February 16, 2015

National Security Alert: National Interest Determinations (NID): DoD Streamlines and Centralizes the NID Approval Process

Summary: On February 11, 2015, the Under Secretary of Defense for Intelligence issued a Directive-Type Memorandum (DTM) that significantly alters key components of the process by which a company under foreign ownership, control or influence (FOCI) operating under a US Department of Defense (DoD) Special Security Agreement (SSA) may obtain a National Interest Determination (NID) in order to access proscribed classified information (Proscribed Information). In summary, the DTM assigns the DoD’s Defense Security Service (DSS) a more centralized role in the overall process for evaluating and obtaining a NID from a Government Contracting Activity (GCA), removes some of the open-endedness of NID timing and contemplates a broader “blanket” NID for certain companies that have been operating under SSAs for at least ten years. Most other fundamental aspects of NIDs—including when NIDs are required, the NID approval standard and the statutory requirement for a waiver by the Secretary of Defense for the issuance of a NID to a foreign-government-controlled company—remain unchanged. While the new provisions have the potential to streamline the NID process, SSA companies that require access to Proscribed Information should continue to carefully plan their NID strategy, including with respect to coordination with both DSS and the relevant GCA(s).

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