What Defense Contractors Should Consider Before Appointing FSOs

Becoming a cleared defense contractor (CDC) demands more than just a defense contractor getting a security clearance and performing on classified contracts. It's more to do with, what to do once the clearance is awarded; specifically, protecting classified information. This protection involves physical, classified processing, and information security. It's more than just buying safes, installing access controls and getting employees security clearances. Primarily, the CDC must appoint a Facility Security Officer (FSO) responsible for implementing a program to protect classified information.

To better answer frequently asked questions, I've written several times on the topic of selecting the right Facility Security Officer (FSO) qualifications. According to the National Industrial Security Program Operating Manual (NISPOM), the FSO must be a US Citizen and be cleared to the level of the facility (security) clearance (FCL); period. This provides a lot of room for a cleared facility to figure out how to get the job done. However, in the book, How to Get U.S. Government Contracts and Classified Work, the author identifies what additional qualifications cleared contractors should recognize prior to appointing or hiring the FSO.

Primarily, the FSO should understand how to protect classified information as it relates to the cleared contract, organizational growth, enterprise goals, and NISPOM guidance. The FSO should be able to conduct a risk analysis, express the cost, benefits and impact of supporting a classified contract under the NISPOM requirements and incorporate an environment of cooperation and compliance within the enterprise. Finally, they should be able to influence and compel the senior leaders to make good decisions, support compliance and integrate security into the corporate culture. After all, security violations not only cause damage to national security, but could also impact the organization with loss of contracts. The FSO is pivotal to the successful execution of classified contracts.

In larger cleared contractor organizations the FSO is a full time job held by a department manager or higher. This FSO is supported by a staff of security specialists who may manage classified contract administration, safeguarding classified documents, process classified information on information systems, security clearances and other disciplines. The FSO oversees the entire security program as executed by the competent staff. In a best case scenario, they will report to the senior officer of the organization.

In small business the FSO may be the owner, chief officer, vice president or other senior leader picking up an additional responsibility. This is more of a situation of selecting the most knowledgeable, capable or competent and is usually the best choice. However, these people are already very busy trying to meet cost, scheduling and performance objectives. They may be able to implement and direct a security program to protect classified information, but not the day to day job functions that can pull them away from critical tasks. Jobs such as document control, visit authorization requests, security clearance requests and etc can be delegated to other competent, organized and less busy employees.

When competing for classified contracts, the winning company must be eligible to receive a security clearance. Prior to performing on the contract, they should have a facility security clearance in place and appoint an FSO. The FSO is responsible for the security program, but not necessarily solely responsible for executing the day to day activities. Just as FSOs in large organizations have a staff of employees, the FSO of small organizations should delegate day to day activities to competent cleared employees.

If you need assistance with FSO or security training please contact me. Additionally, we have NISPOM fundamentals training perfect for studying and applying to your CDC facility. https://bennettinstitute.com/course/nispomfundamentals/

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 Jeffrey W. Bennett, ISP is the owner of Red Bike Publishing Red Bike Publishing . He regularly consults, presents security training, and recommends export compliance and intellectual property protection countermeasures. He is an accomplished writer of non-fiction books, novels and periodicals. Jeff is an expert in security and has written many security books including: "Insider's Guide to Security Clearances" and "How to Get U.S. Government Contracts and Classified Work", "ISP(R) and ISOC Master Exam Prep", and NISPOM/FSO Training".

It's always the insider who steals the classified information.

A former engineer with Boeing Company has pleaded guilty to possessing classified information in an unauthorized location. Does anyone want to guess where? Yes, that’s right, his house. He thought he could take the information home with him and work on it there. You can read more about the information in the article Boeing Engineer is found guilty.

    While many security managers are focused on good training and may think that they have it all under control, don’t rest just yet. Chances are that the involved engineer is not the only one breaking the rules of safeguarding classified material. Those who work on classified contracts need to be reminded again and again how to do so while following the laws of our country.

    Let’s break this case down. Engineer has access to computer processing. He then downloads the information to a data stick and brings it home with him. Though he probably meant no harm, his actions created tons of it and he will be punished for it. This is an example of an insider threat with out malicious intent. Regardless of intent, his actions caused a lot of harm.

    Chances are, he had attended and understood all security awareness training events. His former employer probably had warning signs and controls in place to remind the engineer of the proper use of classified IT. The FSO probably followed NISPOM requirements to perform random checks, control classified processing, account for classified material and all actions necessary to prevent unauthorized disclosure. However, he still got through.       

    This serves to remind security professionals to be creative in their risk analysis. This involves thinking like those you support and answering questions like the following: How could an employee sneak or inadvertently remove classified material? Are there any ways to remove, copy, destroy or disclose information without leaving a trail? Can employees be duped into releasing classified, export controlled or proprietary information at a convention?

    Find the answers and address them as soon as possible. For example, our engineer downloaded classified information on a data stick. FSOs could return to policies of two person rules for all tasks requiring the use of classified material, or require each employee to verify verbally that they do not have cameras, data sticks, or recording devices before entering facilities.

    CDCs have the tough job of protecting classified material while under their control. While many may feel they are in the business alone, professionals create an environment including the whole company in the plan and activities of protecting our nation’s secrets.

    Update: More recently a former military officer and Pentagon employee has been sentenced for providing classified information to a Chinese national. Though this happened in a U.S. Government facility, lessons can apply to FSOs. For example, how do you control the movement of classified information? Establishing an Information Management System as required by NISPOM plays a big role. With an established IMS, the CDC can help control the duplication, removal, destruction and any status of classified information. An effective IMS coupled with limiting removable data recorders and providing random searches makes unauthorized use of classified information very difficult. 

Take time to train cleared employees, not only on how to perform specifically on the contract, but how to do so while protecting the classified information. A focus on the right type of performance training plus the insider threat, security awareness and derivative classifier training should provide the perfect package to help counter the insider threat to classified information.

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 Jeffrey W. Bennett, ISP is the owner of Red Bike Publishing Red Bike Publishing . He regularly consults, presents security training, and recommends export compliance and intellectual property protection countermeasures. He is an accomplished writer of non-fiction books, novels and periodicals. Jeff is an expert in security and has written many security books including: "Insider's Guide to Security Clearances" and "How to Get U.S. Government Contracts and Classified Work", "ISP(R) and ISOC Master Exam Prep", and NISPOM/FSO Training".

The fundamentals of protecting classified information and NISPOM

Cleared Defense Contractors use classified information during performance of contracts. The Department of Defense makes the rules and governs how the classified contractors protect classified material. The Federal Government has published a policy appropriately titled: The National Industrial Security Program Operating Manual (NISPOM). This page turner is sponsored by the Presidential Executive Order (E0)12829 for the protection of information classified under E.O. 12958, As Amended. Having poured over both publications and the updates, I can conf
idently assure you that they take this business very seriously.

    When specific work declares performance objectives on classified efforts, provisions of the applicable DD Form 254 and Security Classification Guide (SCG) shall govern. Both the DD 254 and SCG spell out what specific work a contractor can and cannot perform, what exactly is classified and how to protect it. Both of these documents not only should be available prior to execution but read and understood by all performing employees.

    Classified information is marked with CONFIDENTIAL, SECRET and TOP SECRET designations and must be afforded protection at the appropriate level. For example, unauthorized disclosure of CONFIDENTIAL information could reasonably be expected cause damage; SECRET could reasonably be expected to cause serious damage; and TOP SECRET could reasonably be expected to cause exceptionally grave damage to national security. Prior to discussing or providing classified data, cleared employees are required to ascertain the receiving party’s clearance level and need-to-know. 

   Facility security officers and industrial security professionals should develop measures to safeguard classified information at the highest level indicated. Employees should be trained to perform on these contracts based on NISPOM Guidance. This training includes:

Non Disclosure Agreement (SF 312)

Derivative Classifier

Security Awareness Initial and Annual Refresher

Insider Threat

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 Jeffrey W. Bennett, ISP is the owner of Red Bike Publishing Red Bike Publishing . He regularly consults, presents security training, and recommends export compliance and intellectual property protection countermeasures. He is an accomplished writer of non-fiction books, novels and periodicals. Jeff is an expert in security and has written many security books including: "Insider's Guide to Security Clearances" and "How to Get U.S. Government Contracts and Classified Work", "ISP(R) and ISOC Master Exam Prep", and NISPOM/FSO Training".

Another explanation of CUI

A buzz is sweeping the security community since the industry has been notified of the recent updates to DoD's CUI program based on the presidential memorandum with the subject, Designation and sharing of Controlled Unclassified Information (CUI). This memorandum implements a program designed to encourage the speedy sharing of information to those authorized and to better protect the information, privacy and legal rights of Americans. The CUI program is designed to promote proper safeguarding and dissemination of unclassified information.       Many readers may be familiar with the program CUI has replaced. Sensitive But Unclassified (SBU) information had enjoyed protection to a certain level but was not conducive to the necessary information sharing. Controlled Unclassified Information (CUI) directives provide procedures for a more appropriate Information Sharing Environment.     CUI is a designation of unclassified information that does not meet the requirements of Executive Order 12958, as amended (Classified National Security Information). However the protection is necessary for national security or the interests of entities outside the Federal Government. The unclassified information also falls under the law or policy advocating protection from unauthorized disclosure, proper safeguarding and limiting dissemination. Though not a classification, the controls in place may prove to require significant administrative action.     Designation of CUI can only be based on mission requirements, business prudence, legal privilege, protection of personal or commercial rights, safety or security. Finally, as with the classified information, sensitive information cannot be labeled CUI for the purposes of concealing violation of law, inefficiency, or administrative error. The designation cannot be used to prevent embarrassment to the Federal Government or an official, organization or agency, improperly or unlawfully interfere with competition in the private sector or prevent or delay the release of information that does not require such protection.     What does this mean for affected businesses and government agencies? Be prepared to implement the program to allow for proper storage and dissemination, and provide required CUI training. This requires the ability to properly mark the material or provide proper warning before discussing the information. Things to think about include: training employees, developing mail, fax, email and reception procedures, and ordering marking supplies. Also, keep information technology and other business units in the loop of communication. They will need to provide the right support at the right time.

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 Jeffrey W. Bennett, ISP is the owner of Red Bike Publishing Red Bike Publishing . He regularly consults, presents security training, and recommends export compliance and intellectual property protection countermeasures. He is an accomplished writer of non-fiction books, novels and periodicals. Jeff is an expert in security and has written many security books including: "Insider's Guide to Security Clearances" and "How to Get U.S. Government Contracts and Classified Work", "ISP(R) and ISOC Master Exam Prep", and NISPOM/FSO Training".

Training and Goals for Cleared Defense Contractor Employees

Putting first things first. That has been a motto for many after reading books such as Franklin Covey’s 7 Habits of Highly Effective People or Reverend Rick Warren’s The Purpose Driven Life. Those and several similar motivational publications stress that everyone has the same amount of time in a day. What we do during that time helps us either make or goals or fail before we even get started.

   As leaders, FSOs can help cleared defense contractor employees understand how to create incredible security programs. Focusing on training, interaction with other cleared employees, self-improvement and institutional education should be part of professional development. FSOs and managers who write evaluations for direct reports have an excellent opportunity to help them establish goals to become better at their jobs, more impactful in their careers and hopefully, groomed to become FSO’s themselves. Challenging employees and team members to achieve personal and professional goals breeds success.

Security certifications such as ISP Certification and ISOC certification are goals cleared employees could take as a goal as well as encourage employees to achieve. The employee gains from such education and a prestigious career milestone. The organization also benefits from what the security employee learns and applies on the job. When employees study for the ISP Certification, they learn: how to read and apply the NISPOM, the importance of forming professional relationships with cleared employees, how the cleared contractor and the DSS representatives interact, and much more.

   A leader also creates pride in the organization and employee by making them more competitive in their career and providing basis for professional pride. When employees are challenged with the goal, the manager can help by providing or allowing education as found on the DCSA, professional organization or vendor websites. Studies on NISPOM topics are available on the internet as well as on site. If your team is large enough, consider helping them start a study group.

   Here are 2 good training ideas:

1. If the cleared contractor facility has multiple security employees, provide an opportunity to cross train. Security employees who work personnel security issues could work with document control and etc. Also, consider allowing security employees from one discipline inspect anther security section during the annual self inspection.
2. Another idea is for the FSO to create an internal certification program. This helps integrate new employees into their jobs. A self-certification program would train an employee on performing individual tasks. The employee works under a mentor who verifies and documents the training. This training covers how the cleared contractor facility security employees practice document control, manage personnel security, provide classified contract support and etc. If such a program exists in your organization, consider using it for further cross training employees who concentrate only on one task. This will help them become more experienced and more prepared for the exam.

Employees may not feel comfortable asking for NISPOM Fundamentals Training, setting prestigious goals, or asking for funding for professional organizations or certifications. However, a supervisor who is aware of such opportunities can encourages the employee to become engaged.

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 Jeffrey W. Bennett, ISP is the owner of Red Bike Publishing Red Bike Publishing . He regularly consults, presents security training, and recommends export compliance and intellectual property protection countermeasures. He is an accomplished writer of non-fiction books, novels and periodicals. Jeff is an expert in security and has written many security books including: "Insider's Guide to Security Clearances" and "How to Get U.S. Government Contracts and Classified Work", "ISP(R) and ISOC Master Exam Prep", and NISPOM/FSO Training".