CHAPTER 1
General Provisions And Requirements
Section 1. Introduction
1-100. Purpose.
This Manual is issued in accordance with the National Industrial
Security Program (NISP). The Manual prescribes requirements,
restrictions, and other safeguards that are necessary to prevent
unauthorized disclosure of classified information and to control
authorized disclosure of classified information released by U.S.
Government Executive Branch Departments and Agencies to their
contractors. The Manual also prescribes 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. These procedures are applicable to licensees,
grantees, and certificate holders to the extent legally and
practically possible within the constraints of applicable law and
the Code of Federal Regulations.
1-101. Authority.
a. The NISP was established by Executive Order 12829, 6 January
1993, "National Industrial Security Program" for the protection of
information classified pursuant to Executive Order 12356, April 2,
1982, "National Security Information," or its successor or
predecessor orders, and the Atomic Energy Act of 1954, as amended.
The National Security Council is responsible for providing overall
policy direction for the NISP. The Secretary of Defense has been
designated Executive Agent for the NISP by the President. The
Director, Information Security Oversight Office (ISOO) is
responsible for implementing and monitoring the NISP and for
issuing implementing directives that shall be binding on agencies.
b. The Secretary of Defense, in consultation with all affected
agencies and with the concurrence of the Secretary of Energy, the
Chairman of the Nuclear Regulatory Commission and the Director of
Central Intelligence is responsible for issuance and maintenance of
this Manual. The Secretary of Energy and the Nuclear Regulatory
Commission shall prescribe 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 that
portion of the Manual that pertains to intelligence sources and
methods, including Sensitive Compartmented Information. 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. 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, grantee,
and certificate holder programs and facilities that involve access
to such information.
c. The Secretary of Defense serves as Executive Agent for
inspecting and monitoring contractors, licensees, grantees, and
certificate holders 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, certificate holders, 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 their behalf.
d. The Director, ISOO, will consider and take action on
complaints and suggestions from persons within or outside the
Government with respect to the administration of the NISP.
e. Nothing in this Manual shall be construed to supersede the
authority of the Secretary of Energy or the Chairman of the Nuclear
Regulatory Commission under the Atomic Energy Act of 1954, as
amended; or detract from the authority of installation Commanders
under the Internal Security Act of 1950; 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 any other federal department or agency Head
granted pursuant to U.S. statute or Presidential decree.
1-102. Scope.
a. The NISP applies to all executive branch departments and
agencies and to all cleared contractor facilities located within
the United States, its Trust Territories and Possessions.
b. This Manual applies to and shall be used by contractors to
safeguard classified information released during all phases of the
contracting, licensing, and grant process, including bidding,
negotiation, award, performance, and termination. This Manual also
applies to classified information not released under a contract,
license, certificate or grant, and to foreign government
information furnished to contractors that requires protection in
the interest of national security. The Manual implements applicable
Federal Statutes, Executive orders, National Directives,
international treaties, and certain government-to- government
agreements.
c. If a contractor determines that implementation of any
provision of this Manual is more costly than provisions imposed
under previous U.S. Government policies, standards or requirements,
the contractor shall notify the Cognizant Security Agency (CSA).
The notification shall indicate the prior policy, standard or
requirement and explain how the NISPOM requirement is more costly
to implement. Contractors shall, however, implement any such
provision within three years from the date of this Manual, unless
a written exception is granted by the CSA. When implementation is
determined to be cost neutral, or where cost savings or cost
avoidance can be achieved, implementation by contractors shall be
effected no later than 6 months from the date of this Manual.
d. This Manual does not contain protection requirements for
Special Nuclear Material.
1-103. Agency Agreements.
a. E.O.12829 requires the heads of agencies to 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 Secretary of Defense has entered into agreements with the
departments and agencies listed below for the purpose of rendering
industrial security services. This delegation of authority is
contained in an exchange of letters between the Secretary of
Defense and: (1) The Administrator, National Aeronautics and Space
Administration (NASA); (2) The Secretary of Commerce; (3) The
Administrator, General Services Administration (GSA); (4) The
Secretary of State; (5) The Administrator, Small Business
Administration (SBA); (6) The Director, National Science Foundation
(NSF); (7) The Secretary of the Treasury; (8) The Secretary of
Transportation; (9) The Secretary of the Interior; (10) The
Secretary of Agriculture; (11) The Director, United States
Information Agency (USIA); (12) The Secretary of Labor; (13) The
Administrator, Environmental Protection Agency (EPA); (14) The
Attorney General, Department of Justice; (15) The Director, U.S.
Arms Control and Disarmament Agency (ACDA); (16) The Director,
Federal Emergency Management Agency (FEMA); (17) The Chairman,
Board of Governors, Federal Reserve System (FRS); (18) The
Comptroller General of the United States, General Accounting Office
(GAO); (19) The Director of Administrative Services, United States
Trade Representative (USTR); and (20) The Director of
Administration, United States International Trade Commission
(USITC). NOTE: Appropriate interagency agreements have not yet been
effected with the Department of Defense by the Department of
Energy, the Nuclear Regulatory Commission and the Central
Intelligence Agency.
1-104. Security Cognizance.
a. Consistent with 1-101e, above, security cognizance remains
with each federal department or agency unless lawfully delegated.
The term "Cognizant Security Agency" (CSA) denotes the Department
of Defense (DoD), the Department of Energy, the Nuclear Regulatory
Commission, and the Central Intelligence Agency. The Secretary of
Defense, the Secretary of Energy, the Director of Central
Intelligence and the Chairman, Nuclear Regulatory Commission may
delegate any aspect of security administration regarding classified
activities and contracts under their purview within the CSA or to
another CSA. Responsibility for security administration may be
further delegated by a CSA to one or more "Cognizant Security
Offices (CSO)." It is the obligation of each CSA to inform industry
of the applicable CSO.
b. The designation of a CSO does not relieve any Government
Contracting Activity (GCA) of the responsibility to protect and
safeguard the classified information necessary for its classified
contracts, or from visiting the contractor to review the security
aspects of such contracts.
c. Nothing in this Manual affects the authority of the Head of an
Agency to limit, deny, or revoke access to classified information
under its statutory, regulatory, or contract jurisdiction if that
Agency Head determines that the security of the nation so requires.
The term "agency head" has the meaning provided in 5 U.S.C. 552(f).
1-105. Composition of Manual.
This Manual is comprised of a "baseline" portion (Chapters 1
through 11). That portion of the Manual that prescribes
requirements, restrictions, and safeguards that exceed the baseline
standards, such as those necessary to protect special classes of
information, are included in the NISPOM Supplement (NISPOMSUP).
Until officially revised or canceled, the existing COMSEC, Carrier,
and Marking Supplements to the former "Industrial Security Manual
for Safeguarding Classified Information" will continue to be
applicable to DoD-cleared facilities only.
1-106. Manual Interpretations.
All contractor re-quests for interpretations of this Manual shall
be forwarded to the Cognizant Security Agency (CSA) through its
designated Cognizant Security Office (CSO). Requests for
interpretation by contractors located on any U.S. Government
installation shall be forwarded to the CSA through the Commander or
Head of the host installation. Requests for interpretation of DCIDs
referenced in the NISPOM Supplement shall be forwarded to the DCI
through approved channels.
1-107. Waivers and Exceptions to this Manual.
Requests shall be submitted by industry through government channels
approved by the CSA. When submitting a request for waiver, the
contractor shall specify, in writing, the reasons why it is
impractical or unreasonable to comply with the requirement. Waivers
and exceptions will not be granted to impose more stringent
protection requirements than this Manual provides for CONFIDENTIAL,
SECRET, or TOP SECRET information.
Section 2. General Requirements
1-200. General.
Contractors shall protect all classified information to which they
have access or custody. A contractor performing work within the
confines of a Federal installation shall safeguard classified
information in accordance with provisions of this Manual and/or
with the procedures of the host installation or agency.
1-201. Facility Security Officer (FSO).
The contractor shall appoint a U.S. citizen employee, who is
cleared as part of the facility clearance (FCL), to be the FSO. The
FSO will supervise and direct security measures necessary for
implementing this Manual and related Federal requirements for
classified information. The FSO, or those otherwise performing
security duties, shall complete security training as specified in
Chapter 3 and as deemed appropriate by the CSA.
1-202. Standard Practice Procedures.
The contractor shall implement all terms of this Manual applicable
to each of its cleared facilities. Written procedures shall be
prepared when the FSO believes them to be necessary for effective
implementation of this Manual or when the cognizant security office
(CSO) determines them to be necessary to reasonably foreclose the
possibility of loss or compromise of classified information.
1-203. One-Person Facilities.
A facility at which only one person is assigned shall establish
procedures for CSA notification after death or incapacitation of
that person. The current combination of the facility's security
container shall be provided to the CSA, or in the case of a
multiple facility organization, to the home office.
1-204. Cooperation with Federal Agencies.
Contractors shall cooperate with Federal agencies during official
inspections, investigations concerning the protection of classified
information, and during the conduct of personnel security
investigations of present or former employees and others. This
includes providing suitable arrangements within the facility for
conducting private interviews with employees during normal working
hours, providing relevant employment and security records for
review, when requested, and rendering other necessary assistance.
1-205. Agreements with Foreign Interests.
Contractors shall establish procedures to ensure compliance with
governing export control laws before executing any agreement with
a foreign interest that involves access to U.S. classified
information by a foreign national. Contractors must also comply
with the foreign ownership, control or influence requirements in
this Manual. Prior to the execution of such agreements, review and
approval are required by the State Department and release of the
classified information must be approved by the U.S. Government.
Failure to comply with Federal licensing requirements may render a
contractor ineligible for a facility clearance.
1-206. Security Training and Briefings.
Contractors are responsible for advising all cleared employees,
including those outside the United States, of their individual
responsibility for safeguarding classified information. In this
regard, contractors shall provide security training as appropriate,
and in accordance with Chapter 3, to cleared employees by initial
briefings, refresher briefings, and debriefings.
1-207. Security Reviews.
a. Government Reviews. Aperiodic security reviews of all cleared
contractor facilities will be conducted to ensure that safeguards
employed by contractors are adequate for the protection of
classified information.
(1) Review Cycle. The CSA will determine the frequency of
security reviews, which may be increased or decreased for
sufficient reason, consistent with risk management principals.
Security reviews may be conducted no more often than once every 12
months unless special circumstances exist.
(2) Procedures. Contractors will normally be provided notice
of a forthcoming review. Unannounced reviews may be conducted at
the discretion of the CSA. Security reviews necessarily subject all
contractor employees and all areas and receptacles under the
control of the contractor to examination. However, every effort
will be made to avoid unnecessary intrusion into the personal
effects of contractor personnel. The physical examination of the
interior space of equipment not authorized to secure classified
material will always be accomplished in the presence of a
representative of the contractor.
(3) Reciprocity. Each CSA is responsible for ensuring that
redundant and duplicative security review, and audit activity of
its contractors is held to a minimum, including such activity
conducted at common facilities by other CSA's. Appropriate intra
and/or inter-agency agreements shall be executed to fulfill this
cost-sensitive imperative. Instances of redundant and duplicative
security review and audit activity shall be reported to the
Director, Information Security Oversight Office (ISOO) for
resolution.
b. Contractor Reviews. Contractors shall review their security
system on a continuing basis and shall also conduct a formal
self-inspection at intervals consistent with risk management
principals.
1-208. Hotlines.
Federal agencies maintain hotlines to provide an unconstrained
avenue for government and contractor employees to report, without
fear of reprisal, known or suspected instances of serious security
irregularities and infractions concerning contracts, programs, or
projects. These hotlines do not supplant contractor responsibility
to facilitate reporting and timely investigation of security
matters concerning its operations or personnel, and contractor
personnel are encouraged to furnish information through established
company channels. However, the hotline may be used as an alternate
means to report this type of information when considered prudent or
necessary. Contractors shall inform all employees that the hotlines
may be used, if necessary, for reporting matters of national
security significance. CSA hotline addresses and telephone numbers
are as follows:
Defense Hotline
The Pentagon
Washington, DC 20301-1900
(800) 424-9098
(703) 693-5080
NRC Hotline
U.S. Nuclear Regulatory Commission
Office of the Inspector General
Mail StopTSD 28
Washington, D.C. 20555-0001
(800) 233-3497
CIA Hotline
Office of the Inspector General
Central Intelligence Agency
Washington, D.C. 20505
(703) 874-2600
DOE Hotline
Department of Energy
Office of the Inspector General
1000 Independence Avenue, S.W.
Room 5A235
Washington, D.C. 20585
(202) 586-4073
(800) 541-1625
1-209. Classified Information Procedures Act (CIPA).
(P.L. 96-456, 94 STAT. 2025)
The provisions of this Manual do not apply to proceedings in
criminal cases involving classified information, and appeals
therefrom, before the United States District Courts, the Courts of
Appeal, and the Supreme Court. Contractors and their employees are
not authorized to afford defendants, or persons acting for the
defendant, regardless of their personnel security clearance status,
access to classified information except as otherwise authorized by
a protective order issued pursuant to the CIPA.
SECTION 3. REPORTING REQUIREMENTS
1-300. General
Contractors are required to report certain events that have an
impact on the status of the facility clearance (FCL), that impact
on the status of an employee's personnel clearance (PCL), that
affect proper safegarding of classified information, or that
indicate classified information has been lost or compromised.
Contractors shall establish such internal procedures as are
necessary to ensure that cleared employees are aware of their
responsibilities for reporting pertinent information to the FSO,
the Federal Bureau of Investigation (FBI), or other Federal
authorities as required by this Manual, the terms of a classified
contract, and U.S. law. Contractors shall provide complete
information to enable the CSA to ascertain whether classified
information is adequately protected. Contractors shall submit
reports to the FBI, and to their CSA, as specified in this Section.
a. When the reports are classified or offered in confidence
and so marked by the contractor, the information will be reviewed
by the CSA to determine whether it may be withheld from public
disclosure under applicable exemptions of the Freedom of
Information Act (5 U.S.C. 552).
b. When the reports are unclassified and contain information
pertaining to an individual, the Privacy Act of 1974 (5 U.S.C.
552a) permits withholding of that infomation from the individual
only to the extent that the disclosure of the information would
reveal the identity of a source who furnished the information to
the U.S. Government under an expressed promise that the identity of
the source would be held in confidence. The fact that a report is
submitted in confidence must be clearly marked on the report.
1-301 Reports to be Submitted to the FBI.
The contractor shall promptly submit a written report to the
nearest field office of the FBI, regarding information coming to
the contractor's attention concerning actual, probable or possible
espionage, or subversive activities at any of its locations. An
initial report may be made by phone, but it must be followed in
writing, regardless of the disposition made of the report by the
FBI. A copy of the written report shall be provided to the CSA.
1-302 Reports to be Submitted to the CSA.
a. Adverse Information. Contractors shall report adverse
information coming to their attention concerning any of their
cleared employees. Reports based on rumor or innuendo should not
be made. The subsequent termination of employment of an employee
does not obviate the requirement to submit this report. The report
shall include the name and telephone number of the individual to
contact for further information regarding the matter and the
signature, typed name and title of the individual submitting the
report. If the individual is employed on a Federal installation,
a copy of the report and its final disposition shall be furnished
by the contractor to the Commander or Head of the installation.
NOTE: In two court cases, Becker vs. Philco and Taglia vs. Philco
(389 U.S. 979), the U.S. Court of Appeals for the 4th Circuit
decided on February 6, 1967, that a contractor is not liable for
defamation of an employee because of reports made to the Government
pursuant to the requirements of this Manual.
b. Suspicious Contacts. Contractors shall report efforts by
any individual, regardless of nationality, to obtain illegal or
unauthorized access to classified information or to compromise a
cleared employee. In addition, all contacts by cleared employees
with known or suspected intelligence officers from any country, or
any contact which suggests the employee concerned may be the target
of an attempted exploitation by the intelligence services of
another country shall be reported.
c. Change in Cleared Employee Status. Contractors shall
report (1) The death; (2) A change in name; (3) The termination of
employment; (4) Change in marital status; (5) Change in
citizenship; and (6) When the possibility of access to classified
information in the future has been reasonably foreclosed. Such
changes shall be reported by submission of a CSA designated form.
d. Representative of a Foreign Interest. Any cleared
employee, who becomes a representative of a foreign interest (RFI)
or whose status as an RFI is materially changed.
e. Citizenship by Naturalization. A. non-U.S. citizen
granted a Limited Access Authorization (LAA) who becomes a citizen
through naturalization. Submission of this report shall be made on
a CSA designated form, and include the (1) city, county, and state
where naturalized; (2) date naturalized; (3) court; and (4)
certificate number.
f. Employees Desiring Not to Perform on Classified Work.
Evidence that an employee no longer wishes to be processed for a
clearance or to continue an existing clearance.
g. Standard Form (SF) 312. Refusal by an employee to
execute the "Classified Information Nondisclosure Agreement"
(SF 312).
h. Change Conditions Affecting the Facility Clearance.
(1) Any change of ownership, including stock transfers
that effect control of the company.
(2) Any change of operating name or address of the
company or any of its cleared locations.
(3) Any change to the information previously submitted
for key management personnel including, as appropriate,
the names of the individuals they are replacing. In
addition, a statement shall be made indicating: (a)
Whether the new key management personnel are cleared,
and if so, to what level and when, their dates and
places of birth, social security numbers, and their
citizenship; (b) Whether they have been excluded from
access; or (c) Whether they have been temporarily
excluded from access pending the granting of their
clearance. A new complete listing of key management
personnel need only be submitted at the discretion of
the contractor and/or when requested in writing by the
CSA.
(4) Action to terminate business or operations for any
reason, imminent adjudication or reorganization in
bankruptcy, or any change that might affect the
validity of the FCL.
(5) Any material change concerning the information
previously reported by the contractor concerning
foreign ownership, control or influence (FOCI). This
report shall be made by the submission of a CSA-
designated form. When submitting this form, it is not
necessary to repeat answers that have not changed.
When entering into discussions, consultations or
agreements that may reasonably lead to effective
ownership or control by a foreign interest, the
contractor shall report the details by letter. If the
contractor has received a Schedule 13D from the
investor, a copy shall be forwarded with the report. A
new CSA-designated form regarding FOCI shall also be
executed every 5 years.
i. Changes in Storage Capability. Any change in the storage
capability that would raise or lower the level of classified
information the facility is approved to safeguard.
j. Inability to Safeguard Classified Material. Any emergency
situation that renders the facility incapable of safeguarding
classified material.
k. Security Equipment Vulnerabilities. Significant
vulnerabilities identified in security equipment, intrusion
detection systems (IDS), access control systems, communications
security (COMSEC) equipment or systems, and automated information
system (AIS) security hardware and software used to protect
classified material.
l. Unauthorized Receipt of Classified Material. The receipt
or discovery of any classified material that the contractor is not
authorized to have. The report should identify the source of the
material, originator, quantity, subject or title, date, and
classification level.
m. Employee Information in Compromise Cases. When requested
by the CSA, information concerning an employee when the information
is needed in connection with the loss, compromise, or suspected
compromise of classified information.
n. Disposition of Classified Material Terminated From
Accountability. When the whereabouts or disposition of classified
material previously terminated from accountability is subsequently
determined.
o. Foreign Classified Contracts. Any precontract
negotiation or award not placed through a GCA that involves, or may
involve, (1) The release or disclosure of U.S. classified
information to a foreign interest, or (2) Access to classified
information furnished by a foreign interest.
1-303. Reports of Loss, Compromise, or Suspected Compromise.
Any loss, compromise or suspected compromise of classified
information, foreign or domestic, shall be reported to the CSA.
Classified material that cannot be located within a reasonable
period of time shall be presumed to be lost until an investigation
determines otherwise. If the facility is located on a Government
installation, the report shall be furnished to the CSA through the
Commander or Head of the host installation.
a. Preliminary Inquiry. Immediately on receipt of a report
of loss, compromise, or suspected compromise of classified
information, the contractor shall initiate a preliminary inquiry to
ascertain all of the circumstances surrounding the reported loss,
compromise or suspected compromise.
b. Initial Report. If the contractor's preliminary inquiry
confirms that a loss, compromise, or suspected compromise of any
classified information occurred, the contractor shall promptly
submit an initial report of the incident unless otherwise notified
by the CSA. Submission of the initial report shall not be deferred
pending completion of the entire investigation.
c. Final Report. When the investigation has been completed,
a final report shall be submitted to the CSA. The report should
include:
(1) Material and relevant information that was not
included in the initial report;
(2) The name, position, social security number, date
and place of birth, and date of the clearance of
the individual(s) who was primarily responsible
for the incident, including a record of prior
loss, compromise, or suspected compromise for
which the individual had been determined
responsible;
(3) A statement of the corrective action taken to
preclude a recurrence and the disciplinary action
taken against the responsible individual(s), if
any; and
(4) Specific reasons for reaching the conclusion that
loss, compromise, or suspected compromise occurred
or did not occur.
1-304. Individual Culpability Reports.
Contractors shall establish and enforce policies that provide for
appropriate administrative actions taken against employees who
violate requirements of this Manual. They shall establish and
apply a graduated scale of disciplinary actions in the event of
employee violations or negligence. A statement of the
administrative actions taken against an employee shall be included
in a report to the CSA when individual responsibility for a
security violation can be determined and one or more of the
following factors are evident:
a. The violation involved a deliberate disregard of security
requirements.
b. The violation involved gross negligence in the handling
of classified material.
c. The violation involved was not deliberate in nature but
involves a pattern of negligence or carelessness.