Firms pursuing defense and intelligence work often discover that some opportunities in their pipeline require access to classified information. That requires a facility clearance for the company, in addition to personnel clearances for the people who will do the work. Because the process takes time and cannot be started on your own initiative, it is worth understanding well before fourth-quarter awards that may depend on it.
What is a facility clearance?
A facility clearance is an administrative determination that a company is eligible, from a national security standpoint, for access to classified information at a specified level. It is granted under the National Industrial Security Program, whose operating requirements for contractors appear in federal regulation. For most agencies, the Defense Counterintelligence and Security Agency administers the program for industry. A facility clearance does not by itself give anyone access to classified material; employees still need their own personnel clearances and a need to know.
Can my company apply on its own?
No. A company must be sponsored for a facility clearance by a government contracting activity or by a cleared contractor, typically because the company is being considered for, or has received, a classified contract or subcontract. The sponsor confirms a legitimate need. This is why many small firms first obtain a facility clearance as a subcontractor to a cleared prime that sponsors them for a specific effort. The security requirements of a classified contract are described in a contract security classification specification, commonly known by its form number, DD Form 254.
What does the process involve?
After sponsorship, the company works through the security agency’s processes and systems, providing information about its organization, ownership and leadership. Key steps generally include:
- Identifying key management personnel, such as senior officers and the facility security officer, many of whom must obtain personnel clearances in connection with the facility clearance
- Completing forms that describe the business structure and any foreign interests
- Appointing a facility security officer who will run the security program
- Executing a security agreement with the government
- Establishing required security procedures, training and reporting
Why does foreign ownership matter?
Companies are reviewed for foreign ownership, control or influence, often shortened to FOCI. Foreign investment does not automatically disqualify a company, but significant foreign ownership or influence may require mitigation measures before a clearance can be granted. If your firm has foreign investors, board members, debt or contracts, discuss them candidly early in the process, ideally with an attorney experienced in this area.
How long does it take, and what comes after?
Timelines vary with the company’s complexity, the investigations needed for key personnel and the agency’s workload, and they can stretch over many months. Start as soon as a sponsor is willing, and avoid promising a customer that a clearance will be in place by a particular date.
Once granted, a facility clearance carries ongoing obligations: maintaining a security program, reporting certain changes such as new ownership or key personnel, training employees, supporting periodic reviews and protecting classified information as required. The clearance is tied to a continuing need, and without classified work to support it, it may be terminated. The responsible security agency publishes current requirements, and solicitations on sam.gov identify when a clearance is required.