[Weekly Compilation of Presidential Documents Volume 29, Number 1 (Monday, January 11, 1993)]
[Pages 17-22]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Executive Order 12829--National Industrial Security Program

 January 6, 1993

    This order establishes a National Industrial Security Program to 
safeguard Federal Government classified information that is released to 
contractors, licensees, and grantees of the United States Government. To 
promote our national interests, the United States Government issues 
contracts, licenses, and grants to nongovernment organizations. When 
these arrangements require access to classified information, the 
national security requires that this information be safeguarded in a 
manner equivalent to its protection within the executive branch of 
Government. The national security also requires that our industrial 
security program promote the economic and technological interests of the 
United States. Redundant, overlapping, or unnecessary requirements 
impede those interests. Therefore, the National Industrial Security 
Program shall serve as a single, integrated, cohesive industrial 
security program to protect classified information and to preserve our 
Nation's economic and technological interests.
    Therefore, by the authority vested in me as President by the 
Constitution and the laws of the United States of America, including the 
Atomic Energy Act of 1954, as amended (42 U.S.C. 2011-2286), the 
National Security Act of 1947, as amended (codified as amended in 
scattered sections of the United States Code), and the Federal Advisory 
Committee

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Act, as amended (5 U.S.C. App. 2), it is hereby ordered as follows:

    Part 1. Establishment and Policy

    Section 101. Establishment. (a) There is established a National 
Industrial Security Program. The purpose of this program is to safeguard 
classified information that may be released or has been released to 
current, prospective, or former contractors, licensees, or grantees of 
United States agencies. For the purposes of this order, the terms 
``contractor, licensee, or grantee'' means current, prospective, or 
former contractors, licensees, or grantees of United States agencies. 
The National Industrial Security Program shall be applicable to all 
executive branch departments and agencies.
    (b) The National Industrial Security Program shall provide for the 
protection of information classified pursuant to Executive Order No. 
12356 of April 2, 1982, or its successor, and the Atomic Energy Act of 
1954, as amended.
    (c) For the purposes of this order, the term ``contractor'' does not 
include individuals engaged under personal services contracts.
    Sec. 102. Policy Direction. (a) The National Security Council shall 
provide overall policy direction for the National Industrial Security 
Program.
    (b) The Director of the Information Security Oversight Office, 
established under Executive Order No. 12356 of April 2, 1982, shall be 
responsible for implementing and monitoring the National Industrial 
Security Program and shall:
    (1) develop, in consultation with the agencies, and promulgate 
subject to the approval of the National Security Council, directives for 
the implementation of this order, which shall be binding on the 
agencies;
    (2) oversee agency, contractor, licensee, and grantee actions to 
ensure compliance with this order and implementing directives;
    (3) review all agency implementing regulations, internal rules, or 
guidelines. The Director shall require any regulation, rule, or 
guideline to be changed if it is not consistent with this order or 
implementing directives. Any such decision by the Director may be 
appealed to the National Security Council. The agency regulation, rule, 
or guideline shall remain in effect pending a prompt decision on the 
appeal;
    (4) have the authority, pursuant to terms of applicable contracts, 
licenses, grants, or regulations, to conduct on-site reviews of the 
implementation of the National Industrial Security Program by each 
agency, contractor, licensee, and grantee that has access to or stores 
classified information and to require of each agency, contractor, 
licensee, and grantee those reports, information, and other cooperation 
that may be necessary to fulfill the Director's responsibilities. If 
these reports, inspections, or access to specific classified 
information, or other forms of cooperation, would pose an exceptional 
national security risk, the affected agency head or the senior official 
designated under section 203(a) of this order may request the National 
Security Council to deny access to the Director. The Director shall not 
have access pending a prompt decision by the National Security Council;
    (5) report any violations of this order or its implementing 
directives to the head of the agency or to the senior official 
designated under section 203(a) of this order so that corrective action, 
if appropriate, may be taken. Any such report pertaining to the 
implementation of the National Industrial Security Program by a 
contractor, licensee, or grantee shall be directed to the agency that is 
exercising operational oversight over the contractor, licensee, or 
grantee under section 202 of this order;
    (6) consider and take action on complaints and suggestions from 
persons within or outside the Government with respect to the 
administration of the National Industrial Security Program;
    (7) consider, in consultation with the advisory committee 
established by this order, affected agencies, contractors, licensees, 
and grantees, and recommend to the President through the National 
Security Council changes to this order; and
    (8) report at least annually to the President through the National 
Security Council on the implementation of the National Industrial 
Security Program.
    (c) Nothing in this order shall be construed to supersede the 
authority of the Secretary of Energy or the Nuclear Regulatory Com- 

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mission under the Atomic Energy Act of 1954, as amended, or the 
authority of the Director of Central Intelligence under the National 
Security Act of 1947, as amended, or Executive Order No. 12333 of 
December 8, 1981.
    Sec. 103. National Industrial Security Program Policy Advisory 
Committee. (a) Establishment. There is established the National 
Industrial Security Program Policy Advisory Committee (``Committee''). 
The Director of the Information Security Oversight Office shall serve as 
Chairman of the Committee and appoint the members of the Committee. The 
members of the Committee shall be the representatives of those 
departments and agencies most affected by the National Industrial 
Security Program and nongovernment representatives of contractors, 
licensees, or grantees involved with classified contracts, licenses, or 
grants, as determined by the Chairman.
    (b) Functions. (1) The Committee members shall advise the Chairman 
of the Committee on all matters concerning the policies of the National 
Industrial Security Program, including recommended changes to those 
policies as reflected in this order, its implementing directives, or the 
operating manual established under this order, and serve as a forum to 
discuss policy issues in dispute.
    (2) The Committee shall meet at the request of the Chairman, but at 
least twice during the calendar year.
    (c) Administration. (1) Members of the Committee shall serve without 
compensation for their work on the Committee. However, nongovernment 
members may be allowed travel expenses, including per diem in lieu of 
subsistence, as authorized by law for persons serving intermittently in 
the Government service (5 U.S.C. 5701-5707).
    (2) To the extent permitted by law and subject to the availability 
of funds, the Administrator of General Services shall provide the 
Committee with administrative services, facilities, staff, and other 
support services necessary for the performance of its functions.
    (d) General. Notwithstanding any other Executive order, the 
functions of the President under the Federal Advisory Committee Act, as 
amended, except that of reporting to the Congress, which are applicable 
to the Committee, shall be performed by the Administrator of General 
Services in accordance with the guidelines and procedures established by 
the General Services Administration.

    Part 2. Operations

    Sec. 201. National Industrial Security Program Operating Manual. (a) 
The Secretary of Defense, in consultation with all affected agencies and 
with the concurrence of the Secretary of Energy, the Nuclear Regulatory 
Commission, and the Director of Central Intelligence, shall issue and 
maintain a National Industrial Security Program Operating Manual 
(``Manual''). The Secretary of Energy and the Nuclear Regulatory 
Commission shall prescribe and issue that portion of the Manual that 
pertains to information classified under the Atomic Energy Act of 1954, 
as amended. The Director of Central Intelligence shall prescribe and 
issue that portion of the Manual that pertains to intelligence sources 
and methods, including Sensitive Compartmented Information.
    (b) The Manual shall prescribe specific requirements, restrictions, 
and other safeguards that are necessary to preclude unauthorized 
disclosure and control authorized disclosure of classified information 
to contractors, licensees, or grantees. The Manual shall apply to the 
release of classified information during all phases of the contracting 
process including bidding, negotiation, award, performance, and 
termination of contracts, the licensing process, or the grant process, 
with or under the control of departments or agencies.
    (c) The Manual shall also prescribe requirements, restrictions, and 
other safeguards that are necessary to protect special classes of 
classified information, including Restricted Data, Formerly Restricted 
Data, intelligence sources and methods information, Sensitive 
Compartmented Information, and Special Access Program information.
    (d) In establishing particular requirements, restrictions, and other 
safeguards within the Manual, the Secretary of Defense, the Secretary of 
Energy, the Nuclear Regulatory Commission, and the Director of Central 
Intelligence shall take into account

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these factors: (i) the damage to the national security that reasonably 
could be expected to result from an unauthorized disclosure; (ii) the 
existing or anticipated threat to the disclosure of information; and 
(iii) the short- and long-term costs of the requirements, restrictions, 
and other safeguards.
    (e) To the extent that is practicable and reasonable, the 
requirements, restrictions, and safeguards that the Manual establishes 
for the protection of classified information by contractors, licensees, 
and grantees shall be consistent with the requirements, restrictions, 
and safeguards that directives implementing Executive Order No. 12356 of 
April 2, 1982, or the Atomic Energy Act of 1954, as amended, establish 
for the protection of classified information by agencies. Upon request 
by the Chairman of the Committee, the Secretary of Defense shall provide 
an explanation and justification for any requirement, restriction, or 
safeguard that results in a standard for the protection of classified 
information by contractors, licensees, and grantees that differs from 
the standard that applies to agencies.
    (f) The Manual shall be issued no later than 1 year from the 
issuance of this order.
    Sec. 202. Operational Oversight. (a) The Secretary of Defense shall 
serve as Executive Agent for inspecting and monitoring the contractors, 
licensees, and grantees who require or will require access to, or who 
store or will store classified information; and for determining the 
eligibility for access to classified information of contractors, 
licensees, and grantees and their respective employees. The heads of 
agencies shall enter into agreements with the Secretary of Defense that 
establish the terms of the Secretary's responsibilities on behalf of 
these agency heads.
    (b) The Director of Central Intelligence retains authority over 
access to intelligence sources and methods, including Sensitive 
Compartmented Information. The Director of Central Intelligence may 
inspect and monitor contractor, licensee, and grantee programs and 
facilities that involve access to such information or may enter into 
written agreements with the Secretary of Defense, as Executive Agent, to 
inspect and monitor these programs or facilities, in whole or in part, 
on the Director's behalf.
    (c) The Secretary of Energy and the Nuclear Regulatory Commission 
retain authority over access to information under their respective 
programs classified under the Atomic Energy Act of 1954, as amended. The 
Secretary or the Commission may inspect and monitor contractor, 
licensee, and grantee programs and facilities that involve access to 
such information or may enter into written agreements with the Secretary 
of Defense, as Executive Agent, to inspect and monitor these programs or 
facilities, in whole or in part, on behalf of the Secretary or the 
Commission, respectively.
    (d) The Executive Agent shall have the authority to issue, after 
consultation with affected agencies, standard forms or other 
standardization that will promote the implementation of the National 
Industrial Security Program.
    Sec. 203. Implementation. (a) The head of each agency that enters 
into classified contracts, licenses, or grants shall designate a senior 
agency official to direct and administer the agency's implementation and 
compliance with the National Industrial Security Program.
    (b) Agency implementing regulations, internal rules, or guidelines 
shall be consistent with this order, its implementing directives, and 
the Manual. Agencies shall issue these regulations, rules, or guidelines 
no later than 180 days from the issuance of the Manual. They may 
incorporate all or portions of the Manual by reference.
    (c) Each agency head or the senior official designated under 
paragraph (a) above shall take appropriate and prompt corrective action 
whenever a violation of this order, its implementing directives, or the 
Manual occurs.
    (d) The senior agency official designated under paragraph (a) above 
shall account each year for the costs within the agency associated with 
the implementation of the National Industrial Security Program. These 
costs shall be reported to the Director of the Information Security 
Oversight Office, who shall include them in the reports to the President 
prescribed by this order.
    (e) The Secretary of Defense, with the concurrence of the 
Administrator of General Services, the Administrator of the National

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Aeronautics and Space Administration, and such other agency heads or 
officials who may be responsible, shall amend the Federal Acquisition 
Regulation to be consistent with the implementation of the National 
Industrial Security Program.

    (f) All contracts, licenses, or grants that involve access to 
classified information and that are advertised or proposed following the 
issuance of agency regulations, rules, or guide-lines described in 
paragraph (b) above shall comply with the National Industrial Security 
Program. To the extent that is feasible, economical, and permitted by 
law, agencies shall amend, modify, or convert preexisting contracts, 
licenses, or grants, or previously advertised or proposed contracts, 
licenses, or grants, that involve access to classified information for 
operation under the National Industrial Security Program. Any direct 
inspection or monitoring of contractors, licensees, or grantees 
specified by this order shall be carried out pursuant to the terms of a 
contract, license, grant, or regulation.

    (g) Executive Order No. 10865 of February 20, 1960, as amended by 
Executive Order No. 10909 of January 17, 1961, and Executive Order No. 
11382 of November 27, 1967, is hereby amended as follows:

    (1) Section 1(a) and (b) are revoked as of the effective date of 
this order.

    (2) Section 1(c) is renumbered as Section 1 and is amended to read 
as follows:

    ``Section 1. When used in this order, the term `head of a 
department' means the Secretary of State, the Secretary of Defense, the 
Secretary of Transportation, the Secretary of Energy, the Nuclear 
Regulatory Commission, the Administrator of the National Aeronautics and 
Space Administration, and, in section 4, the Attorney General. The term 
`head of a department' also means the head of any department or agency, 
including but not limited to those referenced above with whom the 
Department of Defense makes an agreement to extend regulations 
prescribed by the Secretary of Defense concerning authorizations for 
access to classified information pursuant to Executive Order No. 
12829.''
    (3) Section 2 is amended by inserting the words ``pursuant to 
Executive Order No. 12829'' after the word ``information.''
    (4) Section 3 is amended by inserting the words ``pursuant to 
Executive Order No. 12829'' between the words ``revoked'' and ``by'' in 
the second clause of that section.
    (5) Section 6 is amended by striking out the words ``The Secretary 
of State, the Secretary of Defense, the Administrator of the National 
Aeronautics and Space Administration, the Secretary of Transportation, 
or his representative, or the head of any other department or agency of 
the United States with which the Department of Defense makes an 
agreement under section (1)(b),'' at the beginning of the first 
sentence, and inserting in their place ``The head of a department of the 
United States . . . .''
    (6) Section 8 is amended by striking out paragraphs (1) through (7) 
and inserting in their place ``. . . the deputy of that department, or 
the principal assistant to the head of that department, as the case may 
be.''
    (h) All delegations, rules, regulations, orders, directives, 
agreements, contracts, licenses, and grants issued under preexisting 
authorities, including section 1(a) and (b) of Executive Order No. 10865 
of February 20, 1960, as amended, by Executive Order No. 10909 of 
January 17, 1961, and Executive Order No. 11382 of November 27, 1967, 
shall remain in full force and effect until amended, modified, or 
terminated pursuant to authority of this order.
    (i) This order shall be effective immediately.
                                                   George Bush
The White House,
January 6, 1993.

[Filed with the Office of the Federal Register, 10:52 a.m., January 7, 
1993]


Note: This Executive order was released by the Office of the Press 
Secretary on January 7, and it was published in the Federal Register on 
January 8.

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