Doing Business With DoD & The Intel Community - BEHIND CLOSED DOORS #govcon

Doing Business With DOD
&
The INTEL Community
Monday, November 28, 2016
Hosted By:
Jennifer Schaus & Associates
In Collaboration With:
GMU PTAP (George Mason University Procurement Technical
Assistance Center)
and
AED (Arlington Economic Development BizLaunch)

ABOUT US:
Jennifer Schaus & Associates is a specialized consulting firm based
in downtown Washington DC. The organization assist companies
with federal government contracting services. This includes:
 business plans,
 small business Sub-Contracting plans,
 capability statements,
 proposal writing,
 sales & business development,
 GSA and VA Schedules,
 SBA 8(a) Certification and more.
Clients are domestic and foreign, both product and service firms, mid-
tier and large businesses.
Ms. Schaus is a frequent speaker and contributor to government
industry publications. Jennifer holds a BA from Towson University.
She has completed the Leadership Accelerator from UC Berkeley
and holds a Certificate in Executive Leadership from Cornell
University.
For More Information Please Visit:
http://www.JenniferSchaus.com or Call Us At: 2 0 2 – 3 6 5 – 0 5 9 8

Please Join Us
200+ Federal Government Contractors At
Government Contractors Holiday Soiree – 2016
Tuesday, December 20, 2016
Location: Terrace Level of The John F Kennedy Center
Time: 5.30pm – 7.30pm
This is a NETWORKING Event, not a conference.
All Ticket Sales are Final. No Refunds.
Government Contractor With CAGE CODE: $30.
Non-Government Contractor: $60
Sponsorships Are Available.
INFO & REGISTRATION: https://govconholiday16.eventbrite.com

Doing Business With DOD
&
The INTEL Community
PRESENTERS SLIDES
"Understanding DoD Nuances & Winning Defense
Contracts"
(Ret.) VADM Lou Crenshaw
"Best Practices for Surviving A DCAA Audit"
Alex Brager & Kevin Swatt (E Cohen CPAs)
"Contracting and the National Industrial Security
Program"
Jennifer Zucker, WileyRein
"The Nuts, The Bolts & The Requirements After the
Clearance"
Eleanor Bewley, OCEUS Networks
"Cracking The Nut On The Intel Community"
Moderator - Tony Porter, Eastern Foundry
Panelist #1 - Graham Plaster, The Intel Community
Panelist #2 - Tabetha Chandler, GreenCyber
Panelist #3 - Cheereka Montgomery, P1 Strategies

"Understanding DoD
Nuances & Winning
Defense Contracts"
(Ret.) VADM Lou
Crenshaw

Doing Business with DoD
VADM Lou Crenshaw USN (Ret.)
Crenshaw Consulting Associates
November 28th, 2016

• Keep them simple.
• Use few words.
• Make sure the words are spelled
corectly and numbers add up.
• Have a time budget for your slides.
• DON”T READ THE SLIDES!!
• If they can’t see it, why use it?
• Don’t read the slides.
• Don’t use Power Point.
Lou’s Power Point Rules

Use Agency Small Business Offices

Join a Professional Organization

Read the RFPs Carefully
• Use all the options
• Don’t over deliver
• Answer all the questions
• Don’t waste words
• Demonstrate understanding
• Review all the FAR paragraph
cites in Section I
• Focus on people skills, not
people
• Always, Always get a debrief

Watch Out!!!
Unhappy COs
Where’s my
deliverable?

Be Prepared
• Funding uncertainty
• Holidays
• Stop Work Orders
• Protests
• Reorganizations
• TFTCOG
• Long waits for clearances
• Terminations for Convenience
• Time to develop relationships
• Shifting priorities
• Beware of “contractpation”

LPTA
Strategies for
Lowest Price Technically Acceptable
Bids

Thoughts on LPTA
• Use client risk aversion to your advantage
• Know the guidelines (FAR, BBP 2.0, DFAR, etc)
• Incumbent is in a tough spot
• No points for extra effort
• Factors in “Technically Acceptable”
• Credibility, quality, schedule, capacity, reputation, past
performance, personnel qualifications, project management,
approach, risk management, facilities
• Focus on minimums, not differentiation
• Lower rates by teaming
• TA must be comprehensive…must clearly define government’s
minimum requirements (low risk, high probability of delivering, etc)
• LPTA winning proposals focus on proving you are the only acceptable
offerer.
• “Buying” the work is a one-time silver bullet for most firms

"Best Practices for
Surviving A DCAA
Audit"
Alex Brager & Kevin
Swatt (E Cohen
CPAs)

Presented by: Alex Brager, CPA and Kevin Swatt, CPA

Presented by Alex Brager, CPA and Kevin Swatt, CPA

"Contracting and the
National Industrial
Security Program"
Jennifer Zucker,
WileyRein

Contracting and the National
Industrial Security Program
Jennifer S. Zucker
November 2016

Roadmap
 National Industrial Security Program (the “NISP”)
 Personnel Security Clearances
 Facility Clearances Requirements
 The Facility Clearance Process
 Foreign, Ownership Control and Influence (FOCI)
 Mitigating FOCI
 Common Questions
51

National Industrial Security Program
 NISP Established by Executive Order 12829, (January
8,1993)
 DSS administers the NISP for DoD and 24 other Federal
agencies
• DoD Directive 5220.22 (“NISP”, 5/18/11)
• DoD Directive 5105.42, (DSS Charter, 8/3/10)
 Other references
• DoD 5220.22-M, (NISPOM, 2/28/06)
• DTM 09-019, (Policy Guidance for FOCI, 9/2/09)
• Guides and forms at www.dss.mil
• DoD 5220.22-R (Industrial Sec’ty Reg, 12/4/1985)
52

Personnel Security Clearances
 Adjudicative Guidelines
• Allegiance to the US • Foreign Influence
• Foreign Preference • Sexual Behavior
• Personal Conduct • Financial Considerations
• Alcohol Consumption • Drug Involvement
• Psychological Conditions • Criminal Conduct
• Handling Protected Info • Outside Activities;
• Use of IT Systems
 Due Process – Defense Office of Hearing and Appeals
53

FCL Requirements in Contracts
 FAR Clause 52.204-2, “Security Requirements”
• Prescribed by FAR 4.404(a) (see also FAR 4.402 and 4.403)
 Contractor executes DD Form 441 “Security
Agreement”
 NISP Operating Manual (NISPOM) (DoD 5220.22-M,
2/28/2006) is incorporated into contract
 Contracting activity issues DD 254 “Contract Security
Classification Specification”
• Identifies specific security requirements and classification
guidance
54

Contracting Officer
 Determines need for classified access
 Verifies facility clearance and safeguarding approval
• Possessing/Non-possessing;
• IT requirements?
 Issues sponsorship letter if necessary
 Accurately reflects security requirements for both the
procurement process and contract performance
55

Facility Clearance Process
 Contractor is sponsored for FCL by contracting
activity or another cleared company
• Sponsorship letter is sent to DSS Facility Clearance Branch
• Contractor must have or obtain CAGE code
 DSS contacts contractor with explanation of the FCL
process and required documentation
 DSS assigns the contractor to a local DSS Industrial
Security Field Office for initial and follow-on visits
56

Requirements for Facility Clearance
 DSS must determine that the contractor meets five
threshold requirements before issuing the FCL. The
contractor must:
1. Need access to classified information in connection
with a legitimate US Gov’t or foreign gov’t
requirement (sponsorship letter and later DD 254
fulfill this requirement)
2. Be organized and existing under the laws of any of
the U.S. states, DC or an organized U.S. territory
NISPOM (DoD 5220.22-M) sections 2-102 and 2-104
57

Requirements for Facility Clearance (cont.)
3. Have a reputation for integrity and lawful conduct in its
business dealings
• Company and key managers must not be debarred or suspended
from Federal contracting
4. Not be under foreign ownership, control or influence
(FOCI) to such a degree that granting the FCL would be
inconsistent with the national interest
5. Senior management official, facility security officer (and
Board Chair), and Insider Officer must each have
personnel clearances at the level of the facility
clearance
58

FCL Closeouts
 Administrative termination
• No further requirement for access to classified
• At company request
 Due to non-compliance
• FCL invalidation – no new classified work, but allows
contractor to continue classified performance, with
contracting activity approval
• FCL termination
 Contracting activities are notified of all invalidations
and terminations for cause
59

FOCI
 Analysis begins with SF 328
 FOCI factors (see NISPOM 2-301 and USD(I) DTM 09-
019)
 Does a foreign interest hold a majority or substantial
minority position in the company?
• Minority position deemed substantial if it is greater than 5%
of ownership interest or greater than 10% of voting interest
60

Mitigating FOCI
 Board Resolution
• Minority foreign interest with no Board representation
• Doesn’t affect available FCL levels
 Security Control Agreement
• Minority foreign interest with Board representation
• Doesn’t affect available FCL levels
• Requires disinterested cleared Director(s) approved by DSS
61

Mitigating FOCI
 Special Security Agreement
• Company effectively owned or controlled by foreign interest
• Requires disinterested cleared Directors approved by DSS, as
well as visit and communication controls overseen by Gov’t
Security Committee of Board (composed of the cleared
Directors)
• Allows foreign owner to be represented on Board
• Permits FCL up to SECRET, but no access to Proscribed Info
without National Interest Determination
62

FOCI Mitigation
 Proxy Agreement (or Voting Trust)
• Company effectively owned or controlled by foreign interest
• Voting interests in cleared company given to at least three
cleared proxy holders or trustees approved by DSS
• Foreign owner not represented on Board
• No restrictions on FCL level
63

Specific FOCI Issues
 National Interest Determinations (NIDs)
• Companies cleared under an SSA cannot have access to
proscribed information (TS, most COMSEC, RD, SAP, SCI)
unless the contracting activity issues a finding (i.e., NID) that
disclosure of the proscribed information will not harm the
national interest of the U.S.
DTM 09-019, Attach. 2, para. 5.(c)
64

Specific FOCI Issues
 DoD or DoE contracts
• Cannot be awarded to a entity effectively controlled by a
foreign government if
• Contract performance requires access to proscribed
information
• Without a waiver from the Secretary concerned (delegated
in DoD to the USD(I))
10 USC 2536; DFARS 209.104-1(g)(ii), 252.209-7002
 Proxy agreement is deemed to negate foreign
government control (DTM 09-019, Att. 2, para. 5(d))
65

Common Questions
 Can a contractor be sponsored for an FCL without
having been awarded a classified contract?
• Yes, if the contractor requires the FCL in order to compete
for the contract
 Common causes for FCL invalidations
• Uncleared key management personnel
• Processing classified information on unaccredited systems
66

Contact Information
Jennifer S. Zucker
jzucker@wileyrein.com
202.719.7277
67

"The Nuts, The Bolts
& The Requirements
After the Clearance"
Eleanor Bewley,
OCEUS Networks

THANK YOU FOR ATTENDING.
FOR MORE INFORMATION ABOUT OUR
SERIVCES, PLEASE VISIT
http://JenniferSchaus.com
or Call Us At 2 0 2 – 3 6 5 – 0 5 9 8

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