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On December 21, 2020, the Department of Defense (DoD) Office of the Undersecretary of Defense for Intelligence & Security published a Final Rule codifying the National Industrial Security Program Operating Manual (NISPOM) currently published as part of DoD Manual 5220.22-M in Title 34, Part 117 of the Code of Federal Regulations. The Final Rule became effective on February 24, 2021.
As many readers are likely aware, the NISPOM plays a key role in the National Industrial Security Program (NISP), the Government’s program for protecting classified information along with specific economic and technological data.
See E.O. 12829 (Jan. 6, 1993) (establishing the NISP and ordering the Secretary of Defense to issue and maintain the NISPOM). In practice, the NISPOM establishes requirements and procedures for the protection of classified information disclosed to or developed by contractors (in addition to similar information dis
Purchase Agreement Components, Part 2: Indemnification Provisions, January 8, 2021, Frank Massaro
In an acquisition, particularly an equity acquisition, a buyer must perform extensive due diligence on the target company to understand, as thoroughly as possible, the risks associated with the acquisition. In most cases, however, the buyer cannot fully evaluate or even identify all sources of risk that it will assume post-closing. To address these uncertainties and allocate these potential risks, the buyer and seller negotiate indemnification provisions that set forth the scope of each party’s obligation to reimburse the other party for certain losses associated with the acquisition that may arise following closing.
The Department of Defense (DOD) is adding the National Industrial Security Program Operating Manual (NISPOM) to the Code of Federal Regulations (CFR). According to the final rule.
Highlights
Effective Feb. 24, 2021, the National Industrial Security Program Operating Manual (NISPOM) will be codified in regulation.
The rule implements the National Defense Authorization Act (NDAA) of 2019 provision allowing cleared companies operating under a Special Security Agreement to access proscribed information without a National Interest Determination.
The public has until Feb. 19, 2021, to comment on the final rule, and U.S. cleared entities have until Aug. 24, 2021, to comply with all applicable changes.
In a final rule effective Feb. 24, 2021, the U.S. Department of Defense (DoD) codified the National Industrial Security Program Operating Manual (NISPOM) in Title 32, Part 117 of the Code of Federal Regulations.