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To Contents	"Confidential" Marked on Contractor Documents
By Anonymous on Tuesday, February 04, 2003 - 11:38 am: Had an interesting situation last week. Apparently a DoD inspector told our security chief that we couldn't use the word "confidential" on our company documents. The reason given was that it could cause confusion and mishandling of government classified material. He also vaguely referred to some executive order. I've never heard of this, and I know lots of companies that stamp their documents "confidential." Is there any basis for his assertion? Is there such an exec order? Is this in the NISPOM (sp?)? By Vern Edwards on Tuesday, February 04, 2003 - 07:56 pm: Is there a DD Form 254 attached to any of your contracts? By Anon2U on Tuesday, February 04, 2003 - 08:26 pm: Yes, this is a problem. Our security inspectors, who know nothing of contracting, automatically assume a document marked Confidential must be handled as a classified document and cannot be in a desk drawer or cabinet. Confidential is one of three security classifications for classified material. While the proposal may be confidential to your company it does not necessarily have classified information in it. We had a CO get a security violation for this very issue and it took 6 months and countless wasted hours getting it off his record. So now we know that any proposals so marked must go into a safe. This takes up valuable safe space and is very inconvienient to the CO. By Anonymous on Tuesday, February 04, 2003 - 08:47 pm: Vern, probably yes, although the question is general and not related to a particular contract. We were simply told that the company cannot use the term "confidential" on any of its documents unless they were classified. Anon2u, were the inspectors able to point to anything in the NISPOM to support the violation? By Vern Edwards on Tuesday, February 04, 2003 - 09:06 pm: Anonymous: I sympathize with the inspector's concerns, but I don't know by what authority he is giving you such direction. It may have something to do with one or more DD254s on your contracts, or with some condition of your facility clearance. Would it be a big deal to come up with a different legend for your company documents? By anon-two on Wednesday, February 05, 2003 - 01:52 am: In the few cases where I've seen a company involved with national security work and still using one of the markings for classified documents they have used COMPANY CONFIDENTIAL, not just CONFIDENTIAL, and used a different color scheme. I agree it is a problem for a company whether or not there is specific authority for a security inspector to direct a private company that they cannot use the word. The risk of confusion and mistakenly applying corporate rules to national security information could be a cause for you to lose your facility clearance. For example, if reviews determined that people in your company with access to your CONFIDENTIAL do not have a security clearance at that level could justify review of your company's ability to protect national security information properly, loss of facility clearance and loss of classified contracts. Remember, you have no right to clearances. All it takes to lose one is an agency authority deciding you are too great a risk. As an example, even though it deals specifically with "foreign ownership, control or influence", see NISPOM 2-301-e under Policy for a hint: Nothing contained in this Section [meaning the FOCI conditions] shall affect the authority of the Head of an Agency to limit, deny or revoke access to classified information under its statutory, regulatory or contract jurisdiction.) If executed, the government can force removal of everything "classified" (2-110. Termination of the FCL.); perhaps sweeping up some of your "CONFIDENTIAL" stuff as well. Want to try to get it back? It is possible the inspector would quote another section under "Policy": c. The Federal Government reserves the right and has the obligation to impose any security method, safeguard, or restriction it believes necessary to ensure that unauthorized access to classified information is effectively precluded and that performance of classified contracts is not adversely affected." That may be under the FOIC heading, but it is clearly a statement of general policy. Any actual mistake, particularly giving national security material to a foreign national who is on distribution for company Confidential, would expose your people to loss of their personal clearances and, in some situations, prosecution. It isn't worth the risk in my opinion. On a practical level anything bearing a national security marking is supposed to have additional information that makes that clear (classification level, classification authority and duration of classification). I wouldn't try to explain to people holding your FCL in their hands that this will preclude mistakes. By anon-two on Thursday, February 06, 2003 - 01:34 am: Purely as background for contractors, who may be used to protest procedures and think those and other contract dispute principles apply to security clearance issues, I suggest reading some of the comment and following citations in TALBOTT v. WIDNALL (U.S. Court of Appeals, Tenth Circuit, No. 98-1361, 1999). Extract: "It is well established that a district court has no jurisdiction to review the merits of a decision to revoke or deny a security clearance. See Hill v. Department of Air Force, 844 F.2d 1407, 1411 (10th Cir. 1998). In Hill the plaintiff challenged the revocation of his security clearance by the Air Force. Applying Department of the Navy v. Egan, 484 U.S. 518 (1988), we held that courts have no statutory authority to review "the merits and motives of Air Force decisions relating to Hill's clearance, and the nexus between those decisions and national security interests." Hill, 844 F.2d at 1411. Furthermore, we determined that since "no one has a 'right' to a security clearance," id. at 1409 (quoting Egan, 484 U.S. at 528), there is no liberty or property interest to protect, id. at 411. Accordingly, no Fifth Amendment due process right is implicated. See id." [bold added] Personally I think the inspector, though having a legitimate concern, was a not particularly helpful. I've so far found no explicit, general prohibition. I also know some companies, heavily involved in national security work, get the point and have their own prohibiting policies. The inspector may have been stating a policy that is not entirely supported. Nevertheless, remember at all times that your clearance is at the discretion of the agency sponsoring your FCL or personal clearances. If you try to play hardball on this you can find yourself in a corner with no way out. If this is a matter of a large company with limited national security work and a large investment in company "Confidential" you may find a clear mitigation plan to be acceptable in an environment of reasonable discussion. Any such plan must clearly demonstrate mechanisms to avoid mistakes and probably a prohibition of confusing company markings within any elements doing classified work. If your company thinks it will continue or enlarge its security work I really would suggest changing your marking to something that cannot be confused in any way with national security marking. By Ophelia on Thursday, February 06, 2003 - 09:24 am: Anon-2 is correct in that documents marked "Confidential" cannot be assumed to be unclassified Company proprietary or private information. The security inspector cannot be faulted for making this assertion. The best thing for a company to do is to mark the documents as Company Confidential, Company Private, or Proprietary.

"Confidential" Marked on Contractor Documents

By Anonymous on Tuesday, February 04, 2003 - 11:38 am:

Had an interesting situation last week. Apparently a DoD inspector told our security chief that we couldn't use the word "confidential" on our company documents. The reason given was that it could cause confusion and mishandling of government classified material. He also vaguely referred to some executive order.

I've never heard of this, and I know lots of companies that stamp their documents "confidential." Is there any basis for his assertion? Is there such an exec order? Is this in the NISPOM (sp?)?

By Vern Edwards on Tuesday, February 04, 2003 - 07:56 pm:

Is there a DD Form 254 attached to any of your contracts?

By Anon2U on Tuesday, February 04, 2003 - 08:26 pm:

Yes, this is a problem. Our security inspectors, who know nothing of contracting, automatically assume a document marked Confidential must be handled as a classified document and cannot be in a desk drawer or cabinet. Confidential is one of three security classifications for classified material. While the proposal may be confidential to your company it does not necessarily have classified information in it.

We had a CO get a security violation for this very issue and it took 6 months and countless wasted hours getting it off his record. So now we know that any proposals so marked must go into a safe. This takes up valuable safe space and is very inconvienient to the CO.

By Anonymous on Tuesday, February 04, 2003 - 08:47 pm:

Vern, probably yes, although the question is general and not related to a particular contract. We were simply told that the company cannot use the term "confidential" on any of its documents unless they were classified.
Anon2u, were the inspectors able to point to anything in the NISPOM to support the violation?

By Vern Edwards on Tuesday, February 04, 2003 - 09:06 pm:

Anonymous:

I sympathize with the inspector's concerns, but I don't know by what authority he is giving you such direction. It may have something to do with one or more DD254s on your contracts, or with some condition of your facility clearance. Would it be a big deal to come up with a different legend for your company documents?

By anon-two on Wednesday, February 05, 2003 - 01:52 am:

In the few cases where I've seen a company involved with national security work and still using one of the markings for classified documents they have used COMPANY CONFIDENTIAL, not just CONFIDENTIAL, and used a different color scheme.

I agree it is a problem for a company whether or not there is specific authority for a security inspector to direct a private company that they cannot use the word. The risk of confusion and mistakenly applying corporate rules to national security information could be a cause for you to lose your facility clearance. For example, if reviews determined that people in your company with access to your CONFIDENTIAL do not have a security clearance at that level could justify review of your company's ability to protect national security information properly, loss of facility clearance and loss of classified contracts.

Remember, you have no right to clearances. All it takes to lose one is an agency authority deciding you are too great a risk. As an example, even though it deals specifically with "foreign ownership, control or influence", see NISPOM 2-301-e under Policy for a hint: Nothing contained in this Section [meaning the FOCI conditions] shall affect the authority of the Head of an Agency to limit, deny or revoke access to classified information under its statutory, regulatory or contract jurisdiction.) If executed, the government can force removal of everything "classified" (2-110. Termination of the FCL.); perhaps sweeping up some of your "CONFIDENTIAL" stuff as well. Want to try to get it back?

It is possible the inspector would quote another section under "Policy":

c. The Federal Government reserves the right and has the obligation to impose any security method, safeguard, or restriction it believes necessary to ensure that unauthorized access to classified information is effectively precluded and that performance of classified contracts is not adversely affected."

That may be under the FOIC heading, but it is clearly a statement of general policy.

Any actual mistake, particularly giving national security material to a foreign national who is on distribution for company Confidential, would expose your people to loss of their personal clearances and, in some situations, prosecution. It isn't worth the risk in my opinion.

On a practical level anything bearing a national security marking is supposed to have additional information that makes that clear (classification level, classification authority and duration of classification). I wouldn't try to explain to people holding your FCL in their hands that this will preclude mistakes.

By anon-two on Thursday, February 06, 2003 - 01:34 am:

Purely as background for contractors, who may be used to protest procedures and think those and other contract dispute principles apply to security clearance issues, I suggest reading some of the comment and following citations in TALBOTT v. WIDNALL (U.S. Court of Appeals, Tenth Circuit, No. 98-1361, 1999).

Extract: "It is well established that a district court has no jurisdiction to review the merits of a decision to revoke or deny a security clearance. See Hill v. Department of Air Force, 844 F.2d 1407, 1411 (10th Cir. 1998). In Hill the plaintiff challenged the revocation of his security clearance by the Air Force. Applying Department of the Navy v. Egan, 484 U.S. 518 (1988), we held that courts have no statutory authority to review "the merits and motives of Air Force decisions relating to Hill's clearance, and the nexus between those decisions and national security interests." Hill, 844 F.2d at 1411. Furthermore, we determined that since "no one has a 'right' to a security clearance," id. at 1409 (quoting Egan, 484 U.S. at 528), there is no liberty or property interest to protect, id. at 411. Accordingly, no Fifth Amendment due process right is implicated. See id." [bold added]

Personally I think the inspector, though having a legitimate concern, was a not particularly helpful. I've so far found no explicit, general prohibition. I also know some companies, heavily involved in national security work, get the point and have their own prohibiting policies. The inspector may have been stating a policy that is not entirely supported. Nevertheless, remember at all times that your clearance is at the discretion of the agency sponsoring your FCL or personal clearances.

If you try to play hardball on this you can find yourself in a corner with no way out. If this is a matter of a large company with limited national security work and a large investment in company "Confidential" you may find a clear mitigation plan to be acceptable in an environment of reasonable discussion. Any such plan must clearly demonstrate mechanisms to avoid mistakes and probably a prohibition of confusing company markings within any elements doing classified work. If your company thinks it will continue or enlarge its security work I really would suggest changing your marking to something that cannot be confused in any way with national security marking.

By Ophelia on Thursday, February 06, 2003 - 09:24 am:

Anon-2 is correct in that documents marked "Confidential" cannot be assumed to be unclassified Company proprietary or private information. The security inspector cannot be faulted for making this assertion. The best thing for a company to do is to mark the documents as Company Confidential, Company Private, or Proprietary.