[Material transmitted:]{.underline}

HHS Instruction 731-1, Personnel Security/Suitability Program

[Material superseded:]{.underline}

HHS Instruction 731-1 (all)

[Background:]{.underline}

This Instruction has been revised consistent with recent changes in the
organization of HHS, and in support of HHS administrative initiatives
calling for more streamlined rules and greater delegation of authority.
It covers personnel security and

suitability policy and procedures, including the designation of public
trust and national security positions, the scheduling and adjudication
of personnel investigations, and the granting of security clearances for
access to classified national security information. This revised
Instruction is necessary to implement numerous changes in the Federal
personnel security program due to the abolishment of the Federal
Personnel Manual, the issuance of new regulations and security forms by
the Office of Personnel Management (OPM), and the issuance of a new
executive order on access to classified information.

This issuance has been streamlined and outdated material has been either
eliminated or updated.

Any reference to \"OPDIV\" in this instruction now includes AHCPR,
ATSDR, CDC, FDA, HRSA, IHS, NIH, SAMHSA, the Office of the Secretary,
the Program Support Center, HCFA, ACF, and AOA.

This issuance is effective immediately. Implementation under this
issuance must be carried out in accordance with applicable laws and
bargaining agreements.

[Filing Instructions:]{.underline}

Remove superseded material and file new material. Post receipt of this
transmittal to the HHS Check List of Transmittals and file this
transmittal in sequential order after the check list.

/s/

Evelyn M. White

Deputy Assistant Secretary for

Human Resources, ASMB

INSTRUCTION 731-1

[HHS PERSONNEL INSTRUCTION 731-1]{.underline}

[PERSONNEL SECURITY/SUITABILITY PROGRAM]{.underline}

731-1-00 Purpose

10 Coverage

20 References

30 Authority

40 Policy

50 Position Sensitivity Designation

60 Suitability for Federal Employment

70 Personnel Security Background Investigations

80 Waivers

90 Security Clearances - Access to Classified Information

100 Access Eligibility Standards

110 Clearance Terminations, Downgrades, Denials

120 Reinvestigations

130 Adverse Actions

140 Safeguarding and Handling Investigative Reports

**731-1-00** PURPOSE

This Instruction outlines the policies and requirements for the
administration of the Department\'s personnel security/suitability
program.

**731-1-10** COVERAGE

This Instruction covers all employees of the Department, including
contractors who work in HHS-controlled facilities or on sensitive HHS
projects.

**731-1-20** REFERENCES

A. Executive Order 10450, Security Requirements for Government
Employment

B. Executive Order 12968, Access to Classified Information

C. 5 CFR Part 315 (regulations - career and career-conditional
employment)

D.  5 CFR Parts 731, 732, and 736 (regulations - suitability, national
    security positions,

and personnel investigations)

E. 5 CFR Part 752 (regulations - adverse actions)

F HHS National Security Information Manual

G. National Security Directive 63 - Single Scope Background
Investigations

H. OMB Circular No. A-130, Appendix III, Security of Federal Automated
Systems

I. Public Law 100-235, The Computer Security Act of 1987

J.  Public Law 101-630, Section 408, \"Character Investigations\",
    Indian Child Protection and

Family Violence Prevention Act

K.  Public Law 101-647, Section 231, \"Child Care Worker Employee
    Background Checks\",

Crime Control Act, as amended by Public Law 102-190

**731-1-30** AUTHORITY

A. Authority for the Department\'s security/suitability program is
vested in the Secretary pursuant to the requirements of Executive Order
(EO) 10450 and 5 CFR Parts 731, 732, and 736. These directives and
others require the Secretary to establish and maintain an effective
personnel security/suitability program within the Department to ensure
that the employment and retention of any employee or contractor is
clearly consistent with the efficiency of Federal service and the
interests of the national security.

B. The Secretary delegated to the Assistant Secretary for Personnel
Administration the authority to conduct all personnel
security/suitability functions for the Department. On September 29,
1995, the Secretary approved a reorganization which placed those
personnel security functions under the authority of the Assistant
Secretary for Management and Budget (ASMB).

C. The Secretary has retained authority to suspend or separate an
employee on grounds of disloyalty or subversion, to restore to duty any
employee who had been released from duty on such grounds, and to
reemploy any person separated from a Federal position on such grounds.

D. A number of officials have major responsibilities for personnel
security and suitability policy and practices in this Department. Those
responsibilities are listed in the

> *HHS Personnel Security/Suitability Handbook* which is issued by the
> Director, Security and Drug Testing Division (SDD).

**731-1-40** POLICY

A. Every Department position, including those occupied by Commissioned
Corps officers and those of contractors, must be designated with a
sensitivity level. (Indian tribes and tribal organizations contracting
under the Indian Self-Determination and Education Assistance Act are not
considered contractors under this policy).

B. All employees and contractors must meet personnel
security/suitability standards commensurate with their position
sensitivity level and they must be subject to personnel investigation
requirements.

C. Access to classified national security information is granted upon
demonstration of a valid \"need-to-know\" and not merely on the basis of
position, title, level of investigation conducted, or position
sensitivity level.

D. There is a reinvestigation requirement for individuals who have
security clearances if they continue to have a need for access to
classified information.

**731-1-50** POSITION SENSITIVITY DESIGNATION

A. [General]{.underline}

> The key to an effective and efficient personnel security/ suitability
> program is to spend the majority of the program resources
> investigating and evaluating those individuals whose actions or
> inactions pose the greatest risk to the Department or national
> security. To assure that the risk inherent in the hiring and placement
> decisions is properly managed, it is essential that all positions be
> designated with correct and consistent sensitivity levels.
>
> The position sensitivity level is very important because it indicates
> what the investigative requirements are for anyone occupying the
> position. Incorrect designations could result in program
> vulnerabilities and unwarranted staffing delays as well as unnecessary
> and costly investigative coverage.
>
> The investigation required for each position should be sufficient to
> provide management with a basis for ensuring that the employment of
> the individual is clearly consistent with Federal suitability and
> national security standards, thus reducing the risk of any damage that
> could be done by the individual.

B. [Sensitivity Levels]{.underline}

> There are three sensitivity designations (Non-Sensitive, Public Trust,
> and National Security) which correlate directly with specific
> sensitivity levels and the personnel security questionnaire that the
> individual must complete for the required investigation.
>
> 1\. [Non-Sensitive Positions]{.underline} (Level 1) make up the
> majority HHS positions because of the nature of the primary
> responsibilities of this Department.
>
> 2\. [Public Trust Positions]{.underline} (Levels 5 & 6) have duties
> which include policy-making, major program responsibility, access to
> sensitive, proprietary, or financial information, audit, law
> enforcement, or security responsibilities, etc.
>
> 3\. [National Security Positions]{.underline} (Levels 2, 3, & 4) are
> quite limited at HHS because they are positions in which the incumbent
> needs a security clearance for access to classified national security
> information.

**731-1-60** SUITABILITY FOR FEDERAL EMPLOYMENT

A. The Office of Personnel Management (OPM) is responsible for carrying
out a program of investigating and adjudicating the suitability of
applicants and employees for Federal employment. Suitability involves
assessing identifiable character traits and past conduct sufficiently to
determine whether a specific individual is likely to be able to carry
out the duties of a Federal job with appropriate efficiency and
effectiveness. OPM provides guidance making suitability determinations
in 5 CFR Part 731. Unfavorable decisions are made to promote the
efficiency of Government service, and only after giving the individual
due process rights.

B. OPM has delegated to agencies the authority for adjudicating
suitability, except in competitive service cases involving evidence of
material, intentional false statement or deception or fraud in
examination or appointment. In these cases, agencies are required to
contact OPM before taking action. In adjudicating suitability, 5 CFR
Part 731 guidance on standards, due process, and jurisdiction must be
followed.

C. The \"suitability\" or \"fitness\" decision is made by the Personnel
Security Representative (PSR) or other management official after
reviewing the results of the required background investigation which is
conducted by OPM or another Federal agency. The scope and coverage area
of the investigation is determined by the designated position
sensitivity level. The investigation is designed to reveal pertinent
facts, past and present, about the character, honesty, trustworthiness,
reputation, etc., of the applicant, employee, or contractor.

D. All pertinent information obtained from investigative reports,
personnel records, responses to written inquiries, medical fitness
records, personal or subject interviews, or any other sources, shall be
considered in reaching suitability/security determinations. Due process
procedures must be followed when making an unfavorable determination.

E. The Director, SDD, and each PSR shall assure that the analysis of
background investigative information and subsequent suitability/security
determination and the handling of the investigative reports follow the
requirements, criteria, and standards in 5 CFR Parts 731, 732, and 736
and in EOs 10450 and 12968.

**731-1-70** PERSONNEL SECURITY BACKGROUND INVESTIGATIONS

A. The minimum personnel background investigation requirements for the
various position sensitivity levels are listed in the *HHS Personnel
Security/Suitability Handbook*, supplemented by OPM issuances, including
those which show the current costs of the available investigations.

B. There is an exemption to the minimum investigation requirements for
certain [Non-Sensitive]{.underline} ([Level 1]{.underline}) positions.
(See the *HHS Personnel Security/Suitability Handbook*.)

**731-1-80** WAIVERS

A. Special circumstances may require immediate action to employ an
applicant or move an employee into a position designated as sensitive
National Security (Level 3) or high risk Public Trust (Level 6). The
situation may not permit sufficient time to complete the required
preappointment investigation.

B. EO 10450 authorizes a waiver of the preappointment investigation for
a person being considered for a sensitive position \"in case of
emergency\" if the agency \"finds that such action is necessary in the
national interest.\" In such cases, the Secretary or a designated
official can make this decision by signing the waiver request. The
original signed waiver must be made a part of the records of the
Department by placing it in the employee\'s OPF and the background
investigation must be scheduled shortly after the employee enters on
duty.

**[731-1-90]{.underline}** SECURITY CLEARANCES - ACCESS TO CLASSIFIED
INFORMATION

A. The employment and retention of any employee or contractor in a
national security position must be consistent with the interests of the
national security. At HHS that determination usually is related
specifically to the individual\'s need for access to classified national
security information, also referred to as a need for a security
clearance.

B. Security clearances to permit access to classified (Confidential,
Secret, or Top Secret) information are granted by the Director, SDD, in
accordance with EO 12968 or any successor order.

C. Completion of a favorable background investigation does not of itself
confer access to classified materials. An individual is eligible for
access to classified information provided: (l) the individual has been
determined to be trustworthy after completion and review of the required
investigation and (2) it is determined that access to classified
information is essential to the accomplishment of lawful and authorized
Government purposes, referred to as a \"need-to-know\".

D. The final responsibility for determining whether an employee\'s
official duties require possession of, or access to, classified
information and whether the employee has been granted the appropriate
security clearance and has a bona-fide \"need-to-know\" this information
rests with the official who will be providing access to the information,
and not with the prospective recipient.

E. Government contractors, licensees, grantee employees, or other
non-governmental personnel requiring access to classified information in
the performance of their duties are subject to the same access
requirements and standards as Federal employees.

F. As an additional condition for access to classified information, all
individuals shall be required to provide to HHS written consent
permitting access by an authorized investigative agency to their
relevant financial and consumer reports, for such time as access to
classified information is maintained and for a period of three years
thereafter. Further clarification of the records which can be accessed
and the conditions under which the information can be requested pursuant
to the individual\'s written content are stated in EO 12968.

G. EO 12968 further requires in Section 1.3 that certain employees with
access to special types of classified intelligence, cryptographic, or
special access information meet financial disclosure and foreign travel
requirements.

**731-1-100** ACCESS ELIGIBILITY STANDARDS

Eligibility standards for access to classified information are further
clarified in EO 12968.

A. An individual must not be granted a security clearance for access to
classified information solely by virtue of title, position, or level of
position sensitivity. A security clearance must be granted only when
there is a demonstrated need for required access to a specific
classified program, project, or assignment.

B. Only United States citizens are eligible for security clearances,
except as provided in EO 12968. The completed background investigation
must show that the individual is loyal to the United States and that the
individual\'s personal and professional history affirmatively indicate
strength of character, trustworthiness, honesty, reliability,
discretion, and sound judgment. Additionally, the investigation must
show the individual to be free from conflicting allegiances and the
potential for coercion and also indicate the individual\'s willingness
and ability to abide by regulations governing the use, handling, and
protection of classified information.

C. In granting access to classified information, there must be no
discrimination on the basis of race, color, religion, sex, national
origin, disability, or sexual orientation.

D.  Although the Department may investigate and consider any matter that
    relates to the determination of whether access is clearly consistent
    with the interests of national security, no inference concerning
    these standards may be raised solely on the basis of the sexual
    orientation of the employee.

E.  No negative inference concerning these standards may be raised
    solely on the basis of mental health counseling. Such counseling can
    be a positive factor in eligibility determination. However, mental
    health counseling, where relevant to the adjudication of the access
    decision, may justify further inquiry to determine whether the
    standards cited in paragraph B above are satisfied, and mental
    health may be considered where it directly relates to those
    standards.

F. The determination of eligibility for access is a discretionary
security decision based upon all available facts and circumstances. Any
doubt about whether access should be granted must be resolved in favor
of national security.

G. PSRs must ensure that each individual who has been granted a security
clearance receives briefings on security matters based upon guidance
provided by SDD.

**731-1-110** CLEARANCE TERMINATIONS, DOWNGRADES, DENIALS

A.  A PSR in coordination with the immediate supervisor and the
    Director, SDD, may determine a currently cleared individual no
    longer has a need for a security clearance. That determination is a
    discretionary one and the decision of the Director, SDD, is
    conclusive. Upon written notice to the individual, the PSR may
    administratively terminate, or downgrade, the security clearance by
    following SDD procedures.

B.  Individuals who are being denied a security clearance, or having
    their clearance revoked, because they do not meet access eligibility
    standards, must be given specific due process and appeal rights as
    stipulated in EO 12968, Section 5.2, Review Proceedings for Denials
    or Revocation of Eligibility for Access.

**731-1-120** REINVESTIGATIONS

A. Because circumstances and characteristics of individuals may change
dramatically over time and thereby alter their eligibility for continued
access to classified information, reinvestigations must be conducted
with the same priority and care as initial investigations. The
reinvestigation requirement covers all incumbents in National Security
Positions, i.e., those designated as Levels 2, 3, and 4. The type of
reinvestigation required for each access level is indicated in the
*Personnel Security/Suitability Handbook*.

B. Individuals having a security clearance also may be reinvestigated
if, at any time, there is reason to believe that they may no longer meet
the standards for access. Recent arrest records, news media information,
etc., are examples of reasons why a PSR and the Director, SDD, may
decide to schedule a reinvestigation of an individual prior to the
normal reinvestigation date.

C. The results of the reinvestigation must be evaluated to determine
whether the incumbent can continue to occupy a National Security
Position or have a security clearance, and an unfavorable decision could
result in a clearance suspension, revocation, or other disciplinary or
adverse action.

**731-1-130** ADVERSE ACTION

A. An adverse action proposed as a part of the suitability adjudication
process must involve an assessment of the risk of public trust abuse by
the individual in performing specific duties. This assessment provides
the nexus between the suitability issue and the efficiency of service.

B. Adverse suitability actions are taken by authorized officials and are
processed under procedures in 5 CFR Part 731, except when they decide
that it is more appropriate to take action under procedures in 5 CFR
Part 315 or 752.

C. Adverse suitability actions taken under 5 CFR Part 731 are appealable
to the Merit Systems Protection Board or may be grievable under the HHS
grievance procedures. All due process requirements must be followed.

D. Most of the FBI post appointment arrest records that are referred to
the Department by OPM for action are on employees who already have been
found suitable for Federal employment. Therefore, these records shall be
adjudicated to determine if there is need for some kind of disciplinary
or adverse action against the employee.

**731-1-140** SAFEGUARDING AND HANDLING INVESTIGATIVE REPORTS

Personnel investigative reports and records must be safeguarded with the
highest degree of discretion to protect the interests of the individual
and the Department. Accordingly, the *Personnel Security/Suitability
Handbook* contains specific safeguarding and handling requirements.