1

STAKEHOLDER 

REPORT 2010

MESSAGE FROM DSS DIRECTOR

I’m pleased to provide the second Stakeholder Report of the Defense Security Service (DSS). We launched the first report in 

response to lingering questions about the DSS mission and status. I think we’ve finally convinced the community that we’re 

no longer in the personnel security investigation business. I think we have also demonstrated that DSS has turned a corner 

and is stable and well-positioned to meet the demands of our Stakeholders – both within the government and in industry.

To meet these demands however, DSS cannot rest on its laurels, but must continue to look at ways to improve its internal 

operations and satisfy the needs of the community. This document articulates our new focus in Counterintelligence on 

building a culture of “catching spies.” It also recognizes that a comprehensive cyber security strategy is absolutely critical to 

protecting and defending industry and the Department against cyber intrusions. Delivering on-demand training is no longer 

a luxury, but an operational requirement for the DSS Academy. Internally, DSS continues to refine its staff assistance and 

quality assurance processes to ensure a unified, consistent process is communicated to the industrial base, and IT solutions 

provide efficiencies across the agency.

It’s an exciting time to be at DSS. We have much to be proud of, but much to do to continue to deliver the world class service 

we have committed to provide. Thank you for reading and your continued support of DSS.

Kathleen M. Watson

Director
2

“ 

“ 

”

”

A professional and fully integrated and seamless Enterprise, 

providing the best intelligence, counterintelligence, and 

security under any condition or circumstance, whenever and 

wherever, in support of the war fighter and the Nation.

Vision of the Defense Intelligence Enterprise

Defense Intelligence Strategy, 2008

Secretary of Defense Robert M. Gates

We must keep our eye fixed on the world we seek to build — one 

that defeats our adversaries, but that also promotes dignity 

and opportunity and justice for all who stand with us. To do 

that, we need you to keep standing and serving together — every 

agency, every department, every branch, every level. One team. 

One mission. That’s how we’re going to prevail in this fight, and 

that’s how we’re going to protect this country that we all love.

Barack H. Obama

President of the United States

VISION

DSS is the premier provider of industrial security services in the Department of Defense (DoD), improving the security of our 

nation and its warfighters.

MISSION

DSS supports national security and the warfighter, secures the nation’s technological base, and oversees the protection of U.S. and 

foreign classified information in the hands of industry under the National Industrial Security Program (NISP) – on behalf of the 

Department of Defense and 23 other Federal Agencies that have signed agreements with the Secretary of Defense. 

We accomplish this mission by performing six mission essential tasks: 

• Clear industrial facilities, personnel and associated information systems.

• Identify unlawful penetrators of the defense industrial base.

• Manage foreign ownership, control and influence (FOCI) in cleared industry.

• Provide advice and oversight to industry.

• Deliver security education and training.

• Provide critical mission support operations.
3

STAKEHOLDER 

REPORT 2010

DSS SEAL

The three divisions of the shield refer to the three basic requirements of all investigations: patient 

inquiry, observation, and careful examination of the facts.

The eagle, adopted from that used in the seal of DoD, alludes to keenness of vision, 

strength, and tenacity that symbolizes DSS.

The three arrows, also adopted from the seal of DoD, refer to the Armed Services, 

comprising the military components of DSS. In crossing over and protectively 

covering the Pentagon, these arrows represent the DoD wide aspects of the DSS 

mission.

The color dark blue, the National color, represents the United States, and the color 

light blue represents DoD, the shade of blue being used by the Defense Department. 

The pattern indicates the integral unity of the United States, DoD, and DSS. The 

color gold (or yellow) is symbolic of zeal and achievement.

On a white disc within a border of blue with gold outer rim is the shield of DSS in full 

color blazoned above a wreath of laurel and olive proper (as depicted on the DoD seal). 

Inscribed at top of the white disc is “Defense Security Service” and in the base, in smaller 

letters, is “United States of America,” all letters gold.

The laurel and olives symbolizes merit and peace; the color white signifies “deeds worthy of remembrance.”

ORGANIZATIONAL OVERVIEW

Command Elements

Office of the 

Chief Financial Officer

Executive Steering Committee

& Stakeholders Board

____________

Director & Chair

Deputy Director 

& Vice Chair

Deputy Chief of

Staff

Director, SETA

Office of 

Aquisitions

Office of the 

General Counsel

Office of

Legislative Affairs

Office of the 

Inspector General

Office of

Public Affairs

Equal Employment

Opportunity

Base Realignment

and Closure

(BRAC)

Operational Elements

Counterintelligence 

(CI)

Industrial Security

Field Operations

(IO)

Security Education

Training & Awareness

(SETA)

Industrial Policy

& Programs

(IP)

Enabling Elements

Comptroller & Financial

Management Division

Support Services 

Division

Office of Human

Resourcees & Security

Office of the Chief

Information Officer

(OCIO)

Chief Financial Chief of Staff

Officer

Director, CI Director, IO

 Chief

Director, IP Information 

 Officer
1965 1972 1976 1980 1984 1993 

On March 8, 1965, the Defense Industrial Security 

Clearance Office (DISCO) was established when more 

than 115 Army, Navy and Air Force clearance activities 

were merged into one facility.

On January 1, 1972, the Defense Investigative Service (DIS) was 

established. DIS was created in response to President Richard 

M. Nixon’s approval of proposals suggesting the reorganization 

of the national intelligence community and the creation of an 

“Office of Defense Investigation” to consolidate Department of 

Defense (DoD) personnel security investigations (PSI). Prior to 

this consolidation, such work was accomplished through the U.S. 

military departments by four major DoD investigative agencies. 

They were: 1) the U.S. Army Intelligence Command, 2) the U.S. 

Army Criminal Investigative Command, 3) the Naval Investigative 

Service, and 4) the Office of Special Investigations, Air Force. 

In 1976, DIS received Congressional direction to phase out 

all military personnel and become a totally civilian agency.

On January 1, 1984, the Defense Industrial 

Security Institute in Richmond was 

redesignated the Defense Security Institute. 

The name change was to better identify the 

Institute’s mission and scope of responsibilities. 

The Defense Industrial Security Institute, 

located near Richmond, was the focal point 

of education and training efforts for DIS. The 

school was founded in 1972 as the training 

facility for industrial security under DLA.

On January 6, 1993, President George W. Bush signed Executive 

Order 12829, that established the National Industrial Security 

Program. This program was intended to replace not only 

the DISP, but the industrial security programs of the Central 

Intelligence Agency, the Department of Energy and the Nuclear 

Regulatory Commission. 

In May 1993, DIS established a counterintelligence (CI) office.

On October 1, 1980, the Industrial Security Program, the 

Key Asset Protection Program, the Arms, Ammunition 

and Explosives Security Program and the Defense 

Industrial Security Institute were transferred to DIS from 

the Defense Logistics Agency.

4

HISTORY

Key dates in the History of the Defense Security Service
On April 1, 1995, the National Industrial Security 

Program Operating Manual (NISPOM) became 

effective, formally implementing the National 

Industrial Security Program. It was the most 

significant change in the Industrial Security Program 

in nearly 40 years.

On April 19, 1995, the Alfred P. Murrah Building in 

Oklahoma City was bombed, killing DIS employees 

Bob Westberry, Larry Cottingham, Peter DeMaster, 

Jean Johnson and Larry Turner in the Oklahoma 

City Investigative Field Office. DIS dedicated two 

living memorials to them – an Oklahoma Red Bud 

Tree at the Headquarters building and a cherry tree 

by the Tidal Basin.

On November 10, 1997, Secretary of 

Defense William Cohen announced 

that DIS would be redesignated as the 

Defense Security Service. The name 

change was effective November 25, 

1997. The Department made the change 

to reflect the agency’s broader mission 

and functions. 

On July 21, 1999, DSS Director 

Charles Cunningham signed the charter 

establishing the Defense Security Service 

Academy.

On February 4, 2003, the Commission of the Council on Occupational 

Education (COE), a national accrediting authority recognized by the Department 

of Education, granted accreditation to the Defense Security Service Academy. This 

award of accreditation was based on COE’s evaluation that the Academy met not 

only the standards of quality of the Commission, but also the needs of its students 

and community. The DSS Academy was reaccredited in 2009.

On February 20, 2005, DSS transferred the personnel security investigations function to the Office 

of Personnel Management. This included PSIs for industry personnel under the National Industrial 

Security Program (NISP) and the transfer of approximately 1,850 personnel. DSS retained the 

function, on behalf of DoD, to oversee the OPM billing and financial reconciliation process for PSIs 

for the entire Department.

On December 18, 2007, the Director of DSS was named 

the functional manager for DoD Security Training.

On January 15, 2009, the Deputy 

Secretary of Defense signed a 

memorandum which directed that 

DSS move forward on enhancing 

the National Industrial Security 

Program and reinvigorating the 

Security Education Training and 

Awareness Program, in an effort 

to “strengthen and refocus DSS 

to meet 21st century industrial 

security and counterintelligence 

needs.” 

 1995 1997 1999 2003 2005 2007 2009 

5

STAKEHOLDER 

REPORT 2010
6

INDUSTRIAL SECURITY FIELD OPERATIONS

Industrial Security Field Operations (IO) inspects and provides oversight to cleared defense 

industry on behalf of DoD and 23 National Industrial Security Program partners.

270 Industrial Security Representatives spread across the United States

• Provide advice and assistance

• Inspect facilities for compliance with established guidelines

• Report security incidents and provide remediation 

83 Information System Security Professionals (ISSP) provide integrated support 

• Provide technical expertise to identify key threats facing industry today

• Certify and accredit industry information systems

Adjudicate clearances for contractors (DISCO) 

Facts:

• 13,036 active, cleared facilities in NISP; (9,712 cleared business families)

• 9,225 facility security inspections (FY09)

• 1,650 new facility clearances granted (FY09)

o 970 facility clearances terminated for a net increase of 680 active, cleared facilities (FY09)

• 14,355 accredited IT systems in industry

• Average time for system accreditation: 32.5 days

Adjudicate Industry Security Clearances 

• More than 1.1M active cleared contractors

• 298,489 Personnel Security Adjudication actions (FY09)

o 161,018 final eligibility decisions

o 118,323 interim decisions

• Met the IRTPA* goal of 20 days average to adjudicate all initial clearances 

*Intelligence Reform and Terrorism Prevention Act of 2004 mandated specific goals for improving timelines for both personnel security 

investigations and adjudications.

“ 

”

Identify, deny, disrupt and exploit Foreign Intelligence and 

Security Service activities targeting those interests and 

share information with national-level partners. Support 

the protection of U.S. Department of Defense personnel, 

facilities, technologies, sources and methods.

Defense Intelligence Strategy, 2008
7

STAKEHOLDER 

REPORT 2010

U.S. MAP WITH DSS LOCATIONS

Capital Region, Arlington, VA

Bryans Road, MD

Fort Meade, MD (under BRAC)

Lexington Park, MD

Linthicum, MD

Arlington, VA

Chantilly, VA

Fredericksburg, VA

Quantico, VA (under BRAC)

Northern Region, Boston, MA

Groton, CT

Shelton, CT

Andover, MA

Boston, MA

Wilmington, MA

Detroit, MI

Livonia, MI

Fort Snelling, MN

Mt. Laurel, NJ

Picatinny Arsenal, NJ

Syracuse-Liverpool, NY

Watervliet-Arsenal, NY

Westbury, NY

Williamsville, NY

Cincinnati, OH

Cleveland, OH

Wright-Patterson AFB, OH

Fort Indiantown Gap, PA

Lester, PA

McClure, PA

Philadelphia, PA

Sewickley, PA

Milwaukee, WI

Southern Region, Irving, TX

Huntsville, AL

Homestead, FL

Hurlburt Field, FL

Jacksonville, FL

Melbourne, FL

Orlando, FL

Tampa, FL

Smyrna, GA

Des Plaines, IL

Downers Grove, IL

Indianapolis, IN

Kansas City, KS

Slidell, LA

St. Louis, MO

Gulfport, MS

Charlotte, NC

Raleigh, NC

Offutt Air Force Base, NE

Oklahoma City, OK

Charleston, SC

San Antonio, TX

El Paso, TX

Irving, TX

Hampton, VA

Virginia Beach, VA

Western Region, San Diego, CA

Anchorage, AK

Phoenix, AZ

Tucson, AZ

Camarillo, CA 

Cypress, CA

Dublin, CA

Encino, CA

Palmdale, CA

Pasadena, CA

San Diego, CA

Santa Barbara, CA

Sunnyvale, CA

Travis Air Force Base, CA

Colorado Springs, CO

Denver, CO

Honolulu, HI

Albuquerque, NM

Seattle, WA

Bountiful, UT
8

COUNTERINTELLIGENCE

Counterintelligence (CI) identifies “unlawful penetrators” who illicitly attempt to obtain 

DoD information and technologies resident in the cleared Defense Industrial Base. DSS CI 

Specialists work in partnership with industry and other DSS partners to:

• Determine hostile involvement, identify intelligence collection trends and provide a baseline for effective countermeasures 

to protect classified technology and programs at risk for foreign or hostile targeting;

• Leverage national counterintelligence and federal law enforcement resources to effectively neutralize or exploit penetration 

attempts;

• Communicate lessons learned through an aggressive education and awareness program to help industry become the CI “First 

Line of Defense” against a pervasive and growing threat; and

• Encourage an enhanced Insider Threat program focusing on building a “culture of catching spies” within the cleared 

contractor community.

Facts:

• 45 individuals or entities under investigation as possible “unlawful penetrators” based on DSS CI developed information 

• 6 federal law enforcement agencies conducting investigations or operations as a result of referrals from DSS CI

• 11 confirmed incidents of foreign intelligence and security services involvement in collection attempts targeting key 

technologies

• 165 incidents of “probable” foreign Intelligence and security services involvement in collection attempts 

• 1489 reports where foreign intelligence and security services involvement in collection attempts cannot be ruled out

“ 

”

We are entering an era marked by pace, scope and complexity 

of change that will challenge the minds and resources of 

the Defense Intelligence Enterprise. The challenge to 

provide the information, insight and warning that allow our 

national military and civilian leaders to make better decisions 

both in Washington and on the field of battle has never 

been greater or more urgent. It will require a concerted, 

collective effort by the Department of Defense intelligence, 

counterintelligence and security communities to protect our 

military and intelligence assets against all forms and domains 

of attack and transform the Defense Intelligence Enterprise 

into one that is agile, global and diverse.

James R. Clapper

Under Secretary of Defense (Intelligence)

Defense Intelligence Strategy, 2008
9

STAKEHOLDER 

REPORT 2010

INDUSTRIAL POLICY AND PROGRAMS

Industrial Policy and Programs (IP) supports the National Industrial Security Program:

• Mitigate foreign ownership, control or influence (FOCI)

• Implement FOCI mitigation agreements

• Administer international programs

• Issue internal DSS policies and procedures

• Interpret industrial and personnel security policies

• Develop projections for industry personnel security investigations

• Provide analytic support

Facts:

• 620 FOCI facilities 

• 249 FOCI mitigation agreements

• Support to 65 foreign countries

NISP PSI Projections:

• Industry PSI submissions were 97.6 percent of the projected 182,315 cases

• Over $215 million expended overall in FY09

“ 

”

Attacks are on the rise against our defense contractors, who 

face cyber espionage from foreign governments, competitors 

and criminals. Indeed, major aerospace weapons platforms have 

experienced intrusions that have compromised unclassified 

but sensitive technical information.

William J. Lynn III

Deputy Secretary of Defense
10

SECURITY EDUCATION, TRAINING AND AWARENESS 

(SETA)

SETA delivers security education and training to DoD and the cleared contractor community through formal classroom, webbased and correspondence/distance learning. Over the past year, in order to meet the demand by security professionals for “the 

right content, for the right person, at the right time, and in the right place,” SETA has continued its efforts to move from a 

classroom-based environment to a web-based delivery platform. DSS, with assistance from the DoD Security Training Council, 

has developed the DoD Security Skill Standards. These standards serve as the foundation for the DoD Security Certification 

Program currently under development. The first level of the Security Certification Program is scheduled for implementation in 

the fourth quarter of FY10.

Facts: 

• Trained 79,897 students trained in FY09 (Represents a 49 percent increase over FY08)

• Deployed 27 new courses in FY09

• Developing 33 courses at request of stakeholders

• Deployed seven new security information/job aid videos

• Developing two additional security information/job aid videos

• Participated in 23 security forums and conferences, with approximately 4,000 personnel in attendance, providing overviews 

of SETA highlighting training opportunities and providing guidance to security professionals in attendance.

• Chair the Department of Defense Security Training Council (DSTC) -- the advisory body representing the DoD security 

training community. 

“ 

Our mission is a fully integrated intelligence community, 

and there is no turning back. My most urgent priorities 

are to permanently instill this new culture and to use 

every tool at my disposal – from joint duty to recruitment 

and communications – to build a generation of intelligence 

leaders for whom this culture is business as usual.

Dennis C. Blair

Director of National Intelligence

”
11

STAKEHOLDER 

REPORT 2010

CHIEF INFORMATION OFFICER

The Office of Chief Information Officer (OCIO) works closely with DSS leadership to ensure 

that information technology systems continually meet mission requirements. Current 

focus areas include:

• Classified and unclassified network connectivity

• Legacy system sustainment, office automation and web services

• Dual Call Center management

• Information assurance/computer network defense

• New systems and application development

The OCIO manages and maintains the Enterprise Security Systems (ESS) in support of the industrial security and personnel 

security missions which support over 100,000 users world-wide. These legacy Information Technology Systems, such as the Joint 

Personnel Adjudication System (JPAS), will transition to the Defense Manpower Data Center in FY10 at the direction of the 

Deputy Secretary of Defense. 

“ 

The cyber security challenges we face every day at the 

defense department—albeit on a very much larger scale than 

some—are not unlike those faced by your agencies, your 

industries, your institutions. There’s no exaggerating our 

dependence on our information networks—in our case, a 21st 

century military that simply cannot function without them. 

And there’s no exaggerating the threat. It’s unprecedented 

in its source, its speed and its scope.

William J. Lynn III

Deputy Secretary of Defense

”
12

ACHIEVEMENTS AND CASE STUDIES

DSS continually assesses its oversight of the industrial security program to ensure the most robust mechanisms for the protection 

of classified information in industry are in place. During the past year DSS has launched a number of new initiatives in support 

of its mission.

NEW INITIATIVES

Cyber Security

DSS is developing an agency-wide cyber security strategy to ensure that cyber security is fully integrated into the DSS industrial 

security mission. The strategy identifies the activities necessary for DSS to fund, organize, equip, and staff its headquarters and 

train its field offices to operate as a single integrated team for cyber security: field operations, counterintelligence, policy and 

programs, information technology and support activities.

DSS has placed employees at the Defense Cyber Crime Center and the National Cyber Investigative Joint Task Force to ensure 

DSS is fully integrated into the community effort addressing this threat.

As a result of these efforts, DSS is better positioned to ensure that cyber threats to cleared industry and ultimately the Department 

of Defense are mitigated to preclude the loss or compromise of classified information. 

Staff Assistance Visits

In 2008 and 2009, DSS established and conducted its first Field Office Staff Assistance Visits (SAV). The SAV is a quality 

assurance program designed to continuously assess and monitor field office operations. The goal of SAV is to gain insight into the 

status of field operations, identify areas for improvement, and identify best practice processes and procedures that can be shared 

and adopted among field offices. DSS has also hired a Quality Assurance Manager who will oversee the SAV process and develop 

a quality assurance program in FY10. 

Adopting and internalizing the SAV process provides several benefits to DSS. Regional Directors and Field Office Chiefs have 

better tools to manage their operations and a codified procedure to share and learn from one another. Adopting best practices and 

processes will also lead to more consistent operations across the agency’s field operations. 

FOCI analytic products

The Foreign Ownership Control or Influence (FOCI) Analytic Branch developed a product which provides an in-depth 

description of the foreign investment in the National Industrial Security Program (NISP). The data in this initial document will 

be used as a baseline for subsequent documents outlining trends in foreign investment in the NISP. The FOCI Analytic Branch 

also created a process to monitor material changes for facilities in the NISP. These changes are disseminated throughout DSS in 

a weekly product titled, FOCI in the News. 

These analytic products allow DSS to move to a proactive, rather than a reactive mode, and allow it to better prepare FOCI 

mitigation measures in cleared industry. 

FOCI best practices

The FOCI Office at DSS Headquarters reviewed and consolidated lessons learned over the last year from several high visibility 

FOCI cases to increase the effectiveness and efficiency of the process for instituting mitigation agreements, leading to an 

overall reduction of unmitigated FOCI. For example, by requiring specific information from the company at the beginning 

of the process, all of DSS will operate from the same company information and there will be fewer inconsistencies to address 

operationally within DSS. 

Industrial Security Letters 

DSS issued two Industrial Security Letters (ISLs) during 2009 to clarify National Industrial Security Program (NISP) policy for 

cleared industry. The first ISL (ISL 2009-01) pertained to the DSS “Manual for the Certification and Accreditation of Classified 

Systems under the NISP” and the “Standardization of Baseline Technical Security Configurations.” The ISL described the baseline 

safeguards DSS will apply when making an accreditation decision for a contractor information technology system to process 

classified information. 
13

STAKEHOLDER 

REPORT 2010

This ISL is critical to the implementation and adoption of national federal standards for IT systems by cleared industry. Prior to 

the publication of the ISL, no published baseline standards existed resulting in inconsistent security controls being applied across 

industry to protect classified information. The ISL clarified confusion that existed among DSS and cleared contractors, and has 

strengthened DoD’s accountability and user access requirements.

The second ISL (ISL 2009-02) addressed three important NISP policy issues. Prior to this ISL, contractors organized and 

existing in territorial areas other than Puerto Rico were not eligible to be considered for facility clearances. This ISL clarified the 

eligibility of companies organized and existing under the laws of organized U.S. territorial areas for facility clearances. The policy 

clarification ensures consistent application of NISP policy in all of the organized U.S. territories. 

Additionally, the second ISL establishes consistent application of policy as it applies to potential contractor employees and ensures 

that DSS is not processing personnel security clearances for individuals who will not begin working right away; and the ISL 

defined when DSS may invalidate an existing facility clearance if a contractor is unable or unwilling to negotiate an acceptable 

measure to mitigate foreign ownership, control or influence.

Changing the CI culture

DSS Counterintelligence (CI) is actively engaged in building a “culture of catching spies” not only within DSS, but within the 

entire cleared defense community. To build that culture, DSS CI is undertaking a number of specific efforts which change the 

way reporting has been done and refocusing it on the most critical technologies. Central to this effort is ensuring that information 

available to DSS — including reporting from industry — is effectively triaged, analyzed and referred to the appropriate law 

enforcement or counterintelligence agency for investigative or operational follow-up. The DSS goal is that any such referrals must 

be pursued to their logical conclusion. 

DSS will build a more effective partnership with industry to ensure they have the knowledge, means and opportunity to report 

suspicious incidents for timely assessment and appropriate response. The fundamental cultural shift involves changing the 

prevailing perception within industry (and some government sectors) that reporting a possible unlawful penetration adversely 

affects how that company’s security posture is perceived. To mitigate this perception, DSS will seek to reward those companies 

that do have effective measures to identify such issues and report them.

This effort will require that DSS CI specialists are available and effectively equipped with the skill-sets and knowledge necessary to 

assist industry in identifying threats and responding appropriately. The end result will be a CI mindset integrated into all aspects 

of the DSS mission. 

Metrics Report

DSS produces a monthly statistical summary of DoD Personnel Security Investigation (PSI) processing metrics and other 

elements of the security clearance process. The report includes timeliness metrics, projected vs. actual case volume, DoD pending 

case inventory levels, and DoD Central Adjudication Facilities’ (CAF) adjudication metrics. The report is distributed to the staff 

of the Under Secretary of Defense for Intelligence, the Military Services and the Defense Agencies as a monthly personnel security 

program evaluation tool. The assessment tool has been well received and has assisted recipients in tracking actual PSI submissions 

against budget projections.

“ 

”

... a more fundamental change we must make in our approach 

to cyber security: we must be more proactive. We can and 

should do more to get ahead of this problem, but it will 

take participation from all of the relevant stakeholders, 

facilitated by strong and centralized coordination.

Larry M. Wortzel

Vice Chairman, U.S.-China Economic and Security Review Commission
14

ONGOING INITIATIVES

The following initiatives are ongoing at DSS to better meet the needs of the NISP and cleared industry.

Trend analysis

The annual CI publication, “Targeting U.S. Technology: A Trend Analysis of Reporting from Defense Industry” analyzes information 

obtained from suspicious contact reports (SCRs) submitted by industry. This information identifies the most frequently targeted 

technologies, assesses the most common methods of collection, explores possible motivations and affiliations of those attempting 

the collection, and identifies the locations where these collection threats originate.

Security officials, cleared contractors, intelligence professionals and DoD policy and decision makers use this information to 

assess the technology collection threat and develop and implement appropriate measures to mitigate its effect. The most recent 

version of the document includes a special section on unmanned aerial vehicles (UAV) and the intense interest the technology 

receives from foreign companies.

Refined Facilities of Interest List

The facilities of interest list (FIL) is a tool designed to rank the more than 13,000 cleared facilities by programs, technologies and 

level of probable risk, with consideration of the threat at those facilities. The FIL forms the basis of an updated threat mitigation 

strategy which focuses on technologies most at risk. The FIL is also used to prioritize inspections and tailor the inspection to 

address the specific threats. 

On a quarterly basis, DSS updates the FIL to help focus the efforts of Field CI Specialists and Industry Security Representatives 

on the protection of DoD’s most sensitive technologies. Industrial Security Representatives now indicate the FIL tier level on all 

suspicious contact reports (SCR) and violation reports concerning facilities in Tiers I and II which contain the most sensitive and 

critical technologies and facilities. This action helps expedite the SCR process and analysis timeline, and improves the CI feedback 

to the Industrial Security Representatives and industry on the most critical reporting. 

Personnel Security Investigations for Industry (PSI-I) Requirements Survey 

In April 2009, DSS deployed its annual web-based survey to 10,953 cleared Industry Facility Security Officers representing 

12,189 cleared facilities to project PSI-I requirements. The projections are the key component in Future Years Defense Program 

(FYDP) DSS/DoD program planning and budgeting for NISP security clearances. 

With more than 87.5 percent of cleared contractor facilities responding, representing 94.6 percent of the cleared contractor 

population, this was the most successful survey to date in terms of industry participation. The survey was conducted using a 

professional web-based application, which ensures ease of use and standardizes the survey dissemination and data collection 

process.

The annual survey has proven to be an excellent tool for forecasting industry requirements. At the close of FY09, industry 

clearance eligibility submissions were 97.6 percent of the 182,315 cases projected through the survey - well within the Office of 

Management and Budget mandate that the survey results be +/- 5 percent of actual submissions.

Spring 2009 

Survey

Spring 2008 

Survey

Fall 2007 

Survey

Fall 2006 

Survey

Facility 

Participation Rate 87.5% 83% 70% 51%

Cleared Industry 

Population 

Represented

94.6% 92% 83% 61%
15

STAKEHOLDER 

REPORT 2010

Meeting adjudicative timelines

In 2004, Congress enacted the Intelligence Reform and Terrorism Prevention Act (IRTPA). IRTPA mandated specific goals for 

improving timelines for both personnel security investigations and adjudications. The Defense Industrial Security Clearance 

Office, the DSS adjudication facility which adjudicates collateral clearances for Industry, continues to exceed the mandated 

IRTPA guidelines for completion of adjudications. 

• In FY09, DISCO completed 90 percent of initial adjudications in 16 days, exceeding the 20-day IRTPA goal.

• DISCO increased the number of interim personnel security clearances granted by 28 percent, from 92,350 in FY08 to 

118,323 in FY09.

• DISCO granted 180,166 final personnel security clearances in FY09, as compared to 181,179 in FY08.

ISFO C&A Process Manual

The ISFO Certification and Accreditation Process Manual (formerly the ODAA Process Manual) was revised in 2009. This 

revision divided the Process Manual into two distinct versions, one specifically for Industry use and one for DSS internal use. 

The DSS internal version includes all information contained in the Industry version, as well as specific instructions and directions 

for Information Systems Security Professionals (ISSP) in the field. This helps provide DSS personnel with a ‘big picture’ of the 

certification and accreditation process. With the future re-write of NISPOM Chapter 8, the ISFO Process Manual will be an 

evolving document that will assist DSS in protecting classified information in an ever-changing environment.

The next release of the Process Manual, scheduled for Spring 2010, will provide cleared industry with a desktop reference guide 

to follow in their compliance responsibilities as well as a training and education tool for new and experienced system security 

professionals. Most importantly, the Process Manual will address areas of confusion and inconsistency brought to DSS by cleared 

industry.

Expanded training courses

The demand for professional security training continues to grow, and to meet this demand, the SETA expanded its course 

offerings, seeking news ways to provide training and creating tools to support security education. During the last year, 32 new 

web-based courses were offered by SETA, including:

• Foreign Disclosure Officer training for the Army (a nine course suite of training)

• Special Adjudication Training for Army contractors

• Physical Security Programs 

• Facility Security Officer orientation

• Facility Security Officer management processing 

The DSS Academy also expanded its virtual classroom training capability and the Resource Tool for Security Professionals, and 

provided mobile training delivery of courses critical to the Air Force.

“ 

The nature of the national security threat to the U.S. has 

changed over time. So it’s incumbent on the Intelligence 

Community to not only keep up, but to stay ahead of the 

curve, and to tell policymakers in Washington where that 

curve is heading.

Dennis C. Blair

Director of National Intelligence

”
16

Call Center Operations

The DoD Security Services Call Center is a dual-sited integrated Center (Alexandria, Va., and Columbus, Ohio) that provides 

front-line user support to the mission systems including:

• The Industrial Security Facilities Database (ISFD) which manages facility information for those cleared contractors 

participating in the National Industrial Security Program (NISP).

• The Defense Central Index of Investigations (DCII) which allows for the central management and identification of DoD 

investigative report information.

• The Electronic Network Registration & On-line Learning (ENROL) which is a web-based Learning Management System 

that automates the administration, documentation, tracking, and reporting of training in support of the Security Education 

Awareness and Training (SETA) mission area.

• The Electronic Questionnaires for Investigations Processing (e-QIP) system which is part of an e-government initiative 

sponsored by the U.S. Office of Personnel Management (OPM). e-QIP allows applicants to electronically enter, update, 

and transmit their personal investigative data over a secure Internet connection to their employing agency for review and 

approval.

Approximately 1,500 daily callers are supported with a call abandonment rate of less than one percent with an average caller wait 

time of only seven seconds. In September 2009 part of the Call Center was relocated from the DSS headquarters facility to the 

Hoffman Building I in Alexandria, Va. with no disruption to service. 

“ 

“ 

As we consider the security challenges of today, we must be 

ever cognizant that the choices we make will for many years 

weigh heavily on the fate of our peoples. To meet great 

expectations, we must all be willing to take risks – for peace, 

for security, and for the future of our children.

Robert M. Gates

Secretary of Defense

We must overcome the full spectrum of threats. This includes 

the nation-state and the terrorist network, the spread of 

deadly technologies and the spread of hateful ideologies, 

18th century piracy and 21st century cyber threats.

Barack H. Obama

President of the United States

”

”
17

STAKEHOLDER 

REPORT 2010

AUTOMATION INITIATIVES

During the past year, DSS undertook a number of automation initiatives across the agency to better improve processes and 

operations. 

Electronic transmission of fingerprints

Submission of fingerprints is required to initiate all personnel security investigation requests with the Office of Personnel 

Management (OPM). Until recently, the process of capturing and submitting a subject’s fingerprints was manual, time 

consuming, and prone to errors. To alleviate these issues, DSS implemented a solution that allows cleared industry to provide 

fingerprints electronically to OPM.

In November 2007, DSS explored multiple alternatives and selected a CrossMatch Technologies solution that consisted of a 

store-and-forward server coupled with a custom web application. This system was designated as the Secure Web Fingerprint 

Transmission system (SWFT).

The SWFT pilot program (SWFT 1.0) began in June 2008. The pilot provided the Initial Operating Capabilities of the system 

and included four industry partners. Based on the success of the pilot program, DSS developed and implemented an enhanced 

version of SWFT (SWFT 2.0), allowing full operational capability, and expanded the availability of the system to all cleared 

industry in July 2009. 

During the 14 months of the program, industry participants have uploaded 18,489 electronic fingerprints into the SWFT system, 

allowing DSS to match and transmit 10,739 of those electronic fingerprints to OPM for further processing. 

These voluntary electronic submissions from industry have increased the quality of submissions and reduced the fingerprint 

rejection rate by approximately nine percent. As of November 2009, 63 Facility Security Officers representing 13 companies 

have joined the SWFT program and have submitted nearly 11,000 electronic fingerprint files for transmission by the SWFT 

system to OPM.

While these numbers represent a small piece of the total number of investigative requests, these electronic submissions have 

eliminated delays associated with mailing paper fingerprint cards. This process has also ensured that fingerprint files were matched 

to a valid investigation in the Joint Personnel Adjudication System (JPAS) prior to release to OPM.

Electronic submission of facility clearances

DSS partnered with the Department of Energy (DOE) to use the DOE electronic FOCI (e-FOCI) submission site to facilitate 

and enhance DSS’ facility clearance and FOCI adjudication and mitigation processes. DSS also worked with DOE to develop a 

proprietary DSS Electronic Facility Clearance (e-FCL) application, which is scheduled for implementation in early 2010.

The web-based application is designed around the SF 328, “Certificate Pertaining to Foreign Interests,” and requires companies to 

upload and submit their required information into the e-FCL system. This information includes: SF 328, list of key management 

personnel, list of stockholders, bylaws, and other supporting documentation. 

In addition to offering a streamlined and automated process for submission of the SF 328 and supporting documentation, e-FCL 

enables DSS to process facility clearances more effectively and efficiently while providing a centralized repository to assist in the 

FOCI adjudication and mitigation process.

“ 

In the 18th and 19th century we faced a threat where ships 

crossed the ocean in days. In World War II, aircraft could 

cross the ocean in hours. In the Cold War, missiles could 

do it in minutes. And now today, cyber attacks can strike in 

milliseconds.

William J. Lynn III

Deputy Secretary of Defense

”
18

Joint Personnel Adjudication System (JPAS) Enhancements

DSS implemented the revised SF-86 (Questionnaire for National Security Positions) in JPAS, allowing DoD to fulfill its 

commitment nearly two months ahead of its implementation deadline. This enhancement allows cleared industry and military 

offices to continue processing personnel security clearance requests and smoothly transition to the revised SF-86. DSS implemented 

interfaces with the Clearance Adjudication Tracking System (CATS) and the Automated Continuing Evaluation System (ACES) 

to allow critical data to be exchanged in support of DoD Personnel Security reform initiatives. The CATS tool was selected as the 

DoD non-Intelligence Community IT system / tool for case management and adjudications. The interface allows adjudicative 

information from CATS to be updated in JPAS, giving security managers visibility into the clearance eligibility status of their 

personnel. The ACES interface provides JPAS data in support of the ACES automated eligibility assessments conducted between 

normal investigation cycles. 

JPAS Certification and Accreditation

DSS certified and accredited JPAS by validating the security controls, and obtained an Authority to Operate on the Nonsecure 

Internet Protocol Router Network (NIPRNet). DSS complied with various Defense Information Systems Agency, Joint Task 

Force-Global Network Operations security vulnerability alerts and tested all patches and upgrades to ensure requirements were 

implemented and new problems were not introduced into the system. DSS responded and provided resolution to various JPAS 

incidents involving government and contract personnel. In addition, DSS initiated a network security solution which provides 

real-time analysis of network flows and models behavior to identify abnormal activity. DSS installed U. S. Army Research 

Laboratory sensors to monitor external traffic between routers and firewalls for abnormal activity on the DSS unclassified data 

network.

“ 

In 1989, with the fall of the Berlin Wall, the nature of 

threats against us became a lot less clear cut, and much more 

complex. And then in September 2001, everything changed 

again. The challenge for today’s Intelligence Community 

is: now we need to worry not only about the old standards 

of nuclear missiles, insurgencies, and spies from other 

nations, but other global threats. And powerful, dangerous 

organizations that are not nations.

Dennis C. Blair

Director of National Intelligence

”

“ 

Governments of all stripes seem to have great difficulty 

summoning the will and the resources to deal even with 

threats that are obvious and likely inevitable, much less 

threats that are more complex or over the horizon. 

Robert M. Gates

Secretary of Defense

”
19

STAKEHOLDER 

REPORT 2010

OUTREACH

During the past year, DSS has launched an agency-wide campaign to reach out to the larger security, counterintelligence and 

stakeholder communities to share information and establish face-to-face working relationships.

Security Manager’s Forum

The Security Education, Training and Awareness (SETA) Directorate planned and conducted the 2009 Security Managers’ Forum, 

which was attended by more than 200 civilian and military security professionals. The forum included senior representatives 

from the Office of the Under Secretary of Defense for Intelligence who addressed policy changes, on-going initiatives and related 

topics of interest affecting the DoD security environment. The highlight of the forum, however, was an FBI presentation of the 

Chi Mak espionage investigation. The presentation was provided by an FBI Special Agent with first-hand knowledge of this 

highly publicized case. 

To increase access to the event, a live Webcast of the proceedings was provided to those who couldn’t attend in person. This 

outreach and awareness initiative promotes the exchange of information and highlights initiatives that impact the DoD military, 

civilian and contractor communities across the security disciplines.

Stakeholder Board

The Defense Security Service Stakeholder Board was established in February 2009 to provide a forum for consultation and the 

sharing of information among Department of Defense components and offices on matters related to industrial security and DSS 

operations. The board held three meetings in FY09 and the agendas focused on a number of issues of interest to members, such 

as cyber security, DSS actions to address results of the Personnel Security Investigations for Industry (PSI-I) Requirements Survey, 

and the PSI costs in industry. 

The format is designed to elicit open discussion of issues pertinent to DSS and the larger security community. The Board is an 

advisory and not a decision making body, and is not established to preclude other communications among the Board members. 

It serves as a primary means of communication for DSS and a forum to raise issues of mutual concern within the Department.

Industry Stakeholders 

DSS held a meeting of Industry Stakeholders as part of an active effort to meet on a recurring basis with representatives from 

industry to discuss issues of mutual interest and concern. The Industry group is comprised of representatives from the various 

industry associations, the industry representatives to the National Industrial Security Program Policy Advisory Committee, and 

corporate security officials from the largest cleared contractors. The first meeting allowed for a free exchange of concerns and 

focused on upcoming DSS initiatives and how they would affect industry.

DoD Security Training Council (DSTC)

The Director, DSS is designated by DoD Instruction 3305.13 as the functional manager responsible for the execution and 

maintenance of DoD security training. In this capacity, the Director is responsible for establishing the DoD Security Training 

Council (DSTC). The DSTC is an advisory body on DoD security training, which is comprised of appointed representatives 

from the DoD components.

The DSTC was formally established on Oct. 15, 2008, and since its establishment, the DSTC has driven the professionalization 

of the security workforce by developing skill sets and criteria. The DSTC has reviewed current security skill standards, updated 

and validated those standards, and reviewed component comments on the current draft certification model and the development 

schedule for the DoD security certification program.

Professionalization of the security workforce meets the DoD objective of providing an official and standardized framework for 

security professionals to identify and receive required training and ultimately achieve a security certification credential.

Government Industrial Security Working Group (GISWG)

The purpose of the GISWG is to provide a forum for sharing information between DSS and the Government Agencies for which 

it provides industrial security services under the National Industrial Security Program (NISP). The group meets two to three 

times per year and the agenda focuses on topic areas that are of particular interest to the Government Agencies due to new policies 

or procedures or those that require clarification. 
20

ON THE HORIZON

Building an effective Insider Threat program

Cleared industry is home to some of the United States’ most critical and sensitive information. Counterintelligence and security 

specialists believe that the greatest threat to the integrity, confidentiality and accessibility of this information in industry is the 

“insider threat.” The term “insider threat” refers to someone with legitimate access to sensitive information, who takes malicious 

actions with that information. 

The risk of insider attacks is greatest for systems that contain high value, mission critical data. These high value targets may be 

classified or unclassified government systems or systems in the private sector. 

The DSS Insider Threat program is focused on enhancing training and awareness throughout industry and includes provisions to 

encourage industry reporting and the need to follow through on recommendations. DSS CI is exploring a new computer-based 

“threat awareness training” platform that will enable DSS to reach hundreds of cleared contractors quickly and efficiently.

Transition of legacy IT systems

The Deputy Secretary of Defense directed DSS to transfer “DoD enterprise wide IT systems associated with personnel security 

clearances to the Defense Manpower Data Center.” These systems include the Joint Personnel Adjudication System (JPAS); 

the Defense Central Index of Investigations (DCII); the Secure Web Fingerprint Transmission (SWFT); and, the Investigative 

Records Repository (IRR).

DSS and DMDC have met regularly over the past year to ensure a smooth technical transition of the systems and to ensure the 

transfer is transparent with no interruption in service.

Next Generation Automation

DSS is developing the next generation Industrial Security automation tools to support the growing industrial facility security, 

counterintelligence, training and headquarters mission areas. Significant development efforts will include a Business Management 

System that will manage the submission and processing of System Security Plans (SSPs). An Electronic Facilities Clearance system 

will manage facility information for those cleared contractors participating in the National Industrial Security Program (NISP), 

to include any information pertaining to a facility’s foreign ownership, control, or influence. A DD 254 Database will allow the 

tracking of all contractor security classification specifications awarded to cleared facilities. A CI Analytical Automation System 

will provide advanced collection, analysis, and reporting capabilities. The DSS Chief Information Officer is looking at a Service 

Oriented Architecture (Reusable enterprise services) that allows major capabilities to be deployed as interoperable services and 

promotes capability reuse as well as Identity Management (single sign-on) to provide users with role-based access to DSS Mission 

Systems. Finally, the new automation will provide a Secure Portal – a secure point of entry into the automated information and 

missions critical systems.

“ 

It’s been said that “Trying to predict the future is like trying 

to drive down a country road at night with no lights, while 

looking out the back window.” But that’s exactly what we have 

to do in the U.S. Intelligence Community.

Dennis C. Blair

Director of National Intelligence

”
21

STAKEHOLDER 

REPORT 2010

CASE STUDIES

The following case studies provide lessons learned for DSS, the cleared defense community and Government Contracting 

Activities. 

Counterintelligence: Industry reporting safeguards sensitive technology 

In April 2008, a suspicious individual sent a direct request email to a cleared defense contractor, asking the contractor to add 

the individual as a friend on a popular social networking site. After establishing contact, the suspicious individual emailed 

the contractor again asking to purchase launch systems technology, a subset of the Developing Science and Technologies List’s 

armaments and energetic materials technology. In keeping with the requirements in the National Industrial Security Program 

Operating Manual, the cleared facility reported the incidents to DSS. 

A review of DSS and all-source intelligence community reporting revealed that this was not the individual’s first attempt to obtain 

controlled or restricted technology. In 1989, the U.S. Customs Service investigated and arrested the individual for attempting 

to export ammunition, TOW missiles, and 500 units of sarin nerve gas to Iran. The culprit was convicted and sentenced to 30 

months in prison for those 1989 crimes. Further industry reporting revealed that, in May 2007, the same individual sent a series 

of direct request emails to multiple cleared facilities requesting information on various missile technologies. In that instance as 

well, the cleared facility ended all contact with the suspicious person and referred the case to DSS CI.

Immigrations and Customs Enforcement (ICE) opened an investigation on the individual in September 2008. The investigating 

officer established contact with the individual, and the individual sent him a friend request to join the social networking site. Once 

contact was established, the individual asked the undercover investigator for satellite launch and rocket propellant technology. 

The investigation continued and on April 15, 2009, ICE agents arrested the subject in Florida for attempting to sell missile launch 

technology to Russia. The individual was charged with violations against the Arms Export Control Act, the Missile Technology 

Control regime and the International Trafficking in Arms Regulations. 

String of stolen laptops

During a security review, DSS found that several laptops, containing unclassified information, had been stolen from a cleared 

facility. The theft was reported by the Industrial Security Specialist (ISS) to the Field Counterintelligence Specialist (FCIS) in 

the local DSS field office. The FCIS wrote a report and shared concerns with local law enforcement offices about the growing 

trend, and asked to be notified if any other cleared facilities in the area had property stolen. The report was discussed at a local 

Counterintelligence Working Group in which the FBI took interest. The local FBI office discovered a possible relationship to 

persons of interest and joined the effort, and later established a task force to address this issue. One of the first efforts of this task 

force was to release a Law Enforcement Bulletin within a large geographic area to alert other local law enforcement to this pattern 

of theft. The task force continues to monitor laptop thefts and provides feedback to DSS along with requests for information 

about cleared contractor facilities.

This is a prime example of the importance of industry reporting. 

Reporting suspicious contacts of this nature to DSS CI can identify unlawful 

penetration attempts to the cleared defense industrial base. With this 

reporting, DSS CI can aid local or national law enforcement to exploit or 

neutralize a foreign intelligence element or criminal agent.

DSS actions in this office led to an improved relationship with the law 

enforcement community and ultimately to recognition of an activity that 

may have an impact on National Security. DSS continues to support this 

effort with both statistical and analytical information.

LESSON 

LEARNED

LESSON 

LEARNED
22

FOCI mitigation 

A large cleared research facility notified DSS in January 2009 of the appointment of a foreign citizen as President with an effective 

date in less than two months from the notification. The facility, along with a research lab as a division, is one of the largest cleared 

facilities in the United States.

Under the National Industrial Security Program Operational Manual, paragraph 2-104, both the senior management official 

and the facility security officer must always be cleared to the level of the facility clearance, and only U.S. citizens are eligible for a 

personnel security clearance. Appointment of a non-U.S. citizen as the senior management official renders a company ineligible 

for a facility clearance and puts the company under foreign ownership, control, or influence (FOCI).

To assist the company in retaining its facility clearance, DSS offered the facility FOCI mitigation. The facility decided to amend 

its by-laws to remove the President’s authority to perform duties as a senior management official. However, none of the proposed 

changes removed or changed the authority vested in the President. DSS informed the facility that if it did not present a viable 

plan prior to the non-U.S. citizen taking office, then DSS would invalidate the facility clearance.

The facility opted to use another mitigation strategy and notified DSS that they would form a separate legal entity for the purpose 

of performing the facility’s classified contracts. DSS approved the plan and did not invalidate the facility clearance.

 

Classified Material Found in Home 

A former cleared employee of a cleared facility was found dead in his residence in June 2009. Shortly after his death, the family 

discovered classified information at the decedent’s home with five boxes of classified information ultimately recovered. DSS 

conducted an Administrative Inquiry (AI) and interviewed current and former company employees. An additional 40 to 50 

boxes of mixed unclassified, For Official Use Only, company proprietary, and classified (Confidential and Secret) material were 

found at the residence. DSS concluded that most of the classified material discovered at the residence originated from a cleared 

facility and branch office. 

An unannounced security inspection of the cleared facility confirmed that some of their classified holdings matched those 

discovered at the decedent’s residence. The DSS inquiry determined that at least three employees of the cleared facility received 

phone calls from three different individuals, while the deceased employee was alive, reporting that he had classified information 

in his possession. Further inquiry disclosed that the deceased had been terminated from employment in September 2006 due 

to alcohol abuse, work performance, and personal conduct issues; none of which were reported to DSS. The unannounced 

inspection revealed additional serious findings at the facility to include a failure to report adverse/suspicious information, 

operating an unaccredited classified information system, and retaining classified information without proper authority. An 

Unsatisfactory security rating was issued to the facility and a compliance inspection scheduled.

DSS has the flexibility and tools to analyze and, when possible, mitigate 

foreign influence on any business structure. Companies should involve DSS 

early in the process to ensure valuable time and resources are not wasted.

LESSON 

LEARNED

Interview of employee personnel using in-depth and probing questions 

during DSS inspections is critical to developing potential security issues. 

If the facility’s security personnel had properly interviewed their internal 

employee at the time the adverse information incidents were occurring 

and/or shortly after the allegations of improper possession of classified 

were made, it is highly probable that this security violation would have 

come to the attention of DSS much sooner.

LESSON 

LEARNED
23

STAKEHOLDER 

REPORT 2010

Who should investigate?

During a certification visit for an IT system, the DSS representative overheard some employees discussing the recent firing of 

several other employees and allegations involving the piracy of media. The DSS representative recognized the names of at least 

two of the employees who were fired as personnel who were cleared and performed functions as System Administrators on some 

of the accredited information systems at the facility. 

When the DSS representative questioned the facility personnel about the matter, the facility personnel refused to comment as the 

matter was under investigation by the facility’s Corporate Ethics Office. When asked if the Corporate Security Office was aware 

of the investigation, the management official was unable to answer. He did indicate however, that at least five cleared personnel 

had been fired for alleged misuse of company assets/equipment. He also alleged that the personnel were “running some sort of 

side business” and using company equipment/assets to run this business. 

No adverse information reports had been submitted on any of the individuals cited. The local DSS office launched an administrative 

inquiry into the matter which determined that no classified systems were involved. However, the inquiry also revealed that eight 

employees of either the facility or another cleared division were terminated for varying degrees of participation in the file sharing 

of copyrighted movies, music and software using company owned unclassified computer assets. Five additional employees who 

were either facility employees or employees of another cleared division, were alleged to have known about the situation but did 

not report it and were suspended and reprimanded. 

The inquiry determined that there appeared to be a breakdown between the facility’s security, human resource and ethics offices 

over reporting requirements. As a result of the inquiry, adverse information reports were submitted for the 13 cleared employees 

involved in the initial allegations of copyright violations. A member of the security department is now a member of the facility’s 

Administrative Review Committee for all employee incidents, not just incidents that involve a classified asset. The facility also 

modified its policy to invite participation of a representative from the security staff at any discussion/review of disciplinary cases, 

regardless of behavior or conduct under investigation, where the alleged violator has or is in-process for a Personnel Security 

Clearance (PCL). Facility management also agreed to ensure appropriate notification is made to the security office when an 

employee who has, or is in the process of getting, a PCL is being terminated (voluntary or involuntary). 

Finally, the corporation has a Computer Information Response Team (CIRT) which has representatives assigned at each entity 

throughout the corporation. Previously, the CIRT representatives did not work in conjunction with the local security offices. 

The CIRT representatives would work with members of the Corporate Ethics Office when assisting in the conduct of Ethics 

Investigations involving personnel who were alleged to have been misusing the unaccredited corporate computer systems. Since 

the AI pertained to adverse information associated with misuse of an unaccredited corporate computer system, along with other 

allegations, the Corporate Security Office has worked with the Corporate Ethics Office, to ensure that CIRT representatives keep 

the local security offices informed if a cleared individual is involved in any way with regard to an investigation being handled by 

a local CIRT representative.

The event resulted in a much closer relationship between the Corporate Security Office and the Corporate Ethics Office as well as 

better communication between the local security offices and the local ethics offices at each of the cleared corporate entities, and 

better communication between DSS and the facility. 

The Administrative Inquiry revealed a breakdown at the facility with 

regard to the reporting of Adverse Information associated with ethics 

investigations initiated by the Corporate Ethics Office. The case also 

revealed a similar weakness throughout the entire corporation.

LESSON 

LEARNED
24

DSS PRIORITIES AND PREPARING FOR THE FUTURE

For the coming year, DSS will continue to enhance and expand the National Industrial Security 

Program and reinvigorate the Security Education, Training and Awareness Program. Our priorities 

are:

Computer-based training for industry

Under the new focus of identifying unlawful penetrators, computer-based training will be one method to spread the word to industry about 

the reality of the threat and steps they can take to mitigate the threat. The goal is to launch this program within a year.

Industrial awards recognition program

DSS Counterintelligence is taking a new approach to reward cleared companies for uncovering unlawful penetrators. The premise for 

establishing the awards program is the reality that every company has, or likely will be, unlawfully penetrated, and as such, reporting 

these actors will no longer have negative connotations. Instead, DSS will track and reward the top 10 facilities with the highest number 

of unlawful penetrators reported, and the highest number of facility personnel who have completed the DSS threat awareness training 

programs. DSS will, in turn, positively promote those facilities which have excelled in this competition.

FOCI

DSS is leveraging best practices to refine FOCI requirements for industry and ensure that the FOCI compliance framework is geared 

toward the FOCI risks, which continue to evolve. DSS has consolidated lessons learned from previous cases and will in coming months 

issue updated policies and mitigation templates which are coordinated with operational requirements. FOCI Action Officers have reduced 

response times by one-third, which allows a more proactive approach to FOCI issues. 

Training

SETA is constantly searching out innovative methods to deliver training and increase the scope of the training offered. Currently, there are 

more than 30 courses in development, which includes building a curriculum for accreditation of the DSS work force.

Automation

DSS is realigning its contractor and civilian Information Technology (IT) resources to better support field operations. Projected 

improvements include a government project manager for each region, additional telecommunications engineers and regional contract 

support technicians who can travel to support remote offices. Delivering high quality IT support to all DSS locations will result in a more 

effective, efficient workforce and allow DSS field personnel to focus on their counterintelligence and industrial security missions.

Preparing for the future

While proud of our successes, DSS continuously seeks to improve its performance as the premier provider of personnel and industrial 

security services in the Department of Defense (DoD). Through new ideas, innovations and expanded technology, DSS will continue to 

ensure the security of our nation and our warfighters. 

“ 

...we have to be vigilant in defending our people at home. And 

that takes aggressive intelligence collection and skillful 

analysis. And that demands the effective and efficient 

coordination between federal government and our state and 

local partners.

Barack H. Obama

President of the United States

”
The editorial content of this publication was prepared, edited, and approved by 

the Director, Defense Security Service. The views and opinions expressed do not 

necessarily reflect those of the Department of Defense. To comment, contact the DSS 

Public Affairs Office at (703) 325-9471 or email at ocpa@dss.mil.
Defense Security Service

www.dss.mil