Department of Defense Personnel Security Program (PSP), 18161-18167 [2014-06544]

Agencies

• DEPARTMENT OF DEFENSE
• Office of the Secretary

[Federal Register Volume 79, Number 62 (Tuesday, April 1, 2014)]
[Rules and Regulations]
[Pages 18161-18167]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-06544]


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

DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 156

[DOD-2008-OS-0160]
RIN 0790-AI42


Department of Defense Personnel Security Program (PSP)

AGENCY: Department of Defense.

ACTION: Final rule.

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

SUMMARY: This rule updates policies and responsibilities for the 
Department of Defense (DoD) Personnel Security Program (PSP) in 
accordance with the provisions of current U.S. Code, Public Laws, and 
Executive Orders (E.O.). This rule establishes policy and assigns 
responsibilities related to the operation of the DoD PSP, including 
investigative and adjudicative policy for determining eligibility to 
hold a national security position. This rule also establishes 
investigative and adjudicative policy for the Department's personal 
identity verification (PIV) credential.

DATES: Effective Date: This rule is effective May 1, 2014.

FOR FURTHER INFORMATION CONTACT: Dr. Kelly Buck, (703) 604-1130.

SUPPLEMENTARY INFORMATION:

Executive Summary

I. Purpose and Legal Authority for This Rule

    This rule updates policies, assigns responsibilities, and 
prescribes procedures for the Department of Defense (DoD) Personnel 
Security Program (PSP) in accordance with the provisions of current 
U.S. Code, Public Laws, and Executive Orders (E.O.). This rule 
establishes PSP policy related to the operation of the DoD PSP, 
including investigative and adjudicative policy for determining 
eligibility to hold national security positions. This rule also 
establishes Homeland Security Presidential Directive (HSPD)-12 
investigative and adjudicative policy for the Department's personal 
identity verification (PIV) credential. Legal authorities for this rule 
are E.O. 12968,

[[Page 18162]]

as amended; E.O. 10450, as amended; E.O. 10865, as amended; E.O. 13526; 
E.O. 12829, as amended; E.O. 13467; E.O. 13488; E.O. 12333, as amended; 
5 U.S.C. 301 and 7532; section 1072 of Public Law 110-181, as amended; 
15 U.S.C. 278g-3; 40 U.S.C. section 11331; 10 U.S.C. 1564; 50 U.S.C.; 
3343; 5 CFR parts 731, 732 and 736, and Homeland Security Presidential 
Directive (HSPD)-12.

II. Summary of Major Provisions of This Rule

    The DoD Directive (DoDD) 5200.2, Personnel Security Program (PSP), 
codified at 32 CFR Part 156, was issued April 9, 1999. The Department 
is reissuing the DoD Directive as a DoD Instruction to update existing 
policy regarding operation of the DoD Personnel Security Program and to 
establish new policy implementing HSPD-12.
    The updated policy incorporates Joint Security and Suitability 
Reform Team efforts to revise Executive branch-wide policy and 
procedures needed to implement reform. The Intelligence Reform and 
Terrorism Prevention Act of 2004, E.O. 13467, E.O. 12968, as amended, 
E.O. 10865, and HSPD-12 are some of the current Federal laws, 
directives and statutes that affect the DoD PSP. Since this rule was 
last published, additional executive orders have been issued directing 
alignment of security, suitability and reciprocal acceptance of prior 
investigations and determinations.
    The procedural guidance for the DoD PSP is currently being updated 
and will subsequently be proposed as a rule codified at 32 CFR Part 
154. The investigative and adjudication procedural guidance for the DoD 
Federal PIV credential pursuant HSPD-12 is undergoing coordination and 
will also be proposed a separate rule.

III. Costs and Benefits of This Rule

    This is an update to an existing rule regarding personnel security 
investigative and adjudicative policy and implements new department 
policy related to HSPD-12. The personnel security program has no 
discernable increase in anticipated costs and benefits as the program 
is being updated to conform to current national security guidance. The 
latter dealing with HSPD-12 is an unfunded mandate. However, this rule 
does not increase costs; rather it implements the requirements of HSPD-
12 in the most efficient and effective manner possible by ensuring 
uniform implementation. The benefits inherent to both the personnel 
security and HSPD-12 programs enhance security as directed by the 
Intelligence Reform and Terrorism Prevention Act of 2004 and subsequent 
implementing policies.

Public Comments

    The Department of Defense (DoD) published a proposed rule on 
February 2, 2011 (76 FR 5729). One comment was received and is 
addressed below:
    Comment: Given the increasing use of DNA (deoxyribonucleic acid) as 
an investigatory tool by federal, state, and local law enforcement 
agencies, the DoD should consider requiring applicants to provide a DNA 
sample. That provided DNA sample would be profiled and compared to 
available databases. This would help insure that no applicant for a 
clearance is a subject of an active federal, state, or local criminal 
investigation based on DNA evidence.
    This would achieve the same end as the current collection of 
fingerprints from applicants that are run against Federal Bureau of 
Investigation databases. However, the additional use of DNA would 
recognize the greater prevalence of DNA evidence in criminal 
investigations.
    I do note that DNA is distinctly different from fingerprints in 
that a search of databases may produce a result that does not link to 
the DoD clearance applicant but could instead provide a linkage to a 
familial relative of the applicant. This secondary issue would have to 
be examined by DoD and the legal community.
    I also believe other federal agencies with similar personnel 
security programs should consider the collection of DNA samples from 
applicants to insure appropriate reciprocity of clearances between 
those agencies and DoD.
    DoD Response: The Federal Government is looking into the 
feasibility of using biometric identifiers other than fingerprints in 
the security clearance process. However, any such requirement such as 
the suggested collection of DNA from clearance applicants would be 
covered in a separate rulemaking. As the comment correctly notes, such 
a policy would be best coordinated with the other federal agencies with 
personnel security programs to insure appropriate reciprocity of 
clearances between agencies.
    Additional Changes by DoD: Other changes were made to the final 
rule from what was in the proposed due to additional coordination 
within the Department. These changes include:
    (a) The title for Sec.  156.5 has been changed from ``Procedures-
sensitive positions, duties, and classified access'' to ``National 
Security Positions'' to incorporate the positions, duties, and access 
into one common phrase. The term is listed in the definitions section 
and its use in the part provides for ease of reading.
    (b) Adjustments were made to the part to apply correct U.S. Code, 
Public Laws, or Executive Orders to the appropriate paragraph(s).
    (c) Changes were made in the ``Responsibilities'' section to update 
the new title name for the Deputy Under Secretary of Defense for 
Intelligence and Security (previously known as the Deputy Under 
Secretary of Defense for HUMINT, Counterintelligence, and Security).
    (d) Required responsibilities were also added for the Under 
Secretary of Defense for Acquisition, Technology, and Logistics and the 
Under Secretary of Defense for Policy.
    (e) Verbiage was added that prohibits the use of DoD adjudication 
systems of record for use as a pre-hiring tool. Additional language 
directs the removal of personnel from national security positions who 
have received unfavorable security determinations.
    (f) Any other changes made to the part were made for ease and 
clarity of reading.

Regulatory Procedures

E.O. 12866, ``Regulatory Planning and Review'' and EO 13563, 
``Improving Regulation and Regulatory Review''
    It has been certified that 32 CFR Part 156 does not:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy; a section of the 
economy; productivity; competition; jobs; the environment; public 
health or safety; or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another Agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
these Executive Orders.

Section 202, Public Law 104-4, ``Unfunded Mandates Reform Act''

    It has been certified that 32 CFR Part 156 does not contain a 
Federal mandate that may result in the expenditure by State, local and 
tribal governments, in aggregate, or by the private sector, of $100 
million or more in any one year.

[[Page 18163]]

Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)

    It has been certified that 32 CFR Part 156 is not subject to the 
Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities.

Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)

    It has been certified that 32 CFR Part 156 does not impose 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act of 1995.

E.O. 13132, ``Federalism''

    It has been certified that 32 CFR Part 156 does not have federalism 
implications, as set forth in E.O. 13132. This rule does not have 
substantial direct effects on:
    (1) The States;
    (2) The relationship between the National Government and the 
States; or
    (3) The distribution of power and responsibilities among the 
various levels of Government.

List of Subjects in 32 CFR Part 156

    Government employees, Security measures.

0
Accordingly, 32 CFR Part 156 is revised to read as follows:

PART 156--DEPARTMENT OF DEFENSE PERSONNEL SECURITY PROGRAM (PSP)

Sec.
156.1 Purpose.
156.2 Applicability.
156.3 Policy.
156.4 Responsibilities.
156.5 National security positions.
156.6 Common access card (CAC) investigation and adjudication.
156.7 Definitions.

    Authority: E.O. 12968, as amended; E.O. 10450, as amended; E.O. 
10865, as amended; E.O. 13526; E.O. 12829, as amended; E.O. 13467; 
E.O. 13488; E.O. 12333, as amended; 5 U.S.C 301 and 7532; section 
1072 of Pub. L. 110-181, as amended; 15 U.S.C. 278g-3; 40 U.S.C. 
11331; 10 U.S.C. 1564; 50 U.S.C. 3343; 5 CFR parts 731, 731.101, 
732, and 736; and HSPD-12.


Sec.  156.1  Purpose.

    This part updates policies and responsibilities for the DoD 
Personnel Security Program (PSP) consistent with E.O. 12968, as 
amended; E.O. 10450, as amended; E.O. 10865, as amended; E.O. 13526; 
E.O. 12829, as amended; E.O. 13467; E.O. 13488; E.O. 12333, as amended; 
5 U.S.C. 301 and 7532; section 1072 of Public Law 110-181, as amended; 
15 U.S.C. 278g-3; 40 U.S.C. 11331; 10 U.S.C. 1564; 32 CFR parts 147, 
154 through 156; 50 U.S.C. 3343; 5 CFR parts 731, 731.101, 732 and 736; 
and HSPD-12.


Sec.  156.2  Applicability.

    This part applies to the Office of the Secretary of Defense, the 
Military Departments, the Office of the Chairman of the Joint Chiefs of 
Staff and the Joint Staff, the Combatant Commands, the Office of the 
Inspector General of the DoD, the Defense Agencies, the DoD Field 
Activities, and all other organizational entities within the DoD 
(hereinafter referred to collectively as the ``DoD Components'').


Sec.  156.3  Policy.

    It is DoD policy that:
    (a) The Department shall establish and maintain a uniform DoD PSP 
to the extent consistent with standards and procedures in E.O. 12968, 
as amended; E.O. 10450, as amended; E.O. 10865, as amended; E.O. 13526; 
E.O. 12829, as amended; E.O. 13467; E.O. 13488; E.O. 12333, as amended; 
32 CFR parts 147, 154 through 156; 5 CFR parts 731, 731.101, 732 and 
736; 5 U.S.C. 301 and 7532; section 1072 of Public Law 110-181, as 
amended; 15 U.S.C. 278g-3; section 11331 of 40 U.S.C.; 10 U.S.C. 1564; 
50 U.S.C. 3343; and the Intelligence Community Directive Number 704 
(ICD 704) (available on the Internet at https://www.dni.gov).
    (b) DoD PSP policies and procedures shall be aligned using 
consistent standards to the extent possible; provide for reciprocal 
recognition of existing investigations and adjudications; be cost-
effective, timely, and provide efficient protection of the national 
interest; and provide fair treatment of those upon whom the Federal 
Government relies to conduct the Nation's business and protect national 
security.
    (c) Discretionary judgments used to determine eligibility for 
national security positions are an inherently governmental function and 
shall be performed by appropriately trained and favorably adjudicated 
Federal Government personnel or appropriate automated procedures.
    (d) No negative inference may be raised solely on the basis of 
mental health counseling. Such counseling may be a positive factor 
that, by itself, shall not jeopardize the rendering of eligibility 
determinations or temporary eligibility for access to national security 
information. However, mental health counseling, where relevant to 
adjudication for a national security position, may justify further 
inquiry to assess risk factors that may be relevant to the DoD PSP.
    (e) The DoD shall not discriminate nor may any inference be raised 
on the basis of race, color, religion, sex, national origin, 
disability, or sexual orientation.
    (f) Discretionary judgments that determine eligibility for national 
security positions shall be clearly consistent with the national 
security interests of the United States. Any doubt shall be resolved in 
favor of national security.
    (g) No person shall be deemed to be eligible for a national 
security position merely by reason of Federal service or contracting, 
licensee, certificate holder, or grantee status, or as a matter of 
right or privilege, or as a result of any particular title, rank, 
position, or affiliation.
    (h) No person shall be appointed or assigned to a national security 
position when an unfavorable personnel security determination has been 
rendered.
    (i) Eligibility for national security positions shall be granted 
only to persons who are U.S. citizens for whom the investigative and 
adjudicative process has been favorably completed. However, based on 
exceptional circumstances where official functions must be performed 
prior to completion of the investigative and adjudicative process, 
temporary eligibility for access to classified information may be 
granted while the investigation is underway.
    (j) As an exception, a non-U.S. citizen who possesses an expertise 
that cannot be filled by a cleared or clearable U.S. citizen, may hold 
a national security position or be granted a limited access 
authorization to classified information in support of a specific DoD 
program, project, or contract following a favorable security 
determination by an authorized adjudication facility.
    (k) The DoD shall establish investigative and adjudicative policy 
and procedures to determine whether to issue, deny or revoke common 
access cards (CACs) in accordance with the standards of the Homeland 
Security Presidential Directive (HSPD)-12 (available in the Public 
Papers of the Presidents of the United States: George W. Bush (2004, 
Book II, page 1765) found on the Internet at https://www.gpo.gov/); 
Office of Management and Budget Memorandum (OMB) M-05-24 (available on 
the Internet at https://www.whitehouse.gov/omb); Federal Information 
Processing Standards Publication 201-1 (FIPS 201-1) or successor 
(available on the Internet at https://csrc.nist.gov/); 48 CFR, Chapter 
1, Parts 1-99 (Federal Acquisition Regulation); 48 CFR, Chapter 2, 
Parts 201-253 (Defense Federal Acquisition Regulation Supplement), and 
the Office of Personnel Management (OPM)

[[Page 18164]]

Memorandum, ``Final Credentialing Standards for Issuing Personal 
Identity Verification Cards under HSPD-12,'' dated July 31, 2008 
(available on the Internet at https://www.opm.gov/), as applicable.
    (l) Information about individuals collected as part of the 
investigative and adjudicative process shall be managed in accordance 
with applicable laws and DoD policies, including those related to 
privacy and confidentiality, security of information, and access to 
information.


Sec.  156.4  Responsibilities.

    (a) The Under Secretary of Defense for Intelligence (USD(I)) shall:
    (1) Develop, coordinate, and oversee the implementation of policy, 
programs, and guidance for the DoD PSP.
    (2) In coordination with the Under Secretary of Defense for 
Personnel and Readiness (USD(P&R)) and the General Counsel of the DoD 
(GC, DoD), develop policy for DoD personnel for the CAC personnel 
security investigation (PSI) and adjudication in accordance with HSPD-
12; OMB Memorandum M-05-24; FIPS 201-1; and OPM Memorandum, ``Final 
Credentialing Standards for Issuing Personal Identity Verification 
Cards under HSPD-12.''
    (3) In coordination with the Under Secretary of Defense for 
Acquisition, Technology and Logistics (USD(AT&L)) and the GC, DoD, 
develop policy for contractor investigations for CAC adjudication, 
outside the purview of the National Industrial Security Program, under 
the terms of applicable contracts in accordance with HSPD-12; OMB 
Memorandum M-05-24; FIPS 201-1; the Federal Acquisition Regulation; the 
Defense Federal Acquisition Regulation Supplement; and OPM Memorandum, 
``Final Credentialing Standards for Issuing Personal Identity 
Verification Cards under HSPD-12.''
    (4) Issue guidance implementing the policy in this part.
    (b) The Deputy Under Secretary of Defense for Intelligence & 
Security (DUSD(I&S)), under the authority, direction, and control of 
the USD(I) shall:
    (1) Ensure that the PSP is consistent, cost-effective, efficient, 
and balances the rights of individuals with the interests of national 
security.
    (2) Develop and publish revisions to 32 CFR Part 154.
    (3) Approve, coordinate, and oversee all DoD personnel security 
research initiatives and activities to improve the efficiency, 
effectiveness, and fairness of the DoD PSP.
    (4) Ensure that the Defense Security Service (DSS) provides 
education, training, and awareness support to the DoD PSP.
    (5) Serve as the primary contact between DoD, the Red Cross, United 
Service Organizations, and other organizations with direct DoD 
affiliation for all matters relating to the DoD PSP.
    (6) When appropriate, approve requests for exceptions to the DoD 
PSP relating to national security eligibility requirements for access 
to classified information except North Atlantic Treaty Organization 
(NATO) classified information. Requests for exceptions involving access 
to NATO classified information shall be sent to the Office of the Under 
Secretary of Defense for Policy.
    (7) Develop guidance, interpretation, and clarification regarding 
the DoD PSP as needed.
    (8) Conduct oversight inspections of the DoD Components for 
implementation and compliance with DoD personnel security policy and 
operating procedures.
    (9) In furtherance of coordinated Government-wide initiatives under 
E.O. 13467, develop a framework setting forth an overarching strategy 
identifying goals, performance measures, roles and responsibilities, a 
communications strategy, and metrics to measure the quality of security 
clearance investigations and adjudications to ensure a sound DoD PSP 
that will continue to meet the needs of DoD.
    (c) The USD(AT&L) shall:
    (1) Establish acquisition policy, procedures, and guidance, in 
coordination with the USD(I) that facilitate DoD Component compliance 
with the DoD PSP.
    (2) Establish regulatory requirements within the Federal 
Acquisition Regulation and Defense Federal Acquisition Regulation for 
contracts and agreements that require non-DoD personnel to adhere to 
personnel security procedures in the performance of a contract or 
agreement.
    (d) The Under Secretary of Defense for Policy (USD(P)) is the 
approval authority for requests for exceptions to the DoD PSP involving 
access to NATO classified information.
    (e) The GC, DoD shall:
    (1) Provide advice and guidance as to the legal sufficiency of 
procedures and standards involved in implementing the DoD PSP and 
exercise oversight of the established administrative due process 
procedures of the DoD PSP.
    (2) Perform functions relating to the DoD PSP including the 
maintenance and oversight of the Defense Office of Hearings and Appeals 
(DOHA).
    (f) The Heads of the DoD Components shall:
    (1) Designate a senior agency official, consistent with the 
provisions of E.O. 12968, as amended, who shall direct and administer 
the DoD PSP consistent with this part.
    (2) Comply with the policy and procedures regarding investigation 
and adjudication for CAC issuance and distribute this guidance to local 
and regional organizations.
    (3) Provide funding to cover Component requirements for PSIs, 
adjudication, and recording of results to comply with the DoD PSP.
    (4) Enforce requirements for prompt reporting of significant 
derogatory information, unfavorable administrative actions, and adverse 
actions to the appropriate personnel security, human resources, and 
counterintelligence official(s), as appropriate, within their 
respective Component.
    (5) Perform functions relating to the DoD Security Professional 
Education Development Program to ensure the security workforce in their 
respective Component has the knowledge and skills required to perform 
security functional tasks.
    (6) Provide requested information and recommendations, as 
appropriate, on any aspect of this part and the DoD PSP to the USD(I).
    (7) Enforce the requirement that DoD personnel security 
adjudication system(s) of records, within their respective Components, 
shall only be used as a personnel security system of records and shall 
not be used as a pre-hiring screening tool.


Sec.  156.5  National security positions.

    (a) Procedures. The objective of the PSP is to ensure persons 
deemed eligible for national security positions remain reliable and 
trustworthy.
    (1) Duties considered sensitive and critical to national security 
do not always involve classified activities or classified matters. 
Personnel security procedures for national security positions are set 
forth in E.O. 12968, as amended; E.O. 10865, 32 CFR parts 154-155; ICD 
704; and DoD Regulation 5220.22-R. The specific procedures applicable 
in each case type are set forth in DoD issuances.
    (2) Employees with access to automated systems that contain active 
duty, guard, or military reservists' personally identifiable 
information or information pertaining to Service members that are 
otherwise protected from disclosure by section 552a of title 5 United 
States Code, may be designated as national security positions within 
DoD, where such access has the potential to cause damage to national 
security.

[[Page 18165]]

    (b) Sensitive Compartmented Information (SCI) Eligibility. 
Investigative and adjudicative requirements for SCI eligibility shall 
be executed in accordance with this part and ICD 704.
    (c) Adjudication. (1) Personnel security criteria and adjudicative 
standards are described in E.O. 12968, as amended; 32 CFR parts 147, 
154 and 155; ICD 704, and DoD Regulation 5220.22-R, as applicable, in 
accordance with Adjudicative Guidelines for Determining Eligibility for 
Access to Classified Information and other types of protected 
information or assignment to national security positions. Adjudications 
of eligibility for national security positions, regardless of whether 
they involve access to classified information, must be made in 
accordance with the Adjudicative Guidelines for Determining Eligibility 
for Access to Classified Information.
    (2) When an unfavorable personnel security determination is 
rendered:
    (i) Individuals cannot be appointed or assigned to national 
security positions.
    (ii) An individual currently occupying a national security position 
will be immediately removed from the national security position and 
placed, in accordance with agency policy, in an existing non-sensitive 
position if available. Placement in a non-sensitive position requires 
compliance with employment suitability standards. The national security 
position is not to be modified or a new position created to circumvent 
an unfavorable personnel security determination. The individual is to 
be placed in an appropriate status, in accordance with agency policy, 
until a final security determination is made. A final security 
determination is the granting, denial or revocation by an appropriate 
central adjudications facility or an appeal board decision, whichever 
is later.
    (iii) To ensure consistency and quality in determinations of 
eligibility for national security positions, adjudicators must 
successfully complete the full program of professional training 
provided by the DSS Center for Development of Security Excellence (or 
equivalent training) and be certified through the DoD Professional 
Certification Program for Adjudicators within 2 years of program 
implementation or, for new hires, within 2 years of eligibility for 
certification testing.
    (d) Appeal Procedures--Denial or Revocation of Eligibility. 
Individuals may elect to appeal unfavorable personnel security 
determinations in accordance with the procedures set forth in E.O. 
12968, as amended; parts 154 and 155 of 32 CFR; ICD 704, and DoD 
Regulation 5220.22-R as applicable or as otherwise authorized by law.
    (e) Polygraph. Under certain conditions, DoD Components are 
authorized to use polygraph examinations to resolve credible derogatory 
information developed in connection with a personnel security 
investigation; to aid in the related adjudication; or to facilitate 
classified access decisions.
    (f) Continuous Evaluation. All personnel in national security 
positions shall be subject to continuous evaluation.
    (g) Financial Disclosure. DoD Component implementation of the 
electronic financial disclosure requirement, consistent with E.O. 
12968, shall be completed by the end of calendar year 2012.
    (h) Reciprocal Acceptance of Eligibility Determinations. (1) DoD 
reciprocally accepts existing national security eligibility 
determinations or clearances from other government agencies in 
accordance with E.O. 13467, OMB Memorandums ``Reciprocal Recognition of 
Existing Personnel Security Clearances'' dated December 12, 2005 
(Copies available on the Internet at https://www.whitehouse.gov/omb) and 
July 17, 2006 (Copies available on the Internet at https://www.whitehouse.gov/omb).
    (2) Reciprocity for SCI eligibility shall be executed in accordance 
with ICD 704 and associated Director of National Intelligence guidance.
    (3) Personnel who have been determined eligible for national 
security positions should not be subjected to additional security 
reviews, completion of a new security questionnaire, or initiation of a 
new investigative check, unless credible derogatory information that 
was not previously adjudicated becomes known, or the previous 
adjudication was granted by a condition, deviation, or waiver pursuant 
the provisions of OMB Memorandums ``Reciprocal Recognition of Existing 
Personnel Security Clearances'' dated December 12, 2005, or there has 
been a break in service of more than 24 months. Exceptions for access 
to SCI or special access programs are listed in the OMB Memorandums 
``Reciprocal Recognition of Existing Personnel Security Clearances'' 
dated July 17, 2006.
    (i) National Security Agency (NSA)/Central Security Service (CSS). 
Employees, contractors, military assignees, and others with similar 
affiliations with the NSA/CSS must maintain SCI eligibility for access 
to sensitive cryptologic information in accordance with 50 U.S.C. 
chapter 23.
    (j) Wounded Warrior Security and Intelligence Internship Program. 
PSIs in support of wounded warriors may be submitted and processed 
regardless of the time remaining in military service. Investigations 
will be accelerated through a special program code established by the 
Office of the USD(I) to ensure expedited service by the investigating 
and adjudicating agencies.
    (1) Category 2 wounded, ill, or injured uniformed service personnel 
who expect to be separated with a medical disability rating of 30 
percent or greater may submit a PSI for Top Secret clearance with SCI 
eligibility prior to medical separation provided they are serving in or 
have been nominated for a wounded warrior internship program.
    (2) The investigations will be funded by the DoD Component that is 
offering the internship. If the DoD Component does not have funds 
available, the Military Service in which the uniform service personnel 
served may choose to fund the investigation.


Sec.  156.6  Common access card (CAC) investigation and adjudication.

    (a) General. Individuals entrusted with access to Federal property, 
information systems, and any other information bearing on national 
security must not put the Government at risk or provide an avenue for 
terrorism.
    (1) All individuals requiring a CAC must meet credentialing 
standards of OPM Memorandum, ``Final Credentialing Standards for 
Issuing Personal Identity Verification Cards under HSPD-12.'' For those 
individuals who are subject to an interim credentialing decision before 
a security, suitability, or equivalent adjudication is completed, the 
OPM credentialing standards will be the basis for issuing or denying a 
CAC. The subsequent credentialing decision will be made upon receipt of 
the completed investigation from the ISP.
    (2) If an individual is found unsuitable for employment in a 
covered position under 5 CFR 731.101, ineligible for access to 
classified information under E.O. 12968, or disqualified from 
appointment in the excepted service or from working on a contract, the 
unfavorable decision is a sufficient basis for non-issuance or 
revocation of a CAC, but does not necessarily mandate this result.
    (b) Investigation. A favorably adjudicated National Agency Check 
with Inquiries (NACI) is the minimum investigation required for a final 
credentialing determination for CAC.

[[Page 18166]]

    (1) An interim credentialing determination can be made based on the 
results of a completed National Agency Check or an Federal Bureau of 
Investigation National Criminal History Check (fingerprint check), and 
submission of a request for investigation (NACI or greater).
    (2) Individuals identified as having a favorably adjudicated 
investigation on record, equivalent to (or greater than) the NACI do 
not require an additional investigation for CAC issuance.
    (3) There is no requirement to reinvestigate CAC holders unless 
they are subject to reinvestigation for national security or 
suitability reasons as specified in applicable DoD issuances.
    (4) Existing CAC holders without the requisite background 
investigation on record must be investigated in accordance with OMB 
Memorandum M-05-24, ``Implementation of Homeland Security Presidential 
Directive (HSPD) 12--Policy for a Common Identification Standard for 
Federal Employees and Contractors,'' dated August 5, 2005.
    (c) Adjudication. The ultimate determination whether to authorize 
CAC issuance or revoke the CAC must be an overall common-sense judgment 
after careful consideration of the basic and, if applicable, 
supplemental credentialing standards in OPM Memorandum, ``Final 
Credentialing Standards for Issuing Personal Identity Verification 
Cards under HSPD-12,'' each of which is to be evaluated in the context 
of the whole person. These standards shall be evaluated to determine if 
there is a reasonable basis to believe that issuing a CAC to the 
individual poses an unacceptable risk.
    (1) Each case is unique and must be judged on its own merits. To 
the extent pertinent to the individual case, when evaluating the 
conduct, the adjudicator should consider: the nature and seriousness of 
the conduct, the circumstances surrounding the conduct, the recency and 
frequency of the conduct, the individual's age and maturity at the time 
of the conduct, contributing external conditions, and the presence or 
absence of rehabilitation or efforts toward rehabilitation.
    (2) Final credentialing standards are:
    (i) Basic Credentialing Standards. All CAC adjudications must apply 
the basic credentialing standards. CAC shall not be issued when a 
disqualifying factor cannot be mitigated.
    (ii) Supplemental Credentialing Standards. The supplemental 
credentialing standards, in addition to the basic credentialing 
standards, shall apply generally to individuals who are not subject to 
adjudication for eligibility for a sensitive position or access to 
classified information, suitability for Federal employment or fitness. 
These standards may be applied based on the risk associated with the 
position or work on the contract.
    (3) All interim and final adjudicative determinations shall be made 
by cleared and trained Federal Government personnel. Automated 
adjudicative processes shall be used to the maximum extent practicable.
    (4) Adjudication decisions of CAC investigations shall be 
incorporated into the Consolidated Central Adjudication Facility as 
directed by the Deputy Secretary of Defense.
    (5) CAC adjudicators must successfully complete formal training 
through a DoD adjudicator course from the DSS Center for Development of 
Security Excellence to achieve maximum consistency and fairness of 
decisions rendered.
    (6) Federal Government credentialing standards do not prohibit 
employment of convicted felons who have been released from correctional 
institutions, absent other issues, if they have demonstrated clear 
evidence of rehabilitation.
    (d) Appeals. CAC applicants or holders may appeal CAC denial or 
revocation.
    (1) No separate administrative appeal process is allowed when an 
individual has been denied a CAC as a result of a negative suitability 
determination under 5 CFR Part 731, an applicable decision to deny or 
revoke a security clearance, or based on the results of a determination 
to disqualify the person from an appointment in an excepted service 
position or from working on a contract for reasons other than 
eligibility for a Federal Credential as described in OPM Memorandum, 
``Final Credentialing Standards for Issuing Personal Identity 
Verification Cards under HSPD-12.'' If a later denial or revocation of 
a CAC results from an applicable denial or revocation of a security 
clearance, suitability decision, or other action for which 
administrative process was already provided on grounds that support 
denial or revocation of a CAC, no separate appeal for CAC denial or 
revocation is allowed.
    (2) Initial civilian and contractor applicants who have been denied 
a CAC, and for whom an appeal is allowed under this paragraph, may 
elect to appeal to a three member board containing no more than one 
security representative from the sponsoring activity.
    (3) Contractor employees who have had their CAC revoked, and for 
whom an appeal is allowed under this paragraph, may appeal to DOHA 
under the established administrative process set out in 32 CFR Part 
155.
    (4) Decisions following appeal are final.
    (5) Individuals whose CACs have been denied or revoked are eligible 
for reconsideration 1 year after the date of final denial or 
revocation, provided the sponsoring activity supports reconsideration. 
Individuals with a statutory or regulatory bar are not eligible for 
reconsideration while under debarment.
    (e) Foreign Nationals. Special considerations for conducting 
background investigations of non-U.S. nationals (foreign nationals) are 
addressed in OPM Memorandum, ``Final Credentialing Standards for 
Issuing Personal Identity Verification Cards under HSPD-12.'' The 
following criteria shall be met prior to CAC issuance to foreign 
nationals:
    (1) The background investigation must be completed and favorably 
adjudicated before issuing CACs to foreign nationals.
    (2) Foreign nationals are not eligible to receive CAC on an interim 
basis.
    (3) At foreign locations:
    (i) Foreign national background investigations may vary based on 
standing reciprocity treaties concerning identity assurance and 
information exchange that exist between the United States and its 
allies. This includes foreign military, civilian, or contract support 
with a visit status and security assurance that has been confirmed, 
documented, and processed in accordance with USD(P) policy.
    (ii) The type of background investigation may also vary based upon 
agency agreements with the host country when the foreign national CAC 
applicant (such as a DoD direct or indirect hire) has not resided in 
the United States for at least 3 of the past 5 years or is residing in 
a foreign country. The investigation must be consistent with NACI, to 
the extent possible, and include a fingerprint check against the 
Federal Bureau of Investigation (FBI) criminal history database, an FBI 
Investigations Files (name check) search, and a name check against the 
Terrorist Screening Database.
    (4) At U.S.-based locations and in U.S. territories:
    (i) Foreign nationals who have resided in the United States or U.S. 
territory for 3 years or more must have a NACI or greater 
investigation.
    (ii) Components may delay the background investigation of foreign 
nationals who have resided in the U.S. or U.S. territory for less than 
3 years

[[Page 18167]]

until the individual has been in the U.S. or U.S. territory for 3 
years. When the investigation is delayed, the Component may, in lieu of 
a CAC, issue an alternative facility access credential at the 
discretion of the relevant Component official based on a risk 
determination.
    (f) Recording Final Adjudication. Immediately following final 
adjudication, the sponsoring activity shall record the final 
eligibility determination (active, revoked, denied, etc.) in the OPM 
Central Verification System as directed by OPM Memorandum, ``Final 
Credentialing Standards for Issuing Personal Identity Verification 
Cards under HSPD-12,'' and maintain local records for posting in a DoD 
repository when available.
    (g) Reciprocity of CAC Determinations. (1) The sponsoring activity 
shall not re-adjudicate CAC determinations for individuals transferring 
from another Federal department or agency, provided:
    (i) Possession of a valid personal identity verification (PIV) card 
or CAC can be verified by the individual's former department or agency.
    (ii) The individual has undergone the required NACI or other 
equivalent suitability, public trust, or national security 
investigation and received favorable adjudication from the former 
agency.
    (iii) There is no break in service greater than 24 months and the 
individual has no actionable information since the date of the last 
completed investigation.
    (2) Interim CAC determinations are not eligible to be transferred 
or reciprocally accepted. Reciprocity shall be based on final favorable 
adjudication only.


Sec.  156.7  Definitions.

    These terms and their definitions are for the purposes of this 
part:
    Continuous evaluation. Defined in section 1.3(d) of E.O. 13467.
    Contractor. Defined in E.O. 13467.
    Employee. Defined in E.O. 12968, as amended.
    Limited access authorization. Defined in 32 CFR Part 154.
    National security position. (1) Any position in a department or 
agency, the occupant of which could bring about, by virtue of the 
nature of the position, a material adverse effect on the national 
security.
    (i) Such positions include those requiring eligibility for access 
to classified information.
    (ii) Other such positions include, but are not limited to, those 
whose duties include:
    (A) Protecting the nation, its citizens and residents from acts of 
terrorism, espionage, or foreign aggression, including those positions 
where the occupant's duties involve protecting the nation's borders, 
ports, critical infrastructure or key resources, and where the 
occupant's neglect, action, or inaction could bring about a material 
adverse effect on the national security;
    (B) Developing defense plans or policies;
    (C) Planning or conducting intelligence or counterintelligence 
activities, counterterrorism activities and related activities 
concerned with the preservation of the military strength of the United 
States;
    (D) Protecting or controlling access to facilities or information 
systems where the occupant's neglect, action, or inaction could bring 
about a material adverse effect on the national security;
    (E) Controlling, maintaining custody, safeguarding, or disposing of 
hazardous materials, arms, ammunition or explosives, where the 
occupant's neglect, action, or inaction could bring about a material 
adverse effect on the national security;
    (F) Exercising investigative or adjudicative duties related to 
national security, suitability, fitness or identity credentialing, 
where the occupant's neglect, action, or inaction could bring about a 
material adverse effect on the national security;
    (G) Exercising duties related to criminal justice, public safety or 
law enforcement, where the occupant's neglect, action, or inaction 
could bring about a material adverse effect on the national security; 
or
    (H) Conducting investigations or audits related to the functions 
described in paragraphs (1)(ii)(B) through (G) of this definition, 
where the occupant's neglect, action, or inaction could bring about a 
material adverse effect on the national security.
    (2) The requirements of this part apply to positions in the 
competitive service, positions in the excepted service where the 
incumbent can be noncompetitively converted to the competitive service, 
and career appointments in the Senior Executive Service within the 
executive branch. Departments and agencies may apply the requirements 
of this part to other excepted service positions within the executive 
branch and contractor positions, to the extent consistent with law.
    Unacceptable risk. Threat to the life, safety, or health of 
employees, contractors, vendors, or visitors; to the Government's 
physical assets or information systems; to personal property; to 
records, privileged, proprietary, financial, or medical records; or to 
the privacy of data subjects, which will not be tolerated by the 
Government.

    Dated: March 20, 2014.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2014-06544 Filed 3-31-14; 8:45 am]
BILLING CODE 5001-06-P