FOCI Requirements & Implementation Guide (2024)

Foreign Ownership, Control, or Influence (FOCI) pertains to any U.S. company or contractor that is vulnerable to foreign interests that may affect national security. For companies involved in government contracts, especially those related to classified information, understanding and mitigating FOCI is crucial.

Key Requirements:

1. Initial Disclosure: Companies must assess if they have any foreign ownership, control, or influence. This is typically done via a comprehensive questionnaire, as part of the facility clearance (FCL) process with the Defense Counterintelligence and Security Agency (DCSA).  

2. Mitigation Plan: If FOCI exists, the company must submit a mitigation plan. Options include:

  - Board Resolution: Establishes that foreign entities do not control the company’s daily operations.

  - Security Control Agreement (SCA): For U.S. companies with significant foreign involvement, requiring oversight by U.S. personnel.

  - Voting Trust Agreement: Applies to companies with substantial foreign ownership, separating operational control. 

3. Annual Certification: Even if mitigated, companies must annually certify their FOCI status and update DCSA on any changes.

4. Compliance Reviews: Periodic audits and reviews ensure ongoing compliance with FOCI mitigation agreements.

 Implementation Steps:

- Conduct a self-assessment to determine FOCI exposure.

- Submit an Electronic Facility Clearance (e-FCL) request to DCSA.

- Develop and implement the FOCI mitigation plan as required.

- Maintain open communication with DCSA and ensure annual recertification.

Helpful Resources:

DCSA FOCI Overview

National Industrial Security Program Operating Manual (NISPOM)

DoD Cybersecurity Strategy 2024: A New Era of Defense in the Digital Space

In March 2024, the Department of Defense (DoD) unveiled its latest DoD Cyber Strategy. This comprehensive strategy is designed to address the increasing complexity and severity of cyber threats against the U.S. and its military operations. As digital attacks have grown more sophisticated, the DoD's new strategy focuses on a proactive approach to defending national security in cyberspace, collaborating with international allies, and integrating cutting-edge technologies.

1.     Defending Critical Infrastructure: The strategy emphasizes protecting key military and national infrastructure systems from cyberattacks. By securing networks across energy, communication, and transportation sectors, the DoD aims to reduce the risk of wide-reaching attacks like those seen in past ransomware incidents.

2.     Deterrence Through Resilience and Response: In addition to preventing attacks, the strategy highlights the importance of resilience—being able to respond quickly and effectively to mitigate damage. This involves improving incident response protocols and ensuring the continuity of military operations even when under cyber threats.

3.     Enhancing Cyber Capabilities: One of the main goals of the 2024 strategy is to upgrade the U.S. military’s cyber capabilities. This includes investing in Artificial Intelligence (AI) and machine learning to automate threat detection and response, as well as developing offensive cyber capabilities to deter adversaries.

4.     Collaborating with Allies and Partners: Recognizing that cyber threats transcend borders, the DoD is prioritizing international collaboration. By working closely with allied nations, the U.S. seeks to create a unified response to global cyberattacks, while sharing best practices and intelligence.

5.     Cyber Workforce Development: Acknowledging the need for a skilled workforce, the strategy emphasizes the recruitment and retention of highly trained cybersecurity professionals. The DoD plans to expand education and training programs to prepare military and civilian personnel to meet current and future cyber challenges

For further insights, you can access the full 2024 DoD Cyber Strategy here.

New Small Business Innovative Research Initiatives

The Army's SBIR program launched five new funding opportunities this September. The focus of these opportunities is around AI, advanced manufacturing, materials for military equipment, and energy solutions.

Read more here

The Air Force's program AFWERX awarded a $1.2M SBIR contract to Authorium. This contract will support research into AI driven procurement solutions regarding defense operations. This is expected to improve the efficiency of the Air Force's procurement processes.

Read more here

Other Open Topics

The Department of Defense has developed new security measures as part of their SBIR/STTR Due Diligence program. The goal of these measures is to minimize security risks when businesses seek federal funding & they have ties to any foreign country of concern.

Read more here

Defense SBIR Homepage

Update on DPA Title III

DPA Title III has been a cornerstone of U.S. industrial policy, empowering the President to prioritize the production of essential materials and goods for national defense. In recent months, there have been significant developments in the implementation and application of this legislation.

1. Expanded Authority: The Biden Administration has expanded the scope of DPA Title III to address a wider range of critical industries. This includes sectors such as semiconductors, pharmaceuticals, and rare earth elements, which are essential for national security and economic competitiveness.

2. Increased Investments: The government has allocated substantial funding to support domestic production and research and development in critical industries. These investments aim to bolster the U.S. manufacturing base, reduce reliance on foreign suppliers, and ensure a resilient supply chain.

3. Focus on Emerging Technologies: DPA Title III has been used to prioritize investments in emerging technologies, such as artificial intelligence, quantum computing, and advanced materials. These technologies are essential for maintaining a technological edge and addressing future national security challenges.

4. Supply Chain Resilience: The government has taken steps to strengthen domestic supply chains and reduce vulnerabilities to disruptions. This includes efforts to diversify sourcing, increase domestic production capacity, and improve information sharing among industry stakeholders.

5. International Cooperation: DPA Title III has been used to foster international cooperation and partnerships. This includes working with allies and partners to secure critical materials, coordinate production efforts, and address global supply chain challenges.

While DPA Title III has shown promise in addressing critical challenges, there are ongoing challenges and opportunities for improvement. These include balancing the needs of national security with economic considerations, ensuring equitable distribution of benefits, and adapting to rapidly evolving technological landscapes. As the world continues to face new threats and challenges, DPA Title III will likely remain a valuable tool for safeguarding the nation's interests and bolstering new emerging technology.

Learn more here