[Federal Register Volume 86, Number 158 (Thursday, August 19, 2021)]
[Rules and Regulations]
[Pages 46597-46599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-17688]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 117

[Docket ID: DoD-2020-OS-0045]
RIN 0790-AL41


National Industrial Security Program Operating Manual (NISPOM); 
Amendment

AGENCY: Office of the Under Secretary of Defense for Intelligence & 
Security, Department of Defense (DoD).

ACTION: Final rule; technical amendment.

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SUMMARY: DoD is amending its NISPOM regulation to extend the 
implementation date for those contractors under DoD security cognizance 
to report and obtain pre-approval of unofficial foreign travel to the 
Department of Defense.

DATES: This rule is effective August 19, 2021.

FOR FURTHER INFORMATION CONTACT: Valerie Heil, 703-692-3754.

SUPPLEMENTARY INFORMATION: This final rule amends 32 CFR part 117, 
``National Industrial Security Program Operating Manual (NISPOM)'' 
final rule that published in the Federal Register on December 21, 2020 
(85 FR 83300). The rule includes reporting requirements for contractor 
personnel who have been granted eligibility for access to classified 
information through the National Industrial Security Program to follow

[[Page 46598]]

Security Executive Agent Directive (SEAD) 3, ``Reporting Requirements 
for Personnel with Access to Classified Information or Who Hold a 
Sensitive Position.'' Reporting requirements in the rule include 
provisions for covered individuals to report and obtain pre-approval of 
unofficial foreign travel. DoD received comments from regulated parties 
concerning how burdensome it would be for contractors under DoD 
security cognizance to submit individual foreign travel reports. 
Regulated parties recommended DoD modify its IT system so multiple or 
batched foreign travel reports can be submitted in a single submission. 
DoD agrees with this recommendation and intends to modify its IT 
system. However, DoD cannot complete modifications to its IT system 
before the original implementation date of August 24, 2021. This 
amendment will extend until August 24, 2022, the implementation date 
for those contractors under DoD security cognizance to report and 
obtain pre-approval of unofficial foreign travel to DoD to allow for 
the modifications to DoD's IT system to be completed. If a government 
contracting activity's (GCA) contract separately requires reporting or 
pre-approval of unofficial foreign travel (i.e., contains a provision 
requiring such reports other than by incorporating the NISPOM), the 
contractor should consult with the GCA on when and where to submit such 
reports and the procedures for obtaining pre-approval.

Exception to Notice and Comment

    This regulation can be effective immediately, notwithstanding the 
general requirement in the Administrative Procedure Act (APA) for 
advance notice and comment. Principally, this rule follows from a final 
rule with comment. This final rule is a logical outgrowth of the notice 
and comment incorporated in the prior final rule, because it is 
directly responsive to public comments made in response to the final 
rule. Several commenters specifically requested a delay in the August 
24, 2021 implementation date. For example, one commenter stated that 
for contractors under DoD security cognizance, reporting foreign travel 
and foreign contacts will be impractical for companies of size without 
a mass or bulk upload capability that doesn't exist in the system as 
designed today. Further, the commenter stated this capability should be 
pursued and aligns with one of the stated goals of SEAD 3, which 
encourages ``automation and centralization.'' Even absent the prior 
notice and comment incorporated in the final rule, this rule would be 
exempt from the APA's notice-and-comment requirement, because it 
satisfies the good-cause exception in 553(b)(3)(B). Specifically, 
notice-and-comment rulemaking is ``unnecessary,'' id., because as noted 
in the preamble, DoD already took comments on its NISPOM regulation and 
the regulated parties affected by the regulation requested that the 
Department change its IT system before they must report and obtain pre-
approval of unofficial foreign travel to DoD. Indeed, DoD is amending 
the NISPOM regulation for the purpose of extending the implementation 
date at the request of the regulated parties affected by the rule who 
provided comments on the NISPOM regulation during a previous notice and 
comment period provided for the final rule. The need for this change to 
DoD's IT system was discovered in the comments received on the NISPOM 
regulation. While DoD desired to modify its IT system before the 
original implementation date to meet the requested change by the 
regulated parties, the Department discovered through the comment 
process that such modification is not feasible. DoD has therefore 
concluded that there is good cause to dispense with the advanced 
notice-and-comment rulemaking requirements in 5 U.S.C. 553.

Regulatory Analysis

Executive Order 12866, ``Regulatory Planning and Review'' and Executive 
Order 13563, ``Improving Regulation and Regulatory Review''

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distribute impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. It has been determined that this rule is a significant 
regulatory action. Accordingly, the rule has been reviewed by the 
Office of Management and Budget (OMB) under the requirements of these 
E.O.s.

Congressional Review Act

    This rule is not a ``major rule'' as defined by 5 U.S.C. 804(2).

Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. Chapter 6)

    The Under Secretary of Defense for Intelligence and Security, 
pursuant to a delegation of authority from the Secretary of Defense, 
certifies that this final rule would not, if promulgated, have a 
significant economic impact on a substantial number of small business 
entities in accordance with the Regulatory Flexibility Act (5 U.S.C. 
601) requirements since a contractor cleared legal entity may, in 
entering into contracts requiring access to classified information, 
negotiate for security costs determined to be properly chargeable by a 
Government Contracting Activity.

Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)

    It has been determined that this rule does not impose any new 
information collection or record keeping requirements under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

Section 202, Public Law 104-4, ``Unfunded Mandates Reform Act''

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 
U.S.C. 1532) requires agencies to assess anticipated costs and benefits 
before issuing any rule whose mandates require spending in any 1 year 
of $100 million in 1995 dollars, updated annually for inflation. This 
final rule will not mandate any requirements for State, local, or 
tribal governments, nor will it affect private sector costs.

Executive Order 13132, ``Federalism''

    E.O. 13132 establishes certain requirements that an agency must 
meet when it promulgates a final rule (and subsequent final rule) that 
imposes substantial direct requirement costs on State and local 
governments, preempts State law, or otherwise has Federalism 
implications. This final rule will not have a substantial effect on 
State and local governments.

List of Subjects in 32 CFR Part 117

    Classified information; Government contracts; USG contracts, 
National Industrial Program (NISP); Prime contractor, Subcontractor.
    Accordingly, 32 CFR part 117 is amended as follows:

PART 117-- NATIONAL INDUSTRIAL SECURITY PROGRAM OPERATING MANUAL 
(NISPOM)

0
1. The authority citation for 32 CFR part 310 continues to read as 
follows:

    Authority:  32 CFR part 2004; E.O. 10865; E.O. 12333; E.O. 
12829; E.O. 12866; E.O. 12968; E.O. 13526; E.O. 13563; E.O. 13587; 
E.O. 13691; Pub. L. 108-458; Title 42 U.S.C. 2011 et seq.; Title 50 
U.S.C. Chapter 44; Title 50 U.S.C. 3501 et seq.


0
2. In Sec.  117.1, paragraph (b)(3) is revised to read as follows:

[[Page 46599]]

Sec.  117.1   Purpose.

* * * * *
    (b) * * *
    (3) Prescribes that contractors will implement the provisions of 
this part no later than 6 months from February 24, 2021, with the 
exception of requirements for reporting foreign travel to the 
Department of Defense prescribed in SEAD 3 and implemented through this 
rule. Contractors under the security cognizance of the Department of 
Defense will begin reporting foreign travel to the Department of 
Defense no later than 18 months from February 24, 2021.

    Dated: August 12, 2021.
Patricia L. Toppings,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2021-17688 Filed 8-18-21; 8:45 am]
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