Thursday, February 4, 2010

How Contractors Get Facility Security Clearances

Having a Facility Clearance (FCL) makes a business attractive, but that desire does not provide the needed justification for obtaining a security clearance. The FCL is strictly contract based and demonstrates an enterprise’s trustworthiness. A company is eligible for a facility security clearance after the award of a classified contract. The FCL is a result of a lengthy investigation and the subsequent government’s determination that a company is eligible to have access to classified information.
A company can bid on a classified contract without possessing a facility clearance, but is sponsored for a clearance after the contract is awarded. The interested company cannot simply request its own FCL, but must be sponsored by the Government Contracting Activity (GCA) or a prime contractor. Once the need to conduct classified work is determined, the next requirements are administrative. The company has to submit proof that they are structured and a legal entity under the laws of the United States, the District of Columbia or Puerto Rico and have a physical location in the United States or her territories. The enterprise has to be in good business standing and neither the company nor key managers can be barred from participating in U.S. Government contracts.
The company being sponsored for a clearance should immediately obtain the federal regulations necessary to determine the government’s guidance for working with classified material. For Department of Defense contractors, the National Industrial Security Program Operating Manual (NISPOM) is the most frequently used. The sooner the contractor obtains their copy of the regulations, the quicker they will begin to understand their expected role in protecting the nation’s secrets.
A critical piece of the sponsorship program revolves around the Cognizant Security Agency (CSA) having a good understanding of the subject company and their mission. To do this, the CSA will need to review organizational structure and governance documentation to determine who can commit the company and make decisions. This information includes: articles of incorporation, stock records, corporate by-laws and minutes.
The senior company officer, FSO and other key management employees will be processed for a security clearance. The CSA may also want to see proof of citizenship and other information to determine eligibility for a clearance. The other officers and board members may be excluded from the security clearance process if they will not have influence over cleared contractor decisions.
Aside from corporate entity documentation, the CSA will collect and complete additional forms sometime during the FCL process. These forms include, but are not limited to the Department of Defense Security Agreement (DD Form 441), and the Certificate Pertaining to Foreign Interests (SF328). The CSA will advise the contractor on how to fill out the forms and answer any questions the contractor may have.
The DD Form 441 lists the responsibilities of both the cleared contractor and the government. The contractor agrees to implement and enforce the security controls necessary to prevent unauthorized disclosure of classified material in accordance with the NISPOM. The contractor also agrees to verify that the subcontractor, customer, individual and any other person has the proper need to know and possesses the security clearance necessary to access classified information. The Government will also instruct the contractor on the proper handling, storage and disposition of classified material usually in the form of the DD Form 254 (Figure 2-3). The Government also agrees to provide security clearances to eligible contractor employees.
The SF 328 is used by the contractor and the CSA to determine whether or not and to what extent the cleared contractor falls under Foreign Ownership Control and Influence (FOCI). The primary concern is always protecting classified information from unauthorized disclosure. In today’s changing world it is not unusual for a cleared company to be involved with international business. If classified contracts are under the control of a foreign entity, the classified information could be in jeopardy of unauthorized disclosure. Additionally, items that fall under the International Traffic and Arms Regulation (ITAR) could be in jeopardy of unauthorized export. If a contractor falls under FOCI, the CSA will evaluate their ability to mitigate the extent of foreign influence concerning classified information and approve, deny or revoke the FCL. Companies that are determined to fall under FOCI can still compete for classified work; however, there are measures to be taken to ensure that only U.S. persons control the scope of classified work.
The FCL is a determination that a legal entity is trustworthy and able to safeguard classified information. This FCL relates to an organization and not a physical location or building. For example, a cleared contractor organization can move locations and keep the FCL. The FCL remains in place until either party terminates it. If for some reason the contractor no longer needs access or is no longer eligible for access to classified material or either party terminates the FCL, the contractor must return or destroy any classified material to the GCA.

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