Subpart 904.4.Safeguarding Classified Information Within Industry
Sec.
904.401 Definitions.
904.402 General.
904.404 Contract clause.
Subpart 904.6 [Reserved]
Subpart 904.7.Contractor Records Retention
904.702 Applicability.
Subpart 904.8.Contract Files
904.803 Contents of contract files.
904.804-1 Closeout by the office administering the contract.
904.805 Disposal of contract files.
Subpart 904.70.Foreign Ownership, Control, or Influence Over Contractors
904.7000 Purpose.
904.7001 Applicability.
904.7002 Definitions.
904.7003 Disclosure of foreign ownership, control, or influence.
904.7004 Findings, determination, and contract award or termination.
904.7005 Solicitation provision and contract clause.
Subpart 904.71.Prohibition on Contracting (National Security Program Contracts)
904.7100 Scope of subpart.
904.7101 Definitions.
904.7102 Waiver by the Secretary.
904.7103 Solicitation provision and contract clause.
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).
Source: 49 FR 11941, Mar. 28, 1984, unless otherwise
noted.
_______________________________
904.401 Definitions.
Classified Information means any information or material that is owned by, produced by or for, or is
under the control of the United States Government, and
determined pursuant to provisions of Executive Order
12356, April 2, 1982 (47 FR 14874, April 6, 1982), or
prior orders, or as authorized under the Atomic Energy
Act of 1954, as amended, to require protection against
unauthorized disclosure, and is so designated.
Restricted Data means data which is defined in section 11, of the Atomic Energy Act of 1954, as amended, as
"all data concerning: (1) Design, manufacture, or
utilization of atomic weapons; (2) the production of
special nuclear material; or (3) the use of special
nuclear material in the production of energy, but shall
not include data declassified or removed from the
Restricted Data category pursuant to section 142."
904.402 General.
(a) The basis of DOE's security requirements is the
Atomic Energy Act of 1954, as amended.
(b) DOE security regulations. DOE regulations concerning national security information are codified at
10 CFR Part 1045.
[60 FR 47307, Sept. 12, 1995]
904.404 Contract clause.
(d) The security clauses to be used in DOE contracts
are found at 952.204. They are:
(1) Security, 952.204-2. This clause is required in contracts under section 31 (research assistance) or 41
(ownership and operation of production facilities) of
the Atomic Energy Act of 1954, as amended, and in
other contracts and subcontracts, the performance of
which involves or is likely to involve classified
information. The DOE system is separate from that of
the Department of Defense and the DEAR clause shall
be used instead of that at FAR 52.204-2.
(2) Classification, 952.204-70. This clause is to be used in all contracts which involve classified
information.
(3) Sensitive foreign nation controls, 952.204-71. This clause is required in unclassified research contracts
which may involve making unclassified information
about nuclear technology available to certain sensitive
foreign nations. The contractor shall be provided at the
time of award the listing of nations included in DOE
1240.2, (See current version) Attachment 3, and any
subsequent changes. (The attachment referred to in the
clause shall set forth the applicable requirements of the
DOE regulations on dissemination of unclassified
published and unpublished technical information to
foreign nations.)
(4) Disclosure of information, 952.204-72. This clause should be used in place of the clauses entitled
"Security" and "Classification" in contracts with
educational institutions for research work performed in
their own institute facilities that are not likely to
produce classified information.
[49 FR 11941, Mar. 28, 1984; 49 FR 38949, Oct. 2,
1984, as amended at 54 FR 27646, June 30, 1989 and
59 FR 24357, May 11, 1994]
Subpart 904.6 [Reserved]
[52 FR 28717, Aug. 3, 1987; 60 FR 47307, Sept. 12, 1995; 62 FR 2310, Jan. 16, 1997]
Subpart 904.7.Contractor Records Retention
904.702 Applicability.
(b) Contracts containing the Safety and Health clause at
952.223-71, the Radiation Protection and Nuclear
Criticality clause at 952.223-72, or the Nuclear Safety
clause at 952.223-74 must also include the
Preservation of Individual Occupational Radiation
Exposure Records clause at 952.223-75 which will
necessitate retention of records in accordance with
schedules contained in applicable DOE Directives in
the records management series and any pertinent
superseding provisions, rather than those found at FAR
4.7.
[60 FR 47307, Sept. 12, 1995; 62 FR 2310, Jan. 16,
1997]
Subpart 904.8.Contract Files
904.803 Contents of contract files.
(a) (29) The record copy of the Individual Procurement
Action Report shall be included in the file section
containing procurement management reports.
904.804-1
Closeout by the office administering the contract (DOE Coverage.paragraphs (a) and (b)).
(a) The Head of the Contracting Activity shall ensure
that necessary procedures and milestone schedules are
established to meet the requirements of FAR 4.804-1,
and that resources are applied to effect the earliest
practicable deobligation of excess funds and the timely
closeout of all contract files which are physically
completed or otherwise eligible for closeout action.
(b) Quick closeout procedures for cost reimbursable and other than firm fixed price type contracts are
covered under 48 CFR 42.708.
[62 FR 53754, Oct. 16, 1997]
904.805 Disposal of contract files.
Contract files shall be disposed of in accordance with
applicable DOE Order 1324.2 (See current version).
Subpart 904.70.Foreign Ownership, Control, or Influence Over Contractors
904.7000 Purpose.
This subpart sets forth the Department of Energy
policies and procedures regarding foreign ownership,
control, or influence (FOCI) over contractors. The
procedures are designed to protect against an undue
risk to the common defense and security which may
result if classified information or special nuclear
material is made available to DOE contractors or
subcontractors who are owned, controlled, or
influenced by foreign governments, individuals, or
organizations. The procedures require certain offerors
and contractors/subcontractors to submit information
which will help DOE to determine whether award of a
contract to a firm, or continued performance of a
contract by a firm, may pose an undue risk to the
common defense and security because of the foreign
influence.
904.7001 Applicability.
The provisions of this subpart shall apply to all
offerors, contractors, and subcontractors who will or do
have access to classified information or a significant
quantity of special nuclear material as defined in 10
CFR Part 710. In this subpart, the term "contractor"
shall also mean subcontractor at any tier, the term
"contract" shall also mean subcontract at any tier, and
the term "special nuclear material" shall also mean
significant quantity of special nuclear material as
defined in 10 CFR Part 710.
904.7002 Definitions.
Contracting officer means the DOE contracting officer.
Foreign interest means any of the following:
(1) Foreign government or foreign government agency
or instrumentality thereof;
(2) Any form of business enterprise organized under
the laws of any country other than the United States or
its possessions;
(3) Any form of business enterprise organized or
incorporated under the laws of the U.S., or a State or
other jurisdiction within the U.S. which is owned,
controlled, or influenced by a foreign government,
agency, firm, corporation, or person, or
(4) Any person who is not a U.S. citizen.
Foreign ownership, control, or influence means the situation where the degree of ownership, control, or
influence over an offeror or a contractor by a foreign
interest is such that a reasonable basis exists for
concluding that compromise of classified information
or special nuclear material may possibly result.
904.7003 Disclosure of foreign ownership, control, or influence.
(a) If a contract requires a contractor to have access to
classified information or a significant quantity of
special nuclear material, the DOE must determine
whether access to the information or material by a
contractor who is or may be subject to FOCI may pose
an undue risk to the common defense and security
before a contract can be awarded.
(b) If during the performance of a contract, the
contractor comes under FOCI, then the DOE must
determine whether any further access to the classified
information or special nuclear material may pose an
undue risk to the common defense and security through
the possible compromise of that information or
material. If the DOE determines that such a threat or
potential threat exists, the contracting officer shall
consider the alternatives of negotiating an acceptable
method of isolating the foreign interest which owns,
controls, or influences the contractor or terminating the
contract.
(c) It is essential for the DOE to obtain information
about FOCI which is sufficient to help the Department
determine whether award of a contract to a person or
firm, or the continued performance of a contract by a person or firm, may pose undue risk to the common
defense and security. Therefore, the provision
specified at 952.204-73 shall be included in
solicitations that involve offeror or contractors that are
subject to 904.7001.
(d) The contracting officer shall not award or extend any contract subject to this subpart, exercise any
options under a contract, modify any contracts subject
to this subpart, or approve or consent to a subcontract
subject to this subpart unless:
(1) The contractor provides the information required by
the solicitation provision at 48 CFR 952.204-73, and
(2) The contracting officer has made a positive
determination in accordance with 48 CFR 904.7004.
[62 FR 42072, Aug. 5, 1997]
904.7004 Findings, determination, and contract award or termination.
(a) Based on the information disclosed by the offeror or
contractor, and after consulting with the DOE Office of
Safeguards and Security, the contracting officer must
determine that award of a contract to an offeror or
continued performance of a contract by a contractor
will not pose an undue risk to the common defense and
security. The contracting officer need not prepare a
separate finding and determination addressing FOCI;
however, the memorandum of negotiation shall include
a discussion of the applicability of this subpart and the
resulting determination.
(b) In those cases where FOCI does exist, and the DOE
determines that an undue risk to the common defense
and security may exist, the offeror or contractor shall be
requested to propose within a prescribed period of time
a plan of action to avoid or mitigate the foreign
influences by isolation of the foreign interest.
(c) The types of plans that a contractor can propose are: measures which provide for physical or organizational separation of the facility or organizational component containing the classified information or special nuclear material; modification or termination of agreements with foreign interests; diversification or reduction of foreign source income; assignment of specific security duties and responsibilities to board members or special executive level committees; or any other actions to negate or reduce FOCI to acceptable levels. The plan of action may vary with the type of foreign interest involved, degree of ownership, and information involved so that each plan must be negotiated on a case by case basis. If the offeror or contractor and the DOE
cannot negotiate a plan of action that isolates the
offeror or contractor from FOCI satisfactory to the
DOE, then the offeror shall not be considered for
contract award and affected existing contracts with a
contractor shall be terminated.
904.7005 Solicitation provision and contract clause.
(a) The contracting officer shall insert the provision at 48 CFR 952.204-73, Foreign Ownership, Control or
Influence over Contractor, in all solicitations for
contracts subject to 48 CFR 904.7001.
(b) The contracting officer shall insert the clause at
952.204-74, Foreign Ownership, Control, or Influence
Over Contractor, in new contracts and contract
modifications to existing contracts subject to 904.7001.
[62 FR 42072, Aug. 5, 1997]
904.71.Prohibition on Contracting (National Security Program Contracts)
904.7100 Scope of subpart.
This subpart implements section 836 of the Fiscal Year
1993 Defense Authorization Act (Pub. L. 102-484)
which prohibits the award of a Department of Energy
contract under the national security program to a
company owned by an entity controlled by a foreign
government if it is necessary for that company to be
given access to information in a proscribed category of
information in order to perform the contract.
904.7101 Definitions.
Effectively owned or controlled means that a foreign government or an entity controlled by a foreign
government has the power, either directly or indirectly,
whether exercised or exercisable, to control or
influence the election or appointment of the Offeror's
officers, directors, partners, regents, trustees, or a
majority of the Offeror's board of directors by any
means, e.g., ownership, contract, or operation of law.
Entity controlled by a foreign government means any domestic or foreign organization or corporation that is
effectively owned or controlled by a foreign
government or any individual acting on behalf of a
foreign government. See 925.7 for a statement of the
prohibition.
Foreign government means any governing body organized and existing under the laws of any country
other than the United States and its possessions and
trust territories and any agent or instrumentality of that
government.
Proscribed information means
(1) Top Secret information;
(2) Communications Security (COMSEC) information,
except classified keys used to operate secure telephone
units (STU IIIs);
(3) Restricted Data, as defined in the Atomic Energy
Act of 1954, as amended;
(4) Special Access Program (SAP) information; or,
(5) Sensitive Compartmented Information (SCI).
904.7102 Waiver by the Secretary.
(a) The Secretary of Energy may waive this prohibition,
pursuant to 10 U.S.C. 2536(b), if the Secretary
determines that waiver is essential to the national
security interests of the United States. Any request for
such a waiver shall address:
(1) Identification of the proposed awardee and
description of the foreign ownership;
(2) Description of the procurement and performance
requirements;
(3) Description of the national security interests
involved and the ways award of the contract would
promote those interests;
(4) The availability of other entities to perform the
work; and,
(5) A description of alternate means available to satisfy
the requirement.
(b) Any request for such a waiver shall be forwarded
by the Head of the Contracting Activity to the Office of
Clearance and Support, within the Headquarters
procurement organization. That office will coordinate
such requests with the Program Assistant Secretary, the
Office of Intelligence and National Security, the Office
of General Counsel, and the Procurement Executive
prior to seeking approval of the Secretary.
904.7103 Solicitation provision and contract
clause.
(a) Any solicitation, including those under simplified acquisition procedures, for a contract under the national
security program which will require access to
proscribed information shall include the provision at 48
CFR 952.204-73 with its Alternate I.
(b) Any contract, including those awarded under
simplified acquisition procedures, under the national
security program which require access to proscribed
information to enable performance, shall include the
clause at 952.204-74.
[59 FR 6221, Feb. 10, 1994; 61 FR 21975, May 13, 1996; 62 FR 42072, Aug. 5, 1997]