Security Requirements
FAR 52.204-2 requires strict compliance with federal security protocols for contracts involving classified information, including flowdown to subcontractors and procedures for handling changes in security requirements.
Overview
FAR 52.204-2, Security Requirements, mandates that contractors and their subcontractors comply with federal security protocols when a contract involves access to classified information (Confidential, Secret, or Top Secret). The clause requires adherence to the Security Agreement (DD Form 441) and the National Industrial Security Program Operating Manual (NISPOM), including any updates. If the government changes security requirements or classification levels during contract performance, contractors may seek equitable adjustments for cost or other impacts. Contractors must flow down similar requirements to all subcontractors with access to classified information. Alternate versions of the clause address additional requirements for research and development contracts with educational institutions (e.g., procedures for handling impracticable security changes and possible contract termination) and for construction or architect-engineer contracts (e.g., employee identification and fingerprinting requirements).
Key Rules
- Compliance with Security Protocols
- Contractors must follow the Security Agreement (DD Form 441) and NISPOM (32 CFR part 117), including any revisions.
- Equitable Adjustments for Security Changes
- Contractors may request equitable adjustments if government-directed security changes affect contract terms or costs.
- Subcontractor Flowdown
- Contractors must include substantially similar security requirements in all subcontracts involving classified information.
- Alternate I (R&D/Educational Institutions)
- Outlines procedures for handling impracticable security changes and allows for contract termination if issues cannot be resolved.
- Alternate II (Construction/AE Contracts)
- Requires employee identification, delivery of IDs upon release, and fingerprinting as directed by the Contracting Officer.
Responsibilities
- Contracting Officers: Ensure inclusion of the clause, manage security changes, and oversee compliance and notifications.
- Contractors: Comply with all security requirements, flow down clauses to subs, notify of impracticable changes, and manage employee identification as required.
- Agencies: Provide updates to security manuals, process equitable adjustments, and oversee contract terminations if necessary.
Practical Implications
- This clause ensures the protection of classified information in federal contracts.
- Contractors must have robust security compliance programs and be prepared for changes in requirements.
- Failure to comply can result in contract termination or loss of access to classified work.