Hearing of the House Armed Services Committee - National Industrial Security Program: Globalization and Foreign Ownership of the Defense Industrial Base

Interview

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REP. BOYDA: Thank you so much, Mr. Chairman, for calling this hearing. And thank you all for your service.

Recently -- I represent Kansas, so there's a little issue about a contract going to Airbus as opposed to Boeing. And knowing it's certainly a complicated issue, but clearly, I get asked on a regular basis not about so much why are we outsourcing our jobs, it's why are we outsourcing our national security.

What role do you all play, or do you play any roles when it comes to those contracts? Are you consulted on that? Do you weigh in on how well these people have done in the past or what their expectation is? What role do you play in the contracting process?

MS. CALVARESI-BARR: I would say we play a minor role, but it is important. Any company that currently has a classified contract that is under the oversight of DSS gets a facility security rating every year after we do an inspection. And we notify the government contracting activities of those ratings so they're aware of how well we assess the company is postured to protect classified in their hands.

REP. BOYDA: Would you happen to know, on the Airbus contractor, or what we fondly call the Boeing contract in Kansas, do you know was that -- they already had a security clearance?

MS. CALVARESI-BARR: I don't know.

REP. BOYDA: All right. Could I just for the record just some background --

MS. CALVARESI-BARR: Certainly.

REP. BOYDA: -- that's publicly available on what that was, what the standing was? Was it part of your contracting?

MS. WATSON: Just for the record, DSS does not get involved in the contracting process itself.

REP. BOYDA: And then my follow-up question would be, to you or to -- to any of you on the panel, because the issue of outsourcing our national security, clearly this was about jobs, but it's not just about jobs, it's about outsourcing our national security. And what would you have me tell the good people of Kansas when they ask me, what are we doing to safeguard that national security?

From what I've heard today, it's not -- you know, we've had our fair share of challenges in this area and we're doing better, but as you said, we're going to be in transition for quite a while. What am I supposed to tell them about the security of our secrets and our classified information?

MS. WATSON: I think we have the proper framework in place to provide the security that we need.

Any company, that has access to classified information, needs a facility security clearance. In order to get that, their key management personnel need a personnel security clearance. Usually that's the head of the company.

The facility security officer needs a security clearance. And so does anyone in that company that has access to classified information. So that is the general framework.

There's another comment I want to make about FOCI companies to put this in perspective. FOCI companies come to us in two ways.

One is, a new company that's already under FOCI is seeking access to classified and needs a facility security clearance. So during the course of processing that company for the clearance, we understand what the Foreign Ownership Controller Influence is in it.

There was a question earlier about hedge funds. We do not approve companies for access to classified unless we understand completely the ownership chain. So there is some transparency there.

The second class of cases are companies that already have facility security clearances that are then -- there's a foreign interest that acquires part of the business, or there is a control element that comes into play. And that's when there would be a material change that they need to report to us.

There have been lags in reporting. But again the facility security officers, if they're doing their jobs, and we train them on how to do their jobs, report to us information like that on a routine basis. We don't depend on the annual inspections.

REP. BOYDA: I'm going to run out of time but thank you.

And again if you would again for the record, give me some background about what the status of Airbus was, if they were already in this category, and you've already, you know, they already have some of the clearances; you've already done some of your inspections on that. But I appreciate that.

Again it's very concerning to hear that we've left this, you know, we've left this very important process pretty unfunded and without what they need to get the job done. So it's a little concerning. Actually it's very, very, very concerning. I appreciate the work that you're doing to clear it up. Thank you.

I yield back.

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