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The Department of Defense is amending the National Industrial Security Program Operating Manual (NISPOM) based on public comments received on a final rule published on December 21, 2020. The amendments address implementation guidance and costs for the Security Executive Agent Directive (SEAD) 3, clarifications on procedures for the protection and reproduction of classified information, controlled unclassified information (CUI), National Interest Determination (NID) requirements for cleared contractors operating under a Special Security Agreement for Foreign Ownership, Control or Influence, and eligibility determinations for personnel security clearance processes and requirements.

Statement of Need:

With this amendment, DoD amends the National Industrial Security Program Operating Manual (NISPOM) to address implementation guidance and costs for the Security Executive Agent Directive (SEAD) 2, clarifications on procedures for the protection and reproduction of classified information.

Summary of the Legal Basis:

32 CFR 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 ; 42 U.S.C. 2011 et seq. ; 50 U.S.C. ch. 44 ; 50 U.S.C. 3501 et seq.

Alternatives:

None

Anticipated Costs and Benefits:

DCSA began the cost analysis for the baseline costs for fiscal year (FY) 2017 by randomly selecting active NISP contractor facilities that have existing DoD approval for classified storage at their own physical locations and having those facilities submit security costs.  The randomly selected contractor facilities also have an active facility security clearance and a permanent Commercial and Government Entity (CAGE) Code.  In addition to the randomly selected cleared facilities having approved classified storage, DCSA categorizes these contractor facilities for the survey based on the size, scope, and complexity of each contractor’s security program. The general methodology used to estimate security costs incurred by contractor cleared facilities with approved storage of classified information is based on the costs incurred by respondent contractors for the protection of classified information.  The methodology captures the most significant portion of industry’s costs, which is labor.  Security labor in the survey is defined as personnel whose positions exist to support operations and staff in the implementation of government security requirements for the protection of classified information.  Guards who are required as supplemental controls are included in security labor.  The respondent contractors are requested to compile their cleared facility's current annual security labor cost in burdened, current year dollars with the most recent data being from the 2017 survey.  The labor cost, when identified as an estimated percent of each contractor’s total security costs, enables the respondent contractors to calculate their total security costs. Information collected is compiled to create an aggregate estimated cost of NISP classification-related activities. 

Risks:

None