Background Investigations
Understand the National Industrial Security Program (NISP)

The National Industrial Security Program (NISP) is a partnership between the federal government and private industry ensuring that classified information is adequately safeguarded - to keep our country safe. The government, especially the military, has a great and pressing need for supplies, support services and state-of the- art technology: weapons systems, information technology, communications systems, and so forth. With rare exceptions, the government does not research, develop, or manufacture these items. Instead, it relies on industry. In order for industry to meet the government's need, it must have access to classified information. This is where the National Industrial Security Program (NISP) comes in.

The NISP was established by Executive Order 12829 to ensure that industry safeguards the classified information in their possession or to which they have access while performing work on contracts, programs, bids or research and development efforts. The Defense Security Service (DSS) administers the NISP on behalf of the Department of Defense as well as 26 other federal agencies within the Executive Branch. Presently, DSS has Industrial Security oversight responsibility for over 13,500 cleared companies participating in the NISP.

If you’re a company desiring to perform on DoD-related classified contracts in the National Industrial Security Program, you need 5 things in order to obtain your Facility Security Clearance (FCL): Sponsorship, Organization, Security Agreement (DD 441), Certificate Pertaining to Foreign Interests (SF 328) & Key Management Personnel (KMPs).

To have access to U.S. classified information and participate in the NISP, a company or other designated operating entity in private industry or at a college/university, must have a legitimate U.S. Government or foreign government requirement for such access. Once this requirement has been established, a company can be processed for a Facility Security Clearance (FCL). An FCL is an administrative determination that the company is eligible to access classified information at the same or lower classification category as the FCL being granted. The FCL may be granted at the Top Secret, Secret or Confidential level. When a determination has been made that a company meets the eligibility requirements for a FCL, the company must execute a Defense Security Agreement (DD-441) which is a legally binding document that sets forth the responsibilities of both parties and obligates the company to abide by the security requirements of the National Industrial Security Program Operating Manual (NISPOM).

Federal contractors in the NISP do not pay for the security clearances of their job applicants or their employees; the U.S. government does! Some companies tell applicants that they will not pay for their clearance investigation because it is too costly. That's a lie. They don't pay for them anyway; the U.S. government does. The lesson here is don't let a company tell you that you're not eligible for the position because of the cost to the company for initiating a security clearance investigation on your behalf. The company merely sponsors you; the U.S. government pays for and conducts the investigation. Security clearance costs are zero for federal contractors participating in the National Industrial Security Program (NISP). Approximately 44 to 46% of the annual budget for the Defense Security Service (DSS) is earmarked for Personnel Security Investigations (PSIs) payable over to the Office of Personnel Management’s Federal Investigative Services Division (FISD). FISD conducts approximately 90% of all security clearance background investigations for the U.S. government.

The NISP is a government-industry program that safeguards classified information entrusted to industry. The government establishes requirements for the protection of classified information in the hands of industry, and industry implements these requirements with advice, assistance, and oversight provided by the government. The following four federal agencies provide this advice, assistance and oversight as Cognizant Security Agencies within the NISP:

• Department of Defense (DoD)
• Department of Energy (DOE)
• Nuclear Regulatory Commission (NRC)
• Central Intelligence Agency (CIA)

The DoD has delegated the security oversight and the administration of its classified activities and contracts to the Defense Security Service (DSS). DSS serves as the Cognizant Security Office (CSO) for the DoD. For most security matters you will be dealing directly with two elements of DSS: the Defense Industrial Security Clearance Office (DISCO) and the DSS Field Office (Industrial Security Representatives or IS Reps) in your local area.

Protection of classified information, and ultimately protection of the national security, is what the NISP is all about. Classified information is official government information which an authorized US Government official (original classification authority) has determined requires protection against unauthorized disclosure in the interest of national security and which has been so designated. The levels of classified information forming the basis for the handling and safeguarding requirements promulgated by the NISP are TOP SECRET, SECRET, and CONFIDENTIAL.