MEMORANDUM FOR: MR. COLBY FROM JENONNE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01495R000600100006-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: January 4, 2017
• Document Release Date: July 11, 2005
• Sequence Number: 6
• Publication Date: April 17, 1974
• Content Type: MEMO

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MEMORANDUM FOR: Mr. CoBy
cbums at RA11D told him
You'd be having a meeting today to talk
about giving RAND folk these clearances; and
they sent this letter by special smzm courier
to get to you . . .?
denonne
(DATE)
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WHICH MAY BE USED.
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DONALD B. RICE
President
The Honorable William E. Colby
Director, Central Intelligence Agency
Washington, D.C. 20505
April 17, 1974
Dear Mr. Colby:
George Tanham has told. me of your interest in some of the problems
of intelligence access for Federal Contract Research Centers (FCRCs),
including The Rand Corporation. We believe that the current regula
tions impose an unnecessary and counterproductive constraint on the
value of national security research by FCRCs for their clients. I
thought I would take this opportunity to assure you that our interest
in the matter is genuine and extends beyond just our Project RAND
research for the Air Force.
Enclosed is a discussion of our views on some possible modifications
to the current procedures. While we have not discussed this matter
with other FCRCs for several years, we would expect our proposal
to find broad support from them and, indeed, from their (and our)
clients, as was the case on an earlier Navy-sponsored proposal to
DIA.
We would be pleased to elaborate further on this or provide any
other information you would find pertinent to this matter.
Enclosure
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Approved
THE RAND CORPORATION, 1700 MAIN STREET, SANTA MONICA, CALIFORNIA 90406, PHONE: [phone]
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INTELLIGENCE ACCESS ISSUES RELATING TO CONTROLLED DISSEMINATION
I. Introduction to the Problem
The present Controlled Dissemination (CD) caveat prohibits the release of intelligence
materials to an industrial contractor without written permission from the office of
origin. The same prohibition applies to the designation Sensitive Intelligence Sources
and Methods Involved (SIMI), which is now being applied much more frequently to
document series formerly distributed without caveat. At present, both caveats make no
distinction between profit making, industrial corporations engaged in for-profit contract
research or hardware production and a non-profit, Federal Contract Research Center
(FCRC) engaged in basic, long-term, policy oriented research. Rand thinks that such a
distinction logically should be made and that the present restrictions and limitations of
the CD caveat should be modified to reflect this distinction. Our reasons are outlined
be low.
II. FCRCs' versus Other Contractors
Contracts awarded to the profit making, non-FCRC contractors are normally directed to
a specific project, e.g., a weapon system development. Being narrow in scope, they
do not usually require extensive access to a wide variety of intelligence materials.
Consequently, such contractors are usually provided with very narrow access to data
covering a specific project of limited scope. Contracts are normally awarded on the
basis of competitive bidding and are of limited duration -- usually terminated when
the specific task is completed. To place such a contractor on "regular distribution" for
a wide variety of intelligence material covering a myriad of subjects would make little
sense. We understand that this was the original rationale for the policy of restricting
certain intelligence material from distribution to industrial contractors.
The situation with regard to FCRCs is quite different. Extensive Congressional hearings
and testimony by various defense officials underscores the special, indeed unique,
.distinctions between FCRCs and other contractors.
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It has been said that the studies and analyses FCRCs enjoy a
favored position. This is true, almost by definition. In
order for organizations like IDA and Rand to be effective,
they must have access to privileged information from both
Government and industry. In order to make objective and
penetrating evaluations of the potential effectiveness of our
future weapons systems, they must have a complete background
on a continuing basis regarding our objectives, our plans, and
the details of competing systems. The very effectiveness of
these organizations requires a special position in the sense
just described. *
Moreover, Rand and the other FCRCs are closely monitored by their sponsors
and limited in both the amount and nature of the research assigned to them:
We are persuaded that there is a strong need for organizations
like the FCRCs.... This type of organization is thus particularly
useful as a means of allowing this talent to be privy to a broad
scope of information on a continuing basis. However, in pro-
viding these organizations and their technical personnel with
privy information, the DoD places them in a special position.
Thus, they must expect limits, as they do, on the total amount
of effort that they will undertake for the DoD.
I do not think it is at all feasible to have the type of studies
and engineering support required from the FCRCs supplied by
private companies....
The other alternative is to accomplish all these activities
strictly in-house by personnel under civil service. In my view,
we would lose by that approach....
In recognition of the FCRCs' special characteristics, the content
of the tasks assigned to these organizations will be thoroughly
reviewed to assure that they cannot be performed effectively and
objectively by other organizations....**
Testimony of Dr. John S. Foster, Jr., Hearings on S. 3108 (FCRCs); Extract-
FY '73 Authorization for Military Procurement and RDT&E, Committee on Armed
Services, p. 3229.
Ibid., pp. 3230-31.
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Such broad policy oriented research is based on a long-term, continuing relationship
with the sponsor; this relationship is what originally led to the creation of the FCRC
classification. We feel that an awareness of the special nature of the research
performed, and of the special relationship which exists between each FCRC and its
sponsor dictates a special approach to the subject of access to classified intelligence:.
material in general, and intelligence carrying the CD or SIMI caveats in particular.!
111. . Problems with the Present System
It is the current policy of the originating and contracting agencies to require a full
and detailed justification for all contractor requests for the release of CD material.
The preparation of such lengthy and formal requests is time consuming. This delay is
further compounded by the fact that such requests must pass through a series of
channels, involving both the contracting and originating agency. Delays of 5-6
months are not uncommon, and some requests have been delayed for more than a year;
even routine requests may require staffing and coordination in more than half a dozen
offices of each agency involved.
This long time lag impacts adversely on our studies in several ways. Because of the
delay we are often forced to send in our request at an early stage of our study;
then, as the study progresses, we typically find that when received some data requested
is superfluous to our by then better defined needs, and that other data which we now
find we require was not originally requested. We thus must either suffer additional
delays in our study, or to meet a deadline, dilute our effort in an area which merits
fuller attention. Another danger inherent in the present system arises from the
necessity of using "next best" uncaveated data when we are unable to obtain CD
intelligence in sufficient time. Such substitute data is, at times, at variance with or
in direct contradiction to intelligence carrying the CD caveat.
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It should also be pointed out that intelligence bearing the CD or SIMI caveat is
highly useful because it often pulls together data from scattered sources and
presents it in a convenient and complete form -- often arranged in the form of charts
and tables. While our staff could and sometimes does perform a similar synthesis of
scattered data, this obviously duplicates the efforts of others -- without the benefits
of their analytical expertise and without their broad access to a greater variety of
data. Such duplication on our part is also time consuming and costly, and dilutes
the amount of original, substantial work we can do for our clients.
IV. Proposed Solution
The recognition of the distinction which exists between the designated FCRCs and all
other defense contractors, and of the special nature and scope. of the FCRC relation-
ship, should be reflected in a revision of DCID 1/7.. The procedure could possibly
involve a discussion between the DCI and the Director, DIA, along the lines of an
earlier Navy-sponsored proposal to liberalize release policy for FCRCs. Following the
revision of DCID 117, DIA could make the appropriate revisions to DIAI 50-4, and
notify the FCRCs through the contract monitors. The FCRCs could then prepare
intelligence interest/requirements and, upon approval by the sponsoring agency, file
these with DIA, so that distribution could be made automatically to FCRCs in certain
approved subject areas.
V. Security
With regard to security of such data, The Rand Corporation has established procedures
to ensure that all intelligence materials released to it are used properly in the study
and are not disseminated in external reports. Rand has effective procedures for
ensuring proper adherence to the provisions of DIAI 50-4, and for ensuring that proper
need-to-know exists before intelligence material is released. The Rand Intelligence
Facility acts to ensure compliance with the provisions of DIAI 50-4, and maintains
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Records of Access of all staff members having access to intelligence material.
Finally, Rand has the benefit of an Air Force officer, representing AF/IN, assigned
to Rand. He provides valuable assistance and guidance in the proper use of
intelligence materials at Rand, and helps ensure that effective security procedures are
maintained.
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