EXECUTIVE
ORDER
EO 12829
Effective Date: January 06, 1993

Responsible Office: Management Assessment Division
Subject: National Industrial Security Program

				

TEXT

This order establishes a Natural 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 safeguard 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 (codified as
amended in scattered sections of the United States Code), and the
Federal Advisory Committee 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 the 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, 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 it 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
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, it 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, 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 by 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.

                              /s/George Bush






THE WHITE HOUSE,
January 6, 1993.

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