[Federal Register Volume 61, Number 225 (Wednesday, November 20, 1996)]
[Proposed Rules]
[Pages 59072-59075]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29542]
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DEPARTMENT OF ENERGY
48 CFR Parts 952 and 970
Acquisition Regulation, Classification, Security and
Counterintelligence
AGENCY: Energy.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Department of Energy (DOE) proposes to amend the
Department of Energy Acquisition Regulation (DEAR) to revise its
classification contract clause, revise its access authorization
(security clearance) procedures for contractor personnel, and add new
counterintelligence provisions. Specific material being revised or
added is summarized in the ``Section-by-Section Analysis'' appearing
later in this document.
DATES: Written comments should be forwarded no later than January 21,
1997.
ADDRESSES: Send written comments to the attention of Richard B.
Langston, Office of Policy (HR-51), Office of the Assistant Secretary
for Procurement and Assistance Management, Department of Energy, 1000
Independence Avenue, SW., Washington, D.C. 20585.
FOR FURTHER INFORMATION CONTACT: Richard Langston, (202) 586-8247.
SUPPLEMENTARY INFORMATION:
I. Background
II. Section-by-Section Analysis
III. Procedural Requirements
A. Review Under Executive Order 12866
B. Review Under Executive Order 12988
C. Review Under the Regulatory Flexibility Act
D. Review Under the Paperwork Reduction Act
E. Review Under Executive Order 12612
F. Review Under the National Environmental Policy Act
G. Public Hearing Determination
I. Background
This proposed rule will accomplish three objectives.
First, it will update the classification contract clause to
incorporate interim changes set forth in Acquisition Letter 92-2R dated
April 8, 1993 which provides that only Federal Government employees may
serve as ``original classifiers'' and that both Federal Government
employees and contractor employees may serve as ``derivative
classifiers.'' The clause is also changed to recognize that a balance
is required between the Department's mission to protect the national
security and prevent nuclear proliferation and its commitment to
maximize the amount of information available to the public. As revised,
the clause not only requires that information, documents or equipment
originated or generated in classified or potentially classified subject
areas be reviewed for classification by the appropriate officials using
proper classification guidance provided by the Department, but also
requires that documents containing information which is no longer
classified by current classification guidance be systematically
reviewed for declassification by a Derivative Declassifier. Only when
both classification and declassification reviews are performed can the
Department achieve its goal of protecting the national security while
providing the public with access to as much Government information as
possible.
Second, it will provide a definition of ``counterintelligence''
consistent with E.O. 12333, a policy statement regarding DOE's
counterintelligence program, and a new contract clause on
counterintelligence applicable to certain
[[Page 59073]]
DOE management and operating contractors and other contractors managing
DOE-owned facilities.
Third, it will revise the DEAR to be consistent with the General
Accounting Office Report on Nuclear Security, RCED-93- 183, as
implemented by DOE Order 472.1 entitled ``Personnel Security
Activities.'' The GAO report stresses contractor responsibility for
certifying preemployment checks conducted on prospective employees.
Where DOE access authorization is required, the contractor must perform
normal and prudent preemployment checks and the applicant's job
qualifications and suitability must be established before a request is
made to the Department for a security clearance. This revision is
applicable to DOE management and operating contractors and other
contractors managing DOE-owned facilities.
II. Section-by-Section Analysis
1. The authority citations for Parts 952 and 970 are restated.
2. The classification clause at 952.204-70 is renamed
classification/declassification and is updated to incorporate changes
set forth as interim changes in Acquisition Letter 92-2R dated April 8,
1993. It is also revised to require systematic declassification reviews
as well as classification reviews.
3. A definition of counterintelligence is added to subsection
970.0404-1.
4. A new paragraph is added to 970.0404-2 to describe DOE policy on
counterintelligence.
5. New instructions are added to 970.0404-4 to detail the security
clause requirements for management and operating contractors and other
contractors managing DOE-owned facilities.
6. Section 970.2201 is amended to describe the procedures for
confirming to DOE the conduct and outcome of preemployment checks
performed by management and operating contractors and other contractors
managing DOE-owned facilities, when such contractors request that the
DOE process an applicant for access authorization.
7. Section 970.5204-1 is amended to add a new clause entitled
counterintelligence.
III. Procedural Requirements
A. Review Under Executive Order 12866
Today's regulatory action has been determined not to be a
``significant regulatory action'' under Executive Order 12866,
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993).
Accordingly, this action was not subject to review, under that
Executive Order, by the Office of Information and Regulatory Affairs of
the Office of Management and Budget (OMB).
B. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. With regard to the review
required by section 3(a), section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftsmanship under any guidelines issued by the Attorney
General. Section 3(c) of Executive Order 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to the extent permitted by law,
the interim final regulations meet the relevant standards of Executive
Order 12988.
C. Review Under the Regulatory Flexibility Act
This proposed rule was reviewed under the Regulatory Flexibility
Act of 1980, Pub. L. 96-354, 5 U.S.C. 601, et seq., which requires
preparation of a regulatory flexibility analysis for any rule that is
likely to have a significant economic impact on a substantial number of
small entities. This proposed rule revises established classification,
and security requirements and adds counterintelligence requirements.
The security and counterintelligence requirements of this proposed rule
are applicable only to management and operating contractors and other
contractors managing DOE-owned facilities. Typically, such contractors
are large businesses or universities, therefor, this proposed rule will
have no significant impact on a substantial number of small entities.
These security and counterintelligence requirements apply only to prime
contractors and there is no flowdown to subcontractors who might be
small entities. The change to the classification clause applies to all
contracts and subcontracts with classified information but has no
significant economic impact. Based on this review, DOE certifies that
this proposed rule will not have a significant economic impact on a
substantial number of small entities and, therefore, no regulatory
flexibility analysis has been prepared.
D. Review Under the Paperwork Reduction Act
This proposed rule imposes no new information collection or record
keeping requirements. Accordingly, they require no OMB clearance under
the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).
E. Review Under Executive Order 12612
Executive Order 12612, entitled ``Federalism,'' 52 FR 41685
(October 30, 1987), requires that regulations, rules, legislation, and
any other policy actions be reviewed for any substantial direct effects
on states, on the relationship between the Federal Government and the
states, or in the distribution of power and responsibilities among
various levels of government. If there are sufficient substantial
direct effects, then the Executive Order requires preparation of a
federalism assessment to be used in all decisions involved in
promulgating and implementing a policy action. DOE has determined that
this proposed rule will not have a substantial direct effect on the
institutional interests or traditional functions of states.
F. Review Under the National Environmental Policy Act
Pursuant to the Council on Environmental Quality Regulations (40
CFR 1500-1508), the Department has established guidelines for its
compliance with the provisions of the National Environmental Policy Act
(NEPA) of 1969 (42 U.S.C. 4321 et seq.). Pursuant to Appendix A of
Subpart D of 10 CFR Part 1021, National Environmental Policy Act
Implementing Procedures (Categorical Exclusion A), DOE has determined
that this proposed rule is categorically excluded from the need to
prepare an environmental impact statement or environmental assessment.
[[Page 59074]]
G. Public Hearing Determination
DOE has concluded that this proposed rule does not involve any
significant issues of law or fact. Therefore, consistent with 5 U.S.C.
553, DOE has not scheduled a public hearing.
List of Subjects in 48 CFR Parts 952 and 970
Government procurement.
Issued in Washington, D.C., on November 13, 1996.
Richard H. Hopf,
Deputy Assistant Secretary for Procurement and Assistance Management.
For the reasons set out in the preamble, Chapter 9 of Title 48 of
the Code of Federal Regulations is proposed to be amended as set forth
below:
1. The authority citation for Part 952 continues to read:
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c); 42 U.S.C. 13524.
PART 952--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
952.204-70 [Amended]
2. Subsection 952.204-70 is amended by revising the section heading
and revising the clause to read:
952.204-70 Classification/Declassification.
* * * * *
CLASSIFICATION/DECLASSIFICATION (XXX 1996)
In the performance of work under this contract, the contractor
shall ensure that all information originated or generated under the
contract in a classified or potentially classified subject area is
reviewed by a Federal Government Original Classifier and that any
documents or equipment originated or generated in such areas are
reviewed by a Federal Government or Contractor Derivative Classifier
in accordance with classification regulations (e.g., internal agency
directives) and guidance furnished to the contractor by the
Department of Energy. Every subcontract and purchase order issued
hereunder involving the origination or generation of classified
information, documents, or equipment shall require that, in the
performance of such subcontract or purchase order, the subcontractor
or supplier shall ensure that all such information, documents or
equipment in a classified or potentially classified subject area are
reviewed by a Federal Government Original Classifier or a Federal
Government or Contractor Derivative Classifier in accordance with
classification regulations (e.g., internal agency directives) and
guidance furnished to such subcontractor or supplier by the
contractor. In addition, each contractor or subcontractor shall
assure that documents containing information which is no longer
classified by current classification regulations are systematically
reviewed by a Federal Government or Contractor Derivative
Declassifier under applicable regulations in order to maximize the
public's access to as much Government information as possible while
minimizing security costs.
PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS
The authority citation for Part 970 continues to read:
Authority: Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C.
2201), and Sec. 644 of the Department of Energy Organization Act,
Pub. L. 95-91 (42 U.S.C. 7254).
970.0404-1 [Amended]
3. Subsection 970.0404-1 is amended by adding in alphabetical order
``counterintelligence'' as a new definition to read as follows:
970.0404-1 Definitions.
* * * * *
Counterintelligence means information gathered and activities
conducted to protect against espionage, other intelligence activities,
sabotage, or assassinations conducted for or on behalf of foreign
powers, organizations or persons, or international terrorist
activities.
* * * * *
4. Subsection 970.0404-2 is amended by adding paragraph (e) to read
as follows:
970.0404-2 General.
* * * * *
(e) Executive Order 12333, United States Intelligence Activities,
provides for the organization and control of United States foreign
intelligence and counterintelligence activities. In accordance with
this Executive Order, DOE has established a counterintelligence program
which is described in DOE Order 5670.3 (as amended). All DOE elements,
including management and operating contractors and other contractors
managing DOE-owned facilities, should undertake the necessary
precautions to ensure that DOE and covered contractor personnel,
programs and resources are properly protected from foreign intelligence
threats and activities.
5. Subsection 970.0404-4 is amended by revising paragraph (a)(1)
and by adding a new paragraph (a)(2) to read as follows:
970.0404-4 Contract clauses.
(a) * * *
(1) Security and Classification/Declassification, 970.5204-1(a).
These clauses are required in all contracts which involve access to
classified information, nuclear material, or access authorizations.
(2) Counterintelligence, 970.5204-1(b). This clause is required in
all management and operating contracts and other contracts for the
management of DOE-owned facilities which include the security and
classification/declassification clauses.
* * * * *
6. Section 970.2201 is amended by revising paragraph (b)(1)(ii) to
read as follows:
970.2201 Basic labor policies.
* * * * *
(b) * * *
(1) * * *
(ii) The job qualifications and suitability of prospective
employees should be established by the contractor prior to employment
by careful personnel investigations. Such personnel investigations
should include, as appropriate: A credit check; verification of high
school degree/diploma or degree/diploma granted by an institution of
higher learning within the last 5 years; contacts with listed personal
references; contacts with listed employers for the past 3 years
(excluding employment of less than 60 days duration, part-time
employments, and craft/union employments); and local law enforcement
checks when such checks are not prohibited by state or local law,
statute, or regulation, and when the individual had resided in the
jurisdiction where the contractor is located. When a DOE access
authorization (security clearance) will be required, the preemployment
checks must be conducted and the applicant's job qualifications and
suitability must be established before a request is made to the DOE to
process the applicant for access authorization. Evidence must be
furnished to the DOE with the applicant's security forms that
specifies: the date each check was conducted, the entity contacted that
provided information concerning the applicant, a synopsis of the
information provided as a result of each contact, and a statement that
all information available has been reviewed and favorably adjudicated
in accordance with the contractor's personnel policies. When an
applicant is being hired specifically for a position which requires a
DOE access authorization, the applicant shall not be placed in that
position prior to the access authorization being granted by the DOE
unless an exception has been obtained from the Head of the Contracting
Activity or designee. If an applicant is placed in that position prior
to access authorization being granted by the DOE, the applicant may not
be afforded access to classified matter or special nuclear materials
(in categories requiring access authorization) until the
[[Page 59075]]
DOE notifies the employer that access authorization has been granted.
* * * * *
970.5204-1 [Amended]
7. Section 970.5204-1 is revised to read as follows:
970.5204-1 Security.
(a) As prescribed in 970.0404-4(a)(1), insert the Security and
Classification/Declassification clauses found at 952.204-1 and 952.204-
70.
(b) As prescribed in 970.0404-4(a)(2), insert the following clause
in contracts containing the security and classification/
declassification clauses:
COUNTERINTELLIGENCE (XXX 1996)
(a) The contractor shall take all reasonable precautions in the
work under this contract to protect DOE programs, facilities,
technology, personnel, unclassified sensitive information and
classified matter from foreign intelligence threats and activities
conducted for governmental or industrial purposes, in accordance
with DOE Order 5670.3, Counterintelligence Program; Executive Order
12333, U.S. Intelligence Activities; and other pertinent national
and Departmental Counterintelligence requirements.
(b) The contractor shall appoint a qualified employee(s) to
function as the Contractor Counterintelligence Officer. The
Contractor Counterintelligence Officer will be responsible for
conducting defensive Counterintelligence briefings and debriefings
of employees traveling to foreign countries or interacting with
foreign nationals; providing thoroughly documented written reports
relative to targeting, suspicious activity and other matters of
counterintelligence interest; immediately reporting targeting,
suspicious activity and other Counterintelligence concerns to the
DOE Headquarters Counterintelligence Division; and providing
assistance to other elements of the U.S. Intelligence Community as
stated in the aforementioned Executive Order, the DOE
Counterintelligence Order, and other pertinent national and
Departmental Counterintelligence requirements.
[FR Doc. 96-29542 Filed 11-19-96; 8:45 am]
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