Requirement to authorize additional security clearances for certain contractors

(a) Designation of additional personnel Any entity that enters into a covered contract or agreement with a component of the Department of Defense may designate additional covered persons who may submit an application for a security clearance in accordance with this section. (b) Investigation and adjudication The appropriate authorized investigative agency and authorized adjudicative agency shall, upon receiving an application by an additional covered person designated under paragraph (1)— (1) conduct an investigation of the background of an additional covered person for purposes of determining the eligibility of such additional covered person for access to classified information; and (2) make a determination as to whether such additional covered person is eligible for access to classified information. (c) Final determination If an entity that enters into a covered contract or agreement determines an initial covered person is unable to perform the work intended to be performed by that person under such covered contract or agreement person, an additional covered person may perform such work in lieu of the initial covered person if— (1) the person received a favorable determination under subsection (b) with respect to eligibility for access to classified information; (2) the person has a demonstrated need-to-know under Executive Order 12968, provided that demonstrating such need-to-know shall not require an investigation or adjudication with respect to eligibility for access to classified information in addition to the investigation and adjudication required under subsection (b); and (3) the person signs appropriate agreements with respect to non-disclosure of classified information. (d) Limitation on number of personnel (1) Maximum per contract The number of additional covered persons designated by an entity under subsection (a) for each covered contract or agreement may not exceed the greater of— (A) (i) during the 5-year period that begins on the date of the enactment of this Act, 5 percent of the number of security clearances required to be held by covered persons to perform work under the covered contract or agreement; and (ii) after the 5-year period that begins on the date of the enactment of this Act, 10 percent of the number of security clearances required to be held by covered persons to perform work under the covered contract or agreement; and (B) 1 person. (2) Maximum per entity The number of additional covered persons designated by an entity under subsection (a) may not exceed the greater of— (A) 10 percent of the total number of security clearances required to be held by covered persons to perform work under all covered contracts or agreements of the entity; and (B) 1 person. (e) Costs (1) Authority to charge and collect The Secretary of Defense may charge fees or collect amounts to cover the costs associated with investigating, adjudicating, and maintaining a security clearance for which an application is submitted under subsection (a). (2) Retention of amounts Notwithstanding section 3302(b) of title 31, United States Code— (A) the Secretary of Defense may retain amounts received under paragraph (1); and (B) any amount so retained shall be deposited into an account to be determined by the Secretary of Defense and shall be made available without further appropriation until expended for the purpose of investigating, adjudicating, or maintaining security clearances. (3) Prohibition on bearing costs The Secretary of Defense may not bear any cost associated with investigating, adjudicating, or maintaining a security clearance the application for which is submitted pursuant to subsection (a). (4) Unallowable cost Any fees charged or amounts collected under this subsection to cover the costs associated with investigating, adjudicating, and maintaining a security clearance for which an application is submitted under subsection (a) may not be considered an allowable cost under a covered contract or agreement. (f) Applicability This section shall apply with respect to contracts and other agreements entered into on or after the date of the enactment of this Act. (g) Rule of construction Nothing in this section shall be construed to require the Secretary of Defense to grant any person access to classified information unless a favorable determination of eligibility to access such classified information is made with respect to such person. (h) Relationship to other laws This section shall apply subject to Executive Order 12968, Executive Order 10865, and any successor executive orders, but notwithstanding any other provision of law. (i) Definitions In this section: (1) Additional covered person The term additional covered person means a covered person designated by a private-sector entity as an alternative covered person who is intended to be available to conduct work under a covered contract or agreement that requires a security clearance if an initial covered person becomes unavailable to complete such work. (2) Authorized adjudicative agency; authorized investigative agency The terms authorized adjudicative agency and authorized investigative agency have the meaning given the terms in section 3001(a) of the Intelligence Reform and Terrorism Prevention Act of 2004 (50 U.S.C. 3341(a)). (3) Covered contract or agreement The term covered contract or agreement means a contract or other agreement between a private-sector entity and a component of the Department of Defense the performance of which requires a specified number of covered persons to hold a security clearance. (4) Covered person The term covered person means a contractor to or employee of a private-sector entity. (5) Initial covered person The term initial covered person means a covered person designated by a private-sector entity as responsible for conducting work under a covered contract or agreement that requires a security clearance.

(a) Designation of additional personnel Any entity that enters into a covered contract or agreement with a component of the Department of Defense may designate additional covered persons who may submit an application for a security clearance in accordance with this section. (b) Investigation and adjudication The appropriate authorized investigative agency and authorized adjudicative agency shall, upon receiving an application by an additional covered person designated under paragraph (1)— (1) conduct an investigation of the background of an additional covered person for purposes of determining the eligibility of such additional covered person for access to classified information; and (2) make a determination as to whether such additional covered person is eligible for access to classified information. (c) Final determination If an entity that enters into a covered contract or agreement determines an initial covered person is unable to perform the work intended to be performed by that person under such covered contract or agreement person, an additional covered person may perform such work in lieu of the initial covered person if— (1) the person received a favorable determination under subsection (b) with respect to eligibility for access to classified information; (2) the person has a demonstrated need-to-know under Executive Order 12968, provided that demonstrating such need-to-know shall not require an investigation or adjudication with respect to eligibility for access to classified information in addition to the investigation and adjudication required under subsection (b); and (3) the person signs appropriate agreements with respect to non-disclosure of classified information. (d) Limitation on number of personnel (1) Maximum per contract The number of additional covered persons designated by an entity under subsection (a) for each covered contract or agreement may not exceed the greater of— (A) (i) during the 5-year period that begins on the date of the enactment of this Act, 5 percent of the number of security clearances required to be held by covered persons to perform work under the covered contract or agreement; and (ii) after the 5-year period that begins on the date of the enactment of this Act, 10 percent of the number of security clearances required to be held by covered persons to perform work under the covered contract or agreement; and (B) 1 person. (2) Maximum per entity The number of additional covered persons designated by an entity under subsection (a) may not exceed the greater of— (A) 10 percent of the total number of security clearances required to be held by covered persons to perform work under all covered contracts or agreements of the entity; and (B) 1 person. (e) Costs (1) Authority to charge and collect The Secretary of Defense may charge fees or collect amounts to cover the costs associated with investigating, adjudicating, and maintaining a security clearance for which an application is submitted under subsection (a). (2) Retention of amounts Notwithstanding section 3302(b) of title 31, United States Code— (A) the Secretary of Defense may retain amounts received under paragraph (1); and (B) any amount so retained shall be deposited into an account to be determined by the Secretary of Defense and shall be made available without further appropriation until expended for the purpose of investigating, adjudicating, or maintaining security clearances. (3) Prohibition on bearing costs The Secretary of Defense may not bear any cost associated with investigating, adjudicating, or maintaining a security clearance the application for which is submitted pursuant to subsection (a). (4) Unallowable cost Any fees charged or amounts collected under this subsection to cover the costs associated with investigating, adjudicating, and maintaining a security clearance for which an application is submitted under subsection (a) may not be considered an allowable cost under a covered contract or agreement. (f) Applicability This section shall apply with respect to contracts and other agreements entered into on or after the date of the enactment of this Act. (g) Rule of construction Nothing in this section shall be construed to require the Secretary of Defense to grant any person access to classified information unless a favorable determination of eligibility to access such classified information is made with respect to such person. (h) Relationship to other laws This section shall apply subject to Executive Order 12968, Executive Order 10865, and any successor executive orders, but notwithstanding any other provision of law. (i) Definitions In this section: (1) Additional covered person The term additional covered person means a covered person designated by a private-sector entity as an alternative covered person who is intended to be available to conduct work under a covered contract or agreement that requires a security clearance if an initial covered person becomes unavailable to complete such work. (2) Authorized adjudicative agency; authorized investigative agency The terms authorized adjudicative agency and authorized investigative agency have the meaning given the terms in section 3001(a) of the Intelligence Reform and Terrorism Prevention Act of 2004 (50 U.S.C. 3341(a)). (3) Covered contract or agreement The term covered contract or agreement means a contract or other agreement between a private-sector entity and a component of the Department of Defense the performance of which requires a specified number of covered persons to hold a security clearance. (4) Covered person The term covered person means a contractor to or employee of a private-sector entity. (5) Initial covered person The term initial covered person means a covered person designated by a private-sector entity as responsible for conducting work under a covered contract or agreement that requires a security clearance.