PDF Version

[Federal Register: January 27, 2006 (Volume 71, Number 18)]
[Proposed Rules]               
[Page 4541-4543]
                     

=======================================================================
-----------------------------------------------------------------------

NATIONAL ARCHIVES AND RECORDS ADMINISTRATION

Information Security Oversight Office

32 CFR Part 2004

RIN 3095-AB34

 
Information Security Oversight Office; National Industrial 
Security Program Directive No. 1

AGENCY: Information Security Oversight Office (ISOO), National Archives 
and Records Administration (NARA).

ACTION: Implementing directive; proposed rule.

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

SUMMARY: The Information Security Oversight Office (ISOO), National 
Archives and Records Administration (NARA), is publishing this 
Directive as a proposed rule and pursuant to section 102(b)(1) of 
Executive Order 12829, as amended, relating to the National Industrial 
Security Program. This order establishes a National Industrial Security 
Program (NISP) to safeguard Federal Government classified information 
that is released to contractors, licensees, and grantees of the United 
States Government. Redundant, overlapping, or unnecessary requirements 
impede those interests. Therefore, the NISP serves as the single, 
integrated, cohesive industrial security program to protect classified 
information and to preserve our Nation's economic and technological 
interests. This Directive sets forth guidance to agencies to set 
uniform standards throughout the NISP that promote these objectives.

DATES: Comments must be received on or before March 13, 2006.

ADDRESSES: You may submit comments, identified by ``RIN 3095-AB34,'' by 
any of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 

instructions for submitting comments.
    E-mail: [email protected] Include ``RIN 3095-AB34'' in the subject 
line of the message.
    Fax: (301) 837-0319.
    Mail: Regulation Comments Desk (NPOL), Room 4100, National Archives

[[Page 4542]]

and Records Administration, 8601 Adelphi Road, College Park, MD 20740-
6001.
    Hand Delivery/Courier: Regulation Comments Desk (NPOL), Room 4100, 
National Archives and Records Administration, 8601 Adelphi Road, 
College Park, MD 20740-6001.

FOR FURTHER INFORMATION CONTACT: J. William Leonard, Director, ISOO, at 
202-219-5250.

SUPPLEMENTARY INFORMATION: This proposed rule is being issued pursuant 
to the provisions of section 102(b)(1) of Executive Order 12829, 
January 6, 2003 (58 FR 3479), as amended by Executive Order 12885, 
December 14, 1993, (58 FR 65863). The purpose of this Directive is to 
assist in implementing the Order; users of the Directive shall refer 
concurrently to that Order for guidance. As of November 17, 1995, ISOO 
became a part of NARA. The drafting, coordination, and issuance of this 
Directive fulfills one of the responsibilities of the implementation 
delegated to the ISOO Director. ISOO maintains oversight over Executive 
Order 12958, as amended, and policy oversight over Executive Order 
12829, as amended. Nothing in this directive shall be construed to 
supersede the authority of the Secretary of Energy or the Nuclear 
Regulatory Commission under the Atomic Energy Act of 1954, as amended 
(42 U.S.C. 2011 et seq.), 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, or the authority of the 
Director of National Intelligence under the Intelligence Reform and 
Terrorism Prevention Act of 2004. Requirements of the latter Act will 
necessitate additional future changes to Executive Order 12829 and this 
implementing Directive. The interpretive guidance contained in this 
proposed rule will assist agencies in implementing Executive Order 
12829, as amended.
    The proposed rule is [not] a significant regulatory action for the 
purposes of Executive Order 12866. The proposed rule is [not] a major 
rule as defined in 5 U.S.C. Chapter 8, Congressional Review of Agency 
Rulemaking. As required by the Regulatory Flexibility Act, we certify 
that this proposed rule will [not] have a significant impact on a 
substantial number of small entities because it applies only to Federal 
agencies.

List of Subjects in 32 CFR Part 2004

    Classified information.

    1. For the reasons set forth in the preamble, NARA proposes to 
amend Title 32 of the Code of Federal Regulations to add part 2004 as 
follows:

PART 2004--NATIONAL INDUSTRIAL SECURITY PROGRAM DIRECTIVE NO. 1

Subpart A--Implementation and Oversight
Sec.
2004.10 Responsibilities of the Director, Information Security 
Oversight Office (ISOO) [102(b)].
2004.11 Agency implementing regulations, internal rules, or 
guidelines [102(b)(3)].
2004.12 Reviews by ISOO [102(b)(4)].
Subpart B--Operations
2004.20 National Industrial Security Program Operating Manual 
(NISPOM) [201(a)].
2004.21 Protection of classified information [201(e)].
2004.22 Operational responsibilities [202(a)].
2004.23 Cost reports [203 (d)].
2004.24 Definitions.

    Authority: Section 102(b)(1) of Executive Order 12829, January 
6, 2003, 58 FR 3479, as amended by Executive Order 12885, December 
14, 1993, 58 FR 65863.

Subpart A--Implementation and Oversight


Sec.  2004.10  Responsibilities of the Director, Information Security 
Oversight Office (ISOO) [102(b)].1
---------------------------------------------------------------------------

    \1\ Bracketed references pertain to related sections of 
Executive Order 12829, as amended by E.O. 12885.
---------------------------------------------------------------------------

    The Director ISOO shall:
    (a) Implement EO 12829, as amended.
    (b) Ensure that the NISP is operated as a single, integrated 
program across the Executive Branch of the Federal Government; i.e., 
that the Executive Branch departments and agencies adhere to NISP 
principles.
    (c) Ensure that each contractor's implementation of the NISP is 
overseen by a single Cognizant Security Authority (CSA), based on a 
preponderance of classified contracts per agreement by the CSAs.
    (d) Ensure that all Executive Branch departments and agencies that 
contract for classified work have included the Security Requirements 
clause, 52.204-2, from the Federal Acquisition Regulation (FAR), or an 
equivalent clause, in such contract.
    (e) Ensure that those Executive Branch departments and agencies for 
which the Department of Defense (DoD) serves as the CSA have entered 
into agreements with the DoD that establish the terms of the 
Secretary's responsibilities on behalf of those agency heads.


Sec.  2004.11  Agency implementing regulations, internal rules, or 
guidelines [102(b)(3)].

    (a) Reviews and Updates. All implementing regulations, internal 
rules, or guidelines that pertain to the NISP shall be reviewed and 
updated by the originating agency, as circumstances require. If a 
change in national policy necessitates a change in agency implementing 
regulations, internal rules, or guidelines that pertain to the NISP, 
the agency shall promptly issue revisions.
    (b) Reviews by ISOO. The Director, ISOO, shall review agency 
implementing regulations, internal rules, or guidelines, as necessary, 
to ensure consistency with NISP policies and procedures. Such reviews 
should normally occur during routine oversight visits, when there is 
indication of a problem that comes to the attention of the Director, 
ISOO, or after a change in national policy that impacts such 
regulations, rules, or guidelines. The Director, ISOO, shall provide 
findings from such reviews to the responsible department or agency.


Sec.  2004.12  Reviews by ISOO [102(b)(4)].

    The Director, ISOO, shall fulfill his monitoring role based, in 
part, on information received from NISP Policy Advisory Committee 
(NISPPAC) members, from on-site reviews that ISOO conducts under the 
authority of EO 12829, as amended, and from complaints and suggestions 
from persons within or outside the Government. Findings shall be 
reported to the responsible department or agency.

Subpart B--Operations


Sec.  2004.20  National Industrial Security Program Operating Manual 
(NISPOM) [201(a)].

    (a) The NISPOM applies to release of classified information during 
all phases of the contracting process.
    (b) As a general rule, procedures for safeguarding classified 
information by contractors and recommendations for changes shall be 
addressed through the NISPOM coordination process that shall be 
facilitated by the Executive Agent. The Executive Agent shall address 
NISPOM issues that surface from industry, Executive Branch departments 
and agencies, or the NISPPAC. When consensus cannot be achieved through 
the NISPOM coordination process, the issue shall be raised to the NSC 
for resolution.


Sec.  2004.21  Protection of classified information [201(e)].

    Procedures for the safeguarding of classified information by 
contractors are

[[Page 4543]]

promulgated in the NISPOM. DoD, as the Executive Agent, shall use 
standards applicable to agencies as the basis for the requirements, 
restrictions, and safeguards contained in the NISPOM; however, the 
NISPOM requirements may be designed to accommodate as necessary the 
unique circumstances of industry. Any issue pertaining to deviation of 
industry requirements in the NISPOM from the standards applicable to 
agencies shall be addressed through the NISPOM coordination process.


Sec.  2004.22  Operational responsibilities [202(a)].

    (a) Designation of Cognizant Security Authority (CSA). The CSA for 
a contractor shall be determined by the preponderance of classified 
contract activity per agreement by the CSAs. The responsible CSA shall 
conduct oversight inspections of contractor security programs and 
provide other support services to contractors as necessary to ensure 
compliance with the NISPOM and that contractors are protecting 
classified information as required. DoD, as Executive Agent, shall 
serve as the CSA for all Executive Branch departments and agencies that 
are not a designated CSA. As such, DoD shall:
    (1) Provide training to industry to ensure that industry 
understands the responsibilities associated with protecting classified 
information.
    (2) Validate the need for contractor access to classified 
information, shall establish a system to request personnel security 
investigations for contractor personnel, and shall ensure adequate 
funding for investigations of those contractors under Department of 
Defense cognizance.
    (3) Maintain a system of eligibility and access determinations of 
contractor personnel.
    (b) General Responsibilities. Executive Branch departments and 
agencies that issue contracts requiring industry to have access to 
classified information and are not a designated CSA shall:
    (1) Include the Security Requirements clause, 52.204-2, from the 
FAR in such contracts;
    (2) Incorporate a Contract Security Classification Specification 
(DD 254) into the contracts in accordance with the FAR subpart 4.4;
    (3) Sign agreements with the Department of Defense as the Executive 
Agent for industrial security services; and
    (4) Ensure applicable department and agency personnel having NISP 
implementation responsibilities are provided appropriate education and 
training.


Sec.  2004.23  Cost reports [203 (d)].

    (a) The Executive Branch departments and agencies shall provide 
information each year to the Director, ISOO, on the costs within the 
agency associated with implementation of the NISP for the previous 
year.
    (b) The DoD as the Executive Agent shall develop a cost methodology 
in coordination with industry to collect the costs incurred by 
contractors of all Executive Branch departments and agencies to 
implement the NISP, and shall report those costs to the Director, ISOO, 
on an annual basis.


Sec.  2004.24  Definitions.

    For the purposes of this part the following definitions apply:
    (a) Cognizant Security Agencies (CSAs) means the Executive Branch 
departments and agencies authorized in EO 12829, as amended, to 
establish industrial security programs: the Department of Defense, 
designated as the Executive Agent; the Department of Energy; the 
Nuclear Regulatory Commission; and the Central Intelligence Agency.
    (b) Contractor means any industrial, education, commercial, or 
other entity, to include licensees or grantees that has been granted 
access to classified information. Contractor does not include 
individuals engaged under personal services contracts.

    Dated: December 5, 2005.
J. William Leonard,
Director, Information Security Oversight Office.
    Approved: January 14, 2006.
Allen Weinstein,
Archivist of the United States.
[FR Doc. E6-815 Filed 1-26-06; 8:45 am]

BILLING CODE 7515-01-P