January 24, 2018

Government contractors often require access to classified information to perform their job. Therefore, they must seek security clearances for their company and their employees. Applying for a clearance may appear daunting, but the process is not as difficult as it seems. This article briefly addresses the security clearance process for companies and individuals, provides recent updates on the procedures, and discusses new case law in the security clearance process.

Levels of Clearance 

The Department of Defense (DoD) issues over 80% of national security clearances and recognizes three levels: “Confidential” is information that could cause damage to the national security; “Secret” is information that could cause serious damage to the national security; and, “Top Secret” is information that could cause exceptionally grave damage to national security. Individuals and companies may be issued clearances at each of these levels depending on their work requirements.

Facility v. Personnel Clearances

A difference exists between a clearance for a company and a clearance for specific individuals. A company may obtain a security clearance by being sponsored by a federal agency or another cleared contractor. For example, a company working with DoD or a prime contractor may require a clearance for their work. A company’s clearance is a “Facility Security Clearance” or FCL. A facility clearance is an administrative determination that a facility is eligible for access to classified information at a certain classification level. A “facility” is defined as a plant, laboratory, office, college, university, or commercial structure with associated warehouses, storage areas, utilities, and components, that, when related by function and location, form an operating entity. Companies requesting a FCL submit their applications electronically in the e-FCL program managed by the Defense Security Service (DSS).

DSS is implementing a new program, the National Industrial Security System (NISS), to replace e-FCL. DSS planned to fully implement NISS in 2017; however, delays have caused e-FCL to remain the system of record for FCL applications.

Process for Facility Clearance

Obtaining a FCL begins with a request from an agency or cleared contractor and is managed by DSS, which will visit to review your business’s organizational documents. The company must identify a Facility Security Officer responsible for managing the company’s clearance. Key Management Personnel (KMP) of the business must also obtain Personnel Security Clearances (PCL). KMP often include company executives who will work on the project, and some personnel may be excluded from KMP. The final step in the process is the execution of several documents, including a DoD Security Agreement (DD Form 441), in which a company agrees to abide by all security laws and regulations.

Process For Personnel Clearances For Government Contractor Employees

The application process for an individual security clearance begins with a SF86 Security Clearance Questionnaire or an Electronic Questionnaire for Investigations Processing (EQIP), which requests extensive personal history including education, places of residence, employment history, criminal record, drug use, etc. The agency then requests a personal background investigation, which may include interviews with your co-workers, neighbors and references.  Finally, you may be interviewed by a federal investigator.

If no negative information is found, the applicant is often given an interim clearance. Adjudicators at the DoD Central Adjudication Facility (DoD CAF), along with the requesting agency, will determine eligibility. If a clearance is granted, an electronic entry is made in the Joint Personnel Adjudication System (JPAS). If DoD CAF determines that issuing a clearance is not in the interest of national security, they will refer the clearance request to the Defense Office of Hearing and Appeals (DOHA).

Revised Adjudication Standards

 Security Executive Agent Directive 4 (SEAD 4), effective June 8, 2017, revised the adjudication guidelines used to make security clearance eligibility determinations. These revised standards include: A: Allegiance to the United States; B: Foreign Influence; C: Foreign Preference; D: Sexual Behavior; E: Personal Conduct; F: Financial Considerations; G: Alcohol Consumption; H: Drug Involvement and Substance Misuse; I: Psychological Conditions; J: Criminal Conduct; K: Handling Protected Information; L: Outside Activities; and M: Use of Information Technology. These guidelines are used across the federal Government to evaluate all security clearance applicants.

The Appeal Process

If a clearance is denied, the individual receives a “Statement of Reasons” (SOR) explaining why it is not in the national security interest to grant the clearance. An applicant has 20 days to respond to the SOR and to request a hearing before an Administrative Judge (AJ). An applicant should always request a hearing – cases decided without hearings are significantly more likely to be denied. After the hearing, the AJ issues a final decision, which may be appealed to the DOHA Appeal Board. The denial of a security clearance is an administrative matter and generally cannot be appealed to a federal court absent proof that the decision was arbitrary, capricious, an abuse of discretion or otherwise contrary to the law.

Recent DOHA decisions shed light on DOHA’s approach to evaluating clearances. DOHA evaluates an applicant’s eligibility for a security clearance using the “whole-person” concept by considering the totality of an applicant’s conduct and all relevant circumstances. Accordingly, an individual will not automatically be denied a clearance if the initial reason for the denial has mitigating factors.  In the past few months, DOHA has granted security clearances to three individuals who: (1) incurred delinquent medical debts and defaulted on a home equity loan (ISCR Case: 16-00539, Oct. 13, 2017); (2) improperly entered work hours and used marijuana (ISCR Case: 16-02352, Oct. 19, 2017); and, (3) had three delinquent student-loan accounts and two medical collections, and one delinquent consumer debt (ISCR Case: 15-08837, Oct. 20, 2017). In each case, the individual proved mitigating factors which allowed a clearance to be granted.

After Receiving A Clearance

After an applicant obtains a security clearance, she will be monitored for compliance. Re-investigations are required every five years for top secret clearances, every ten years for secret clearances, and every fifteen years for confidential clearances. Persons holding clearances, however, may be randomly investigated at any time. Additionally, all persons with security clearances have a duty to inform their FSO whenever adverse information affecting their clearance arises.


This article provides only a brief description of the security clearance procedures. However, armed with an understanding of the process, government contractors can successfully obtain personnel and facility clearances. Throughout the application process, remember the goal of security clearances: to ensure that applicants are able and willing to safeguard classified national security information. With that goal in mind, applicants should be honest, up-front about adverse information, eager to prove their loyalty, character, trustworthiness, and reliability, and ready to cooperate with the Government at every step. To learn more about these processes, please contact Scott P. Fitzsimmons or Julia Fox.