1. Security 101 Joint Ventures, FCl’s, Policy Updates and Timelines
2018 National HUBZone Conference
Chantilly, Virginia
October 11, 2018

2. Table of Contents Terminology Joint Ventures Facility Security Officer
JPAS & DISS
Clearances & Eligibilities
Security Clearance Processing

3. Security Terminology FCL – Facility Clearance Level
PCL – Personnel Security Level
FSO – Facility Security Officer
ITPSO – Insider threat Program Security Officer
KMP – Key Management Personnel
JPAS – Joint Personnel Adjudication System
DISS – Defense information system for security
GCA – Government Cognizant Agency

4. Joint Venture
A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it. However, the venture is its own entity, separate from the participants' other business interests.

5. Types of Joint Ventures
a joint venture can be either populated or unpopulated.  
populated joint venture acts like an actual operating company: it brings employees onto its payroll, and performs contract using its own employees.  
An unpopulated joint venture, on the other hand, does not use its own employees to perform contracts.  
unpopulated joint venture serves as a vehicle by which the joint venture’s members can collectively serve as the prime contractor, with each joint venture member performing work with its own employees.

6. Joint Ventures in regards to Security
Populated -- Has cleared employees including the KMP
Unpopulated – No cleared Employees
There are no issues if both companies that are in the JV are Both have an FCL and are cleared at the same level.
If both companies have an FCL then a New FCL will be issued based on the level of the DD-254 .
the JV would need to have at least one administrative employee who couldn’t do any billable work but would need to be there to support the JV’s facility clearance.
If one of the companies in the JV is not cleared the other cleared company with the FCL has to potentially sponsor the other one with permission and justification from the government customer.

7. Unpopulated Joint Venture
The administrative personnel employed by an unpopulated joint venture can be the individuals upon whom the joint venture’s FCL is based. For instance, the joint venture could employ a single management position, the FSO, and the joint venture’s FCL would be contingent on the FSO’s PCL. Although the NISPOM requires the FSO to be an employee of the cleared entity, there is no requirement for the FSO to be a full- time employee, so the FSO could split his time as the FSO of the joint venture and as the FSO of one of the venturers. The FSO could not perform direct labor on the joint venture’s contracts, but could (and should) be performing administrative functions, like supervising the joint venture’s compliance with the NISPOM and maintaining the joint venture’s records in the Joint Personnel Adjudication System. 

8. The hazards of bidding as a joint venture
Are two (or three, or four) companies better than one? Not necessarily. While joint ventures between multiple companies are becoming more popular, providing participants with the opportunity to leverage each others capabilities and certifications, there are also difficulties associated with a JV structure that can stop a contract award in its tracks.
Protesting contractor: Torres International, LLC (TI JV), Arlington
Contracting agency: State Department
Protest issue: Whether State was reasonable in determining that TI JV did not qualify to bid for task orders under its awarded indefinite delivery/indefinite quantity contract, because it failed to obtain a facility security clearance for the JV within the time required.
GAO decision, May 31, 2011: Denied.
Post-mortem: In this case, the contract required that the JV receive a facility clearance within 120 days following award of the ID/IQ contract or it would not be allowed to bid on any task orders. Torres AES was the majority owner of the JV and did have a valid facility clearance, but the two other members did not — and could not obtain them by the deadline.
In an attempt to meet the requirements, Torres removed the other members of the JV so that the Defense Security Service could then award a facility clearance to the then one-member joint venture, but State refused to accept that — arguing that the JV as originally structured did not possess the required facility clearance.
A joint venture, which in this case was a separate LLC composed of three members, is its own legal entity that’s assessed completely apart from its individual members. While some agencies will allow a joint venture to rely on the clearances, past performance, or technical expertise of its members, they don’t always – as this case demonstrates. Contractors who rush into a JV without thinking through the issues and requirements or without getting the proper legal advice about the structure can run into serious problems when it comes time for award and performance of a contract.

9. Joint Venture – FCL Requirements
A joint venture without any personnel of its own cannot obtain a facility clearance (“FCL”) because an FCL always depends on the personnel security clearance (“PCL”) of the company’s key management personnel, including the facility security officer (“FSO”). In other words, the only way a contractor receives an FCL is if it has cleared employees.
 Business License
 Fictitious Name Certificate
 JV Agreement
 Legal Organization Chart
 Board/Company Meeting Meetings*
 Recent changes to company structure
 SMO
 FSO
 JV Partners must be excluded or cleared if their duties require access to classified information
 Officials working on JV are cleared if their duties require access to classified information

10. Facility Clearance Process FAQ
What is a facility? The term facility is used within the NISP as a common designation for an operating entity consisting of a plant, laboratory, office, college, university, or commercial structure with associated warehouse, storage areas, utilities and components, which are related by function or location.
What is a facility clearance? A facility clearance (FCL) is an administrative determination that, from a national security standpoint, a facility is eligible for access to classified information at the same or lower classification category as the clearance being granted. The FCL may be granted at the Confidential, Secret, or Top Secret level.
Can a facility apply for its own facility clearance? NO A procuring activity of the Government, or cleared contractor in the case of subcontracting, may request the clearance when a definite, classified procurement need has been established.
What does the facility clearance cost the contractor? There is no direct charge to the contractor for processing a facility clearance
How long does the facility clearance remain in effect? remain in effect as long as there is a need for the contractor to have access to classified information.

11. 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 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.
, 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.

12. Types of FCL’s
Possessing Facility – This is a company that is authorized through the issued DD- 254 by the Government Cognizant Agency to maintain and Possess Classified information at their Facility.
Non-Possessing Facility – No Authorization to Maintain or Possess Classified Material.

13. Facility Security Officer
The Facility Security Officer handles all the security related tasks for a company including establishing the FCL
In most small companies the FSO can wear multiple hats or have other job responsibilities.
An FSO can be a FULL TIME OR A PART-TIME EMPLOYEE OF THE COMPANY.
An FSO does not have to be physically located at the Facility especially if it is non-Possessing Facility.

14. Part-time FSO 1099 consultant W-2 Cannot be the FSO in Title,
Cannot be Key Management Personnel (KMP)
Cannot be an account Manager in JPAS
W-2
Can be the FSO in Title
Can be Key Management Personnel (KMP)
Can Be an Account Manager in JPAS

15. JPAS & DISS
JPAS is currently the system of record but is going to be replaced with DISS.
JPAS and DISS is are up and running concurrently however JPAS is still the system of record and DISS is primarily view only (minor Functionality).
By end of 2019, Diss will be fully functional and jpas will have gone away.
If you or your FSO have not been given access to DISS, make sure that happens as soon as possible.

16. Clearances & Eligibilities
Confidential – Periodic Reinvestigation every 15 years
Secret or T3 – Periodic Reinvestigation every 10 years.
Top Secret or T5 – Periodic Reinvestigation every 5 years * (6)
Polygraphs
Counterintelligence Scope (CI, CI Poly)
Full Scope / Lifestyle (FSP, FS, LS, Lifestyle Poly)
SCI ACCESS
Sensitive compartmented information (SCI) is a type of classified information controlled through formal systems established by the Director of National Intelligence. To access SCI, one must first have a favorable Tier 5 and be granted SCI eligibility.

17. 10 3 DoD Industry Metrics* 8,113 investigations.1 53. 3 18,275 14,882
At the start of July 2018, NBIB had 125,460 pending investigations for Industry customers.
Between July 1-31, NBIB closed 24,956 investigations. 
NBIB scheduled 18,182 new Industry investigations between
July 1-31.
Between July 1-31, 1,339 other investigations were either discontinued or canceled…
Data is net as of the 1st of the month
DoD Industry Metrics*
As of August 1, 2018
NBIB is launching a video teleconferencing (VTC) Hub with Northrop Grumman from August 6 to October 1, where the team plans to conduct more than 100 VTC interviews at two separate end-point locations.
…ending the period through July 31 with a total of 117,347 pending investigations yielding a net decrease of
8,113 investigations.1
Distribution of Industry Items (CONUS Only)1
Top Industry Locations
Pending Items1
WASHINGTON/ ARLINGTON/MCLEAN
79,868
EL SEGUNDO/ LA COUNTY
16,099
SAN DIEGO
15,746
LEXINGTON/ CAMBRIDGE
11,906
IRVING/ FORT WORTH
11,713
NEWPORT NEWS/ NORFOLK
8,254
HUNTSVILLE
7,908
COLORADO SPRINGS
6,655
ORLANDO
6,582
DENVER
6,445
NBIB is continuing to partner with Lockheed Martin to expedite background investigations both in-person and using VTC equipment. 10
mission-critical cases prioritized between October 1 and July 30.2 3
prioritized cases closed in an average of
53. 3
days
since prioritized.2
Aging of Current Investigations1
Decreased number
of pending cases by 1.1% between October 1 – July 31
Total Cases Aged Days
Total Cases Aged Days
Total Cases Aged >120 Days
18,275
14,882
8,664
75,992
Total Cases Aged 0-60 Days
Industry Workload Management1,3
Data is net as of the 31st of the month
Closed 204,516 cases
between October 1 – July 311 T1 T3
T3R T5 1
48,423
34,429
16,319
T5R
12,797
T2S
Other4
92,547 T4
T4R
T2RS 4
Inventory Distribution by Case Type1
Other4 T1
T2S
T2RS T3
T3R T4
T4R T5
T5R
1,761
34,634
22,051
24,576
34,791
Oct. ‘17
Nov. ‘17
Dec. ‘17
Jan. ‘18
Feb. ‘18
Mar. ‘18
Apr. ’18
May ‘18
Jun. ‘18
Jul. ‘18
Pending Investigations
(Beg. of Month)
118,644
115,710
116,369
119,858
119,958
121,678
122,224
119,328
127,154
125,460
New Investigations Scheduled
18,952
19,867
20,511
19,404
22,286
22,701
20,786
30,715
21,560
18,182
Closed Investigations
20,541
17,997
16,161
18,302
19,593
21,071
22,110
22,102
22,120
24,956
Discontinued/Canceled
1,497
1,092
1,034
1,036
1,087
868
1,289
1,082
1,551
1,339
End of Month Total
115,558
116,488
119,685
119,924
121,564
122,440
119,611
126,859
125,043
117,347
Difference (Increase/Decrease)
-3,086
+778
+3,316
+66
+1,606
+762
-2,613
+7,531
-2,111
-8,113
Monthly Metrics1
1 Data extracted on August 1, 2018 and is as of August 1, 2018
2 Data is as of July 30, 2018
3 Pending cases as of beginning of each month
4 Other Case Types: NAC, RSI, SAC
*Placemat information is based on DSS provided information only.
Note: Workload fluctuates daily and data in this depiction is an accurate snapshot as of designated date(s)

18. Distribution of Industry Cases
Top Industry Locations
Pending Items1
WASHINGTON/ ARLINGTON/MCLEAN
79,868
EL SEGUNDO/LA COUNTY
16,099
SAN DIEGO
15,746
LEXINGTON/ CAMBRIDGE
11,906
IRVING/ FORT WORTH
11,713
NEWPORT NEWS/ NORFOLK
8,254
HUNTSVILLE
7,908
COLORADO SPRINGS
6,655
ORLANDO
6,582
DENVER
6,445

19. The Backlog: Deconstructed As of June 2018
Defense Office of Hearings and Appeals
HEARING/APPEAL
UN-FAVORABLE
DOD Central Adjudication Facility
ADJUDICATE
OPM
(NBIB Division)
INVESTIGATE
Defense Security Service
(PSMO-I Division)
REVIEW
Industry
SUBMIT $
688
Cases
17,138 Cases
721,000
Cases
15,680
Cases
INDUSTRY
INDOCTRINATE
FAVORABLE

20. Initial Secret & Confidential: 92 days to 259 days
Goal

21. Secret PRs: 68 days to 188 days
Goal
GOOOALL!

22. Top Secret PRs: 272 days to 696 days
Goal

23. NBIB Addressing the Backlog
Current State as of July 2018:
701,000 cases in queue
PSMO continuing to meter and up to 21,214 investigations waiting to go to NBIB
8,538 Investigators – 46% increase since inception of NBIB
Receive ~50,000 cases a week and close ~53,000 cases a week = 4.13 years to work the backlog at this rate
NBIB Coordinating with Industry on ideas to lessen the backlog
Industry to host “hubs”
ITIP (Industry Trusted Information Provider) Pilot
Industry is asking NBIB for clarification regarding the need to freeze/unfreeze credit reports.

24. Air Force Gets Involved
Air Force has over 90,000 backlogged investigations.
Creating NBIB Hubs at Air Force installations to schedule and interview personnel.

25. Clearances Don’t Expire!
OUSD(I) Memo signed 12/7/2016: Personnel Security Clearances in Industry
“Personnel security clearances do not expire…An individual with current eligibility in JPAS should not be denied access based on an out-of-scope investigation, unless DOD is aware of relevant derogatory information related to an individual’s continued eligibility for access. However, when the system of record flags an individual as having current adverse information, and eligibility is still valid, access may continue.”

26. The Move from Five to Six
OUSD(I) Memo signed 1/17/2017: Extension of Periodic Reinvestigation Timelines to Address the Background Investigation Backlog
Tier 3 PRs (SECRET) will continue to be initiated 10 years after the date of the previous investigation.
Tier 5 PRs (TOP SECRET) will temporarily be initiated six years after the date of the previous investigation rather than five years.
December 22: 2017: The temporary change in periodicity from five to six years for T5Rs will remain in effect until notified otherwise. Facility Security Officers should continue to submit T5Rs at the six year periodicity mark. Previously established exceptions will remain in effect. This will result in T5Rs continuing to be within the seven year reciprocity guidelines.

27. DSS System Updates: CURRENT STATE
E-FCL
SWFT
JPAS
NCAISS
OBMS
ISFD
STEPP
eQIP
DMDC System
DSS System
OPM System
E-FCL Electronic Facility Clearance
eQIP Electronic Questionnaire for Investigation Processing
SWFT Secure Web Fingerprint Transmission
JPAS Joint Personnel Adjudication System
NCAISS NISP Central Access Information Security System
ISFD Industrial Security Facilities Database
OBMS ODAA Business Management System
STEPP Security, Training, Education and Professionalization Portal

28. DSS System Updates: FUTURE STATE
10/5/2017: Soft Launch
Full Deployment TBD
NISS
(replacing eFCL, ISFD)
USA Learning
DISS
(replacing JPAS)
eMASS
(replacing OBMS)
NCCS
12/2016: Components
Q2 2018: Industry Phase 1
10/1/2018
NBIS?
DMDC System
DSS System
OPM System
eAPP
(replacing eQIP)
1/2019: Industry
eAPP e-Application
eMASS Enterprise Mission Assurance Support Service
NISS National Industrial Security System
NCCS National Contract Classification System
OBMS ODAA Business Management System
DISS Defense Information System for Security
JVS Joint Verification System
STEPP Security, Training, Education and Professionalization Portal
12/2016: Fully operational
4/2018: 40 agencies online

29. Questions?

30. Contact Information
David P. Essex
Facility Security Officer & Insider Threat Security Specialist
(301) 980 – 6543