[Executive Orders]

NATIONAL INDUSTRIAL SECURITY PROGRAM

EO 12829

6 January 1993



     Ex. Ord. No. 12829, Jan. 6, 1993, 58 F.R. 3479, as amended by Ex.
   Ord. No. 12885, Dec. 14, 1993, 58 F.R. 65863, provided:

     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) (42 U.S.C. 2011 et seq.), the National Security Act of
   1947, as amended (codified as amended in scattered sections of the
   United States Code) (see Short Title note above), and the Federal
   Advisory Committee Act, as amended (5 U.S.C. App. 2) (5 App.
   U.S.C.), 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 (set out above), or its successor,
   and the Atomic Energy Act of 1954, as amended (42 U.S.C. 2011 et
   seq.).

     (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 (set
   out above), 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
   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
   (see Short Title note above), or Executive Order No. 12333 of
   December 8, 1981 (set out above).

     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 (5 App. U.S.C.), 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 (42
   U.S.C. 2011 et seq.).  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 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 (set out
   above), 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 to correspond as closely as
   possible to pertinent decisions of the Secretary of Defense and the
   Director of Central Intelligence made pursuant to the
   recommendations of the Joint Security Review Commission and to
   revisions to the security classification system that result from
   Presidential Review Directive 29, but in any event no later than
   June 30, 1994.

     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 monitcr 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
   (42 U.S.C. 2011 et seq.).  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 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 guidelines
   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 (set out
   above), 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.