DoD Isuues Final Rule for Private Security Contractors (PSCs) Operating in Contingency Operations, Combat Operations or Other Significant Military Operations

August 11, 2011

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 movements in operational areas. This Rule ensures compliance with laws and regulations pertaining to Inherently Governmental functions, and ensures proper performance by armed contractors. Reference Federal Register Volume 76, Number 155 (Thursday, August 11, 2011). This rule is effective September 12, 2011.

This Final Rule is required to meet the mandate of Section 862 of the FY 2008 NDAA, as amended, which lays out two requirements:
(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.''

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 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, 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.

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. 






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