Amending the Civil Service Rules, Executive Order 13488, and Executive Order 13467 To Modernize the Executive Branch-Wide Governance Structure and Processes for Security Clearances, Suitability and Fitness for Employment, and Credentialing, and Related Matters, 8115-8129 [2017-01623]

Agencies

• Executive Office of the President

[Federal Register Volume 82, Number 13 (Monday, January 23, 2017)]
[Presidential Documents]
[Pages 8115-8129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01623]



[[Page 8113]]

Vol. 82

Monday,

No. 13

January 23, 2017

Part VII





The President





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Executive Order 13764--Amending the Civil Service Rules, Executive 
Order 13488, and Executive Order 13467 To Modernize the Executive 
Branch-Wide Governance Structure and Processes for Security Clearances, 
Suitability and Fitness for Employment, and Credentialing, and Related 
Matters


                        Presidential Documents 



Federal Register / Vol. 82 , No. 13 / Monday, January 23, 2017 / 
Presidential Documents

___________________________________________________________________

Title 3--
The President

[[Page 8115]]

                Executive Order 13764 of January 17, 2017

                
Amending the Civil Service Rules, Executive Order 
                13488, and Executive Order 13467 To Modernize the 
                Executive Branch-Wide Governance Structure and 
                Processes for Security Clearances, Suitability and 
                Fitness for Employment, and Credentialing, and Related 
                Matters

                By the authority vested in me as President by the 
                Constitution and the laws of the United States of 
                America, and as part of continuing efforts to modernize 
                the overarching executive branch enterprise to ensure 
                that all persons performing work for or on behalf of 
                the Government are and continue to be loyal to the 
                United States, reliable, trustworthy, and of good 
                conduct and character, and by using mutually consistent 
                standards and procedures, it is hereby ordered as 
                follows:

                Section 1. Amendments to the Civil Service Rules. (a) 
                Civil Service Rule II is amended as follows:

(i) The title to 5 CFR Part 2 is revised to read as follows:

  ``PART 2--APPOINTMENT THROUGH THE COMPETITIVE SERVICE; RELATED MATTERS 
(RULE II)''

(ii) The title to 5 CFR 2.1 is revised to read as follows:

  ``Sec.  2.1 Competitive examinations and eligible registers; suitability 
and fitness for civil service employment.''

(iii) 5 CFR 2.1(a) is revised to read as follows:

  ``(a) OPM shall be responsible for:

``(i) Open competitive examinations for admission to the competitive 
service that will fairly test the relative capacity and fitness of the 
persons examined for the position to be filled.

``(ii) Standards with respect to citizenship, age, education, training and 
experience, physical and mental fitness, and for residence or other 
requirements that applicants must meet to be admitted to or rated in 
examinations.

``(iii) Standards of suitability based on character and conduct for 
appointment to a position in the competitive service, for appointment to a 
position in the excepted service where the incumbent can be 
noncompetitively converted to the competitive service, and for career 
appointment to a position in the Senior Executive Service.

``(iv) Minimum standards of fitness based on character and conduct for 
appointment in any other position in the excepted service of the executive 
branch, except for (A) positions in any element of the intelligence 
community as defined in the National Security Act of 1947, as amended, to 
the extent they are not otherwise subject to OPM appointing authorities, 
and (B) positions where OPM is statutorily precluded from prescribing such 
standards.''

                    (b) Civil Service Rule V is amended as follows:

(i) 5 CFR 5.2(a) is revised to read as follows:

  ``(a) Investigating the qualifications, suitability, and fitness of 
applicants for positions in the competitive service, positions in the 
excepted service where the incumbent can be noncompetitively converted to 
the competitive service, career appointments to positions in the Senior 
Executive Service,

[[Page 8116]]

and any other positions in the excepted service of the executive branch for 
which the Director has standard-setting responsibility under Civil Service 
Rule II.

``(i) The Director may require appointments to be made subject to 
investigation to enable the Director to determine, after appointment, that 
the requirements of law or the Civil Service Rules and Regulations have 
been met.

``(ii) The Director may cause positions to be designated based on risk to 
determine the appropriate level of investigation, and may prescribe 
investigative standards, policies, and procedures.

``(iii) The Director may prescribe standards for reciprocal acceptance by 
agencies of investigations and adjudications of suitability and fitness, 
except to the extent authority to apply additional fitness standards is 
vested by statute in an agency.''

(ii) 5 CFR 5.3(a)(1) is revised by striking ``disqualified for Federal 
employment'' and inserting in lieu thereof ``disqualified or unsuitable for 
Federal employment.''

                    (c) Civil Service Rule VI is amended as follows:

(i) 5 CFR 6.3(b) is revised to read as follows:

  ``(b) To the extent permitted by law and the provisions of this part, and 
subject to the suitability and fitness requirements of the applicable Civil 
Service Rules and Regulations, appointments and position changes in the 
excepted service shall be made in accordance with such regulations and 
practices as the head of the agency concerned finds necessary.''

                Sec. 2. Amendment to Executive Order 13488 of January 
                16, 2009. (a) Section 1(a) of Executive Order 13488 is 
                revised to read as follows:

                    ``Section 1. Policy. (a) When agencies conduct 
                fitness determinations, prior favorable fitness or 
                suitability determinations shall be granted reciprocal 
                recognition, to the extent practicable.''
                    (b) Section 2 of Executive Order 13488 is revised 
                to read as follows:

``(a) `Agency' means an executive agency as defined in section 105 of title 
5, United States Code, but does not include the Government Accountability 
Office.

``(b) `Contractor employee' means an individual who performs work for or on 
behalf of any agency under a contract and who, in order to perform the work 
specified under the contract, will require access to space, information, 
information technology systems, staff, or other assets of the Federal 
Government, and who could, by the nature of his or her access or duties, 
adversely affect the integrity or efficiency of the Government. Such 
contracts, include, but are not limited to:

  ``(i) personal services contracts;

  ``(ii) contracts between any non-Federal entity and any agency; and

  ``(iii) sub-contracts between any non-Federal entity and another non-
Federal entity to perform work related to the primary contract with the 
agency.

``(c) `Excepted service' has the meaning provided in section 2103 of title 
5, United States Code, but does not include those positions in any element 
of the intelligence community as defined in the National Security Act of 
1947, as amended, to the extent they are not otherwise subject to Office of 
Personnel Management appointing authorities.

``(d) `Fitness' is the level of character and conduct determined necessary 
for an individual to perform work for or on behalf of a Federal agency as 
an employee in the excepted service (other than a position subject to 
suitability), as a contractor employee, or as a nonappropriated fund 
employee.

``(e) `Fitness determination' means a decision by an agency that an 
individual has or does not have the required level of character and conduct

[[Page 8117]]

necessary to perform work for or on behalf of a Federal agency as an 
employee in the excepted service (other than a position subject to 
suitability), as a contractor employee, or as a nonappropriated fund 
employee. A favorable fitness determination is not a decision to appoint or 
contract with an individual.

``(f) `Nonappropriated fund employee' means an employee paid from 
nonappropriated funds of an instrumentality of the United States under the 
jurisdiction of the Armed Forces conducted for the comfort, pleasure, 
contentment, and mental and physical improvement of personnel of the Armed 
Forces as described in section 2105 of title 5, United States Code.

``(g) `Position of Public Trust' has the meaning provided in 5 CFR Part 
731.

``(h) `Suitability' has the meaning and coverage provided in 5 CFR Part 
731.

                (c) Section 3 of Executive Order 13488 is revised to 
                read as follows:

``OPM and Agency Authority.

``(a) Adjudications for determining fitness for contractual or 
nonappropriated fund employment. While the Office of Personnel Management 
establishes the minimum adjudicative criteria for suitability and fitness 
determinations for employment in the civil service pursuant to the Civil 
Service Rules, the heads of agencies retain the discretion to establish 
adjudicative criteria for determining fitness to perform work as a 
contractor employee or as a nonappropriated fund employee. Such discretion 
shall be exercised with due regard to the regulations and guidance 
prescribed by the Office of Personnel Management for the civil service and, 
for contractual work, subject to applicable regulations and directives of 
the Office of Management and Budget.

``(b) Investigations for determining fitness for contractual or 
nonappropriated fund employment. Contractor employee fitness or 
nonappropriated fund employee fitness is subject to the same position 
designation requirements and investigative standards, policies, and 
procedures as fitness determinations for civil service employees, as 
prescribed by the Office of Personnel Management under the Civil Service 
Rules.

``(c) Reciprocity. Fitness determinations and investigations for fitness 
determinations for contractor employees and for nonappropriated fund 
employees are subject to the same reciprocity requirements as those for 
employment in the civil service, as prescribed by the Office of Personnel 
Management under the Civil Service Rules.''

                    (d) Executive Order 13488 is revised by striking 
                section 4 in its entirety, and redesignating sections 5 
                through 8 as sections 4 through 7, respectively.

                Sec. 3. Amendments to Executive Order 13467 of June 30, 
                2008, as amended. (a) The preamble to Executive Order 
                13467 is revised to read as follows:

                    ``By the authority vested in me as President by the 
                Constitution and the laws of the United States of 
                America, including sections 3301, 7103(b), and 7301 of 
                title 5, United States Code, and in order to strengthen 
                and ensure a secure, efficient, timely, reciprocal, and 
                aligned system for investigating and determining 
                suitability or fitness for Government employment, 
                fitness to work as a contractor or a nonappropriated 
                fund employee, eligibility for access to classified 
                information or to hold a sensitive position, and 
                authorization to be issued a Federal credential, while 
                providing fair, impartial, and equitable treatment, and 
                protecting individual rights under the Constitution and 
                laws of the United States, and taking appropriate 
                account of title III of Public Law 108-458, it is 
                hereby ordered as follows:''
                    (b) Section 1.1 of Executive Order 13467 is revised 
                to read as follows:
                    ``Section 1.1. Policy. (a) Executive branch vetting 
                policies and procedures relating to suitability, 
                contractor or Federal employee fitness, eligibility to 
                hold a sensitive position, authorization to be issued a 
                Federal credential for access to federally controlled 
                facilities and information systems, and

[[Page 8118]]

                eligibility for access to classified information shall 
                be aligned using consistent standards to the extent 
                possible, shall provide for reciprocal recognition, and 
                shall ensure cost-effective, timely, and efficient 
                protection of the national interest, while providing 
                fair treatment to those upon whom the Federal 
                Government relies to conduct our Nation's business and 
                protect national security.

``(b) The Government's tools, systems, and processes for conducting these 
background investigations and managing sensitive investigative information 
should keep pace with technological advancements, regularly integrating 
current best practices to better anticipate, detect, and counter malicious 
activities, and threats posed by external or internal actors who may seek 
to do harm to the Government's personnel, property, and information. To 
help fulfill these responsibilities, there shall be a primary executive 
branch investigative service provider whose mission is to provide 
effective, efficient, and secure background investigations for the Federal 
Government.

``(c) Executive branch vetting policies and procedures shall be sustained 
by an enhanced risk-management approach that facilitates early detection of 
issues by an informed, aware, and responsible Federal workforce; results in 
quality decisions enabled by improved vetting capabilities; and advances 
Government-wide capabilities through enterprise approaches.

``(d) The appointment or retention of each covered individual shall be 
subject to an investigation. Federal investigative standards established 
pursuant to this order shall be designed to develop information as to 
whether the employment or retention in employment in the Federal service of 
the person being investigated is clearly consistent with the interests of 
the national security, and the scope of the investigation shall be 
determined in the first instance according to the degree of material 
adverse effect the occupant of the position sought to be filled could bring 
about, by virtue of the nature of the position, on the national security.''

``(e) Investigative agencies shall control the reports, information, and 
other investigative materials that are developed during the vetting 
process. Recipient departments and agencies may retain and use the received 
reports, information, and other investigative material within that 
recipient for authorized purposes (including, but not limited to, 
adjudications, hearings and appeals, continuous evaluation, inspector 
general functions, counterintelligence, research, and insider threat 
programs), in compliance with the Privacy Act of 1974, as amended (section 
552a of title 5, United States Code). Investigative agencies shall ensure 
that their applicable System of Records Notices include, at a minimum, the 
authorized uses of the recipient departments and agencies such as those set 
forth above. Recipient departments and agencies shall not make any external 
releases of received information, other than to an investigative subject 
for the purpose of providing procedural rights or administrative due 
process; and shall direct any other requests for external releases of 
copies of the reports, information, and other investigative materials to 
the investigative agency. In the event redisclosure by the recipient agency 
is required by compulsory legal process, the recipient agency shall consult 
with the investigating agency. The investigative agency shall maintain the 
reports, information, and other investigative material in a system of 
records subject to the Privacy Act and ensure that any re-disclosure does 
not violate statutory restrictions or result in the unauthorized disclosure 
of: classified information, information subject to a claim of privilege, or 
information that is otherwise lawfully exempt from disclosure. Subject to 
Security Executive Agent authorizations consistent with section 3341(e)(5) 
of title 50, United States Code, the investigative agencies shall make 
reports, information, and other investigative material available, as 
necessary, to carry out the responsibilities set forth in this order, 
including but not limited to, authorized executive branch-sponsored 
research and initiatives for enterprise-wide continuous performance 
improvement of vetting policy and procedures, as permitted by law.''

                    (c) Section 1.2 of Executive Order 13467 is revised 
                to read as follows:

[[Page 8119]]

                    ``Sec. 1.2. Applicability. (a) This order applies 
                to vetting of all covered individuals as defined in 
                section 1.3(h), except that:

  ``(i) the provisions regarding eligibility for physical access to 
federally controlled facilities and logical access to federally controlled 
information systems do not apply to individuals exempted in accordance with 
guidance pursuant to the Federal Information Security Management Act (title 
III of Public Law 107-347) and Homeland Security Presidential Directive 12 
of August 27, 2004; and

  ``(ii) the qualification standards for enlistment, appointment, and 
induction into the Armed Forces pursuant to title 10, United States Code, 
are unaffected by this order.

``(b) This order also applies to vetting for employees of agencies working 
in or for the legislative or judicial branches when the vetting is 
conducted by the executive branch.''

                    (d) Section 1.3(a) of Executive Order 13467 is 
                revised to read as follows:

``(a) `Adjudication' means the evaluation of pertinent data in a background 
investigation, as well as any other available information that is relevant 
and reliable, to determine whether a covered individual is:

  ``(i) suitable for Government employment;

  ``(ii) eligible for logical and physical access;

  ``(iii) eligible for access to classified information;

  ``(iv) eligible to hold a sensitive position; or

  ``(v) fit to perform work for or on behalf of the Government as a Federal 
employee, contractor, or nonappropriated fund employee.''

                    (e) Sections 1.3(c) and 1.3(d) of Executive Order 
                13467 are revised to read as follows:

``(c) `Classified information' means information that has been determined 
pursuant to Executive Order 13526 of December 29, 2009, or a successor or 
predecessor order, or the Atomic Energy Act of 1954 (42 U.S.C. 2011 et 
seq.) to require protection against unauthorized disclosure.

``(d) `Continuous evaluation (CE)' means a vetting process to review the 
background of an individual who has been determined to be eligible for 
access to classified information or to hold a sensitive position at any 
time during the period of eligibility. CE leverages a set of automated 
record checks and business rules to assist in the on-going assessment of an 
individual's continued eligibility. CE is intended to complement continuous 
vetting efforts.''

                    (f) Section 1.3(f) of Executive Order 13467 is 
                deleted.
                    (g) Sections 1.3(j), (k), (l), and (m) are 
                redesignated as sections 1.3(m), (n), (o), and (p); 
                sections 1.3(g), (h), and (i) are redesignated as 
                sections 1.3(h), (i), and (j); and section 1.3(e) is 
                redesignated as section 1.3(g).
                    (h) New sections 1.3(e) and 1.3(f) are added to 
                Executive Order 13467 to read as follows:

``(e) `Continuous performance improvement' means assessing national policy 
and operations, adverse events, and emerging trends and technology 
throughout the Government's end-to-end vetting program. It relies on 
research to generate data-driven decisions and uses outcome-based 
measurements to adjust policy and operations.

``(f) `Continuous vetting' means reviewing the background of a covered 
individual at any time to determine whether that individual continues to 
meet applicable requirements.''

                    (i) Redesignated section 1.3(h) of Executive Order 
                13467 is revised to read as follows:

``(h) `Covered individual' means a person who performs, or who seeks to 
perform, work for or on behalf of the executive branch (e.g., Federal 
employee, military member, or contractor), or otherwise interacts with

[[Page 8120]]

the executive branch such that the individual must undergo vetting, but 
does not include:

  ``(i) the President or (except to the extent otherwise directed by the 
President) employees of the President under section 105 or 107 of title 3, 
United States Code;

  ``(ii) the Vice President or (except to the extent otherwise directed by 
the Vice President) employees of the Vice President under section 106 of 
title 3, United States Code, or annual legislative branch appropriations 
acts; or

  ``(iii) with respect to background investigations only, duly elected or 
appointed governor of a State or territory, or an official who has 
succeeded to that office under applicable law in accordance with Executive 
Order 13549 of August 18, 2010, and its implementing directive.''

                    (j) New sections 1.3(k) and 1.3(l) are added to 
                Executive Order 13467 to read as follows:

``(k) `Fitness' means the level of character and conduct determined 
necessary for an individual to perform work for or on behalf of a Federal 
agency as an employee in the excepted service (other than a position 
subject to suitability), or as a `contractor employee' or a 
`nonappropriated fund employee' as those terms are defined in Executive 
Order 13488 of January 16, 2009, as amended.

``(l) `Investigation' means the collection and analysis of pertinent facts 
and data to support a determination of whether a covered individual is, and 
continues to be:

  ``(i) eligible for access to classified information;

  ``(ii) eligible to hold a sensitive position;

  ``(iii) suitable or fit for Federal employment;

  ``(iv) fit to perform work for or on behalf of the Federal Government as 
a contractor or nonappropriated fund employee; or

  ``(v) authorized to be issued a Federal credential.''

                    (k) Redesignated section 1.3(n) of Executive Order 
                13467 is revised to read as follows:

``(n) `National Background Investigations Bureau' (NBIB) means the National 
Background Investigations Bureau, established within the Office of 
Personnel Management under section 1103(a)(3) of title 5, United States 
Code, or a successor entity, with responsibility for conducting effective, 
efficient, and secure personnel background investigations pursuant to law, 
rule, regulation, or Executive Order.''

                    (l) Redesignated section 1.3(o) of Executive Order 
                13467 is revised to read as follows:

``(o) `Sensitive Position' means any position within or in support of 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, regardless of whether the occupant has access to classified 
information, and regardless of whether the occupant is an employee, a 
military service member, or a contractor.

                    (m) New section 1.3(q) is added to Executive Order 
                13467 to read as follows:

``(q) `Vetting' is the process by which covered individuals undergo 
investigation, evaluation, and adjudication of whether they are, and remain 
over time, suitable or fit for Federal employment, eligible to occupy a 
sensitive position, eligible for access to classified information, eligible 
to serve as a nonappropriated fund employee or a contractor, eligible to 
serve in the military, or authorized to be issued a Federal credential. 
Vetting includes all steps in the end-to-end process, including determining 
need (appropriate position designation), validating need (existence of a 
current investigation or adjudication), collecting background information

[[Page 8121]]

via standard forms, investigative activity, adjudication, providing 
administrative due process or other procedural rights, and ongoing 
assessments to ensure that individuals continue to meet the applicable 
standards for the position for which they were favorably adjudicated.''

                    (n) The title to Part 2 of Executive Order 13467 is 
                revised to read as follows:
                    ``PART 2--VETTING ENTERPRISE, RECIPROCITY, 
                CONTINUOUS PERFORMANCE IMPROVEMENT, AND GOVERNANCE''
                    (o) Section 2.1 of Executive Order 13467 is revised 
                to read as follows:
                    ``Sec. 2.1. Vetting Enterprise. (a) The executive 
                branch-wide vetting enterprise shall use, to the 
                greatest extent practicable, aligned and consistent 
                vetting policies, procedures, and standards, as 
                determined by the Council and the Executive Agents. The 
                Executive Agents shall issue guidance to implement this 
                provision.

``(b) The aligned executive branch-wide vetting enterprise shall employ 
modern and consistent standards and methods, enable innovations with 
enterprise information technology capabilities and end-to-end automation to 
the extent practicable, and ensure that relevant information maintained by 
agencies can be accessed and shared rapidly across the executive branch, 
while protecting national security, protecting privacy-related information, 
protecting civil rights and civil liberties, ensuring resulting decisions 
are in the national interest and in accordance with due process 
requirements, and providing the Federal Government with an effective 
trusted workforce.

``(c) The investigative and adjudicative standards for fitness shall, to 
the extent practicable, be consistent with the standards for suitability. 
The Executive Agents shall establish in Federal investigative standards the 
elements of the level of investigation necessary for vetting for fitness.

``(d) All covered individuals shall be subject to continuous vetting under 
standards (including, but not limited to, the frequency of such vetting) as 
determined by the Security Executive Agent or the Suitability and 
Credentialing Executive Agent exercising its Suitability Executive Agent 
functions, as applicable.

``(e) Vetting shall include a search of records of the Federal Bureau of 
Investigation, including a fingerprint-based search, and any other 
appropriate biometric or database searches not precluded by law.''

                    (p) Sections 2.2, 2.3, 2.4, and 2.5 of Executive 
                Order 13467 are redesignated as sections 2.4, 2.5, 2.6, 
                and 2.7.
                    (q) New sections 2.2 and 2.3 are added to Executive 
                Order 13467 to read as follows:
                    ``Sec. 2.2. Reciprocity. Except as otherwise 
                authorized by law or policy issued by the applicable 
                Executive Agent, agencies shall accept background 
                investigations and adjudications conducted by other 
                authorized agencies unless an agency determines that a 
                particular background investigation or adjudication 
                does not sufficiently address the standards used by 
                that agency in determining the fitness of its excepted 
                service employees who cannot be noncompetitively 
                converted to the competitive service. Except as 
                described above and except to the extent authority to 
                apply additional requirements is vested by statute in 
                an agency, an agency may not establish additional 
                investigative or adjudicative requirements (other than 
                requirements for the conduct of a polygraph examination 
                consistent with law, directive, or regulation) that 
                exceed existing requirements without the approval of 
                the Suitability and Credentialing Executive Agent 
                exercising its Suitability Executive Agent functions or 
                Security Executive Agent, as appropriate. Any 
                additional requirements approved by the appropriate 
                Executive Agent shall be limited to those that are 
                necessary to address significant needs unique to the 
                agency involved, to protect national security, or to 
                satisfy a requirement imposed by law.''

[[Page 8122]]

                    ``Sec. 2.3. Continuous Performance Improvement. 
                Executive branch vetting policies, processes, and 
                procedures shall be supported by institutionalized 
                enterprise-wide continuous performance improvement, 
                which shall align with and support process 
                improvements.''
                    (r) Redesignated section 2.4 of Executive Order 
                13467 is revised to read as follows:
                    ``Sec. 2.4. Establishment and Functions of 
                Performance Accountability Council. (a) There is hereby 
                established a Security, Suitability, and Credentialing 
                Performance Accountability Council (Council).

``(b) The Deputy Director for Management, Office of Management and Budget, 
shall serve as Chair of the Council and shall have authority, direction, 
and control over the Council's functions. Membership on the Council shall 
include the Suitability and Credentialing Executive Agent, the Security 
Executive Agent, and the Under Secretary of Defense for Intelligence. These 
four officials collectively shall constitute `the Security, Suitability, 
and Credentialing Performance Accountability Council Principals.' The 
Director of the National Background Investigations Bureau shall also serve 
as a member of the Council. The Chair shall select a Vice Chair to act in 
the Chair's absence. The Chair shall have authority to designate officials 
from additional agencies who shall serve as members of the Council. Council 
membership shall be limited to Federal Government employees in leadership 
positions.

``(c) The Council shall be accountable to the President to achieve, 
consistent with this order, the goals of the executive branch vetting 
enterprise, and is responsible for driving implementation of reform efforts 
and enterprise development, ensuring accountability by agencies, ensuring 
the Executive Agents align their respective processes, and sustaining 
continuous performance improvement and reform momentum.

``(d) The Council shall:

  ``(i) ensure enterprise-wide alignment of suitability, security, 
credentialing, and as appropriate, fitness processes;

  ``(ii) hold agencies accountable for the implementation of suitability, 
security, fitness, and credentialing processes and procedures;

  ``(iii) define requirements for enterprise-wide reciprocity management 
information technology, and develop standards for enterprise-wide 
information technology;

  ``(iv) work with agencies to implement continuous performance improvement 
programs, policies, and procedures; establish annual goals and progress 
metrics; and prepare annual reports on results;

  ``(v) ensure and oversee the development of tools and techniques for 
enhancing background investigations and adjudications;

  ``(vi) enable discussion and consensus resolution of differences in 
processes, policies, and procedures among the Council Principals, and other 
agencies as appropriate;

  ``(vii) share best practices;

  ``(viii) advise the Executive Agents on policies affecting the alignment 
of investigations and adjudications;

  ``(ix) work with agencies to develop agency policies and procedures to 
enable sharing of vetting information consistent with the law and the 
protection of privacy and civil liberties and to the extent necessary for 
enterprise-wide efficiency, effectiveness, and security;

  ``(x) monitor performance to identify and drive enterprise-level process 
enhancements, and make recommendations for changes to executive branch-wide 
guidance and authorities to resolve overlaps or close policy gaps where 
they may exist;

[[Page 8123]]

  ``(xi) promote data-driven, transparent, and expeditious policy-making 
processes; and

  ``(xii) develop and continuously reevaluate and revise outcome-based 
metrics that measure the quality, efficiency and effectiveness of the 
vetting enterprise.

``(e) The Chair shall, to further the goals of the vetting enterprise and 
to the extent consistent with law, establish subordinate entities, 
mechanisms, and policies to support and assist in exercising the Council's 
authorities and responsibilities, and facilitate, consistent with the 
executive branch's enterprise strategy, adoption of enterprise-wide 
standards and solutions to ensure security, quality, reciprocity, 
efficiency, effectiveness, and timeliness. The Chair may assign, in whole 
or in part, to the head of any agency (solely or jointly) any function 
within the Council's authority or responsibilities pursuant to this 
order.''

                    (s) Redesignated section 2.5 of Executive Order 
                13467 is revised to read as follows:
                    ``Sec. 2.5. Establishment, Designation, and 
                Functions of Executive Agents. (a) There are hereby 
                established a Suitability and Credentialing Executive 
                Agent and a Security Executive Agent.

``(b) The Director of the Office of Personnel Management shall serve as the 
Suitability and Credentialing Executive Agent. With respect to the 
Suitability Executive Agent functions, the Director:

  ``(i) shall, pursuant to sections 1103 and 1104 of title 5, United States 
Code, and the Civil Service Rules, be responsible for suitability and 
fitness by prescribing suitability standards and minimum standards of 
fitness for employment; prescribing position designation requirements with 
regard to the risk to the efficiency and integrity of the service; 
prescribing applicable investigative standards, policies, and procedures 
for suitability and fitness; prescribing suitability and fitness 
reciprocity standards; making suitability determinations; and taking 
suitability actions;

  ``(ii) shall issue regulations, guidance, and standards to fulfill the 
Director's responsibilities related to suitability and fitness under 
Executive Order 13488 of January 16, 2009, as amended;

  ``(iii) shall promote reciprocal recognition of suitability or fitness 
determinations among the agencies, including acting as the final authority 
to arbitrate and resolve disputes among the agencies involving the 
reciprocity of investigations and adjudications of suitability and fitness;

  ``(iv) shall continue to initially approve, and periodically review for 
renewal, agencies' requests to administer polygraphs in connection with 
appointment in the competitive service, in consultation with the Security 
Executive Agent as appropriate;

  ``(v) shall make a continuing review of agency programs for suitability 
and fitness vetting to determine whether they are being implemented 
according to this order;

  ``(vi) may issue guidelines and instructions to the heads of agencies to 
promote appropriate uniformity, centralization, efficiency, effectiveness, 
reciprocity, timeliness, and security in processes relating to determining 
suitability or fitness; and

  ``(vii) shall, pursuant to section 1104 of title 5, United States Code, 
prescribe performance standards and a system of oversight for any 
suitability or fitness function delegated by the Director to the head of 
another agency, including uniform and consistent policies and procedures to 
ensure the effective, efficient, timely, and secure completion of delegated 
functions.

``(c) With respect to the Credentialing Executive Agent functions, the 
Director of the Office of Personnel Management:

[[Page 8124]]

  ``(i) shall develop standards for investigations, reinvestigations, and 
continuous vetting for a covered individual's eligibility for a personal 
identity verification credential permitting logical and physical access to 
federally controlled facilities and federally controlled information 
systems (PIV credential);

  ``(ii) shall develop adjudicative guidelines for a covered individual's 
eligibility for a PIV credential;

  ``(iii) shall develop guidelines on reporting and recording 
determinations of eligibility for a PIV credential;

  ``(iv) shall develop standards for unfavorable determinations of 
eligibility for a PIV credential, including procedures for denying and 
revoking the eligibility for a PIV credential, for reconsideration of 
unfavorable determinations, and for rendering the PIV credential 
inoperable;

  ``(v) shall develop standards and procedures for suspending eligibility 
for a PIV credential when there is a reasonable basis to believe there may 
be an unacceptable risk pending an inquiry or investigation, including 
special standards and procedures for imminent risk;

  ``(vi) shall be responsible for developing uniform and consistent 
policies and procedures to ensure the effective, efficient, timely, and 
secure completion of investigations and adjudications relating to 
eligibility for a PIV credential;

  ``(vii) may develop guidelines and instructions to the heads of agencies 
as necessary to ensure appropriate uniformity, centralization, efficiency, 
effectiveness, and timeliness in processes relating to eligibility for a 
PIV credential;

  ``(viii) shall monitor and make a continuing review of agency programs 
for determining eligibility for a PIV credential to determine whether they 
are being implemented according to this order; and

  ``(ix) shall consult to the extent practicable with other agencies with 
responsibilities related to PIV credentials to ensure that policies and 
procedures are consistent with law including:

``(A) the Office of Management and Budget, in exercising its 
responsibilities under section 11331 of title 40, United States Code, 
section 3553(a) of title 44, United States Code, division A, sections 
1086(b)(2) and (b)(3) of Public Law 114-92, and Homeland Security 
Presidential Directive 12 of August 27, 2004;

``(B) the Department of Homeland Security, in exercising its 
responsibilities under sections 3553(b), (f), and (g) of title 44, United 
States Code;

``(C) the Department of Defense, in exercising its responsibilities under 
section 3553(e) of title 44, United States Code, and division A, sections 
1086(a)(1)(E), (b)(1), and (b)(2) of Public Law 114-92;

``(D) the Office of the Director of National Intelligence, in exercising 
its responsibilities under section 3553(e) of title 44, United States Code, 
and division A, section 1086(b)(2) of Public Law 114-92;

``(E) the Department of Commerce and the National Institute of Standards 
and Technology, in exercising their responsibilities under section 278g-3 
of title 15, United States Code, and Homeland Security Presidential 
Directive 12 of August 27, 2004;

``(F) the General Services Administration, in exercising its 
responsibilities under division A, section 1086(b)(2) of Public Law 114-92; 
and

``(G) the Federal Acquisition Regulation agencies, in exercising their 
responsibilities under chapter 137 of title 10, section 121(c) of title 40, 
and section 20113 of title 51, United States Code.

``(d) In fulfilling the Credentialing Executive Agent function of 
developing policies and procedures for determining eligibility for a PIV 
credential and to protect the national security, the Director of the Office 
of Personnel Management shall coordinate with and obtain the concurrence of 
the

[[Page 8125]]

other Council Principals. Agencies with authority to establish standards or 
guidelines or issue instructions related to PIV credentials shall retain 
the discretion as to whether to establish policies, guidelines, or 
instructions developed by the Credentialing Executive Agent.

``(e) The Director of National Intelligence shall serve as the Security 
Executive Agent. The Security Executive Agent:

  ``(i) shall direct the oversight of investigations, reinvestigations, 
adjudications, and, as applicable, polygraphs for eligibility for access to 
classified information or eligibility to hold a sensitive position made by 
any agency;

  ``(ii) shall make a continuing review of agencies' national security 
background investigation and adjudication programs to determine whether 
they are being implemented according to this order;

  ``(iii) shall be responsible for developing and issuing uniform and 
consistent policies and procedures to ensure the effective, efficient, 
timely, and secure completion of investigations, polygraphs, and 
adjudications relating to determinations of eligibility for access to 
classified information or eligibility to hold a sensitive position;

  ``(iv) may issue guidelines and instructions to the heads of agencies to 
ensure appropriate uniformity, centralization, efficiency, effectiveness, 
timeliness, and security in processes relating to determinations by 
agencies of eligibility for access to classified information or eligibility 
to hold a sensitive position, to include such matters as investigations, 
polygraphs, adjudications, and reciprocity;

  ``(v) may, if consistent with the national security, authorize exceptions 
to or waivers of national security investigative requirements, and may 
issue implementing or clarifying guidance as necessary;

  ``(vi) shall serve as the final authority to designate an agency or 
agencies, to the extent that it is not practicable to use the National 
Background Investigations Bureau, to conduct investigations of persons who 
are proposed for access to classified information or for eligibility to 
hold a sensitive position to ascertain whether such persons satisfy the 
criteria for obtaining and retaining access to classified information or 
eligibility to hold a sensitive position;

  ``(vii) shall serve as the final authority to designate an agency or 
agencies to determine eligibility for access to classified information or 
eligibility to hold a sensitive position in accordance with Executive Order 
12968 of August 2, 1995, as amended;

  ``(viii) shall ensure reciprocal recognition of eligibility for access to 
classified information or eligibility to hold a sensitive position among 
the agencies, including acting as the final authority to arbitrate and 
resolve disputes among the agencies involving the reciprocity of 
investigations and adjudications of eligibility; and

  ``(ix) may assign, in whole or in part, to the head of any agency (solely 
or jointly) any of the functions detailed in (i) through (viii) of this 
subsection, with the agency's exercise of such assigned functions to be 
subject to the Security Executive Agent's oversight and with such terms and 
conditions (including approval by the Security Executive Agent) as the 
Security Executive Agent determines appropriate.

``(f) Nothing in this section shall be construed in a manner that would 
limit the authorities of the Director of the Office of Personnel 
Management, the Director of National Intelligence, or the Secretary of 
Defense under law.''

                    (t) Redesignated section 2.6 of Executive Order 
                13467 is revised to read as follows:
                    ``Sec. 2.6. Roles and Responsibilities of the 
                National Background Investigations Bureau and the 
                Department of Defense.

``(a) The National Background Investigations Bureau shall:

[[Page 8126]]

  ``(1) serve as the primary executive branch service provider for 
background investigations for eligibility for access to classified 
information; eligibility to hold a sensitive position; suitability or, for 
employees in positions not subject to suitability, fitness for Government 
employment; fitness to perform work for or on behalf of the Government as a 
contractor; fitness to work as a nonappropriated fund employee, as defined 
in Executive Order 13488 of January 16, 2009, as amended; and authorization 
to be issued a Federal credential for logical and physical access to 
federally controlled facilities or information systems;

  ``(2) provide effective, efficient, and secure personnel background 
investigations for the Federal Government;

  ``(3) provide the Council information, to the extent permitted by law, on 
matters of performance, timeliness, capacity, information technology 
modernization, continuous performance improvement, and other relevant 
aspects of NBIB operations;

  ``(4) be headquartered in or near Washington, District of Columbia;

  ``(5) have dedicated resources, including but not limited to a senior 
privacy and civil liberties official;

  ``(6) institutionalize interagency collaboration and leverage expertise 
across the executive branch;

  ``(7) continuously improve investigative operations, emphasizing 
information accuracy and protection, and regularly integrate best 
practices, including those identified by subject matter experts from 
industry, academia, or other relevant sources;

  ``(8) conduct personnel background investigations in accordance with 
uniform and consistent policies, procedures, standards, and requirements 
established by the Security Executive Agent and the Suitability and 
Credentialing Executive Agent exercising its Suitability Executive Agent 
functions; and

  ``(9) conduct other personnel background investigations as authorized by 
law, rule, regulation, or Executive Order.''

``(b) The Secretary of Defense shall design, develop, deploy, operate, 
secure, defend, and continuously update and modernize, as necessary, 
vetting information technology systems that support all background 
investigation processes conducted by the National Background Investigations 
Bureau. Design and operation of the information technology systems for the 
National Background Investigations Bureau shall comply with applicable 
information technology standards and, to the extent practicable, ensure 
security and interoperability with other background investigation 
information technology systems. The Secretary of Defense shall operate the 
database in the information technology systems containing appropriate data 
relevant to the granting, denial, or revocation of eligibility for access 
to classified information or eligibility for a sensitive position 
pertaining to military, civilian, or Government contractor personnel, see 
section 3341(e) of title 50, United States Code, consistent with and 
following an explicit delegation from the Director of the Office of 
Personnel Management pursuant to section 1104 of title 5, United States 
Code.''

``(c) Delegations and designations of investigative authority in place on 
the date of establishment of the National Background Investigations Bureau 
shall remain in effect until amended or revoked. The National Background 
Investigations Bureau, through the Director of the Office of Personnel 
Management, shall be subject to the oversight of the Security Executive 
Agent in the conduct of investigations for eligibility for access to 
classified information or to hold a sensitive position; and to the 
oversight of the Suitability and Credentialing Executive Agent in the 
conduct of investigations of suitability or fitness and logical and 
physical access, as provided in section 2.5 of this order. The Council 
shall hold the National Background

[[Page 8127]]

Investigations Bureau accountable for the fulfillment of the 
responsibilities set forth in section 2.6(a) of this order.''

                    (u) Subsections (b) and (c) of redesignated section 
                2.7 of Executive Order 13467 are revised to read as 
                follows:

``(b) Heads of agencies shall:

  ``(i) designate, or cause to be designated, as a `sensitive position,' 
any position occupied by a covered individual in which the occupant could 
bring about by virtue of the nature of the position, a material adverse 
effect on the national security;

  ``(ii) establish and maintain within their respective agencies, an 
effective program to ensure that employment and retention of any covered 
individual within the agency is clearly consistent with the interests of 
national security and, as applicable, meets standards for eligibility for 
access to classified information or to hold a sensitive position, 
suitability, fitness, or credentialing, established by the respective 
Executive Agent;

  ``(iii) carry out any function assigned to the agency head by the Chair, 
and shall assist the Chair, the Council, the Executive Agents, the National 
Background Investigations Bureau, and the Department of Defense in carrying 
out any function under sections 2.4, 2.5, and 2.6 of this order;

  ``(iv) implement any policy or procedure established pursuant to this 
order;

  ``(v) to the extent permitted by law, make available to the Council, the 
Executive Agents, the National Background Investigations Bureau, and the 
Department of Defense such information as may be requested to implement 
this order, including information necessary to implement enterprise-wide 
vetting policies and procedures;

  ``(vi) except as authorized by section 3341(e)(5) of title 50, United 
States Code, promptly furnish, or cause to be promptly furnished, to the 
Office of Personnel Management the information deemed by the Executive 
Agents to be necessary for purposes of record keeping and reciprocity 
including, but not limited to, the date on which a background investigation 
is initiated, the date on which the background investigation is closed, and 
the specific adjudicative or access decision made. The Executive Agents 
shall determine the appropriate timeline pursuant to which this information 
must be reported to the Office of Personnel Management. The Executive 
Agents shall maintain discretion to determine the scope of information 
needed for record keeping and reciprocity purposes. The Office of Personnel 
Management shall regularly provide this information to the Director of 
National Intelligence for national security purposes.

  ``(vii) ensure that all actions taken under this order take account of 
the counterintelligence interests of the United States, as appropriate; and

  ``(viii) ensure that actions taken under this order are consistent with 
the President's constitutional authority to:

``(A) conduct the foreign affairs of the United States;

``(B) withhold information the disclosure of which could impair the foreign 
relations, the national security, the deliberative processes of the 
Executive, or the performance of the Executive's constitutional duties;

``(C) recommend for congressional consideration such measures as the 
President may judge necessary or expedient; and

``(D) supervise the unitary executive branch.

``(c) All investigations being conducted by agencies that develop 
information indicating that an individual may have been subjected to 
coercion, influence, or pressure to act contrary to the interests of the 
national security, or information that the individual may pose a 
counterintelligence or terrorist threat, or as otherwise provided by law, 
shall be referred to the Federal Bureau of Investigation for potential 
investigation, and may also be referred to other agencies where 
appropriate.''

[[Page 8128]]

                    (v) Section 3 of Executive Order 13467 is revised 
                to read as follows:
                    ``Sec. 3. General Provisions. (a) Executive Order 
                13381 of June 27, 2005, as amended, and Executive Order 
                10450 of April 27, 1953, as amended, are revoked. By 
                revoking Executive Order 10450 of April 27, 1953, as 
                amended, there is no intent to alter the requirement 
                for an investigation for national security purposes or 
                the ``clearly consistent with the interest of national 
                security'' standard prescribed by that Executive Order 
                for making the determinations referenced in section 
                2.7(b)(ii). Further, suitability, fitness, 
                credentialing, and national security eligibility 
                regulations, standards and guidance issued by, or 
                interagency agreements entered into by, the Council, 
                the Executive Agents, or any agency pursuant to 
                Executive Order 10450 of April 27, 1953, as amended, 
                shall remain valid until superseded. Nothing in this 
                order shall:

  ``(i) supersede, impede, or otherwise affect:

``(A) Executive Order 10577 of November 23, 1954, as amended;

``(B) Executive Order 12333 of December 4, 1981, as amended;

``(C) Executive Order 12829 of January 6, 1993, as amended; or

``(D) Executive Order 13526 of December 29, 2009; or

  ``(ii) diminish or otherwise affect the denial and revocation procedures 
provided to individuals covered by Executive Order 10865 of February 20, 
1960, as amended; or

  ``(iii) be applied in such a way as to affect any administrative 
proceeding pending on the date of this order.

``(b) Executive Order 12968 of August 2, 1995, is amended:

  ``(i) by inserting: `Sec. 3.5. Continuous Evaluation. An individual who 
has been determined to be eligible for or who currently has access to 
classified information shall be subject to continuous evaluation as further 
defined by and under standards (including, but not limited to, the 
frequency of such evaluation) as determined by the Director of National 
Intelligence.'; and

  ``(ii) by striking `the Security Policy Board shall make recommendations 
to the President through the Assistant to the President for National 
Security Affairs' in section 6.3(a) and inserting in lieu thereof `the 
Director of National Intelligence shall serve as the final authority';

  ``(iii) by striking `Security Policy Board' and inserting in lieu thereof 
`Security Executive Agent' in each instance;

  ``(iv) by striking `the Board' in section 1.1(j) and inserting in lieu 
thereof `the Security Executive Agent'; and

  ``(v) by inserting `or appropriate automated procedures' in section 
3.1(b) after `by appropriately trained adjudicative personnel'.

``(c) Provisions of Executive Order 12968 of August 2, 1995, as amended, 
that apply to eligibility for access to classified information shall apply 
to eligibility to hold any sensitive position regardless of whether that 
sensitive position requires access to classified information, subject to 
the Security Executive Agent issuing implementing or clarifying guidance 
regarding requirements for sensitive positions. Nothing in this order shall 
supersede, impede, or otherwise affect the remainder of Executive Order 
12968 of August 2, 1995, as amended.

``(d) Nothing in this order shall be construed to impair or otherwise 
affect the:

  ``(i) authority granted by law to a department or agency, or the head 
thereof; or

  ``(ii) functions of the Director of the Office of Management and Budget 
relating to budgetary, administrative, or legislative proposals.

``(e) This order shall be implemented consistent with applicable law and 
subject to the availability of appropriations.

[[Page 8129]]

``(f) Existing delegations of authority made pursuant to Executive Order 
13381 of June 27, 2005, as amended, to any agency relating to granting 
eligibility for access to classified information shall remain in effect, 
subject to the exercise of authorities pursuant to this order to revise or 
revoke such delegation.

``(g) Existing delegations of authority made by the Office of Personnel 
Management to any agency relating to suitability or fitness shall remain in 
effect, subject to the exercise of authorities to revise or revoke such 
delegations.

``(h) If any provision of this order or the application of such provision 
is held to be invalid, the remainder of this order shall not be affected.

``(i) This order is not intended to, and does not, create any right or 
benefit, substantive or procedural, enforceable at law or in equity by any 
party against the United States, its departments, agencies, or entities, 
its officers, employees, or agents, or any other person.''

                    Sec. 4. General Provisions. (a) This order shall be 
                implemented consistent with applicable law and subject 
                to the availability of appropriations.
                    (b) If any provision of this order or the 
                application of such provision is held to be invalid, 
                the remainder of this order shall not be affected.
                    (c) This order is not intended to, and does not, 
                create any right or benefit, substantive or procedural, 
                enforceable at law or in equity by any party against 
                the United States, its departments, agencies, or 
                entities, its officers, employees, or agents, or any 
                other person.
                
                
                    (Presidential Sig.)

                THE WHITE HOUSE,

                    January 17, 2017.

[FR Doc. 2017-01623
Filed 1-19-17; 11:15 am]
Billing code 3295-F7-P