Suitability, National Security Positions, and Personnel Investigations

SUMMARY: The Office of Personnel Management (OPM) is proposing changes

to rules on personnel suitability, national security positions, and

personnel investigations which OPM previously issued as an interim rule

with a request for comments. OPM has received and considered public

comments and is now publishing for comment proposed changes. The

proposed rule incorporates many of the suggestions received, makes

additional changes based on the recent abolishment of the Federal

Personnel Manual (FPM), and continues the distinctions in the interim

rule between national security investigations and investigations to

determine suitability for non-sensitive positions. OPM will issue a

final rule after review of the comments received on this proposed rule.

DATES: Comments must be submitted on or before February 20, 1996.

ADDRESSES: Send written comments to John J. Lafferty, Deputy Associate

Director for Investigations, Office of Personnel Management, Post

Office Box 886, Washington, DC, 20044-0886.

FOR FURTHER INFORMATION CONTACT:

John J. Lafferty, (202) 376-3800.

SUPPLEMENTARY INFORMATION: OPM promulgated the current suitability and

personnel security regulations as an interim rule with a request for

comments in the Federal Register (56 FR 18650-18656, April 23, 1991).

Comments were received from 16 sources, including individuals, Federal

agencies, Federal employee unions, and public interest organizations.

The following summarizes the principal comments, suggestions and

proposed actions to be taken, as well as information added because of

the abolishment of the FPM.

Part 731

Section 731.102 Implementation

Because of the abolishment of the FPM, a new section has been added

to the regulations outlining OPM's and agencies' responsibilities under

the Computer Security Act of 1987 and OMB Circular A-130.

Section 731.103 Delegation to Agencies

The interim regulations provided that OPM could, in its discretion,

delegate to agencies authority for adjudicating suitability. In

accordance with recommendations of the National Performance Review

(NPR), the proposed regulations delegate to agencies all suitability

adjudication authority, except in cases of material intentional false

statement or deception or fraud in examination or appointment.

Several commenters on the interim regulations were concerned that

the provision for delegation to agencies of suitability determination

authority did not extend all of the same procedural protections that

are applicable in OPM-adjudicated cases.

OPM has revised the regulations to make clear that all procedural

rights applicable in OPM-adjudicated cases pertain to agency

adjudications. This should alleviate concerns expressed regarding

``administrative due process'' for cases involving delegated

suitability determination authority.

Section 731.201 Standard

Section 731.201 has been revised to clarify that removal is not the

only option that may be pursued for an employee found unsuitable. The

Director of OPM has authority under Civil Service Rule 5.3(a)(a) to

instruct agencies ``to separate or take other action'' against an

employee found unsuitable (emphasis supplied), and agencies will have

the same authority under delegated suitability adjudication authority.

Section 731.202 Criteria

OPM received favorable comments on the substitution of a more

clearly job-related criterion for ``alcohol abuse,'' in lieu of the

prior standard of ``habitual use of intoxicating beverages to excess.''

However, a number of negative comments were received regarding certain

other criteria. One commenter thought that ``refusal to furnish

testimony as required by Sec. 5.4 of this chapter'' was too broad and

should be qualified by language making clear that the provision was not

intended to require testimony protected by the U.S. Constitution or the

Whistleblower Protection Act or the Inspector General Act. No change is

proposed in response to this comment. OPM believes it is self-evident

that none of OPM's regulations should or would be interpreted or

applied in any manner that would violate the Constitution or specific

statutory mandates.

Another commenter, while opining that ``knowing and willful

engagement in acts or activities designed to overthrow the U.S.

Government by force'' was ``more stringent'' than ``current criteria,''

nevertheless urged elimination of this criterion altogether on First

Amendment grounds. OPM does not consider it necessary to adopt this

suggestion because OPM does not believe that the criterion authorizes

constitutionally forbidden questions concerning ``political

associations'' or ``broad inquiries into loyalty.'' The phrase ``acts

or activities designed to overthrow the U.S. Government by force''

properly focuses on illegal acts, and prevents inquiry into an

applicant's or employee's political beliefs or associations. Mere

advocacy of the use of violence as an avenue of political reform is not

penalized under the standard.

Other comments were received concerning the proposed illegal drug

use criterion. One commenter thought that ``substantial''

rehabilitation was too vague, and that ``complete'' rehabilitation

should be required; one commenter thought that both ``use'' and

``substantial'' were too vague, calling for purely subjective

judgments, and that the entire standard was defective because not job-

related; another commenter asked how the illegal drug use criterion

could be reconciled with the Drug Abuse Office and Treatment Act. OPM

does not believe that the illegal drug use criterion would be

interpreted or applied in a manner that would contravene the Drug Abuse

Office and Treatment Act, and suggests

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that ``substantial'' rehabilitation is a suitable standard, to be

assessed in light of the evidence in a particular case.

OPM has proposed two additions to the ``specific factors'' in

subsection (b): Misconduct or negligence in prior employment has been

broadened to include current employment as well as prior employment,

and the intentional false statement factor has been changed to read

``material intentional false statement.'' The latter change accords

with longstanding OPM practice (as reflected in the former FPM) that a

falsification must be ``material'' in order to justify debarment,

removal, or other appropriate action.

Section 731.203 Due Process

OPM has set forth a new and separate provision governing ``due

process'' protections applicable in suitability cases, as distinguished

from due process provisions applicable in national security cases under

Sec. 732.301. Based on objections received from many commenters

regarding the use of confidential information in suitability

adjudications, and consistent with judicial precedent, OPM proposes to

ensure that information furnished by confidential sources may not be

used by agencies in adjudicating suitability.

Section 731.302 Designation of Public Trust Positions and

Investigative Requirements [This Section Was Entitled ``Risk

Designation and Investigative Requirements'' in the Interim

Regulations]

OPM received a number of comments questioning the lack of

specificity in paragraphs (a) and (b) of Sec. 731.302. Commenters were

concerned about the lack of guidance to agencies, especially with

respect to assessing ``risk levels'' of positions covered under

Sec. 731.302. OPM has deleted all references to ``risk levels'' in the

proposed regulation, and has set forth specific criteria for

determining public trust positions. In addition, the regulation makes

clear that agency heads, not OPM, are responsible for the designation

of public trust positions within their agencies.

A number of commenters opposed the reinvestigation requirement for

public trust positions set forth in Sec. 731.302(c), pointing out that

there is no clear statutory foundation for imposing a reinvestigation

requirement for current employees occupying positions not affecting

national security; rather, the authorities empowering OPM to conduct

suitability investigations speak solely in terms of ``applicants.''

Because of the lack of statutory or other authority for reinvestigating

the character and fitness of current employees who do not occupy

positions affecting national security, OPM proposes to delete from the

final regulations the reinvestigation requirement for public trust

positions. Agencies wishing to conduct reinvestigations may explore

their enabling legislation to determine whether they have the authority

to conduct reinvestigations on their own initiative.

Section 731.303 Actions by OPM and Other Agencies

OPM received a number of comments concerning Sec. 731.303(c), which

provides that suitability disqualification actions are not considered

actions under part 752 or Secs. 315.804-806 of part 315. The primary

concern seemed to be that by withdrawing suitability-based removal

actions from the statutory protections associated with other adverse

actions, employees would be denied the protection of collective

bargaining agreements and attendant grievance and arbitration

procedures.

OPM does not consider it appropriate to amend the regulation in

question along the lines suggested for two reasons. First, the

questioned provision is not new (except to the extent that removals of

probationary employees are included). Suitability-based removals have

always been exempted from agency-initiated removal procedures; see 5

CFR Sec. 731.302(c) (1991). Second, suitability actions are taken under

authority delegated to OPM by the President. These actions are taken by

OPM in the exercise of its government wide function of safeguarding the

appointment process to positions in the competitive service. They are

not chapter 75 adverse actions at all. Accordingly, chapter 75 of title

5 does not apply to suitability actions. Such actions also are not

subject to the negotiated grievance procedure, which is limited to

disputes between agencies in their capacity as employers and employees

in recognized bargaining units.

Section 731.304 Debarment

One commenter thought that the provision giving OPM discretion to

debar a person found unsuitable from reapplying for a competitive

service position for up to 3 years was unclear in failing to clarify

whether a new determination of suitability after expiration of a

debarment period would trigger the same procedural protections as are

afforded upon an initial suitability determination. Another commenter

felt that debarment for 3 years was too long, and that debarment for up

to 1 year would be a more reasonable standard.

OPM applies the same procedural protections upon subsequent

redeterminations of suitability as it applies in initial

determinations. In order to make this clear, a clarifying phrase to

this effect has been added to Sec. 731.304(b). OPM does not believe it

is necessary to change the permissible debarment period, since OPM

exercises discretion in each case, giving due weight to the

``additional factors'' set forth in Sec. 731.202(c).

Subpart D--Suitability Actions

Two commenters recommended extending due process protections under

part 731 to excepted service employees, since recent amendments to 5

U.S.C. Sec. 7511 grant appeal rights in adverse action cases to most

employees in the excepted service. This suggestion cannot be adopted

since OPM does not have authority to extend part 731 requirements to

the excepted service.

Commenters also suggested that Sec. 731.403 be amended to limit an

agency's discretion to set the time and place of an employee's oral

answer, to require agencies to provide employees paid time to prepare

an answer, and to require that agencies answering an OPM proposed

action notice also provide it to the employee. OPM does not believe it

is appropriate to limit the discretion to set the time and place of

oral responses, in light of the NPR's recommendation that agencies by

given more latitude in suitability determinations. Similarly, it should

be up to each agency to determine whether it wishes to excuse an

individual or class of individuals for brief periods of time for the

purpose of preparing answers and appeals in suitability actions.

OPM has, however, assumed an additional obligation in

Sec. 731.402(b): Copies of notices of proposed actions must now be sent

both to respondents' residences and to their duty stations, in order to

ensure actual receipt of such notices by respondents.

Section 731.501 Appeal to the Merit Systems Protection Board

OPM published a final rule revoking the section establishing the

OPM Review Panel, concluding, as several commenters predicted, that the

OPM Review Panel did not serve a useful independent review function (60

FR 13613) March 14, 1995.

Under OPM's interim rule that established the Review Panel,

appellants were retained in a pay status while their appeals were

pending with the Panel, but if the Panel affirmed OPM's decisions, the

appellants' agencies were directed to remove the appellants within 5

days of receipt of

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the Panel's decision by the agency. With the elimination of the Panel,

the appellants' employing agencies not have the option of retaining

appellants in a pay status pending adjudication of their appeals to the

MSPB.

Part 732

Section 732.102 Definition and Applicability

Several commenters suggested that the definition of national

security positions be changed by broadening ``activities of the

Government'' to include ``the conduct of foreign relations.'' It was

also suggested that the degree of involvement in national security

activities necessary to support a national security designation be

spelled out, and that the meaning of ``regular'' access to classified

information be clarified.

OPM proposes to broaden the definition of national security

positions to include ``positions primarily concerned with sensitive

diplomatic relations with other countries,'' believing that ``conduct

of foreign relations'' is too broad a phrase and might, for example,

invite national security position designations for positions beyond

those involved in trade negotiations, such as those involving only

trade promotion.

OPM has not adopted the suggestion that the degree of involvement

in national security activities necessary to support a national

security position designation be spelled out, since OPM believes that

agencies are in the best position to judge whether particular positions

might have an adverse effect on national security within the meaning of

E.O. 10450.

OPM proposes to retain the word ``regular'' in connection with

access to classified national security information, so that it is clear

that irregular, infrequent, or occasional access to such information

does not justify a national security position designation.

Section 732.201 Sensitivity Level Designations and Investigative

Requirements

This section incorporates definitions of sensitivity levels and

related guidance from the abolished FPM.

Section 732.202 Waivers and Exceptions to Investigative Requirements

One commenter suggested that positions covered by

Sec. 732.202(b)(1) be identified as ``non-sensitive'' and that this

section be moved to part 731. This suggestion misconstrues the meaning

and purpose of Sec. 732.202(b)(1). The positions described in that

section are related to national security, and are thus ``sensitive''

positions; but, because of their temporary or seasonal nature, agencies

are permitted under E.O. 10450 to request that OPM exempt them from the

investigative requirements of that order. (Paragraph (b) of

Sec. 732.202 has been revised to clarify that the specified positions

may be exempted from the investigative requirements of E.O. 10450 only

upon request of the head of the agency concerned.)

OPM also proposes to remove Sec. 732.202(b)(2) from the final

regulations, since there is no authority in E.O. 10450 for this

provision as it appeared in the interim regulations.

Section 732.203 Periodic Reinvestigations

One commenter suggested that periodic investigations in national

security cases are unnecessary, on the ground that competent managers

should make it their business to garner the same information through

personal inquiries and observations. However, OPM proposes to retain

the requirement for periodic reinvestigations in national security

cases, since reinvestigations appear to be authorized under E.O. 10450,

have been standard practice at least since 1965 pursuant to

Presidential directive, and are contemplated by National Security

Directive 63 (October 21, 1991) and E.O. 12968.

Subpart C--Due Process and Reporting

Section 732.301 Due Process

OPM received a number of comments suggesting that procedural

protections be strengthened for persons seeking security clearances, as

well as a suggestion that the standards for granting or continuing

security clearances be made uniform for Federal Government employees

and for Federal Government contractors. With respect to the

recommendation that OPM establish uniform governmentwide procedures for

the granting, denial or revocation of security clearances, general

authority in this area does not belong to OPM but is vested in

individual agencies under E.O. 10450 and E.O. 12958.

Part 736

Part 736 has been revised to make clear that its requirements apply

only to suitability and national security investigations conducted

under parts 731 and 732 and to national security investigations of

individuals seeking or holding employment with Federal contractors. In

addition, OPM proposes to make the following changes in personnel

investigation requirements:

Section 736.104 Timing of Investigations

Except for Special-Sensitive national security position, OPM has

added a requirement that investigations for all positions subject to

investigation be initiated within 14 days of placement in the position.

This section implements the NPR's recommendation that background

investigations be conducted promptly.

Section 736.201 Protecting the Identity of a Source

Several commenters urged OPM to eliminate the use of confidential

sources of information or, in the alternative, to impose tighter

controls on the granting of pledges of confidentiality.

OPM does not believe it is appropriate to eliminate the use of

confidential sources altogether, since Congress specifically provided

for the granting of confidentiality in appropriate circumstances in the

Privacy Act of 1974. However, in Sec. 731.203, OPM has proposed that

information furnished by confidential sources may not be used by

agencies in adjudicating suitability in non-national security cases,

and in Sec. 736.201, OPM has added a new provision that pledges of

confidentiality under either part 731 or part 732 may be granted ``only

in the most compelling circumstances and only upon specific request by

the source.'' The latter requirement conforms to OMB's Privacy Act

guidelines (40 FR 28949, 28974 (1975)).

Section 736.203 Use of the Polygraph

Chapter 736 of the former FPM contained limitations upon using

polygraphs in personnel investigations, based upon a July 29, 1966,

interagency committee report approved by former President Lyndon B.

Johnson. The restrictions previously contained in the FPM are carried

over in their entirety in Sec. 736.203.

Subpart C--Maintenance of Information

This section incorporates OPM requirements for the maintenance and

handling of OPM investigative files formerly contained in the FPM.

E.O. 12866, Regulatory Review

This rule has been reviewed by the Office of Management and Budget

in accordance with E.O. 12866.

Regulatory Flexibility Act

I certify that these regulations will not have a significant

economic impact on a substantial number of small entities because they

relate to internal personnel matters within the Federal Government.

[[Page 397]]

List of Subjects in 5 CFR Parts 731, 732, and 736

Administrative practice and procedure, Government employees,

National defense, Freedom of information, Investigations, Privacy.

U.S. Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM proposes to amend 5 CFR parts 731, 732, and 736 as

follows:

1. Part 731 is revised to read as follows:

PART 731--SUITABILITY

Subpart A--Scope

Sec.

731.101 Purpose.

731.102 Implementation.

731.103 Delegation to agencies.

Subpart B--Suitability Determinations

731.201 Standard.

731.202 Criteria.

731.203 Due process.

Subpart C--Suitability Rating Actions

731.301 Jurisdiction.

731.302 Designation of public trust positions and investigative

requirements.

731.303 Actions by OPM and other agencies.

731.304 Debarment.

Subpart D--Suitability Actions

731.401 Scope.

731.402 Notice of proposed action.

731.403 Answer.

731.404 Decision.

Subpart E--Appeal to the Merit Systems Protection Board

731.501 Appeal to the Merit Systems Protection Board.

Subpart F Savings Provision

731.601 Savings provision.

Authority: 5 U.S.C. 1302, 3301, 3302, 7301, 7701; E.O. 10577, 3

CFR 1954-1958 Comp., p. 218; E.O. 12731, 3 CFR, 1990 Comp., p. 306.

Subpart A--Scope

Sec. 731.101 Purpose.

The purpose of this part is to establish criteria and procedures

for making determinations of suitability for employment in positions in

the competitive service and for career appointments in the Senior

Executive Service (hereinafter in this part, ``competitive service'')

pursuant to 5 U.S.C. 3301 and E.O. 10577 (3 CFR, 1954-1958 Comp., p.

218). Section 3301 of title 5, United States Code, directs

consideration of ``age, health, character, knowledge, and ability for

the employment sought.'' E.O. 10577 directs OPM to examine

``suitability'' for competitive Federal employment. This part concerns

only determinations of ``suitability'' based on an individual's

character or conduct that may impact the efficiency of the service by

jeopardizing an agency's accomplishment of its duties or

responsibilities, or by interfering with or preventing effective

service in the position applied for or employed in, and determinations

that there is a statutory or regulatory bar to employment.

Determinations made under this part are distinct from determinations of

eligibility for assignment to, or retention in, sensitive national

security positions made under E.O. 10450 (3 CFR, 1949-1953 Comp., p.

936) or similar authorities.

Sec. 731.102 Implementation.

(a) An investigation conducted for the purpose of determining

suitability under this part may not be used for any other purpose

except as provided in a Privacy Act system of records notice published

by the agency conducting the investigation.

(b) Under OMB Circular No. A-130 (effective January 22, 1992), the

Director, OPM, is to maintain personnel security policies for Federal

personnel associated with the design, programming, operation,

maintenance, or use of Federal automated information systems. Agencies

are instructed to establish and manage personnel security policies and

procedures to assure an adequate level of security for Federal

automated information systems. In accordance with OMB Circular A-130,

agency policies and procedures for the security of Federal automated

information systems must conform to OPM guidance. The Computer Security

Act of 1987 (Public Law 100-235) provides additional requirements for

Federal automated information systems.

(c) Policies, procedures, criteria, and guidance for the

implementation of this part shall be set forth in issuances of the OPM.

Agencies exercising authority under this part by delegation from OPM

shall conform to such policies, procedures, criteria, and guidance.

Sec. 731.103 Delegation to agencies.

(a) OPM delegates to the heads of agencies authority for

adjudicating suitability in all cases involving applicants for and

appointees to competitive service positions in the agency, except that

OPM retains jurisdiction in competitive service cases involving

evidence of material, intentional false statement or deception or fraud

in examination or appointment. Agencies must refer these cases to OPM

for adjudication, or contact OPM for prior approval if an agency wants

to take action under its own authority (5 CFR part 315 or 5 CFR part

752).

(b) Agencies exercising authority under this part by delegation

from OPM must show by policies and records that reasonable methods are

used to ensure adherence to regulations, standards, and quality control

procedures established by OPM.

(c) Paragraphs (a) and (b) of this section notwithstanding, OPM may

exercise its jurisdiction under this part in any case when deemed

necessary.

(d) Any applicant or appointee who is found unsuitable by any

agency having delegated authority from OPM under this part for any

reason named in Sec. 731.202 may appeal to the Merit Systems Protection

Board under the Board's regulations.

Subpart B--Suitability Determinations

Sec. 731.201 Standard.

Subject to subpart C of this part, an applicant, appointee, or

employee may be denied Federal employment, removed from a position, or

be subjected to other appropriate action, only when the action will

promote the efficiency of the service.

Sec. 731.202 Criteria.

(a) General. In determining whether its action will promote the

efficiency of the service, OPM or an agency to which OPM has delegated

authority under Sec. 731.103 of this chapter, shall make its

determination on the basis of:

(1) Whether the conduct of the individual may reasonably be

expected to interfere with, or prevent, efficient service in the

position applied for or employed in; or

(2) Whether the conduct of the individual may reasonably be

expected to interfere with, or prevent, effective accomplishment by the

employing agency of its duties or responsibilities; or

(3) Whether a statutory or regulatory bar prevents the lawful

employment of the individual in the position in question. Each agency

is responsible for determining whether a statutory or regulatory bar

prevents employment with that agency.

(b) Specific factors. When making a determination under paragraph

(a) of this section, any of the following reasons may be considered a

basis for finding an individual unsuitable:

(1) Misconduct or negligence in current or prior employment which

would have a bearing on efficient service in the position in question,

or would interfere with or prevent effective accomplishment by the

employing agency of its duties and responsibilities;

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(2) Criminal or dishonest conduct related to the duties to be

assigned to the applicant or appointee, or to that person's service in

the position or the service of other employees;

(3) Material, intentional false statement or deception or fraud in

examination or appointment;

(4) Refusal to furnish testimony as required by Sec. 5.4 of this

chapter;

(5) Alcohol abuse of a nature and duration which suggests that the

applicant or appointee would be prevented from performing the duties of

the position in question, or would constitute a direct threat to the

property or safety of others;

(6) Illegal use of narcotics, drugs, or other controlled

substances, without evidence of substantial rehabilitation;

(7) Knowing and willful engagement in acts or activities designed

to overthrow the U.S. Government by force;

(8) Any statutory or regulatory bar which prevents the lawful

employment of the person involved in the position in question.

(c) Additional factors. In making a determination under paragraphs

(a) and (b) of this section, OPM and agencies shall consider the

following additional factors:

(1) The nature of the position for which the person is applying or

in which the person is employed,

(2) The nature and seriousness of the conduct,

(3) The circumstances surrounding the conduct,

(4) The recency of the conduct,

(5) The age of the person involved at the time of the conduct,

(6) Contributing societal conditions,

(7) The absence or presence of rehabilitation or efforts toward

rehabilitation.

Sec. 731.203 Due process.

When an agency makes an adjudicative decision under this part based

on an OPM investigation or upon an investigation conducted pursuant to

OPM-delegated authority, or when an agency, as a result of information

in an OPM investigation or an investigation conducted pursuant to OPM-

delegated authority, changes a tentative favorable placement decision

to an unfavorable decision, the agency must:

(a) Insure that the records used in making the decision are

accurate, relevant, timely, and complete to the extent reasonably

necessary to assure fairness to the individual in any determination;

(b) Insure that all applicable administrative due process

requirements provided by law, the regulations in this part, and OPM

policy guidance have been observed;

(c) Consider all available information in reaching its final

decision, except information furnished by a confidential source; and

(d) Keep any record of the agency action required by OPM as

published in its issuances.

Subpart C--Suitability Rating Actions

Sec. 731.301 Jurisdiction.

(a) Appointments subject to investigation. (1) In order to

establish an appointee's suitability for employment in the competitive

service, every appointment to a position in the competitive service is

subject to investigation by OPM or an agency conducting investigations

under delegated authority from OPM, except:

(i) Promotion;

(ii) Demotion;

(iii) Reassignment;

(iv) Conversion from career-conditional to career tenure;

(v) Appointment, or conversion to an appointment, made by an agency

of an employee of that agency who has been serving continuously with

that agency for at least 1 year in one or more positions under an

appointment subject to investigation; and

(vi) Transfer, provided the 1 year, subject-to-investigation period

applied to the previous appointment has expired.

(2) Appointments are subject to investigation to continue OPM's

jurisdiction to investigate the suitability of an applicant after

appointment and to authorize OPM or an agency acting under delegated

authority to require removal or take other appropriate action when it

finds the appointee is unsuitable for Federal employment. The subject-

to-investigation condition may not be construed as requiring an

employee to serve a new probationary or trial period or as extending

the probationary or trial period of an employee.

(b) Duration of condition. The subject-to-investigation condition

expires automatically at the end of 1 year after the effective date of

appointment, except in a case involving material, intentional false

statement or deception or fraud in examination or appointment, or

refusal to furnish testimony.

Sec. 731.302 Designation of public trust positions and investigative

requirements.

(a) Definition of public trust positions. Public trust positions

include positions involving policymaking, major program responsibility,

law enforcement duties, or other duties demanding the highest degree of

public trust; and positions involving access to or operation or control

of unclassified confidential or financial records, with a relatively

high risk for causing grave damage or realizing a significant personal

gain.

(b) Designation of public trust positions. Agency heads shall be

responsible for designating public trust positions within the agency in

accordance with the criteria set forth in paragraph (a) of this

section.

(c) Investigative requirements. Persons receiving an appointment

made subject to investigation shall undergo a background investigation,

the minimum scope and coverage of which shall be determined by OPM.

Sec. 731.303 Actions by OPM and other agencies.

(a) For a period of 1 year after the effective date of an

appointment subject to investigation under Sec. 731.301, an appointee

may be removed or other appropriate action may be taken when OPM or an

agency exercising delegated authority under this part finds that the

appointee is unsuitable for any of the reasons cited in Sec. 731.202.

(b) Thereafter, OPM may require that an employee be removed or

other appropriate action be taken on the basis of either material,

intentional false statement or deception or fraud in examination or

appointment; or refusal to furnish testimony; or statutory or

regulatory bar.

(c) An action to remove an appointee or employee under this part is

not an action under part 752, or Secs. 315.804 through 315.806 of this

chapter.

(d) When OPM instructs an agency to remove an appointee or employee

under this part it shall notify the agency and the appointee or

employee of its decision in writing.

(e) Before OPM, or any agency having delegated authority from OPM

under this part, shall take a final suitability action against an

applicant, eligible, appointee, or employee under this part, the person

against whom the action is proposed shall be given notice of the

proposed action (including the availability for review, upon request,

of the materials relied upon), an opportunity to answer, notice of the

final decision on the action, and notice of rights of appeals.

(f) Agencies are required to report to OPM all unfavorable

adjudicative actions taken under this part, including all actions based

on OPM reports of investigation.

Sec. 731.304 Debarment.

(a) When OPM finds a person unsuitable for any reason named in

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Sec. 731.202, OPM, in its discretion, may deny that person examination

for, and appointment to, a competitive service position for a period of

not more than 3 years from the date of determination of unsuitability.

(b) On expiration of a period of debarment, a person who has been

debarred may not be appointed to any position in the competitive

service until OPM has redetermined that person's suitability for

appointment, in accordance with the procedures of this part.

(c) Any authorities delegated to agencies by OPM under this part do

not apply to or include OPM's debarment authority under paragraphs (a)

and (b) of this section.

(d) Any adjudication by an agency acting under delegated authority

from OPM which indicates that debarment may be an appropriate action

may be referred to OPM for its consideration.

Subpart D--Suitability Actions

Sec. 731.401 Scope.

(a) Coverage. This subpart sets forth the procedures to be followed

when OPM or an agency having delegated authority from OPM, acting under

authority of this part, proposes to take or to instruct an agency to

take, a final suitability ineligibility action, including removal,

against an applicant, appointee or employee in the competitive service.

(b) Definition. In this subpart, days means calendar days.

Sec. 731.402 Notice of proposed action.

(a) OPM or the agency having delegated authority from OPM under

this part shall notify the applicant, appointee, or employee

(hereinafter, the ``respondent'') in writing of the proposed action and

of the charges against the respondent. The notice shall state the

reasons, specifically and in detail, for the proposed action. The

notice shall also state that the respondent has the right to answer

this notice in writing. If the respondent is an employee the notice

shall further state that the employee may also make an oral answer, as

specified in Sec. 731.403(a). The notice shall further inform the

respondent of the time limits for answer as well as the address to

which such answer should be made.

(b) OPM shall send a copy of this notice to the agency, if any,

that is involved. The notice shall be served upon the respondent by

being mailed to the respondent's last known residence, and duty station

if an employee, no less than 30 days prior to the effective date of the

proposed action. If the respondent is employed in the competitive

service on the date the notice is served, the respondent shall be

entitled to be retained in pay status during the notice period.

Sec. 731.403 Answer.

(a) Respondent's answer. A respondent may answer the charges in

writing and furnish documentation and/or affidavits in support of the

response. A respondent who is an employee may answer orally. The

respondent may be represented by a representative of the respondent's

choice, and such representative shall be designated in writing. To be

timely, a written answer shall be made no more than 30 days after the

date of the notice of proposed action. In the event that an employee

requests to make an oral answer, OPM or the agency having delegated

authority from OPM under this part shall determine the time and place

thereof, and shall consider any answer that the respondent makes in

reaching a decision.

(b) Agency's answer. In actions proposed by OPM under Sec. 5.3 of

this chapter, the agency may also answer the notice of proposed action.

The time limit for filing an answer is 30 days from the date of the

notice. OPM shall consider any answer that the agency makes in reaching

a decision.

Sec. 731.404 Decision.

The decision shall be in writing, dated, and inform the respondent

of the reasons for the decision. Removal of appointees or employees

will be effective 30 days following the date of the decision. The

respondent shall also be informed that an adverse decision can be

appealed in accordance with subpart E of this part. OPM shall notify

the respondent and the agency of the decision.

Subpart E--Appeal to the Merit Systems Protection Board

Sec. 731.501 Appeal to the Merit Systems Protection Board.

(a) Appeal to the Merit Systems Protection Board. An individual who

has been found unsuitable for employment may appeal the decision to the

Merit Systems Protection Board (the Board). An employee or appointee

who appeals a removal directed by OPM shall notify the employing of the

appeal at the time it is filed.

(b) Appeal procedures. The procedures for filing an appeal with the

Board are found at part 1201 of title 5, Code of Federal Regulations.

(c) Pay status pending appeal. When an employee or appointee who

has been found unsuitable for employment by OPM files an appeal to the

Board, the employing agency may, at its option, retain the employee or

appointee in an active duty status for the period, in which event the

agency shall so notify the employee or appointee. If the agency elects

to proceed with a suspension or removal ordered by OPM, part 752 of

this chapter shall not apply.

Subpart F--Savings Provision

Sec. 731.601 Savings provision.

No provision of the regulations in this part shall be applied in

such a way as to affect any administrative proceeding pending on [THE

EFFECTIVE DATE OF THE FINAL RULE]. An administrative proceeding is

deemed to be pending from the date of the ``notice of proposed action''

described in Sec. 731.402.

2. Part 732 is revised to read as follows:

PART 732--NATIONAL SECURITY POSITIONS

Subpart A--Scope

Sec.

731.101 Purpose.

732.102 Definition and applicability.

Subpart B--Designation and Investigative Requirements

732.201 Sensitivity level designations and investigative

requirements.

732.202 Waivers and exceptions to investigative requirements.

732.203 Periodic reinvestigation requirements.

Subpart C--Due Process and Reporting

732.301 Due process.

732.302 Reporting to OPM.

Authority: 5 U.S.C. 3301, 3302, 7312; E.O. 10450, 3 CFR, 1949-

1953 Comp., p. 936.

Subpart A--Scope

Sec. 732.101 Purpose.

This part sets forth certain requirements and procedures which each

agency shall observe in investigations for national security positions

pursuant to Executive Order 10450--Security Requirements for Government

Employment (3 CFR 1949-1953 Comp., p. 936), as amended.

Sec. 732.102 Definition and applicability.

(a) For purposes of this part, the term national security position

includes:

(1) Those positions that involve activities of the Government that

are concerned with the protection of the nation from foreign aggression

or espionage, including development of defense plans or policies,

intelligence or counterintelligence activities, and related activities

concerned with the preservation of the military strength of the United

States;

[[Page 400]]

(2) Positions that are primarily concerned with sensitive

diplomatic relations with other countries; and

(3) Positions that require regular use of, or access to, classified

national security information.

(b) The requirements of this part apply to competitive service

positions and to Senior Executive Service positions filled by career

appointment within the Executive Branch. Nothing in this part prohibits

agencies from applying these provisions, in their discretion, to

excepted service positions within the Executive Branch.

Subpart B--Designation and Investigative Requirements

Sec. 732.201 Sensitivity level designations and investigative

requirements.

(a) For purposes of this part, the head of each agency shall

designate, or cause to be designated, any position within the

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, as a sensitive position at one of three sensitivity

levels: Special-Sensitive, Critical-Sensitive, or Noncritical-

Sensitive.

(b) Definitions of sensitivity levels. For the purposes of this

part: (1) A Special-Sensitive position is a position which the head of

the agency determines to be in a level higher than Critical-Sensitive

because of special requirements under authority other than E.O. 10450.

(2) A Critical-Sensitive position is any position with potential

for exceptionally grave damage to the national security.

(3) A Noncritical-Sensitive position is any position with potential

for some damage to serious damage to the national security.

(c) National Security Directive 63. Standards for single scope

background investigations are established by National Security

Directive (NSD) 63, ``Single Scope Background Investigations,'' dated

October 21, 1991. These investigations are used as the minimum

investigative standard by all executive branch departments and agencies

for granting individuals access to Top Secret (TS) national security

information and Sensitive Compartmented Information (SCI).

(d) Director of Central Intelligence Directive 1/14. The standards

set for single scope background investigations established by NSD 63

are further defined for SCI access in DCID 1/14, ``Personnel Security

Standards and Procedures Governing Eligibility for Access to Sensitive

Compartmented Information (SCI),'' effective January 22, 1992, and as

subsequently amended.

(e) Investigative requirements for each sensitivity level are

provided in OPM issuances.

Sec. 732.202 Waivers and exceptions to investigative requirements.

(a) Waivers.--(1) General. A waiver of the preappointment

investigative requirement contained in section 3(b) of Executive Order

10450 for employment in a sensitive national security position may be

made only for a limited period and only under the following conditions:

(i) In case of emergency if the head of the department or agency

concerned finds that such action is necessary in the national interest;

and

(ii) When such finding is made a part of the records of the

department or agency.

(2) Specific waiver requirements. (i) The preappointment

investigative requirement may not be waived for appointment to

positions designated Special-Sensitive under this part.

(ii) For positions designated Critical-Sensitive under this part,

the records of the department or agency required by Sec. 732.202(a)(1),

shall show what decision was made on obtaining prewaiver checks, as

follows:

(A) The nature of the emergency precluded obtaining prewaiver

checks; or

(B) Checks were initiated but not all responses were received

within 5 days. The records shall also include a listing of all checks

made and favorably completed.

(iii) When waiver is authorized, the required investigation must be

initiated within 14 days of placement of the individual in the

position.

(b) Exceptions to investigative requirements. Pursuant to section

3(a) of E.O. 10450, the head of an agency may request that the

following positions be exempted from the investigative requirements of

E.O. 10450, providing that the employing agency conducts such checks as

it deems appropriate to insure that the employment or retention of

individuals in these positions is clearly consistent with the interests

of the national security:

(1) Positions that are intermittent, seasonal, per diem, or

temporary, not to exceed an aggregate of 180 days in either a single

continuous appointment or series of appointments; or

(2) Positions filled by aliens employed outside the United States.

Sec. 732.203 Periodic reinvestigation requirements.

The incumbent of each position designated Special-Sensitive or

Critical-Sensitive under this part shall be subject to periodic

reinvestigation of a scope prescribed by OPM 5 years after placement,

and at least once each succeeding 5 years. The employing agency will

use the results of such periodic reinvestigation to determine whether

the continued employment of the individual in a sensitive position is

clearly consistent with the interests of the national security.

Subpart C--Due Process and Reporting

Sec. 732.301 Due process.

When an agency makes an adjudicative decision under this part based

on an OPM investigation or upon an investigation conducted pursuant to

OPM-delegated authority, or when an agency, as a result of information

in an OPM investigation or an investigation conducted pursuant to OPM-

delegated authority, changes a tentative favorable placement or

clearance decision to an unfavorable decision, the agency must:

(a) Insure that the records used in making the decision are

accurate, relevant, timely, and complete to the extent reasonably

necessary to assure fairness to the individual in any determination;

(b) Insure that all applicable administrative due process

requirements provided by law, the regulations in this part, and OPM

policy guidance have been observed;

(c) Consider all available information in reaching its final

decision;

(d) Keep any record of the agency action required by OPM as

published in its issuances; and

(e) At a minimum, provide the individual concerned:

(1) Notice of the specific reason(s) for the decision;

(2) An opportunity to respond; and

(3) Notice of appeal rights, if any.

Sec. 732.302 Reporting to OPM.

(a) In accordance with section 9(a) of E.O. 10450, each agency

conducting an investigation under E.O. 10450 is required to notify OPM

when the investigation is initiated.

(b) In accordance with section 14(c) of E.O. 10450, agencies shall

report to OPM the action taken with respect to individuals investigated

pursuant to E.O. 10450 as soon as possible and in no event later than

90 days after receipt of the final report of investigation.

3. Part 736 is revised to read as follows:

[[Page 401]]

PART 736--PERSONNEL INVESTIGATIONS

Subpart A--General Provisions

Sec.

736.101 Purpose.

736.102 Scope.

736.103 Responsibilities of OPM and other Federal agencies.

736.104 Timing of investigations.

Subpart B--Collection of Information

736.201 Protecting the identity of a source.

736.202 Notice to investigative sources.

736.208 Use of the polygraph.

Subpart C--Maintenance of Information

736.301 Maintenance of investigative files.

736.302 Handling of OPM investigative files.

Authority: Pub. L. 93-579; (5 U.S.C. 552a).

Subpart A--General Provisions

Sec. 736.101 Purpose.

The purpose of this part is to specify certain requirements for

personnel investigations conducted by OPM, for investigations conducted

under delegated authority from OPM, and for use of OPM investigative

records.

Sec. 736.102 Scope.

(a) The requirements of this part apply to suitability and national

security investigations conducted under parts 731 and 732 of this

chapter and to national security investigations of individuals seeking

or holding employment with Federal Contractors.

(b) For purposes of this part, Agency means any authority of the

Government of the United States, whether or not it is within or subject

to review by another agency, and includes any executive department,

military department, Government corporation, Government-controlled

corporation, or other establishment in the executive branch of the

Government, or any independent regulatory agency.

Sec. 736.103 Responsibilities of OPM and other Federal agencies.

(a) Unless provided otherwise by law, the investigation of persons

entering or employed in the competitive service, or by career

appointment in the Senior Executive Service, is the responsibility of

OPM.

(b) Requests for delegated investigating authority. Agencies may

request delegated authority from OPM to conduct or contract out

investigations of persons entering or employed in the competitive

service or by career appointment in the Senior Executive Service. Such

requests shall be made in writing by agency heads, or designees, and

must specify the reason(s) and justification for the request and must

include a complete cost analysis of all factors spelled out in OPM

guidance. Background investigations for these positions may not be

conducted or contracted out unless expressly authorized by OPM special

agreement.

(c) OPM Security Program Appraisals. Under E.O. 10450 (3 CFR, 1949-

1953 Comp., p. 936), OPM is required to conduct a continuing study of

each agency's personnel security program. The purpose of the appraisal

is to identify any deficiencies in security programs established under

E.O. 10450 which are inconsistent with the interests of, or directly or

indirectly weaken, the national security, and to identify tendencies in

such programs to deny to individual employees fair, impartial, and

equitable treatment or rights under the Constitution and laws of the

United States.

(d) OPM Suitability Program Appraisals. Under its statutory

authority to delegate personnel management functions to agencies (5

U.S.C. 1104), OPM conducts a continuing appraisal of agency compliance

with personnel suitability program requirements under 5 CFR part 731.

In addition, OPM conducts a continuing appraisal of the Computer/ADP

requirements set forth in OMB Circular A-130.

Sec. 736.104 Timing of investigations.

Investigations required for all positions subject to investigation

must be initiated within 14 days of placement in the position except

for positions designated Special-Sensitive under part 732 of this

chapter, for which the preappointment investigative requirement may not

be waived.

Subpart B--Collection of Information

Sec. 736.201 Protecting the identity of a source.

(a) The interviewing agent may grant a pledge to keep confidential

the identity of an information source only in the most compelling

circumstances and only upon specific request by the source. Although

the interviewing agent may not ordinarily suggest that the source

request confidentiality, the agent may offer a pledge of

confidentiality where the agent believes that the source would not

otherwise be willing to provide needed information.

(b) A pledge of confidentiality may not be assumed by the source.

(c) A pledge of confidentiality, if granted, extends only to the

identity of the source and to any information furnished by the source

that would reveal the identity of the source.

(d) When a source is granted a promise that the source's identity

will be kept confidential, the investigating agency and all other

agencies that receive information obtained under the promise are

required to take all reasonable precautions to protect the source's

identity. Each agency will prepare implementing instructions consistent

with this part.

Sec. 736.202 Notice to investigative sources.

(a) The investigating agent must notify sources:

(1) Of the purpose of the request for information,

(2) Of the uses that may be made of the information, and

(3) That all information provided, including the record source's

identity, may be disclosed to the subject of the investigation upon the

subject's request.

(b) Where information is requested by written inquiry, the form,

instructions, or correspondence used by an agency must include, in

addition to the requirements listed in paragraph (a) of this section:

(1) Space for the source to request a pledge that the source's

identity will not be disclosed to the subject of the investigation, and

(2) An offer to make special arrangements to obtain significant

information which the source feels unable to furnish without a promise

that the source's identity will be kept confidential.

Sec. 736.203 Use of the polygraph.

(a) An executive branch agency which has a highly sensitive

intelligence or counterintelligence mission directly affecting the

national security (e.g., a mission approaching the sensitivity of that

of the Central Intelligence Agency) may use the polygraph for

employment screening and personnel investigations of applicants and

appointees only after complying with the requirements in paragraphs (c)

and (d) of this section.

(b) All other executive branch departments and agencies are

prohibited from initiating a polygraph examination for employment

screening purposes for applicants or appointees to the competitive

service.

(c) If an agency desires to determine whether the agency mission

meets the criteria to be allowed to use the polygraph, the agency must

submit to the Director, OPM a statement of the nature of its mission

and a copy of its current or proposed regulations and directives

governing use of the polygraph (or a citation to them if there has been

no change since they were previously submitted and approved). The

Director shall then determine whether the agency has an intelligence or

counter-intelligence mission directly

[[Page 402]]

affecting the national security and whether the regulations and

directives meet current approval requirements.

(d) The agency shall prepare regulations and directives governing

use of the polygraph in employment screening and personnel

investigations which must be reviewed and approved by the Director,

OPM. These shall contain at a minimum:

(1) Specific purposes for which the polygraph may be used, and

details concerning the types of positions or organizational entities in

which it will be used, and the officials authorized to approve these

examinations;

(2) A provision that a person to be examined must be informed as

far in advance as possible of the intent to use the polygraph, and of

(i) Other devices or aids to the examination which may be used

simultaneously with the polygraph, such as voice recordings,

(ii) The effect of the polygraph examination, or his/her refusal to

take this examination, on eligibility for employment, and that refusal

to consent to a polygraph examination will not be made a part of the

personnel file, and

(iii) The characteristics and nature of the polygraph machine and

examination, including an explanation of the physical operation of the

machine, the procedures to be followed during the examination, and the

disposition of information developed;

(3) A provision that no polygraph examination will be given unless

the person to be examined has voluntarily consented in writing to be

examined after having been informed of the provisions in paragraph

(d)(2) of this section;

(4) A provision that questions to be asked during a polygraph

examination must have relevance to the subject of the particular

inquiry;

(5) Adequate standards for the selection and training of examiners,

keeping in mind the Government's objective of insuring protection for

the subject of an examination and the accuracy of polygraph results;

(6) A provision for adequate monitoring of polygraph operations to

prevent abuses or unwarranted invasions of privacy; and

(7) A provision for adequate safeguarding of files, charts, and

other relevant data developed through polygraph examinations to avoid

unwarranted invasions of privacy.

(e) Approval to use the polygraph for employment selection

screening for positions in the competitive service will be granted only

for a 12-month period, and is conditioned upon prior approval of the

agency's regulations and directives as provided in paragraph (d) of

this section. An agency given approval to use the polygraph for

competitive service positions will be required to recertify annually to

the Director, OPM, that the conditions which led to the original

certification still exist in the agency. Nothing contained in this

section shall be applicable to polygraph examinations for purposes

other than employment selection screening.

(f) The basic requirements of National Security Decision Directive

Number 84 (NSDD-84), subject to and as affected by any restrictions in

force, approved by former President Ronald W. Reagan on March 11, 1983,

include the use of the polygraph in certain instances. Agencies that

originate or handle classified national security information should

review the current requirements of NSDD-84.

Subpart C--Maintenance of Information

Sec. 736.301 Maintenance of Investigative Files.

(a) Investigative files are records subject to the Privacy Act and

the Freedom of Information Act and are maintained in accordance with

the provisions of those Acts.

(b) Investigative information, including investigative reports and

other materials, is highly personal and is properly restricted to

agency officials who have an official need for it in performance of

their duties. All investigative information shall be maintained in

confidence. Notices of systems of records published to fulfill Privacy

Act requirements must show full consideration for the highly personal

nature of this information.

(c) When not in use, personnel investigations must be stored in a

combination-locked cabinet or safe, or in an equally secure area.

Access to case files should be limited only to the Security Officer and

approved staff, who shall not have access to their own files.

Sec. 736.302 Handling of OPM Investigative Files.

(a) The agency security office must maintain a record of each

disclosure of OPM investigative material within the agency, including

at a minimum:

(1) The name and title of the person to whom disclosure was made;

(2) The type of background investigation conducted on the person to

whom the material was disclosed;

(3) The date(s) of disclosure; and

(4) The reason(s) for the disclosure.

(b) An agency may disseminate OPM investigative files, in whole or

in part, outside the agency only when the agency obtains prior OPM

approval. Agency security officers are responsible for controlling

files within their agencies.

(c) Privacy Act and Freedom of Information Act requests for OPM

investigative records are to be submitted to the Office of Personnel

Management, Federal Investigations Processing Center, FOI/P, P.O. Box

618, Boyers, Pennsylvania 16018-0618.

[FR Doc. 96-116 Filed 1-4-96; 8:45 am]

BILLING CODE 6325-01-M