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FACILITY SECURITY CLEARANCES

Q: What is the National Industrial Security Program (NISP)?
A: The NISP prescribes the requirements, restrictions, and other safeguards to prevent unauthorized disclosure of classified information held by the U.S. Departments and Agencies contained under the Executive Branch of the federal government.

Q: What is the National Industrial Security Program Operating Manual (NISPOM)?
A: The NISPOM is a book of rules governing the authorized disclosure of classified information released to corporations who contract with the U.S. Government Executive Branch Departments and Agencies.

Q: Who is responsible for the policies outlined in the NISPOM?
A: The Secretary of Defense, in consultation with the Secretary of Energy, the Chairman of the Nuclear Regulatory Commission (NRC) and the Director of the Central Intelligence Agency (CIA). The Director of National Intelligence (DNI) is also responsible for the portions of the Manual that pertains to intelligence sources and methods.

Q: What are the major Executive Branch Departments that are subject to the NISPOM's regulations?
A: Department of Defense, Department of Energy, Department of Commerce, Department of State, Department of the Treasury, Department of Transportation, Department of the Interior, Department of Agriculture, Department of Education, Department of Health and Human Services, and Department of Homeland Security.

Q: What are the major Executive Branch Agencies that are subject to the NISPOM's regulations?
A: National Aeronautics and Space Administration, General Services Administration, Small Business Administration, National Science Foundation, Environmental Protection Agency, Federal Reserve System, Government Accountability Office, United States Trade Representative, United States International Trade Commission, United States Agency for International Development, NRC, and the Federal Communications Commission.

Q: Who is likely to find the NISPOM most useful?
A: Anyone who is bidding on or has been awarded a contract with one of the Executive Branch Departments or Agencies, especially when that contract calls for the contractor to deal with classified information.

Q: If a contractor is performing a contract outside of a federal government-owned facility, what extra obligations does that impose on the contractor?
A: The contractor must obtain a facility clearance (FCL) and must appoint a U.S. citizen employee to obtain a personnel security clearance and serve as the Facility Security Officer (FSO).

Q: What are the duties of the FSO?
A: The FSO must supervise and direct security measures necessary for implementing the requirements of the Manual and related federal requirements for classified information.

Q: Does a contractor with a contract involving classified information have to train its other employees in addition to the FSO?
A: Yes, the contractor is responsible for advising and training all employees who hold a personnel security clearance of their responsibility for safeguarding classified information.

Q: Once a contractor obtains a facility security clearance (FCL), is that clearance good forever?
A: No, federal officials will conduct periodic security reviews of all cleared contractor facilities to ensure that the safeguards the contractor employs are adequate to protect the classified information.

Q: How often does the U.S. government conduct the reviews?
A: Reviews are usually conducted no more than once a year, unless special circumstances require more frequent reviews.

Q: Can any company be processed for an FCL?
A: No, before being processed for an FCL, the company must:

Need access to the classified information in connection with a legitimate U.S. Government or foreign government requirement;
Be organized and existing under the laws of any of the United States, the District of Columbia, or Puerto Rico, and be located in the U.S. or its territorial areas;
Have a reputation for integrity and lawful conduct in its business dealings and not be barred from participating in U.S. Government contracts; and
Not be under Foreign Ownership, Control or Influence (FOCI) to such a degree that the granting of the FCL would be inconsistent with the national interest.

Q: What is Foreign Ownership, Control or Influence (FOCI)?
A: A U.S. company is considered under FOCI whenever a foreign interest has the power to direct or decide matters affecting the management or operations of that company in a manner which may result in unauthorized access to classified information or may adversely affect the performance of classified contracts.

Q: What criteria does the U.S. government examine to determine whether a company is under FOCI in determining its eligibility for a FCL?
A: The U.S. government looks at several factors including:

Record of economic and government espionage against U.S. targets
Record of enforcement and/or engagement in unauthorized technology transfer
The type and sensitivity of the information that will be accessed
The source, nature and extent of FOCI including whether foreign interests hold a majority or substantial minority position in the company, taking into consideration the immediate, intermediate and ultimate parent companies
Record of compliance with pertinent U.S. laws, regulations and contracts
The nature of any bilateral and multilateral security and information exchange agreements that may pertain
Ownership or control, in whole or in part, by a foreign government

Q: When is a minority position in a company considered "substantial"?
A: A minority position is deemed substantial if it consists of greater than 5 percent of the ownership interests or greater than 10 percent of the voting interest.

Q: Is a U.S. company under FOCI automatically disqualified from obtaining a FCL?
A: No, but the company will need to negotiate security measures to negate or mitigate that FOCI.

Q: If the U.S. government denies a contractor an FCL, what are the most common reasons for denial?
A: In most cases, when the U.S. government denies an application for an FCL it is either because the requisite employees of the contracting company could not obtain personnel security clearances, or the level of FOCI was unacceptable.

Q: Does the denied contractor have the right to appeal the denial?
A: No, but the contractor may attempt to fix the problems and then reapply for the FCL.

Q: If a U.S. company with a FCL later comes under FOCI, does that immediately eliminate that company's FCL?
A: No, not necessarily. The only situations in which the FCL would be immediately terminated are when:

The contractor is unwilling or unable to negotiate an acceptable mitigation/negation measure, or
There is an indication that classified information is at risk of compromise, or
The company does not have possession of classified material and does not have a current or impending requirement for access to classified information.

Otherwise, the current FCL will continue while the mitigation/negation measure is being negotiated.

Q: Are there any limitations on the types of security requirements the federal government can require a contractor to impose to mitigate or negate FOCI?
A: No. The federal government has the right to impose any security method, safeguard, or restriction it believes necessary to ensure that unauthorized access to classified information is precluded and that performance of classified contracts will not be adversely affected.

Q: What are Special Security Agreements (SSAs) and Security Control Agreements (SCAs)?
A: SSAs and SCAs are arrangements that impose various industrial security and export control measures within a set of company procedures based on an assessment of the FOCI factors.