page 824]]

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  U.S. Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  U.S. Immigration and Customs Enforcement, Department 
                of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

[[Page 825]]

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millenium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)

[[Page 826]]

        II  Office of Assistant Secretary for Housing-Federal 
                HousingCommissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)

[[Page 827]]

        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--899)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)

[[Page 828]]

      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Ocean Energy Management, Regulation, and 
                Enforcement, Department of the Interior (Parts 
                200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)
         X  Financial Crimes Enforcement Network, Departmnent of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)

[[Page 829]]

       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvmeent, 
                Department of Education [Reserved]
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

[[Page 830]]

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [Reserved]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                301--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)
        II  Armed Forces Retirement Home

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)

[[Page 831]]

        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
   62--100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
  103--104  [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
  129--200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--499)

[[Page 832]]

         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899) 
                [Reserved]
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)

[[Page 833]]

       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)
        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Health and Human Services (Parts 300--399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)

[[Page 834]]

        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement [Reserved]
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)

[[Page 835]]

         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR

[[Page 837]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of July 1, 2011)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Administrative Conference of the United States    1, III
Advanced Research Projects Agency                 32, I
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            2, IV; 5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  National Institute of Food and Agriculture.     7, XXXIV
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII, L
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV, L
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII, L
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX

[[Page 838]]

Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Bureau of Ocean Energy Management, Regulation,    30, II
     and Enforcement
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Court Services and Offender Supervision Agency    5, LXX
     for the District of Columbia
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Office                                  37, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    28, VIII
     for the District of Columbia
Customs and Border Protection Bureau              19, I
Defense Contract Audit Agency                     32, I
Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII

[[Page 839]]

  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  Human Resources Management and Labor Relations  5, XCIX
       Systems
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Election Assistance Commission                    2, LVIII; 11, II
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                5, III, LXXVII; 14, VI; 
                                                  48, 99

[[Page 840]]

  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Agency                    5, LXXX; 12, XII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Financial Crimes Enforcement Network              31, X
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105

[[Page 841]]

  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A,
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 6, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection Bureau            19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Immigration and Naturalization                  8, I
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing and Urban Development, Department of      2, XXIV; 5, LXV; 24, 
                                                  Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV
Immigration and Naturalization                    8, I
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V

[[Page 842]]

Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  MBureau of Ocean Energy Management,             30, II
       Regulation, and Enforcement
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
Investment Security, Office of                    31, VIII
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                2, XXVII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29

[[Page 843]]

  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Office of Workers' Compensation Programs        20, VII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
  Copyright Royalty Board                         37, III
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Millenium Challenge Corporation                   22, XIII
Mine Safety and Health Administration             30, I
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Food and Agriculture.       7, XXXIV
National Institute of Standards and Technology    15, II
National Intelligence, Office of Director of      32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       2, XXV; 5, XLIII; 45, VI

[[Page 844]]

  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III, IV
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI
Natural Resource Revenue, Office of               30, XII
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Office of Workers' Compensation Programs          20, VII
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Human Resources Management and Labor Relations  5, XCIX
       Systems, Department of Defense
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Recovery Accountability and Transparency Board    4, II
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII, L
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV, L
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII, L
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV

[[Page 845]]

Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
Special Inspector General for Iraq                5, LXXXVII
     Reconstruction
State Department                                  2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     2, XII; 5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection Bureau            19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, Office of                  31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
   and Water Commission, United States Section
[[Page 846]]

Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 847]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations that were 
made by documents published in the Federal Register since January 1, 
2001, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 2001, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, 1973-1985, and 1986-2000'', published in 
11 separate volumes.

                                  2001

32 CFR
                                                                   66 FR
                                                                    Page
Chapter I
3 Revised..........................................................57383
40 Removed.........................................................53958
42 Removed.........................................................53958
46 Removed.........................................................53958
51 Removed.........................................................53958
55 Removed.........................................................53958
62 Removed.........................................................53958
63 Removed.........................................................53958
65 Removed.........................................................53958
72 Removed.........................................................53958
76 Removed.........................................................53958
79 Removed.........................................................53958
89 Removed.........................................................53958
98 Removed.........................................................53958
102 Removed........................................................53958
103 Removed........................................................53958
111 Removed........................................................53958
114 Removed........................................................53958
115 Removed........................................................53958
132 Removed........................................................53958
153 Added..........................................................45169
157 Removed........................................................53958
159 Removed........................................................53958
159a Removed.......................................................53958
171 Removed........................................................53958
186 Removed........................................................53958
188 Removed........................................................53958

                                  2002

32 CFR
                                                                   67 FR
                                                                    Page
Chapter I
3 Authority citation revised.......................................54956
3.1 Revised........................................................54956
3.2 Redesignated as 3.3; new 3.2 added.............................54956
3.3 Redesignated as 3.4; new 3.3 redesignated from 3.2.............54956
3.4 Redesignated as 3.7; new 3.4 redesignated from 3.3 and amended
                                                                   54956
3.5 Added..........................................................54956
3.6 Added..........................................................54956
3.7 Redesignated from 3.4..........................................54956
    Heading revised................................................54957

                                  2003

32 CFR
                                                                   68 FR
                                                                    Page
Chapter I
3.4 Revised........................................................27457
3.8 Added..........................................................27457
9--20 (Subchapter B) Added.........................................38609
9 Removed..........................................................38609
    Added..........................................................39374
10 Removed.........................................................38609
    Added..........................................................39380
11 Removed.........................................................38609
    Added..........................................................39381
12 Removed.........................................................38609
    Added..........................................................39388
13 Removed.........................................................38609
    Added..........................................................39389
14 Removed.........................................................38609
    Added..........................................................39392
15 Removed.........................................................38609
    Added..........................................................39395
16 Removed.........................................................38609
    Added..........................................................39396
17 Removed.........................................................38609

[[Page 848]]

    Added..........................................................39397
18 Removed.........................................................38609
19 Removed.........................................................38609
20 Removed.........................................................38609
21 Revised.........................................................47153
21--34 (Subchapter B) Redesignated as Subchapter C.................38609
22.105 Amended.....................................................47160
22.210 (a)(1) amended..............................................47160
22.220 (a)(1) amended..............................................47160
22.605 (b) amended.................................................47160
25 Revised..................................................66544, 66607
25.440 Added.......................................................66609
25.935 (b) added...................................................66609
25.942 Added.......................................................66609
25.1010 (b) added..................................................66609
26 Added....................................................66557, 66609
26.605 (a)(2) amended..............................................66609
26.632 Added.......................................................66609
32.4 (a) and (c)(2) amended........................................47160
32.11 (a)(2) amended...............................................47160
34.2 Amended.......................................................47160
34.3 (a) and (c) amended...........................................47160
37 Added...........................................................47160
43--149 (Subchapter C) Redesignated as Subchapter D................38609
78.5 (a) revised; (g)(1) through (7) removed; new (g)(1) through 
        (4) added..................................................36914
    (i) amended; (j) revised.......................................36915
78.7 Amended.......................................................36915
150--153 (Subchapter D) Redesignated as Subchapter E...............38609
152 Revised; interim...............................................36916
154--158 (Subchapter E) Redesignated as Subchapter F...............38609
160--173 (Subchapter F) Redesignated as Subchapter G...............38609
171 Added...........................................................8823
171.6 (b) correctly redesignated...................................11633
174--176 (Subchapter G) Redesignated as Subchapter H...............38609
185 (Subchapter H) Redesignated as Subchapter I....................38609

                                  2004

32 CFR
                                                                   69 FR
                                                                    Page
Chapter I
3.4 Amended........................................................16482
3.9 Added..........................................................16483
18 Added...........................................................31292
57 Revised; interim................................................32662
61 Removed.........................................................43319

                                  2005

32 CFR
                                                                   70 FR
                                                                    Page
Chapter I
21.565 Added.......................................................49462
21 Appendix A revised..............................................49463
22.100 (b)(1) amended; (b)(2) and (3) redesignated as (b)(3) and 
        (4); new (b)(2) added......................................49464
22.220 (a)(1) amended..............................................49464
22.315 (a) revised.................................................49464
22.405 (a) amended.................................................49464
22.420 (b)(1) Footnote 2 redesignated as Footnote 5; new (b)(1) 
        Footnote 5 and (c)(1) revised..............................49464
22.505 (a) Footnotes 3 and 4 redesignated as Footnotes 6 and 7 and 
        revised....................................................49464
22.510 (b) Footnote 5 redesignated as Footnote 8; new (b) Footnote 
        8, (a)(2)(ii)(A), (B) and (C) revised......................49464
22.520 Revised.....................................................49465
22.605 (b) amended; (c)(2) Footnote 6 redesignated as Footnote 9 
        and revised................................................49466
22.710 Footnotes 7, 8, and 9 redesignated as Footnotes 10, 11 and 
        12; introductory text and new Footnotes 10, 11 and 12 
        revised....................................................49466
22.715 (a)(3) and (4) revised......................................49466
22.810 (c)(3)(i) Footnote 10 redesignated as Footnote 15 and 
        revised....................................................49467
22 Appendix A revised..............................................49468
    Appendix B revised.............................................49469
25.425 (c) and (d) revised; (e) added..............................49477
32.2 Introductory text amended.....................................49477
32 Appendix A amended..............................................49477
33.26 (b) amended..................................................49477
33.35 Amended......................................................49477
34.16 (a) amended..................................................49477
34 Appendix A amended..............................................49477
37.130 (b)(1) revised; (b)(2) redesignated as (b)(3); new (b)(2) 
        added......................................................49477
37 Appendix D revised..............................................49477
    Appendix E revised.............................................49478
179 Added..........................................................58028
189 Removed........................................................15762

[[Page 849]]

                                  2006

32 CFR
                                                                   71 FR
                                                                    Page
Chapter I
43 Removed.........................................................38764
50 Added...........................................................38764
54.1 Amended.......................................................40656
58 Removed.........................................................64631
59 Removed.........................................................12291
62b Removed........................................................12291
64 Revised; interim................................................19828
71 Removed.........................................................49348
73 Removed.........................................................12291
78.1 Amended.......................................................40657
105 Removed........................................................49348
143 Revised........................................................76914
144 Revised........................................................76917
146 Removed.........................................................9452
153 Revised.........................................................8947
154 Appendix H revised; interim....................................51475
158 Removed........................................................12291
174 Revised.........................................................9919
175 Removed.........................................................9927
176.20 (b) amended..................................................9927
190 Removed........................................................12291

                                  2007

32 CFR
                                                                   72 FR
                                                                    Page
Chapter I
21.330 (a) revised; eff. 8-27-07...................................34986
21.565 Revised; eff. 8-27-07.......................................34986
21 Appendix A revised; eff. 8-27-07................................34986
22.100 (b)(1) revised; eff. 8-27-07................................34988
22.315 (a)(2) and Footnotes 2, 3 and 4 revised; eff. 8-27-07.......34988
22.405 (a) amended; eff. 8-27-07...................................34988
22.420 (c)(1) revised; eff. 8-27-07................................34988
22.520 (c)(3), (4), (d)(1), (e)(1), (3), (4), (5) introductory 
        text, (i), (ii) and (f)(2) revised; eff. 8-27-07...........34988
22.710 Introductory text revised; eff. 8-27-07.....................34989
22.715 (a)(4) revised; eff. 8-27-07................................34989
22 Appendix B revised; eff. 8-27-07................................34989
25 Removed; eff. 8-27-07...........................................34998
32.2 Amended; eff. 8-27-07.........................................34998
32.13 Revised; eff. 8-27-07........................................34998
32.44 (d) amended; eff. 8-27-07....................................34998
32.62 (d) amended; eff. 8-27-07....................................34998
32 Appendix A amended; eff. 8-27-07................................34998
33.35 Amended; eff. 8-27-07........................................34998
34.2 Amended; eff. 8-27-07.........................................34998
34.52 (d) amended; eff. 8-27-07....................................34998
34 Appendix A amended; eff. 8-27-07................................34998
37.130 (b)(1) revised; eff. 8-27-07................................34999
37 Appendices D and E amended; eff. 8-27-07........................34999
57 Regulation at 69 FR 32662 confirmed.............................71793
68 Removed.........................................................70222
75 Removed.........................................................33677

                                  2008

32 CFR
                                                                   73 FR
                                                                    Page
Chapter I
112 Revised........................................................59502

                                  2009

32 CFR
                                                                   74 FR
                                                                    Page
Chapter I
65 Added; interim..................................................30213
159 Added; interim.................................................34691
160 Removed.........................................................2864

                                  2010

32 CFR
                                                                   75 FR
                                                                    Page
Chapter I
108 Added..........................................................72682

                                  2011

   (Regulations published from January 1, 2011, through July 1, 2011)

32 CFR
                                                                   76 FR
                                                                    Page
Chapter I
185 Revised.........................................................2248


                                  [all]