Implementation of the
Government Paperwork Elimination Act (GPEA)
of Management and Budget (OMB)
AGENCY: Office of Management and Budget, Executive Office
of the President
Proposed Implementation of the Government Paperwork Elimination
The Office of Management and Budget (OMB) requests public and agency
comment on proposed procedures and guidance to implement the Government
Paperwork Elimination Act (GPEA). Under the GPEA, agencies must
generally provide for the optional use and acceptance of electronic
documents and signatures, and electronic record keeping where practicable,
by October 2003.
Persons who wish to comment on the GPEA procedures and guidance
should submit their comments no later than Friday, July 5, 1999.
Each Department and Agency is asked to submit a single coordinated
set of comments.
Electronic comments will be included as part of the official record.
Please send comments electronically to: firstname.lastname@example.org. Alternatively,
hardcopy comments may be addressed to: Information Policy and Technology
Branch, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10236 New Executive Office Building,
Washington, D.C. 20503.
AVAILABILITY: This document is available on the Internet
in the OMB library of the "Welcome to the White House" home page,
/WH/EOP/omb, the CIO Council's home page, http://cio.gov, and at
the Government Information Technology Services Board's security
home page at http://gits-sec.treas.gov.
FURTHER INFORMATION CONTACT: Peter Weiss, Information Policy
and Technology Branch, (202) 395-3630. Press inquiries should be
addressed to the OMB Communications Office, (202) 395-7254.
INFORMATION: Public confidence in the security of the government's
electronic information and information technology is essential in
creating government services that are more accessible, efficient,
and easy to use. Electronic commerce, electronic mail, and electronic
benefits transfer sensitive information within government, between
the government and private industry or individuals, and among governments.
These electronic systems must protect the information's confidentiality,
assure that the information is not altered in an unauthorized way,
and be available when needed. A corresponding policy and management
structure must support these protections.
a major step in this direction, the Congress recently enacted legislation,
supported by the Administration, intended to increase the ability
of citizens to interact with the Federal government electronically.
The Government Paperwork Elimination Act, Title XVII of Pub. L.
105-277, provides for Federal agencies, by October 21, 2003, to
give persons who are required to maintain, submit, or disclose information
the option of doing so electronically when practicable as a substitute
for paper, and to use electronic authentication (electronic signature)
methods to verify the identity of the sender and the integrity of
electronic content. The Act specifically provides that electronic
records and their related electronic signatures are not to be denied
legal effect, validity, or enforceability merely because they are
in electronic form.
proposed implementation of the Act is in two parts. The first part
sets forth the policies and procedures for implementing the Act,
and requesting certain specific agencies to provide assistance in
particular areas. The second part is intended to provide Federal
managers with practical implementation guidance.
requests comments on the proposed procedures and guidance.
Deputy Administrator and Acting Administrator
Office of Information and Regulatory Affairs
OMB Procedures and Guidance on Implementing the Government Paperwork
provides Executive agencies with the guidance needed to implement
the Government Paperwork Elimination Act (GPEA), P. L. 105-277,
Title XVII, which took effect on October 21, 1998. The GPEA is an
important tool to fulfill the Administration's vision of improved
customer service and governmental efficiency through the use of
information technology. This vision, articulated in Vice President
Gore's 1997 report, Access America (http://gits.gov), involves widespread
use of the Internet, with Federal agencies transacting business
electronically, in the same way as commercial enterprises. Those
who wished to do business in this way could avoid traveling to government
offices, waiting in line, or mailing paper forms. Delivery of government
services in this way would normally save the government time and
money as well.
America recognized, however, that:
confidence in the security of the government's electronic information
and information technology is essential to creating government services
that are more accessible, efficient, and easy to use. Electronic
commerce, electronic mail, and electronic benefits transfer sensitive
information within government, between governments and private industry
or individuals, and among governments. These electronic systems
must protect the information's confidentiality, assure that the
information is not altered in an unauthorized way, and be available
I. Policy and Procedures
GPEA charges the Office of Management and Budget, in consultation
with the Commerce Department and other appropriate entities, with
the development of procedures for Executive agencies to follow in
using and accepting electronic documents and signatures. These procedures
reflect and are to be executed with due consideration of the following
compatibility with standards and technology for electronic signatures
generally used in commerce and industry and by State governments;
inappropriately favoring one industry or technology;
that electronic signatures are as reliable as is appropriate
for the purpose in question and that electronic record keeping
systems reliably preserve the information submitted;
wherever appropriate for the electronic acknowledgment of electronic
filings that are successfully submitted; and
to the extent feasible and appropriate, for multiple methods
of electronic signatures or identifiers for the submission of
such forms where the agency anticipates receipt of 50,000 or
more electronic submittals of a particular form.
GPEA recognizes that adoption of electronic systems should be
consistent with the need to ensure that investments in information
technology are economically prudent to accomplish the agency's
mission and give due regard to privacy and security. Moreover,
it is Administration policy that a decision to not allow the
option of electronic filing and record keeping should be supported
by a specific showing that, in the context of a particular application,
there is no reasonably cost-effective combination of technologies
and management controls that can minimize the risk of significant
harm. Accordingly, agencies should develop and implement plans
to use and accept documents in electronic form, and engage in
agency's determination of which technology is appropriate for
a given transaction must include a risk assessment, and an evaluation
of targeted customer or user needs. Performing a risk assessment
to evaluate electronic signature alternatives should not be
viewed as an isolated activity or an end in itself. These agency
risk assessments should draw from and feed into the interrelated
requirements of the Paperwork Reduction Act, the Computer Security
Act, the Government Performance and Results Act, the Clinger-Cohen
Act, the Federal Managers Financial Integrity Act, and the Chief
Financial Officers Act.
initial use of the risk assessment is to identify and mitigate
risks in the context of available technologies and their relative
total costs and effects on the program being analyzed. The assessment
also should be used to develop baselines and verifiable performance
measures that track the agency's mission, strategic plans, and
analysis of costs and benefits should be designed so that it
can be used, not only as a guide to selecting among the technologies
under consideration, but also to generate a business case and
verifiable return on investment to support decisions regarding
overall programmatic direction, investment decisions, and budgetary
priorities. The effects on the public and its needs and readiness
to move to an electronic environment are important considerations.
3. Agency Responsibilities
order to ensure a smooth and cost-effective transition to a
more electronic government providing improved service to the
public, each agency shall:
include in its strategic IT plans supporting program responsibilities
(required under OMB Circular A-11) a summary of the agency's
schedule to implement optional electronic maintenance, submission,
or disclosure of information when practicable as a substitute
for paper, including through the use of electonic signatures
when practicable, by the end of Fiscal Year 2003 (note:
agencies need not revise their reports on Federal purchasing
and payment already required by OMB M-99-02, but should
include the automation of purchasing and payment functions
in their schedule);
whether an appropriate combination of information security
practices, authentication technologies and management controls
for each application will be practicable, and if so, which
combination will minimize risk and maximize benefits in
a cost effective manner;
or amend regulations or policies as necessary and appropriate
to: (1) implement optional electronic submission, maintenance,
or disclosure of information, and the use of any necessary
electronic signature alternatives; and (2) permit private
employers who have record keeping responsibilities imposed
by the Federal government to electronically store and file
information pertaining to their employees electronically;
appropriate information system confidentiality and security
in accordance with the guidance contained OMB Circular A-130,
Appendices I and III, and use, to the maximum extent practicable,
technologies either prescribed in Federal Information Processing
Standards promulgated by the Secretary of Commerce or supported
by voluntary consensus standards as defined in OMB Circular
to the extent feasible and appropriate, more than one electronic
signature option for public reporting forms which are collected
annually in electronic form from more than 50,000 respondents;
progress against the strategic plans developed in response
to 1. above through the annual agency reports submitted
to OMB under the Paperwork Reduction Act, including any
determination that a particular application is inappropriate
for conversion to electronic filing.
of Commerce shall promulgate Federal Information Processing Standards
as appropriate to further the specific goals of the GPEA. The
Department should also develop best practices in the area of authentication
technologies and implementations, including cryptographic digital
signature technology, with assistance from the Government Information
Technology Services Board, the Chief Information Officers Council
and the President's Management Council.
Department of the Treasury
Department of the Treasury shall prescribe policies and practices
for the use of electronic authentication techniques in Federal
payments and collections, and ensure that they fulfill the the
goals of GPEA.
Department of Justice
Department of Justice shall develop and publish practical guidance
on legal considerations related to agency use of electronic filing
and record keeping.
General Services Administration
General Services Administration shall support agencies' implementation
of electronic signatures and related electronic service delivery.
II. Paperwork Elimination Through the Use of Electronic Signatures
and Electronic Record Keeping
part provides Federal managers with basic information to assist
in planning for an orderly and efficient transition to electronic
1. Introduction and Background.
required by the Government Paperwork Elimination Act (GPEA),
this Part provides guidance for agencies to use in deciding
whether to use electronic signature technology for an application,
which electronic signature technology may be most appropriate,
and how to minimize the risk of fraud, error, or misuse when
implementing an electronic signature technology to authenticate
electronic transactions. These procedures are consistent with
the requirement of the Paperwork Reduction Act of 1995 (PRA)
that agencies shall "consistent with the Computer Security Act
of 1987 (CSA)(40 U.S.C. 759 note), identify and afford security
protections commensurate with the risk and magnitude of the
harm resulting from the loss, misuse, or unauthorized access
to or modification of information collected or maintained by
or on behalf of an agency." 44 U.S.C. 3506(g)(3).
As the GPEA, PRA, and CSA recognize, the goal of information
security is to protect the integrity of electronic records and
transactions. Different security approaches offer varying levels
of assurance in an electronic environment. Among these approaches
(in an ascending level of assurance) are 1) the so-called "shared
secrets" methods, e.g., personal identification numbers or passwords,
2) digitized signatures or biometric means of identification
such as fingerprints or retinal patterns and voice recognition,
and 3) digital signatures. Combinations of approaches (e.g.,
digital signatures with biometrics) are also possible and may
provide even higher levels of assurance. Deciding which to use
in an application depends upon the risks associated with the
loss, misuse or compromise of the information compared to the
cost and effort associated with deploying and managing the increasingly
secure methods to mitigate those risks. Agencies must strike
a balance, recognizing that achieving absolute security is likely
to be in most cases highly improbable and prohibitively expensive.
2. What is An "Electronic Signature?"
The GPEA defines "electronic signature" as follows:
method of signing an electronic message that --
(A) identifies and authenticates a particular person as the source
of the electronic message; and
(B) indicates such person's approval of the information contained
in the electronic message. (GPEA, section 1709(1)).
definition should be interpreted by reference to accepted legal
definitions of signatures. The term "signature" has long been
understood as including "any symbol executed or adopted by a party
with present intention to authenticate a writing." (Uniform Commercial
Code, 1-201(39)(1970)). These flexible definitions permit the
use of different electronic signature technologies, such as digital
signatures, digitized signatures or biometrics, discussed below.
For this reason, while it is the case that, for historical reasons,
the Federal Rules of Evidence are tailored to the admissibility
of paper-based evidence, the Rules of Evidence have no bias against
enacting the GPEA, Congress addressed the legal effect and validity
of electronic signatures or other electronic authentication:
records submitted or maintained in accordance with procedures developed
under this title, or electronic signatures or other forms of electronic
authentication used in accordance with such procedures, shall not
be denied legal effect, validity, or enforceability because such
records are in electronic form. (GPEA, section 1707).
3. Risk Factors to Consider In Planning and Implementing an Electronic
Signature or Record Keeping System.
signature technologies can offer degrees of confidence in authenticating
identity greater even than the presence of a handwritten signature.
These digital tools should be used to control risks in a cost-effective
manner. In determining whether an electronic signature is sufficiently
reliable for a particular purpose, agencies should consider the
relationships between the parties, the value of the transaction,
and the likely need for accessible, persuasive information regarding
the transaction at some later date. Once these factors are considered
separately, an agency should consider them together to evaluate
its sensitivity to risk for a particular process.
relationship between the parties. Agency transactions
fall into five general categories, each of which may be vulnerable
to different security risks:
Intra-agency transactions (i.e., those which remain within
the same Federal agency).
Inter-agency transactions (i.e., those between Federal agencies).
Transactions between a Federal agency and state or local government
Transactions between a Federal agency and a private organization
- contractor, university, non-profit organization, or other
Transactions between a Federal agency and a member of the
or intra-governmental transactions of a relatively routine nature
will generally entail little risk of a trading partner later repudiating
the transaction, and almost no risk of the trading partner committing
fraud. Similarly, transactions between a regulatory agency and a
publicly traded corporation or other known entity regulated by that
agency bear a relatively low risk of repudiation or fraud. Risk
also tends to be relatively low in cases where there is an ongoing
relationship between the parties. On the other hand, a one-time
transaction between a person and an agency, which has legal or financial
implications, bears the highest risk. In all cases, the relative
value of the transaction needs to be considered.
value of the transaction. Agency transactions fall
into five general categories, each of which may be vulnerable
to different security risks:
Transactions involving the transfer of funds.
Transactions where the parties commit to actions or contracts
that may give rise to financial or legal liability.
Transactions involving information protected under the Privacy
Act or other agency-specific statutes obliging that access
to the information be restricted.
Transactions where the party is fulfilling a legal responsibility
which, if not performed, creates a legal liability (criminal
Transactions where no funds are transferred, no financial
or legal liability is involved and no privacy or confidentiality
issues are involved (electronic signatures are least necessary
in these transactions and should not be used unless specifically
required by law or regulation).
The likely need for accessible, persuasive information
regarding the transaction at a later point. Agency transactions
fall into five general categories:
Transactions where the information generated will never be
Transactions where the information generated may later be
subject to audit.
Transactions where the information generated may later be
subject to dispute by one of the parties (or alleged parties)
to the transaction.
Transactions where the information generated may later be
subject to dispute by a non-party to the transaction.
Transactions where the information generated may later be
needed as proof in court.
Synthesizing the Risk Factors
To evaluate the suitability of electronic signature alternatives
for a particular application, the agency needs to perform
a qualitative risk analysis and should then determine the
particular technologies and management controls best suited
to minimizing the risk to an acceptable level while maximizing
the benefits to the parties involved.
Risk analyses must recognize that no signature alternative
is totally reliable and secure. Every method of signature,
whether electronic or paper, can be compromised to some degree
with enough technology or due to poor security procedures
or practices. In estimating the cost of any system, agencies
should include costs associated with hardware, software, administration
and support of the system, both short-term and long-term.
If it would be extremely expensive to set up a very secure
system, but past experience with fraud risks and a careful
analysis of those risks shows that exposure is low, a less
expensive system that deters the majority of fraud is probably
warranted. However, in making this tradeoff, agencies should:
(a) evaluate whether the security elements of a less expensive
system can be disproportionately exploited resulting in greater
exposure to fraud than would be expected in comparable non-automated
systems; and (b) consider management and other non-technical
process controls which could reduce those risks.
A qualitative risk analysis also should recognize that all
risks and benefits are not quantifiable. While some transactions
can be assigned a definite monetary value that may be placed
at risk, many cannot. For example, the value of deterring
fraud cannot generally be quantified. Should an agency conclude
that a new automated system is less secure than an old, paper-based
system, attempts to commit fraud or to repudiate transactions
may increase. On the benefit side, it is not always possible
to assign a dollar value to the increased efficiency that
an agency experiences when it automates a labor-intensive
process, although agencies should attempt to make this estimation
whenever feasible. Usually, it is not possible to quantify
in monetary terms attitudes such as increased customer satisfaction
and willingness to cooperate with an agency, which are engendered
by the transition from onerous paper processes to user-friendly
One advantage of electronic authentication is that an agency
may strengthen the signature validation by incorporating electronic
links between the user and preexisting data about that user
in the agency's records. The IRS has successfully adopted
this approach in its TeleFile program, which enables selected
taxpayers to file 1040EZs with a touch-tone phone. Taxpayers
get Customer Service Numbers (CSNs, i.e., PINs) that they
then use to sign their returns and which help to validate
their identities to the agency. Even though a CSN is not unique
to an individual taxpayer (since it is only five digits long),
the IRS authenticates the filer by using other identifying
factors, such as the taxpayer's date of birth, taxpayer identification
number, and by using additional procedures. This approach
is not used over the Internet. Rather, it occurs in short-term
connections over telephone lines, an environment where it
is comparatively difficult for malefactors to eavesdrop and
to steal information or to substitute false information for
The Computer Security Act places on agency managers the responsibility
to select an appropriate combination of technologies and practices
to minimize risk cost-effectively while maximizing benefits
to the agency and to its customers. These decisions, however
qualitative, should be documented for later review and adjustment.
4. Privacy and Disclosure.
1708 of the GPEA limits the use of information collected in electronic
signature services for communications with a Federal agency. It
directs agencies and their staff and contractor personnel not to
such use information for any purpose other than for facilitating
the communication. Exceptions exist if the person (or entity) who
is the subject of the information provides affirmative consent to
the additional use of the information, or if such additional use
is otherwise provided by law. Accordingly, agencies should follow
several privacy tenets:
Electronic authentication should only be required where needed.
Many transactions do not need, and should not require, detailed
information about the individual.
electronic authentication is required for a transaction, do
not collect more information from the user than is required
for the application.
should be able to decide the scope of their electronic means
of authentication. In other words, if a user wants a certain
mechanism for authentication to work only with a single agency
or for a single type of transaction, the user's desires should
be honored if practicable. Conversely, if the user wishes to
have the authentication work with multiple agencies or for multiple
types of transactions, that should also be permitted consistent
with how the agency employs such means of authentication and
with relevant statute and regulation.
should ensure, and users should be informed, that information
collected for the purpose of issuing or using electronic means
of authentication will be managed and protected in accordance
with applicable requirements under the Privacy Act, the Computer
Security Act, and any agency-specific statutes mandating the
protection of such information.
Section 5. Overview of Current Electronic Signature
section addresses two categories of security: 1) Non-cryptographic
methods of authenticating identity; and 2) cryptographic control
methods. The non-cryptographic approach relies solely on an identification
and authentication mechanism linked to a specific software application.
Cryptographic controls can be used for multiple applications, if
properly managed, and encompass authentication and encryption services.
A highly secure implementation may combine both categories of technologies.
The spectrum of electronic signature technologies currently available
is described below.
Methods of Authenticating Identity
Personal Identification Number (PIN) or password:
A user accessing an agency's electronic application
is requested to enter a "shared secret" (called "shared" because
it is known both to the user and to the system), such as a
password or PIN. When the user of a system enters her name,
she also enters a password or PIN. The system checks that
password or PIN as a shared secret to "authenticate" the user.
If the authentication process is performed over an open network
such as the Internet, it is usually essential that at least
the shared secret be encrypted; this can be accomplished through
the technology called "Secure Sockets Layer" currently built
into almost all popular Web browsers, in a fashion that is
transparent to the end user.
Smart Card: A smart card is a plastic card
the size of a credit card which contains an embedded chip
that can generate, store, and/or process data. It can be used
to facilitate various authentication technologies. A user
inserts the smart card into a card reader device attached
to a microcomputer or network input device. In the computer,
information from the card's chip is read by security software
only when the user enters a PIN, password, or biometric identifier.
This method provides greater security than use of a PIN alone,
because a user must have both a) physical possession of the
smart card and b) knowledge of the PIN. Good security requires
that the smart card and the PIN never be kept together. Note
that the PIN, password or biometric identifier in this case
is a secret shared between the user and the smart card, not
between the user and a local or remote computer.
Digitized Signature: A digitized signature
is a graphical image of a handwritten signature. Some applications
require a user to create his or her hand-written signature
using a special computer input device, such as a digital pen
and pad. The digitized representation of the entered signature
is compared with a stored copy of the graphical image of the
handwritten signature. If special software considers both
images comparable, the signature is considered valid. This
application of technology shares the same security issues
as those using the PIN or password approach, because the digitized
signature is another form of shared secret known both to the
user and to the system. The digitized signature is more reliable
for authentication than a password or PIN because there is
a biometric component to the creation of the image of the
handwritten signature. Forging a digitized signature can be
more difficultn than forging a paper signature to the extent
that the technology digitally compares the submitted signature
image with the known signature image, and is better than the
human eye. Another element in a digitized signature which
helps make it unique is measuring how each stroke is made
- its duration or pen pressure, for example. This information
can also be compared to a reference value. As with all shared
secret techniques, compromise of a digitized signature image
file could pose a security risk to users.
Biometrics: Individuals have unique physical
characteristics that can be converted into digital form and
then interpreted by a computer. Among these are voice patterns
(where an individual's spoken words are converted into a special
electronic representation), fingerprints, and the blood vessel
patterns present on the retina (or rear) of one or both eyes.
In this technology, the physical characteristic is measured
(by a microphone, optical reader, or some other device), converted
into digital form, and then compared with a copy of that characteristic
stored in the computer and authenticated beforehand as belonging
to a particular person. If the test pattern and the previously
stored patterns are sufficiently close (to a degree which
is usually selectable by the authenticating application),
the authentication will be accepted by the software, and the
transaction allowed to proceed. Biometric applications can
provide very high levels of authentication especially when
the identifier is obtained in the presence of a third party
(making spoofing difficult), but as with any shared secret,
if the digital form is compromised, impersonation becomes
a serious risk. Thus, just like PINs, such information should
not be sent over open networks unless it is encrypted. Moreover,
measurement and recording of a physical characteristic can
raise privacy concerns.
electronic signatures may involve the use of cryptography in
two ways: symmetric (or shared private key) cryptography, or
asymmetric (public key/private key) cryptography. The latter
is used in producing digital signatures, discussed further below.
Shared Private Key Cryptography. In shared
private key (symmetric) approaches, the user signs a document
and verifies the signature using a single key (consisting
of a long string of zeros and ones) that is not publicly known,
or is secret. Since the same key does these two functions,
it must be transferred from the signer to the recipient of
the message. This situation can undermine confidence in the
authentication of the user's identity because the private
key is shared between sender and recipient and therefore is
no longer unique to one person. Since the private key is shared
between the sender and possibly many recipients, it is really
not "private" to the sender and hence has lesser value as
an authentication mechanism. This approach offers no additional
cryptographic strength over digital signatures (see below).
Further, digital signatures avoid the need for the shared
Public/Private Key (Asymmetric) Cryptography - Digital
To produce a digital signature, a user has his or her computer
generate two mathematically linked keys -- a private signing
key that is kept private, and a public validation key that is
available to the public. The private key cannot be deduced from
the public key. In practice, the public key is made part of
a "digital certificate," which is a specialized electronic document
digitally signed by the issuer of the certificate, binding the
identity of the individual to his or her private key in an unalterable
A "digital signature" is created when the owner of a private
signing key uses that key to create a unique mark (called
a "signed hash") on an electronic document or file. The recipient
employs the owner's public key to validate the authenticity
of the attached private key. This process also verifies that
the document was not altered. Since the two keys are mathematically
linked, they are unique: only one public key will validate
signatures made using its corresponding private key. Moreover,
if the private key has been properly protected from compromise
or loss, the signature is unique to the individual who owns
it, that is, the owner is bound by the signature. One concern
in relatively high-risk transactions is that the private key
owner could feign loss to repudiate a transaction. This concern
can be mitigated by encoding the private key onto a smart
card or an equivalent device, and by using a biometric mechanism
(rather than a PIN or password) as the shared secret between
the user and the smart card for unlocking the private key
to effect a signature. It can also be addressed by agencies
establishing clear procedures for a particular implementation,
so that all parties know what the obligations, risks and consequences
reliability of the digital signature is directly proportional
to the degree of confidence one has in the link between the owner's
identity and the digital certificate, how well the owner has protected
the private key from compromise or loss, and to the cryptographic
strength of the methodology used to generate the key pair. Further
information on digital signatures can be found in Access with
Trust (http://gits-sec.treas.gov), a report published by OMB and
Technical Considerations of the Various Technologies
While generally the most certain method for assuring identity
electronically, use of digital signatures requires agencies
to develop a series of policies and documents which provide
the important underlying framework of trust and which facilitate
the evaluation of risk. The framework identifies how well the
signer's identity is bound to his or her public key in a digital
certificate (identity proofing); whether the private key is
placed on a highly secure hardware token or is encapsulated
in software only; and how difficult it is for a malefactor to
deduce using cryptographic methods the private key (the cryptographic
strength of the key-generating algorithm).
By themselves, digitized (not digital) signatures, PINs and
biometric identifiers do not directly bind identity to the contents
of a document. For them to do so, they must be used in conjunction
with some other mechanism. Biometric identifiers such as retinal
patterns used in conjunction with digital signatures can offer
far greater proof of identify than pen and ink signatures.
While not as robust as biometric identifiers and digital signatures,
PINs have the decidedadvantage of proven customer and citizen
acceptance, as evidenced by the universal use of PINs for automated
teller machine transactions. Such transactions, however, typically
occur over proprietary networks rather than open networks like
the Internet, where eavesdropping on transactions is much easier,
unless the messages are encrypted.
It is important to remember that technical factors are but one
aspect to be considered when an agency plans to implement electronic
signature-based applications. Other important aspects are considered
in the following sections.
6. Agency Implementation of Electronic Signature and Authentication.
the agency has conducted the risk analysis and identified an appropriate
electronic signature or other electronic authentication, the agency
will then proceed to implement this decision. In doing so, agencies
should consider the following:
Develop a regulatory or policy scheme. Agencies should
consider whether their programmatic regulations or policies
support the use and enforceability of electronic signature alternatives
to handwritten signatures. By clearly informing the regulated
community that electronic signatures and records will be acceptable
and used for enforcement purposes, their legal standing is enhanced.
Several agencies have already promulgated policies and regulations
making this clear, and a number are developing them:
and Exchange Commission (17 C.F.R. Part 232), electronic regulatory
Protection Agency (55 Fed. Reg. 31,030 (1990)), policy on
and Drug Administration (21 C.F.R. Part 11), electronic signatures
Revenue Service (Treasury Reg. 301.6061-1), signature alternatives
for tax filings;
Acquisition Regulation (41 C.F.R. Parts 2 and 4), electronic
Services Acquisition Regulation (48 C.F.R. Part 552.216-73),
Property Management Regulations (41 C.F.R. Part 101-41), electronic
bills of lading.
specifying the requirements for using electronic record keeping
by regulated entities (particularly the maintenance of electronic
forms pertaining to employees by employers), agencies should
consider the "Performance Guideline for the Legal Acceptance
of Records Produced by Information Technology Systems," developed
by the Association for Information and Image Management (ANSI
AIIM TR31). This document provides suggestions for maximizing
the likelihood that electronically filed and stored documents
will be accorded full legal recognition. If an agency chooses
to use digital signatures, a regulation may specify that each
individual will be issued a unique digital signature certificate
to use, agree to keep the private key confidential, and agree
to accept responsibility for anything that is submitted using
that key, or other conditions under which the agency will accept
electronic submissions using it.
Use a mutually-understood, signed agreement between
the person or entity submitting the electronically-signed information
and the receiving Federal agency.
a matter of efficiency, arrangements with large numbers of customers
would be best accomplished by setting forth an agency's terms
and conditions in a regulation or policy. Arrangements with
smaller numbers may lend themselves to one or more agreements,
using a document referred to as a "terms and conditions" agreement.
These agreements can ensure that all conditions of submission
and receipt of data electronically are known and understood
by the submitting parties. This is particularly the case where
terms and conditions are not spelled out in agency programmatic
is also important to establish that the user of the digital
signature or PIN/password is fully aware of what he or she is
signing at the time of signature. This can be ensured by programming
appropriate ceremonial banners that alert the individual of
the gravity of the action into the software application. The
presence of such banners can later be used to demonstrate to
a court that the user was fully informed of and aware of what
he or she was signing.
Minimize the likelihood of repudiation. Agencies
should develop well-documented and established mechanisms and
procedures to tie transaction in a legally binding way to an
individual. The integrity of even the most secure digital signature
rests on the continuing confidentiality of the private key,
for example. Similarly, in the case of electronic signatures
based on the use of PINs, the integrity of the transaction depends
on the user not disclosing the PIN. If a defendant is later
charged with a crime based on an electronically signed document,
he or she would have every incentive to show a lack of control
over (or loss of) the private key or PIN. Indeed, if that defendant
plans to commit fraud, he or she may intentionally compromise
the secrecy of the key or PIN, so that the government would
later be unable to link him or her to the electronic transaction.
transactions which appear to be at high risk for fraud, e.g.,
one-time high-value transactions with persons not previously
known to an agency, may require extra safeguards or may not
be appropriate for electronic transactions. One way to mitigate
this risk is to require that private keys be encoded on hardware
tokens, making possession of the token a critical requirement.
Another way to guard against fraud is to include other identifying
data in the transaction that links the key or PIN to the individual,
preferably something not readily available to others.
to the electronic data, after receipt, needs to be carefully
controlled yet available in a meaningful and timely fashion.
Security measures should be in place that ensure that no one
is able to alter a transaction, or substitute something in its
place, once it has been received by the agency. Thus, the receiving
agency needs to take prudent steps to control access to the
electronic transaction through such methods as limiting access
to the computer database containing the transaction, and performing
processing with the data using copies of the transaction rather
than the original. Moreover, the information may be needed for
audits, disputes, or court cases many years after the transaction
itself took place. Agencies should make plans for storing data,
and providing meaningful and timely access to it for as long
as such access will be necessary.
the "Chain of Custody." Electronic audit trails must
provide a chain of custody for the secure electronic transaction
that identifies sending location, sending entity, date and time
stamp of receipt, and other measures used to ensure the integrity
of the document. These trails must be sufficiently complete
and reliable to validate the integrity of the transaction and
to prove that, a) the connection between the submitter and the
receiving agency has not been tampered with, and b) how the
document was controlled upon receipt.
an acknowledgment of receipt. The agency's system for
receiving electronic transactions may be required by statute
to have a mechanism for acknowledging receipt of transactions
received, and acknowledging confirmation of transactions sent,
with specific indication of the party with whom the agency is
Obtain legal counsel during the design of the system.
Collection and use of electronic data may raise legal issues,
particularly if it is information that bears on the legality
of the process or that may eventually be needed for proof in
7. Summary of the Procedures and Checklist.
summarize the process which agencies should employ to evaluate authentication
mechanisms (electronic signatures) for electronic transactions and
documents, the following steps apply:
Examine the current business process that is being converted
to employ electronic documents or transactions, identifying
the existing risks associated with fraud, error or misuse, as
well as customer needs and demands.
Consider what risks may arise from the use of electronic transactions
or documents. This evaluation should take into account the relationships
of the parties, the value of the transactions or documents,
and the later need for the documents.
Identify the benefits that accrue from the use of electronic
transactions or documents.
Consult with counsel about any specific legal implications about
the use of electronic transactions or documents in the particular
Evaluate how each electronic signature alternative may minimize
risk compared to the costs incurred in adopting an alternative.
Determine whether any electronic signature alternative in conjunction
with appropriate process controls represents a practicable trade-off
between cost and risk on the one hand, and benefits on the other.
If so, determine, to the extent possible at the time, which
signature alternative is the best one. Document this determination
to allow later evaluation and audit.
Develop plans for retaining and disposing of information, ensuring
that it can be made continuously available to those who will
need it, for managerial control of sensitive data and accommodating
changes in staffing, and for ensuring adherence to these plans.
Determine if regulations or policies are adequate to support
electronic transactions and record keeping, or if "terms and
conditions" agreements are appropriate for the particular application.
Develop plans for seeking the continuing input of technology
experts for updates on the changing state of technology and
the continuing advice of legal counsel for updates on the changing
state of the law in these areas.
these plans into the agency's strategic IT planning and regular
reporting to OMB.
Perform periodic review and re-evaluation, as appropriate.