FAR 4.404—Contract clause.
Plain-English Summary
FAR 4.404 tells contracting officers when to include the Security Requirements clause, FAR 52.204-2, in solicitations and contracts, and when to use one of its alternates or an agency-specific substitute. The section covers four related topics: the basic rule for contracts that may require access to classified information, the special use of Alternate I for cost-reimbursement research and development contracts with educational institutions, the special use of Alternate II for construction or architect-engineer contracts where employee identification is needed for security reasons, and the exception for agencies not covered by the National Industrial Security Program (NISP) that have their own substantially similar clause and alternates. In practice, this section ensures the government puts the right security language in the contract so contractors understand access controls, identification requirements, and any special security obligations before performance begins. It also helps agencies align contract clauses with the type of work being procured and with their own security programs. For contractors, the clause signals that security compliance may affect staffing, access to facilities or information, and performance procedures. For contracting officers, the section is a clause-selection rule that must be applied carefully because the wrong version of the clause can create compliance gaps or conflict with agency security procedures.
Key Rules
Insert Security Requirements Clause
The contracting officer must include FAR 52.204-2, Security Requirements, in solicitations and contracts when the contract may require access to classified information. This is the default rule unless an exception in paragraph (d) applies.
Use Alternate I for R&D Education
If the contemplated contract is a cost contract for research and development with an educational institution, the contracting officer must use 52.204-2 with Alternate I. This alternate is mandatory for that specific contract type and setting.
Use Alternate II for Certain Construction
If the contemplated contract is a construction or architect-engineer contract and employee identification is required for security reasons, the contracting officer must use 52.204-2 with Alternate II. The alternate addresses security-related identification needs in those environments.
Agency Clause May Replace FAR Clause
If the contracting agency is not covered by the NISP and has prescribed a clause and alternates that are substantially the same as 52.204-2, the contracting officer must use the agency-prescribed clause instead, following agency procedures. This exception applies only when the agency has its own comparable security clause framework.
Follow Agency Procedures
When paragraph (d) applies, the contracting officer does not choose the FAR clause by default; the agency’s own procedures control clause selection and use. The agency clause must be substantially similar to the FAR clause and alternates.
Responsibilities
Contracting Officer
Determine whether the contract may require access to classified information and, if so, insert FAR 52.204-2 unless an exception applies. Select Alternate I for cost R&D contracts with educational institutions, Alternate II for construction or architect-engineer contracts requiring employee identification for security reasons, or use the agency-prescribed clause when paragraph (d) applies.
Agency
If not covered by the NISP, prescribe a security clause and alternates that are substantially the same as FAR 52.204-2 and establish procedures for their use. Ensure internal guidance tells contracting officers when the agency clause replaces the FAR clause.
Contractor
Review the solicitation and contract for the applicable security clause or alternate and comply with the resulting security, access, and identification requirements during performance. Coordinate with the contracting officer and security personnel if the work may involve classified information or controlled access conditions.
Practical Implications
This is a clause-selection rule, so the main day-to-day task is identifying the right security language before award; missing the clause can create performance and compliance problems later.
The phrase "may require access to classified information" is broad, so contracting officers should not wait until after award to decide whether the clause is needed.
Alternate selection matters: educational-institution R&D cost contracts and security-sensitive construction or A-E contracts have different needs, and using the wrong version can leave security procedures incomplete.
Agencies outside the NISP cannot simply ignore the FAR clause; they must have a substantially similar agency clause and follow their own procedures when paragraph (d) applies.
Contractors should treat the clause as an early warning that access controls, badges, escorts, facility rules, or other security measures may affect staffing and schedule, especially on classified or secure-site work.
Official Regulatory Text
(a) The contracting officer shall insert the clause at 52.204-2 , Security Requirements, in solicitations and contracts when the contract may require access to classified information, unless the conditions specified in paragraph (d) of this section apply. (b) If a cost contract (see 16.302 ) for research and development with an educational institution is contemplated, the contracting officer shall use the clause with its Alternate I. (c) If a construction or architect-engineer contract where employee identification is required for security reasons is contemplated, the contracting officer shall use the clause with its Alternate II. (d) If the contracting agency is not covered by the NISP and has prescribed a clause and alternates that are substantially the same as those at 52.204-2 , the contracting officer shall use the agency-prescribed clause as required by agency procedures.