[Federal Register Volume 76, Number 155 (Thursday, August 11, 2011)]
[Rules and Regulations]
[Pages 49650-49658]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20239]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 159

[DOD-2008-OS-0125/RIN 0790-AI38]


Private Security Contractors (PSCs) Operating in Contingency 
Operations, Combat Operations or Other Significant Military Operations

AGENCY: Office of the Under Secretary of Defense for Acquisition, 
Technology, and Logistics, DoD.

ACTION: Final rule.

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SUMMARY: This Rule establishes policy, assigns responsibilities and 
provides procedures for the regulation of the selection, 
accountability, training, equipping, and conduct of personnel 
performing private security functions under a covered contract during 
contingency operations, combat operations or other significant military 
operations. It also assigns responsibilities and establishes procedures 
for incident reporting, use of and accountability for equipment, rules 
for the use of force, and a process for administrative action or the 
removal, as appropriate, of PSCs and PSC personnel. For the Department 
of Defense, this Rule supplements DoD Instruction 3020.41, ``Contractor 
Personnel Authorized to Accompany the U.S. Armed Forces,'' which 
provides guidance for all DoD contractors operating in contingency 
operations.
    This Rule was published as an Interim Final Rule on July 17, 2009 
because there was insufficient policy and guidance regulating the 
actions of DoD and other governmental PSCs and their

[[Page 49651]]

movements in operational areas. This Rule ensures compliance with laws 
and regulations pertaining to Inherently Governmental functions, and 
ensures proper performance by armed contractors.

DATES: Effective Date: This rule is effective September 12, 2011.

FOR FURTHER INFORMATION CONTACT: Chris Mayer, Director, Armed 
Contingency Contractor Policy and Programs, Office of the Deputy 
Assistant Secretary of Defense (Program Support), (571) 232-2509.

SUPPLEMENTARY INFORMATION: The publication of this Rule is required to 
meet the mandate of Section 862 of the 2008 National Defense 
Authorization Act (NDAA), as amended by Section 813(b) of the 2010 NDAA 
and Section 832 of the 2011 NDAA. DoD has determined that the updates 
implementing Section 832 of the 2011 NDAA do not require additional 
public comment. These updates are in direct compliance with current 
statute, do not set a precedent in updating the interim final, and any 
delay in implementing these updates would be detrimental to U.S. 
security.

Background

    This Final Rule \1\ is required to meet the mandate of Section 862 
of the FY 2008 NDAA, as amended, which lays out two requirements:
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    \1\ Nothing in this Final Rule is intended to reflect the views 
of the DoD or the United States regarding the merits of any claim or 
defense that may be asserted by a private party in any pending or 
future litigation or disputes.
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    (i) That the Secretary of Defense, in coordination with the 
Secretary of State, shall prescribe regulations on the selection, 
training, equipping, and conduct of personnel performing private 
security functions under a covered contract in an area of combat 
operations or other significant military operations; and
    (ii) That the FAR shall be revised to require the insertion into 
each covered contract (or, in the case of a task order, the contract 
under which the task order is issued) of a contract clause addressing 
the selection, training, equipping, and conduct of personnel performing 
private security functions under such contract.
    This Final Rule meets requirement (i). There will be a separate and 
subsequent Federal Register action to meet requirement (ii) to update 
the FAR. On July 17, 2009, an Interim Final Rule (32 CFR Part 159 DOD-
2008-OS-125/RIN 0790-AI38) was published and public comments were 
solicited. At the end of the comment period, we received comments from 
9 respondents, including the American Bar Association, IPOA, NGO groups 
and members of the public. These comments are discussed below by topic.

Comment: Extent of Delegation of Implementation Authority to Each 
Geographic Combatant Commander

    Response: We believe that it is appropriate for DoD to provide the 
Geographic Combatant Commanders with the requirements to be included in 
their respective guidance and procedures. Situations change 
significantly from one geographic region to another. The Geographic 
Combatant Commanders (GCC) must have the flexibility to apply the 
overarching policy, tailoring their guidance and procedures as 
necessary to meet the particular circumstances within their respective 
areas of responsibility at any particular time. This is consistent with 
the approach that we are currently taking in the CENTCOM Area Of 
Responsibility (AOR) without significant issue.
    We do not believe that differing or conflicting regulations will be 
adopted within a single AOR. The GCC will establish the overarching 
guidance and Subordinate Commanders (down to Joint Task Force level) 
will develop implementing instructions. Specific requirements will be 
made available to Private Security Contractors through the GCC Web 
site.

Comment: Absence of Department-Wide Guidance

    Response: We believe that a de-centralized approach is the most 
appropriate way to implement the requirements of Section 862 of the 
FY08 NDAA. There is sufficient uniformity of guidance provided through 
policy, including this Rule and existing acquisition regulations. The 
intent of the policy is that all PSC personnel operating within the 
designated area are required to have the required training, not only 
those who are deploying. A FAR case has been opened to incorporate the 
required revisions based upon the publication of this Final Rule.

Comment: Lack of Uniformity Across Organizations

    Response: Following publication of this Final Rule, these 
requirements will be added to the FAR and DFARS and subsequently 
incorporated into appropriate contracts. This will provide a basis for 
the management of PSC compliance.

Comment: Chief of Mission Should Be Required to Opt Out of DoD PSC 
Processes

    Response: We believe that the arrangement set out in Section 
159.4(c) is appropriate and meets the congressional intent of a 
consistent approach towards PSCs operating in combat operations or 
other significant military operations, across USG agencies.

Comment: Any Procedures or Guidance Issued Under the Requirements of 
This Rule Should be Subject to an Appropriate Rule-Making with an 
Adequate Opportunity for Public Comment

    Response: The relevant provisions of this Final Rule will be 
implemented through military regulations and orders, in accordance with 
existing procedures.

Comment: The Rule is Not Integrated with Standard Contracting Processes

    Response: The requirements associated with GCC guidance and 
procedures will be included in any solicitations and therefore 
potential bidders will be aware of GCC specific procedures prior to 
submitting their proposals. AOR specific procedures such as training 
requirements are required to be placed on GCC Web sites immediately 
after a declared contingency so that the requirements can get into the 
appropriate contracts as soon as possible.

Comment: The Rule Should Fully Explain How DoD Determines a PSC Law of 
War Status

    Response: It is not the role of the Rule to make statements 
regarding international law. Department Of Defense Instruction 3020.41, 
the overarching Defense policy document for this Rule, provides in 
paragraph 6.1.1 that:

    Under applicable law, contractors may support military 
operations as civilians accompanying the force, so long as such 
personnel have been designated as such by the force they accompany 
and are provided with an appropriate identification card under the 
provisions of the 1949 Geneva Convention Relative to the Treatment 
of Prisoners of War (GPW) (reference (j)). If captured during armed 
conflict, contingency contractor personnel accompanying the force 
are entitled to prisoner of war status.

    The comments regarding direct participation in hostilities are 
unsupportable. There is no agreement within the international community 
or among recognized authorities in international humanitarian law 
(LOAC) on a universally applicable definition for ``Direct 
Participation in Hostilities.''

[[Page 49652]]

(Public address by Dr. Jakob Kellenberger, President, International 
Committee of the Red Cross, 11 September 2009.) Again, contracting 
regulations are not the place to define terms that are not yet defined 
under international law. The Rule specifies that command rules for the 
use of force will be consistent with Chairman of the Joint Chiefs of 
Staff Instruction 3121.01B. This will provide commonality regarding the 
Rules for the Use of Force (RUF) but with the flexibility for commands 
to interpret it in accordance with local, and sometimes transitory, 
circumstances.

Comment: The Rule may benefit from additional guidance on inter-agency 
cooperation

    Response: Interagency coordination is essential to successful 
contingency planning. The Rule, as written supports flexible, agile, 
and focused contingency planning and DoD, DoS and USAID believe the 
rule provides sufficient strategic direction for interagency 
coordination relative to PSC oversight and conduct. DoD disagrees with 
the respondent's assertion that ``many coordination issues will be 
common across AORs.'' Some may, many more may not. The flexibility to 
adapt procedures to local circumstances is essential. As the same 
respondent notes in this same section, ``guidance and procedures in the 
Iraq Memorandum of Agreement (MOA) are not easily transferrable to 
contingency operations outside of Iraq.'' The MOA between DoD and DoS 
in place in Iraq has proven to be extremely successful and serves as a 
good example of interagency coordination. It was referenced in the IFR 
as an example or point of departure for developing GCC guidance and 
procedures. However, to avoid confusion, in the Final Rule we have 
removed the last sentence in Section 159.6(d) which references the MOA. 
DoD, DoS and USAID recognize that some PSC or PSC personnel activities 
may require coordination with other Federal agency partners who 
contract for private security services.

Comment: Confusion about Geographic Combatant Commander Delegation 
Authority to Subordinate Commander

    Response: Geographic combatant commands themselves do not follow a 
uniform organizational structure and commanders are free to assign 
different responsibilities to the most appropriate components of their 
staffs. The language in the Final Rule has been changed to provide more 
specificity as to the subordinate level to which GCCs can delegate 
responsibility for implementation. Through the Rule, the phrase 
``Subordinate Commander'' has been replaced with ``sub unified 
commanders or combined/joint task force commanders''.

Comment: The rule needs to include reference to existing powers of 
removal of a PSC and personnel

    Response: Such language is unnecessary in so far as it is already 
addressed in our existing regulations. Section 862(b)(3) of the 2008 
NDAA as amended includes the following language: ``NONCOMPLIANCE OF 
PERSONNEL WITH CLAUSE--The contracting officer for a covered contract 
may direct the contractor, at its own expense, to remove or replace any 
personnel performing private security functions in an area of combat 
operations or other significant military operations who violate or fail 
to comply with applicable requirements of the clause required by this 
subsection. If the violation or failure to comply is a gross violation 
or failure or is repeated, the contract may be terminated for 
default.'' Incorporation of this statutory language will be considered 
in the DFARS case implementing Section 862.

Comment: The rule fails to address subcontractors providing security 
for the prime contractor

    Response: The definition of ``covered contract'' has been revised 
in the Rule to cover contracts for the performance of services and/or 
the delivery of supplies. Further, we will ensure that regulatory 
guidance developed subsequent to the publication of this Rule makes 
clear that subcontractors providing security for prime contractors must 
comply.

Comment: Recommend application of the rule to PSCs working under 
contract to the DoD whether domestically or internationally

    Response: As required by Section 862 of the 2008 NDAA, as amended, 
this Rule applies to PSCs working for any U.S. Government agency in an 
area of combat operations or other significant military operations. It 
also applies to PSCs working for DoD in contingency operations outside 
the United States. The arrangements for PSC employment in the United 
States are outside the scope of this Rule.

Comment: Section 159.4(a) ``Consistent with the requirement of 
paragraph (a)(2) * * *'' should include at the end of the section, 
``Coordination shall encompass the contemplated use of PSC personnel 
during the planning stages of contingency operations so to allow 
guidance to be developed under parts (b) and (c) herein and promulgate 
under 159.5 in a timely manner that is appropriate for the needs of the 
contingency operation''

    Response: The language has been revised in the Final Rule.

Comment: Section 159.6(a)(i) ``Contain at a minimum procedures to 
implement the following process * * *'' should include, ``That the 
Secretary of Defense, in coordination with the Secretary of State, 
shall prescribe regulations on the selection, training, equipping, and 
conduct of personnel performing private security functions under a 
covered contract in an area of combat operations''

    Response: We believe that the current wording is correct, as it 
reflects our intent.

Comment: Section 159.6(a)(ii) ``PSC verification that PSCs meet all the 
legal, training, and qualification requirements * * *'' should include 
``That the FAR shall be revised to require the insertion into each 
covered contract of a contract clause; addressing the selection, 
training, equipping and conduct of personnel performing private 
security functions under such a contract''

    Response: A FAR clause will be drafted to incorporate all of the 
requirements of this Rule.

Comment: Section 159.6(a)(v) ``Reporting alleged criminal activity and 
other incidents involving PSCs or PSC personnel by another company or 
any other personnel. All incidents shall be reported and documented.'' 
These reporting requirements are already required

    Response: Many of the requirements in this rule are already in 
effect in the CENTCOM AOR. With this Rule, we are establishing the 
requirements for all Geographic Combatant Commanders and Chiefs of 
Mission in order to extend guidance and procedures globally and to the 
wider interagency community.

Comment: Questions of the propriety of having PSCs represent the U.S. 
in contingency operations relative to the U.S. Constitution and the 
Anti Pinkerton Act

    Response: The DoD's use of contractors, including private security

[[Page 49653]]

contractors, is entirely consistent with existing U.S. Government 
policy on inherently governmental functions. We are guided by four main 
documents when determining whether an activity or function is 
inherently governmental: DoD Instruction 1100.22 ``Policy and 
Procedures for Determining Workforce Mix''; the Federal Acquisition 
Regulations (FAR); the Performance of Commercial Activities and the 
Federal Activities Inventory Reform Act, or FAIR Act, of 1998; and, 
Office of Management and Budget (OMB) Policy Letter 92-1, issued in 
1992. The DoD recognizes that there are specific security functions 
that are inherently governmental and cannot be contracted. The DoD does 
not contract those functions, but there are other security functions 
that are appropriate to contract. The DoD, the Government 
Accountability Office (GAO), the Office of Management and Budget (OMB), 
the Congressional Budget Office (CBO), and the Congressional Research 
Service (CRS) have continuously reviewed the use of PSCs, the potential 
for their performance of inherently governmental functions, and the 
appropriateness and manner in which they are employed.

Comment: Opposition to the use of mercenaries in the U.S. Department of 
Defense

    Response: The DoD does not use mercenaries. Article 47 of 
Additional Protocol I to Geneva Conventions provides an internationally 
accepted definition of mercenaries. The elements of that definition 
clearly exclude PSCs under contract to DoD. Private security 
contractors do not perform military functions, but rather, they carry 
out functions similar to those performed by security guards in the 
United States and elsewhere. We agree that the behavior of PSCs may 
affect the national security goals of the U.S. and for this reason we 
have published guidance on the selection, oversight, and management of 
private security contractors operating in contingency operations.

Comment: DoD personnel do not want PSCs in a combat situation

    Response: The primary role of the armed forces is combat: to close 
with and destroy enemy armed forces through firepower, maneuver, and 
shock action. Defense of military personnel and activities against 
organized attack is a military responsibility. DoD allocates military 
personnel to these high priority combat and other critical combat 
support missions. Private Security Companies contracted by the U.S. 
government protect personnel, facilities and activities against 
criminal activity, including individual acts of terrorism. They are 
specifically prohibited from engaging in combat (offensive) operations 
and certain security functions. DoD PSCs have performed well and are 
very important to our mission accomplishment in the CENTCOM area of 
responsibility.

Comment: PSCs should receive Veteran's Affairs benefits for injuries 
sustained while protecting the country

    Response: PSCs and other contractors employed by the U.S. 
government who perform work outside of the United States are covered by 
the Longshore and Harbor Workers' Compensation Act (LHWCA). The LHWCA 
provides disability compensation and medical benefits to employees and 
death benefits to eligible survivors of employees of U.S. government 
contractors who perform work overseas.
    The Defense Base Act is an extension of the LHWCA. The Defense Base 
Act covers the following employment activities: (1) Work for private 
employers on U.S. military bases or on any lands used by the U.S. for 
military purposes outside of the United States, including those in U.S. 
Territories and possessions; (2) Work on public work contracts with any 
U.S. government agency, including construction and service contracts in 
connection with national defense or with war activities outside the 
United States; (3) Work on contracts approved and funded by the U.S. 
under the Foreign Assistance Act, which among other things provides for 
cash sale of military equipment, materials, and services to its allies, 
if the contract is performed outside of the United States; or (4) Work 
for American employers providing welfare or similar services outside 
the United States for the benefit of the Armed Services, e.g. the 
United Service Organizations (USO). If any one of the above criteria is 
met, all employees engaged in such employment, regardless of 
nationality (including U.S. citizens and residents, host country 
nationals (local hires), and third country nationals (individuals hired 
from another country to work in the host country)), are covered under 
the Act.

Comment: Requirements jeopardize NGO security posture

    Response: This Rule applies only to personnel performing private 
security functions under a covered contract. A covered contract is 
defined by Section 864(a)(3) of the FY 2008 NDAA, as amended by Section 
813(b) of the FY 2010 NDAA.

Comment: USAID involvement is not evident

    Response: USAID has been actively involved in various working 
groups implementing the Interim Final Rule and developing the Final 
Rule.

Comment: PSC rules should be consistent with the spirit and intent of 
Guidelines for Relations between U.S. Armed Forces and Non-Governmental 
Humanitarian Agencies in Hostile or Potentially Hostile Environments

    Response: The purpose of publishing the IFR in the Federal Register 
was to obtain the comments of affected agencies, NGOs, contractors and 
the public. The respondent was not specific about any perceived 
conflicts that needed to be addressed in the PSC rule, and should work 
with their USAID and other agency counterparts to provide specific 
inputs on implementing the Final Rule.

Comment: PSC rules should not apply to unarmed guard forces

    Response: We believe that the current language is correct. When 
contractors providing guard services are not armed, those aspects of 
the rule which are specific to armed contractors (i.e. arming 
procedures) are not relevant.

Comment: Procedures associated with PSC rules must be adapted to 
contexts in which NGOs have long-standing programs or minor amounts of 
U.S. Government funding

    Response: This Rule applies only to personnel performing private 
security functions under a covered contract. A covered contract is 
defined by Section 864(a)(3) of the FY 2008 NDAA, as amended by Section 
813(b) of the FY 2010 NDAA.

Comment: SPOT's use for intelligence gathering and vetting is unclear

    Response: The Synchronized Pre-deployment and Operational Tracker 
(SPOT) is a Web-based database which is used to gain visibility over 
contracts and contractors supporting U.S. Government agencies during 
contingency operations. The SPOT system serves multiple purposes; it 
allows contractors to request and receive specific logistics support 
such as meals, housing, transportation, medical support while working 
in-country; it provides Contracting Officer Representatives and Grants 
Officer Representatives with information on what contractor and grantee 
employees are working in what locations which makes approval of 
invoices and inspection of work easier; it allows Contracting Officer 
Representatives,

[[Page 49654]]

Grants Officer Representatives, and other personnel to review the 
credentials of individuals requesting the authority to carry weapons 
(either government furnished or contractor acquired) in the performance 
of a U.S. government contract or grant; it allows agencies to report to 
Congress and other oversight organizations on the size of contractor 
and grantee presence in areas of combat operations or other significant 
military operations. Congress believes the system is necessary. Section 
861 of FY 2008 NDAA provides that the Secretary of Defense, the 
Secretary of State, and the Administrator of USAID must agree to adopt 
a common database for contractors in Iraq and Afghanistan. SPOT is not 
used for intelligence gathering or vetting of personnel. Background 
checks of PSCs are conducted by the contractor and validated by the 
contracting officer. This validation is only annotated in SPOT.

Comment: Applicable guidelines must be effectively disseminated to NGOs

    Response: Contracting Officers and Grants Officers will remain the 
primary point of contact for contractors and grantees on issues 
affecting performance. Rules impacting contractors across multiple 
agencies will be promulgated via the FAR with appropriate opportunities 
for contractor and public comment during the rulemaking process. Rules 
impacting grantees across multiple agencies will be promulgated by the 
Office of Management and Budget (OMB) Office of Federal Financial 
Management (OFFM) as part of its responsibility to issue government-
wide grants policy. The DoD will ensure that a single location, readily 
accessible to both contractors and grantees, exists for the publication 
and maintenance of all guidance relating to PSC rules. The Department 
of State and USAID will provide any agency unique implementing guidance 
to DoD for publication on this same Web site.

Areas for Clarification and Definitions

Comment: ``Private Security Functions'' needs to be better defined

    Response: The term ``private security functions'' is defined by 
section 864 of the FY 2008 NDAA; the IFR used this definition. The Rule 
provides requirements for the management and oversight of companies 
contracted to perform private security functions and certain employees 
who may be required to carry and use arms in the performance of their 
duties. Companies and their personnel contracted to provide training, 
maintenance, or other support functions that are not required to carry 
a weapon in the performance of their duties are not addressed by this 
Rule. For clarification, in the Final Rule we have added ``in 
accordance with the terms of their contract''.

Comment: Enforcement and liability pending adoption of FAR clauses

    Response: A FAR case has been opened to incorporate the required 
revisions based upon the publication of this Rule.

Comment: The Rule should address foreseeable issue concerning host 
nation law

    Response: The Geographic Combatant Commander has legal and 
political staffs capable of addressing the concerns expressed in this 
comment.

Comment: Obligations of non-PSC prime contractors

    Response: The definition of ``covered contract'' has been reworded 
to cover contracts for the performance of services and/or the delivery 
of supplies.

Comment: IFR applicability to contingency operations in the U.S. and 
distinction between ``combat operations'' and ``contingency 
operations''

    Response: The Rule does not apply to operations within the United 
States. We have clarified this in the definition of ``covered 
contract.''

Comment: Applicability to foreign actors

    Response: When applicable conditions are met, the Rule covers all 
companies and personnel providing private security functions, 
regardless of the country of registration of the company or national 
origin of its employees. We believe that this is already made clear by 
sections 159.2 (b)(1) and (2) which state the policy prescription. The 
Rule applies to government entities and prescribes policies for the 
oversight and management of PSCs and PSC personnel. The clause in 
section 159.2 (2)(a)(2) starting with ``specifically'' describes the 
conditions under which this part would apply beyond DoD, to DoS and 
other Federal agencies. The acquisition regulations, rather than this 
rule, will serve as the implementing mechanisms for PSC companies.

Comment: Further define intelligence operations

    Response: This language implements Section 862 (d) of the FY 2008 
NDAA.

Comment: ``Active non-lethal countermeasure'' would benefit from a 
clear definition and examples

    Response: The following clarification has been added to the Rule: 
``Active non-lethal systems include laser optical distracters, acoustic 
hailing devices, electro-muscular TASER guns, blunt-trauma devices like 
rubber balls and sponge grenades, and a variety of riot-control agents 
and delivery systems.''

Comment: Definition of Contingency Operation is a slight variation of 
the definition of contingency operation in FAR 2.101

    Response: The definition in the Rule has been updated; it is taken 
verbatim from U.S. Code Title 10, 101(a)(13).

Comment: Definition of Covered Contract excludes temporary arrangements 
outside of DoD for private security functions when contracted for by a 
non-DoD contractor or a grantee

    Response: The genesis for this provision was a USAID concern that 
development projects undertaken by USAID may engage local personnel as 
security on an ad hoc basis, and that such arrangements should be 
excluded from complying with the requirements of this regulation. These 
arrangements cannot realistically be regulated in the same manner as 
traditional contracts.

Comment: Regarding the Standing rules on the use of force consider 
stating: ``Issue written authorization to the PSC identifying 
individual PSC personnel who are authorized to be armed. Rules for the 
Use of Force shall be included with the written authorization, if not 
previously provided to the contractor in the solicitation or during the 
course of contract administration. Rules for the Use of Force shall 
conform to the guidance in the Chairman of the Joint Chiefs of Staff 
Instruction 3121.01B, ``Standing Rules of Engagement/Standing Rules for 
the Use of Force for U.S. Forces''

    Response: Agreed. The Rule has been revised to reflect the proposed 
change in wording.

Regulatory Procedures

Executive Order 12866, ``Regulatory Planning and Review'' and Executive 
Order 13563, ``Improving Regulation and Regulatory Review''

    It has been certified that 32 CFR part 159 does not:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy; a section of the 
economy;

[[Page 49655]]

productivity; competition; jobs; the environment; public health or 
safety; or State, local, or Tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another Agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
these Executive Orders.

Public Law 104-121, ``Congressional Review Act'' (5 U.S.C. 801)

    It has been determined that 32 CFR part 159 is not a ``major'' rule 
under 5 U.S.C. 801, enacted by Pub. L. 104-121, because it will not 
result in an annual effect on the economy of $100 million or more; a 
major increase in costs or prices for consumers, individual industries, 
Federal, State, or local government agencies, or geographic regions; or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets.

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

    It has been certified that 32 CFR part 159 does not contain a 
Federal mandate that may result in expenditure by State, local and 
Tribal governments, in aggregate, or by the private sector, of $100 
million or more in any one year.

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

    It has been certified that 32 CFR part 159 is not subject to the 
Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities. This rule will apply only to a specific sector of 
defense industry and a limited number of small entities.

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

    It has been certified that 32 CFR part 159 does impose reporting or 
recordkeeping requirements under the Paperwork Reduction Act of 1995. 
These requirements have been approved by OMB and assigned OMB Control 
Numbers 0704-0460, ``Synchronized Predeployment and Operational Tracker 
(SPOT) System'' and 0704-0461, ``Qualification to Possess Firearms or 
Ammunition.''

Executive Order 13132, ``Federalism''

    It has been certified that 32 CFR part 159 does not have federalism 
implications, as set forth in Executive Order 13132. This rule does not 
have substantial direct effects on:
    (1) The States;
    (2) The relationship between the National Government and the 
States; or
    (3) The distribution of power and responsibilities among the 
various levels of Government.

List of Subjects in 32 CFR Part 159

    Contracts, Security measures.

    Accordingly, the interim rule amending 32 CFR part 159 which was 
published at 74 FR 34691 on July 17, 2009, is adopted as a final rule 
with the following change. Part 159 is revised to read as follows:

PART 159--PRIVATE SECURITY CONTRACTORS OPERATING IN CONTINGENCY 
OPERATIONS

Sec.
159.1 Purpose.
159.2 Applicability and scope.
159.3 Definitions.
159.4 Policy.
159.5 Responsibilities.
159.6 Procedures.

    Authority: Pub. L. 110-181; Pub. L. 110-417.


Sec.  159.1  Purpose.

    This part establishes policy, assigns responsibilities and provides 
procedures for the regulation of the selection, accountability, 
training, equipping, and conduct of personnel performing private 
security functions under a covered contract. It also assigns 
responsibilities and establishes procedures for incident reporting, use 
of and accountability for equipment, rules for the use of force, and a 
process for administrative action or the removal, as appropriate, of 
PSCs and PSC personnel.


Sec.  159.2  Applicability and scope.

    This part:
    (a) Applies to:
    (1) The Office of the Secretary of Defense, the Military 
Departments, the Office of the Chairman of the Joint Chiefs of Staff 
and the Joint Staff, the Combatant Commands, the Office of the 
Inspector General of the Department of Defense, the Defense Agencies, 
the DoD Field Activities, and all other organizational entities in the 
Department of Defense (hereafter referred to as the ``DoD 
Components'').
    (2) The Department of State and other U.S. Federal agencies insofar 
as it implements the requirements of section 862 of Public Law 110-181, 
as amended. Specifically, in areas of operations which require enhanced 
coordination of PSC and PSC personnel working for U.S. Government 
(U.S.G.) agencies, the Secretary of Defense may designate such areas as 
areas of combat operations or other significant military operations for 
the limited purposes of this part. In such an instance, the standards 
established in accordance with this part would, in coordination with 
the Secretary of State, expand from covering only DoD PSCs and PSC 
personnel to cover all U.S.G.-funded PSCs and PSC personnel operating 
in the designated area. The requirements of this part shall not apply 
to a nonprofit nongovernmental organization receiving grants or 
cooperative agreements for activities conducted within an area of other 
significant military operations if the Secretary of Defense and the 
Secretary of State agree that such organization may be exempted. An 
exemption may be granted by the agreement of the Secretaries under this 
paragraph on an organization-by-organization or area-by-area basis. 
Such an exemption may not be granted with respect to an area of combat 
operations.
    (b) Prescribes policies applicable to all:
    (1) DoD PSCs and PSC personnel performing private security 
functions during contingency operations outside the United States.
    (2) USG-funded PSCs and PSC personnel performing private security 
functions in an area of combat operations or, with the agreement of the 
Secretary of State, other significant military operations as designated 
by the Secretary of Defense.


Sec.  159.3  Definitions.

    Unless otherwise noted, these terms and their definitions are for 
the purpose of this part.
    Area of combat operations. An area of operations designated as such 
by the Secretary of Defense for the purpose of this part, when enhanced 
coordination of PSCs working for U.S.G. agencies is required.
    Contingency operation. A military operation that is either 
designated by the Secretary of Defense as a contingency operation or 
becomes a contingency operation as a matter of law (10 U.S.C. 
101(a)(13)). It is a military operation that:
    (1) Is designated by the Secretary of Defense as an operation in 
which members of the Armed Forces are or may become involved in 
military actions, operations, or hostilities against an enemy of the 
United States or against an opposing military force; or
    (2) Results in the call or order to, or retention on, active duty 
of members of

[[Page 49656]]

the uniformed services under section 688, 12301(a), 12302, 12304, 
12305, 12406, of 10 U.S.C., chapter 15 of 10 U.S.C. or any other 
provision of law during a war or during a national emergency declared 
by the President or Congress.
    Contractor. The contractor, subcontractor, grantee, or other party 
carrying out the covered contract.
    Covered contract. (1) A DoD contract for performance of services 
and/or delivery of supplies in an area of contingency operations 
outside the United States or a contract of a non-DoD Federal agency for 
performance of services and/or delivery of supplies in an area of 
combat operations or other significant military operations, as 
designated by the Secretary of Defense; a subcontract at any tier under 
such a contract; or a task order or delivery order issued under such a 
contract or subcontract.
    (2) Also includes contracts or subcontracts funded under grants and 
sub-grants by a Federal agency for performance in an area of combat 
operations or other significant military operations as designated by 
the Secretary of Defense.
    (3) Excludes temporary arrangements entered into by non-DoD 
contractors or grantees for the performance of private security 
functions by individual indigenous personnel not affiliated with a 
local or expatriate security company. Such arrangements must still be 
in compliance with local law.
    Other significant military operations. For purposes of this part, 
the term `other significant military operations' means activities, 
other than combat operations, as part of an overseas contingency 
operation that are carried out by United States Armed Forces in an 
uncontrolled or unpredictable high-threat environment where personnel 
performing security functions may be called upon to use deadly 
force.\1\
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    \1\ With respect to an area of other significant military 
operations, the requirements of this part shall apply only upon 
agreement of the Secretary of Defense and the Secretary of State. 
Such an agreement of the Secretaries may be made only on an area-by-
area basis. With respect to an area of combat operations, the 
requirements of this part shall always apply.
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    Private security functions. Activities engaged in by a contractor 
under a covered contract as follows:
    (1) Guarding of personnel, facilities, designated sites, or 
property of a Federal agency, the contractor or subcontractor, or a 
third party.\2\
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    \2\ Contractors performing private security functions are not 
authorized to perform inherently governmental functions. In this 
regard, they are limited to a defensive response to hostile acts or 
demonstrated hostile intent.
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    (2) Any other activity for which personnel are required to carry 
weapons in the performance of their duties in accordance with the terms 
of their contract. For the DoD, DoDI Instruction 3020.41, ``Contractor 
Personnel Authorized to Accompany the U.S. Armed Forces,'' \3\ 
prescribes policies related to personnel allowed to carry weapons for 
self defense.
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    \3\ Available at http://www.dtic.mil/whs/directives/corres/pdf/302041p.pdf.
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    PSC. During contingency operations ``PSC'' means a company employed 
by the DoD performing private security functions under a covered 
contract. In a designated area of combat operations or other 
significant military operations, the term ``PSC'' expands to include 
all companies employed by U.S.G. agencies performing private security 
functions under a covered contract.
    PSC personnel. Any individual performing private security functions 
under a covered contract.


Sec.  159.4  Policy.

    (a) Consistent with the requirements of paragraph (a)(2) of section 
862 of Public Law 110-181, the selection, training, equipping, and 
conduct of PSC personnel including the establishment of appropriate 
processes shall be coordinated between the DoD and the Department of 
State. Coordination shall encompass the contemplated use of PSC 
personnel during the planning stages of contingency operations so as to 
allow guidance to be developed under paragraphs (b) and (c) of this 
section and promulgated under section 159.5 of this part in a timely 
manner that is appropriate for the needs of the contingency operation.
    (b) Geographic Combatant Commanders will provide tailored PSC 
guidance and procedures for the operational environment in their Area 
of Responsibility (AOR) in accordance with this part, the Federal 
Acquisition Regulation (FAR) \4\ and the Defense Federal Acquisition 
Regulation Supplement (DFARS).\5\
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    \4\ Published in Title 48 of the Code of Federal Regulations.
    \5\ Published in Title 48 of the Code of Federal Regulations.
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    (c) In a designated area of combat operations or other significant 
military operations, the relevant Chief of Mission will be responsible 
for developing and issuing implementing instructions for non-DoD PSCs 
and their personnel consistent with the standards set forth by the 
geographic Combatant Commander in accordance with paragraph (b) of this 
section. The Chief of Mission has the option to instruct non-DoD PSCs 
and their personnel to follow the guidance and procedures developed by 
the geographic Combatant Commander and/or a sub unified commander or 
joint force commander (JFC) where specifically authorized by the 
Combatant Commander to do so and notice of that authorization is 
provided to non-DoD agencies.
    (d) The requirements of this part shall not apply to contracts 
entered into by elements of the intelligence community in support of 
intelligence activities.


Sec.  159.5  Responsibilities.

    (a) The Deputy Assistant Secretary of Defense for Program Support, 
under the authority, direction, and control of the Assistant Secretary 
of Defense for Logistics and Materiel Readiness, shall monitor the 
registering, processing, and accounting of PSC personnel in an area of 
contingency operations.
    (b) The Director, Defense Procurement and Acquisition Policy, under 
the authority, direction, and control of the Under Secretary of Defense 
for Acquisition, Technology and Logistics, shall ensure that the DFARS 
and (in consultation with the other members of the FAR Council) the FAR 
provide appropriate guidance and contract clauses consistent with this 
part and paragraph (b) of section 862 of Public Law 110-181.
    (c) The Deputy Chief Management Officer of the Department of 
Defense shall direct the appropriate component to ensure that 
information systems effectively support the accountability and 
visibility of contracts, contractors, and specified equipment 
associated with private security functions.
    (d) The Chairman of the Joint Chiefs of Staff shall ensure that 
joint doctrine is consistent with the principles established by DoD 
Directive 3020.49, ``Orchestrating, Synchronizing, and Integrating 
Program Management of Contingency Acquisition Planning and Its 
Operational Execution,'' \6\ DoD Instruction 3020.41, ``Contractor 
Personnel Authorized to Accompany the U.S. Armed Forces,'' and this 
part.
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    \6\ Available from http://www.dtic.mil/whs/directives/corres/pdf/302040p.pdf.
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    (e) The geographic Combatant Commanders in whose AOR a contingency 
operation is occurring, and within which PSCs and PSC personnel perform 
under covered contracts, shall:
    (1) Provide guidance and procedures, as necessary and consistent 
with the principles established by DoD Directive 3020.49, 
``Orchestrating, Synchronizing, and Integrating Program Management of 
Contingency Acquisition Planning and Its Operational Execution,'' DoD 
Instruction 3020.41, ``Contractor

[[Page 49657]]

Personnel Authorized to Accompany the U.S. Armed Forces,'' \7\ and this 
part, for the selection, training, accountability and equipping of such 
PSC personnel and the conduct of PSCs and PSC personnel within their 
AOR. Individual training and qualification standards shall meet, at a 
minimum, one of the Military Departments' established standards. Within 
a geographic combatant command, a sub unified commander or JFC shall be 
responsible for developing and issuing implementing procedures as 
warranted by the situation, operation, and environment, in consultation 
with the relevant Chief of Mission in designated areas of combat 
operations or other significant military operations.
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    \7\ Available at http://www.dtic.mil/whs/directives/corres/html/302041.htm.
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    (2) Through the Contracting Officer, ensure that PSC personnel 
acknowledge, through their PSC, their understanding and obligation to 
comply with the terms and conditions of their covered contracts.
    (3) Issue written authorization to the PSC identifying individual 
PSC personnel who are authorized to be armed. Rules for the Use of 
Force shall be included with the written authorization, if not 
previously provided to the contractor in the solicitation or during the 
course of contract administration. Rules for the Use of Force shall 
conform to the guidance in the Chairman of the Joint Chiefs of Staff 
Instruction 3121.01B, ``Standing Rules of Engagement/Standing Rules for 
the Use of Force for U.S. Forces.'' Access by offerors and contractors 
to the rules for the use of force may be controlled in accordance with 
the terms of FAR 52.204-2 (Aug 1996), DFARS 252.204-7000 (Dec 1991), or 
both.\8\
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    \8\ CJCSI 3121.01B provides guidance on the standing rules of 
engagement (SROE) and establishes standing rules for the use of 
force (SRUF) for DOD operations worldwide. This document is 
classified secret. CJCSI 3121.01B is available via Secure Internet 
Protocol Router Network at http://js.smil.mil. If the requester is 
not an authorized user of the classified network, the requester 
should contact Joint Staff J-3 at 703-614-0425.
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    (4) Ensure that the procedures, orders, directives and instructions 
prescribed in Sec.  159.6(a) of this part are available through a 
single location (to include an Internet Web site, consistent with 
security considerations and requirements).
    (f) The Heads of the DoD Components shall:
    (1) Ensure that all private security-related requirement documents 
are in compliance with the procedures listed in Sec.  159.6 of this 
part and the guidance and procedures issued by the geographic Combatant 
Command,
    (2) Ensure private security-related contracts contain the 
appropriate clauses in accordance with the applicable FAR clause and 
include additional mission-specific requirements as appropriate.


Sec.  159.6  Procedures.

    (a) Standing Combatant Command Guidance and Procedures. Each 
geographic Combatant Commander shall develop and publish guidance and 
procedures for PSCs and PSC personnel operating during a contingency 
operation within their AOR, consistent with applicable law; this part; 
applicable Military Department publications; and other applicable DoD 
issuances to include DoD Directive 3020.49, ``Orchestrating, 
Synchronizing, and Integrating Program Management of Contingency 
Acquisition Planning and Its Operational Execution,'' DFARS, DoD 
Directive 2311.01E, ``DoD Law of War Program,'' \9\ DoD 5200.8-R, 
``Physical Security Program,'' \10\ CJCSI 3121.01B, ``Standing Rules of 
Engagement/Standing Rules for the Use of Force for U.S. Forces,'' and 
DoD Directive 5210.56, ``Use of Deadly Force and the Carrying of 
Firearms by DoD Personnel Engaged in Law Enforcement and Security 
Duties.'' \11\ The guidance and procedures shall:
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    \9\ Available at http://www.dtic.mil/whs/directives/corres/html/231101.htm.
    \10\ Available at http://www.dtic.mil/whs/directives/corres/pdf/520008r.pdf.
    \11\ Available at http://www.dtic.mil/whs/directives/corres/html/521056.htm.
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    (1) Contain, at a minimum, procedures to implement the following 
processes, and identify the organization responsible for managing these 
processes:
    (i) Registering, processing, accounting for and keeping appropriate 
records of PSCs and PSC personnel in accordance with DoD Instruction 
3020.41, ``Contractor Personnel Authorized to Accompany the U.S. Armed 
Forces.''
    (ii) PSC verification that PSC personnel meet all the legal, 
training, and qualification requirements for authorization to carry a 
weapon in accordance with the terms and conditions of their contract 
and host country law. Weapons accountability procedures will be 
established and approved prior to the weapons authorization.
    (iii) Arming of PSC personnel. Requests for permission to arm PSC 
personnel shall be reviewed on a case-by-case basis by the appropriate 
Staff Judge Advocate to the geographic Combatant Commander (or a 
designee) to ensure there is a legal basis for approval. The request 
will then be approved or denied by the geographic Combatant Commander 
or a specifically identified designee, no lower than the flag officer 
level. Requests to arm non-DOD PSC personnel shall be reviewed and 
approved in accordance with Sec.  159.4(c) of this part. Requests for 
permission to arm all PSC personnel shall include:
    (A) A description of where PSC personnel will operate, the 
anticipated threat, and what property or personnel such personnel are 
intended to protect, if any.
    (B) A description of how the movement of PSC personnel will be 
coordinated through areas of increased risk or planned or ongoing 
military operations, including how PSC personnel will be rapidly 
identified by members of the U.S. Armed Forces.
    (C) A communication plan, to include a description of how relevant 
threat information will be shared between PSC personnel and U.S. 
military forces and how appropriate assistance will be provided to PSC 
personnel who become engaged in hostile situations. DoD contractors 
performing private security functions are only to be used in accordance 
with DoD Instruction 1100.22, ``Guidance for Determining Workforce 
Mix,'' \12\ that is, they are limited to a defensive response to 
hostile acts or demonstrated hostile intent.
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    \12\ Available at http://www.dtic.mil/whs/directives/corres/pdf/110022p.pdf.
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    (D) Documentation of individual training covering weapons 
familiarization and qualification, rules for the use of force, limits 
on the use of force including whether defense of others is consistent 
with host nation Status of Forces Agreements or local law, the 
distinction between the rules of engagement applicable to military 
forces and the prescribed rules for the use of force that control the 
use of weapons by civilians, and the Law of Armed Conflict.
    (E) Written acknowledgment by the PSC and its individual PSC 
personnel, after investigation of background of PSC personnel by the 
contractor, verifying such personnel are not prohibited under U.S. law 
to possess firearms.
    (F) Written acknowledgment by the PSC and individual PSC personnel 
that:
    (1) Inappropriate use of force by contractor personnel authorized 
to accompany the U.S. Armed Forces may subject such personnel to United 
States

[[Page 49658]]

or host nation prosecution and civil liability.\13\
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    \13\ This requirement is specific to arming procedures. Such 
written acknowledgement should not be construed to limit potential 
civil and criminal liability to conduct arising from ``the use of 
weapons.'' For example, PSC personnel could be held criminally 
liable for any conduct that would constitute a Federal offense (see 
MEJA, 18 U.S.C. 3261(a)).
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    (2) Proof of authorization to be armed must be carried by each PSC 
personnel.
    (3) PSC personnel may possess only U.S.G.-issued and/or -approved 
weapons and ammunition for which they have been qualified according to 
paragraph (a)(1)(iii)(E) of this section.
    (4) PSC personnel were briefed about and understand limitations on 
the use of force.
    (5) Authorization to possess weapons and ammunition may be revoked 
for non-compliance with established rules for the use of force.
    (6) PSC personnel are prohibited from consuming alcoholic beverages 
or being under the influence of alcohol while armed.
    (iv) Registration and identification in the Synchronized 
Predeployment and Operational Tracker (or its successor database) of 
armored vehicles, helicopters, and other vehicles operated by PSC 
personnel.
    (v) Reporting alleged criminal activity or other incidents 
involving PSCs or PSC personnel by another company or any other person. 
All incidents involving the following shall be reported and documented:
    (A) A weapon is discharged by an individual performing private 
security functions;
    (B) An individual performing private security functions is killed 
or injured in the performance of their duties;
    (C) A person other than an individual performing private security 
functions is killed or injured as a result of conduct by PSC personnel;
    (D) Property is destroyed as a result of conduct by a PSC or PSC 
personnel;
    (E) An individual performing private security functions has come 
under attack including in cases where a weapon is discharged against an 
individual performing private security functions or personnel 
performing such functions believe a weapon was so discharged; or
    (F) Active, non-lethal counter-measures (other than the discharge 
of a weapon) are employed by PSC personnel in response to a perceived 
immediate threat in an incident that could significantly affect U.S. 
objectives with regard to the military mission or international 
relations. (Active non-lethal systems include laser optical 
distracters, acoustic hailing devices, electro-muscular TASER guns, 
blunt-trauma devices like rubber balls and sponge grenades, and a 
variety of riot-control agents and delivery systems).
    (vi) The independent review and, if practicable, investigation of 
incidents reported pursuant to paragraphs (a)(1)(v)(A) through 
(a)(1)(v)(F) of this section and incidents of alleged misconduct by PSC 
personnel.
    (vii) Identification of ultimate criminal jurisdiction and 
investigative responsibilities, where conduct of U.S.G.-funded PSCs or 
PSC personnel are in question, in accordance with applicable laws to 
include a recognition of investigative jurisdiction and coordination 
for joint investigations (i.e., other U.S.G. agencies, host nation, or 
third country agencies), where the conduct of PSCs and PSC personnel is 
in question.
    (viii) A mechanism by which a commander of a combatant command may 
request an action by which PSC personnel who are non-compliant with 
contract requirements are removed from the designated operational area.
    (ix) Interagency coordination of administrative penalties or 
removal, as appropriate, of non-DoD PSC personnel who fail to comply 
with the terms and conditions of their contract, as they relate to this 
part.
    (x) Implementation of the training requirements contained below in 
paragraph (a)(2)(ii) of this section.
    (2) Specifically cover:
    (i) Matters relating to authorized equipment, force protection, 
security, health, safety, and relations and interaction with locals in 
accordance with DoD Instruction 3020.41, ``Contractor Personnel 
Authorized to Accompany the U.S. Armed Forces.''
    (ii) Predeployment training requirements addressing, at a minimum, 
the identification of resources and assistance available to PSC 
personnel as well as country information and cultural training, and 
guidance on working with host country nationals and military personnel.
    (iii) Rules for the use of force and graduated force procedures.
    (iv) Requirements and procedures for direction, control and the 
maintenance of communications with regard to the movement and 
coordination of PSCs and PSC personnel, including specifying 
interoperability requirements. These include coordinating with the 
Chief of Mission, as necessary, private security operations outside 
secure bases and U.S. diplomatic properties to include movement control 
procedures for all contractors, including PSC personnel.
    (b) Availability of Guidance and Procedures. The geographic 
Combatant Commander shall ensure the guidance and procedures prescribed 
in paragraph (a) of this section are readily available and accessible 
by PSCs and their personnel (e.g., on a Web page and/or through 
contract terms), consistent with security considerations and 
requirements.
    (c) Subordinate Guidance and Procedures. A sub unified commander or 
JFC, in consultation with the Chief of Mission, will issue guidance and 
procedures implementing the standing combatant command publications 
specified in paragraph (a) of this section, consistent with the 
situation and operating environment.
    (d) Consultation and Coordination. The Chief of Mission and the 
geographic Combatant Commander/sub unified commander or JFC shall make 
every effort to consult and coordinate responses to common threats and 
common concerns related to oversight of the conduct of U.S.G.-funded 
PSCs and their personnel.

    Dated: August 3, 2011.
Patricia L. Toppings,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2011-20239 Filed 8-10-11; 8:45 am]
BILLING CODE 5001-06-P