DC Security Clearance Consultants

Industrial Security

Private-sector firms/companies performing defense-related classified contractor work for the federal government and specialized DoD organizations/agencies make up what is known as the National Industrial Security Program or NISP. The Defense Security Service (DSS) of DoD is the government watch-dog of federal contractors in the NISP.

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Defense Security Service Headquarters, Quantico Virginia
Defense Security Service Headquarters, Quantico, VA


Federal contractors in the NISP need to be “cleared.” The firm/company must receive a Facility Security Clearance or an (FCL). Key Management Personnel or KMPs need Personnel Security Clearances (PCLs) before their firms/companies can be cleared. Facility Security Officers (FSOs) are responsible for much of this process. FSOs need to have their facility in order and in compliance with the NISPOM in addition to having all KMPs cleared or excluded from access to classified information. All firms/companies are subject to official government oversight from DSS on a regular and recurring basis.

DSS authorizes Industrial Security Representatives (IS Reps) to survey and inspect all federal contractors in the NISP. There are approximately 350 IS Reps spread thin throughout 4 geographic regions in the U.S. IS Reps are responsible for industrial security functions in the Western, Northern, Southern and Capital Regions. The Capital Region includes the geographic area where the “Beltway Bandits” are known to flourish; the suburbs of Northern Virginia, Maryland and Washington, DC.

Facility Clearance Process (FCL)

The 5 Elements of the Facility Clearance Process

  • Sponsorship: The very first step to clearing a company is for them to be sponsored for a facility clearance by either a government contracting activity (GCA) or another cleared company.
  • Prepare Organizational Documentation/Information: Obtain and have available the following documents/information for your first visit from your Industrial Security Representative from DSS.
    • Articles of Incorporation, Stock Records, Minutes of Board Meetings, and Corporate by-laws.
    • Federal Tax ID Number.
    • Any 10K Reports filed with the Securities Exchange Commission.
    • Key Management Personnel List. The senior management official, the prospective Facility Security Officer (FSO), all executive committee members, and all board members including the Chairman should be listed. NISPOM paragraph 2-104 provides some guidance, and additional guidance will be provided by your Industrial Security Representative during the first visit.
    • Brief summary of your company's primary business or services provided.
    • email, Fax, and complete address information for the last ten years — include the last four number extension on your zip code.
    • Proof of US Citizenship for prospective Facility Security Officer (FSO) (see NISPOM para 2-207).
  • DD Form 441: This is the Department of Defense Security Agreement. It is an agreement between your organization and the United States Government that details the security responsibilities of both the cleared organization and the United States Government.
  • DF Form 328: The Certificate Pertaining to Foreign Interest is used to report your organization's foreign involvement.
  • Personnel Security Clearance: In order for your company to be cleared, specified Key Management Personnel (KMP) must be cleared. Other KMP may be excluded, unless they will require access to classified information. Your Defense Security Service Industrial Security Representative will help you identify those that must be cleared and those that may be excluded.

There are close to 13,300 cleared federal contractors in the NISP. IS Reps are assigned a caseload of between 70 and 90 contractors each. IS Reps only survey & inspect 4 to 5 firms/companies per month. You do the math. Normally, depending on the size and complexity of the facility, DSS inspects facilities at either 12 or 18 month intervals. Because of the disproportionate ratio of cleared facilities to IS Reps, many cleared contractor facilities are not inspected as often as they should be by DSS.

Many contractor facilities should be administratively terminated from the NISP. In theory, if your facility has not worked on a classified contract in the last 12 months, your facility’s FCL is supposed to be terminated by DSS. In reality, this rarely occurs. What usually does occur is this: IS Rep conducts inspection of the facility. Rep ascertains that facility is not currently working on classified contracts. Facility tells IS Rep that a classified contract is “forthcoming.” IS Rep usually says “O.K.” and does not initiate FCL termination process. If IS Rep does try to initiate FCL termination process, he/she is usually “shot down” or overruled by their immediate supervisor or field office chief. More often than not, the contractor mounts an aggressive written & telephonic campaign to the local DSS field office to lodge a protest. Upper level management officials don’t want to be bothered with such trivial matters. Nobody wants to jeopardize their career or have something negative happening on their watch. It’s just a whole lot easier to allow the facility to remain in the NISP.

Allowing such facilities to remain in the NISP leads to increased costs to the government. Industrial Security Facilities Database (ISFD) computer information will have to be unnecessarily maintained. IS Reps will waste time & resources on companies that are not in possession of any classified contracts. Hundreds of thousands of dollars will be wasted on KMP PCL investigations requested from OPM. A “purging” of NISP members would greatly enhance the oversight capabilities of a DSS industrial security workforce already overwhelmed by the sheer numbers and magnitude of what constitutes the National Industrial Security Program.

Historically, there has always been a higher-than-normal attrition rate of IS Reps from DSS. What happens is this: IS Reps undergo at least 1 full year’s worth of top-notch training in all things industrial security; it really takes about 2 full years for an IS Rep to become completely thorough and competent. After 1 or 2 years on the job as an IS Rep, many bolt for the private sector. With the incredible training in industrial security received from DSS, insider contacts and a good understanding of the NISP, many IS Reps can double or even triple their government salary in the private sector. Many assume FSO positions. It doesn’t help matters much when an IS Rep, in reality, has no independent authority over a cleared government contractor to make recommendations or more importantly, enforce adverse actions against a contractor without first having to run it past several layers of upper level management.

As a cleared contractor, you have most of the power in the relationship. All you have to do is “make noise” through phone calls and legal means to the upper levels of DSS management to oppose certain adverse actions. The government has limited time and resources. Most of the time, the contractor will prevail and the IS Rep will have been reduced to a mere bystander in the process.

Overall, as a prospective cleared government contractor in the NISP, OPM will conduct the requisite security clearance background investigations of the FSO and all the KMPs. Once OPM’s work is finished, DISCO of DSS will adjudicate the FCL and PCLs pertaining to your facility. You will henceforth be dealing with DSS through the IS Rep that was assigned to your facility. Your facility will also be interacting and dealing with DISCO through JPAS functions in the administration and maintenance of your facility’s FCL and PCL activities.