Before a defense contractor can perform on a classified contact, it must be approved for a security clearance. You might familiar with security clearances for people, but defense contractor facilities must also be approved for security clearances called a facility clearance (FCL). Having an FCL doesn’t mean that a particular building is approved for a clearance, but rather the determination is based on the entity. For example, a defense contractor facility may be a sole proprietorship, a limited liability company, corporation, university or other recognized establishment. It is the organization itself and not the building that gets the clearance.
A company cannot process itself for a clearance. The clearance is based on a legitimate classified contract from either a government entity or other prime contractor. A company can bid on a classified contract even if it does not possess an FCL. However, it must receive the FCL prior to beginning to work on the classified contract.
When a defense contractor has a legitimate need for a clearance, it is sponsored by the awarding government agency or prime contractor. This sponsorship begins the process of the clearance request. The sponsoring organization notifies Defense Security Services (DSS) who works with the defense contractor to complete the requirements for an FCL. To be eligible for a clearance, the defense contractor facility must first have a good reputation for doing business and be in good standing. DSS will research and evaluate the company. Meanwhile, the candidate company works with DSS to provide four remaining requirements.
A security agreement (DD Form 441) must be signed. This agreement describes the responsibilities that both the contractor and government have to protect classified information. For example, in the security agreement the government agrees to provide security clearances and the contractor agrees to follow the National Industrial Security Program Operating Manual (NISPOM).
CERTIFICATE PERTAINING TO FOREIGN INTERESTS
Additionally, the defense contractor has to complete the certificate pertaining to foreign interests. Once the contractor completes the certificate, DSS will have a good indication of whether or not and how much a foreign entity might influence classified contracts. If the contractor falls under foreign ownership control or influence, the amount of influence will have to mitigated.
The defense contractor will also turn in documentation indicating how they are organized (corporation, sole proprietorship, LLC or other formation). DSS will use this information to determine how the contractor is managed and how decisions are made. DSS needs to know this information to determine how decisions concerning classified information are made.
KEY MANAGEMENT PERSONNEL
Finally, an FCL is not granted until the required key personnel are granted a security clearance. According to NISPOM, the senior ranking officer in the company and the FSO must be granted security clearances. Other cleared personnel are granted clearances based on the minimum necessary to efficiently meet the needs of the classified contract.
In summary, defense contractors come in all shapes and sizes. The NISPOM provides the minimum requirements a defense contractor must meet to be able to be granted an FCL. Whether the contractor is organized as a single owner/employee, university or large corporation, they must meet all five criteria:
Have a contractual need and be in good standing
Sign a Security agreement
Provide a certificate pertaining to foreign interests
Be a real company organization in the US or territories
Key management personnel are granted clearances
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