Understanding Foreign Ownership, Control, or Influence (FOCI) in Government Contracting:

FOCI refers to situations where foreign interests have the power to direct or influence the management or operations of a U.S. entity in a way that could impact national security. Here are some key points related to FOCI in government contracting:

1. General Intent:

• The U.S. government recognizes that foreign investment can contribute to the vitality of the U.S. industrial base.
• However, it aims to allow foreign investment while safeguarding national security interests.
• FOCI procedures are designed to mitigate risks associated with foreign firms gaining unauthorized access to classified information.

1. Criteria for FOCI:

• A U.S. entity is considered to be under FOCI when:
• A foreign interest has the power to direct or decide issues affecting the entity’s management or operations.
• This could result in unauthorized access to classified information or adversely affect performance of classified contracts.
• The foreign government exercises or could prospectively exercise that power.
• This can happen through ownership of the U.S. entity’s securities, contractual arrangements, or other means.
• It may also involve controlling or influencing the election or appointment of board members.

1. Protection of Classified Information:

• When an entity is determined to be under FOCI, the primary consideration is protecting classified information.
• The Contracting Security Authority (CSA) takes necessary actions to safeguard classified data.
• If an entity is in the process of an eligibility determination for access to classified information and is subsequently found to be under FOCI, it becomes ineligible until effective security measures are implemented.

1. Negotiating FOCI Mitigation:

• Contractors under FOCI can negotiate acceptable mitigation or negation measures.
• Existing eligibility determinations may continue during good-faith negotiations.
• However, if security is at risk, the CSA may invalidate the determination until an acceptable FOCI mitigation plan is in place.

1. FY2024 NDAA Provisions:

• The FY2024 National Defense Authorization Act (NDAA) emphasizes efforts to prevent FOCI in the supply chain.
• It increases reporting requirements related to FOCI and imposes stricter restrictions on contractors with FOCI risk1.

Determining FOCI

The process of determining FOCI begins when a company submits Standard Form (SF) 328, the Certificate Pertaining to Foreign Interest, which is a 10-question document designed to help identify the presence of FOCI in an organization. The form is submitted electronically & each of the 10 questions requires a yes or no answer, and any yes answer requires that additional information or documentation be included with the form.

Click below for Instruction for Completion of the Certificate Pertaining to Foreign Interests:

https://www.dcsa.mil/Portals/69/documents/foci/sf328_instructions.pdf

Defense Production Act (DPA) Title III:

This program is a vital investment initiative under Industrial Policy. This program is designed to bolster critical domestic industrial capabilities crucial for the Department of Defense and the American Warfighter. Here are the key focus areas of the DPA Title III program:

1. Sustain Critical Production: The DPA Title III program aims to sustain industrial base capabilities essential for Material Availability, Reliability, Maintainability, Mobility, Commonality, or Affordability. By investing in these areas, the programs ensure the consistent supply of crucial materials.

2. Commercialize Research & Development Investments: This facet of the program focuses on fostering Advanced Component or System Development and Demonstration capabilities. By investing in these areas, the program aims to retain a qualitative edge in capabilities while also establishing commercial viability or scaling up.

3. Scale Emerging Technologies: Innovation is at the heart of the DPA Title III program, which seeks to accelerate the introduction of new capabilities into both the organic and commercial marketplace. Emerging Technology Investments target technologies developed to address emerging threats, capability gaps, or to enhance compatibility and service of existing systems or platforms. These investments are often the result of groundbreaking research, development, and demonstration capabilities.

For more information, visit OUSD A&S - Industrial Base Policy (businessdefense.gov)

Understanding Cybersecurity Terminology and Additional Resources:

Now that we have learned the basics about Cybersecurity and the associated models, it is important to ensure you understand the terminology too. Sometimes, working in the government space feels like everyone is speaking a different language, so here are some helpful tools to define your journey to compliance as well as other resources:

1. NIST Glossary of Terms: https://csrc.nist.gov/glossary
2. As defined in the FAR: Part 4.19 - Basic Safeguarding & Part 252.204-7020 - NIST SP Requirements
3. CMMC Level 1 explained by NAPEX resource partner, Totem Tech: https://www.totem.tech/cmmc-level-1/
4. Totem Tech Glossary: https://www.totem.tech/glossary/
5. Cyber Acronyms: https://public.cyber.mil/acronyms/
6. Manufacturer's Guide to Cybersecurity: https://www.nist.gov/system/files/documents/2019/11/14/mepnn_cybersecurity_guide_10919-508.pdf
7. Alerts and Advisories from the Cybersecurity & Infrastructure Security Agency: https://www.cisa.gov/news-events/cybersecurity-advisories
8. Internet Crime Complaint Center with the Federal Bureau of Investigation: https://www.ic3.gov/Home/BEC
9. Report Scams/Fraud with the Federal Trade Commission: https://reportfraud.ftc.gov/
10. SBA's Strengthen Your Cybersecurity: https://www.sba.gov/business-guide/manage-your-business/strengthen-your-cybersecurity

Bonus self-checks to see how prepared you are to defend yourself against scams!

• Phishing Quiz: https://www.ftc.gov/business-guidance/small-businesses/cybersecurity/quiz/phishing
• Cybersecurity Basics Quizzes: https://www.ftc.gov/business-guidance/small-businesses/cybersecurity/quiz

For more guides, checklists, or templates to assist you, please reach out to your CTAPEX counselor!

The Service-Disabled Veteran-Owned Certification through SBA:

The government never understands what their veterans endure and overcome while serving their country. For many years, veterans were treated like second class citizens or just a foot note in a news article. Thankfully, that narrative has changed for the better. Following the Vietnam conflict, veterans started to speak up and demand better treatment from their fellow citizens and more importantly their former bosses. Thus became the creation of the Department of Veteran’s Affairs and various organizations, both within the government and in the private sector, geared towards those who signed the “blank check” for Uncle Sam. In 1999, the US government passed the Veteran Entrepreneurship and Small Business Development Act which became the backbone for government contracting focusing on Veteran-owned businesses. Then in 2003, the Veterans Benefits Act was passed which gave government agencies the ability to set aside contracts for Veteran-Owned Small Businesses and Service-Disabled Veteran-Owned Small Businesses.

           To gain this certification, the business must meet the eligibility standards set forth:

·        The business must be small according to SBA standards.

·        The veteran must own 51% of the business.

·        The Veteran must have a service-connected disability determined by the DVA or DOD.

·        The veteran must control the management and daily operations.

·        The Veteran must hold the highest officer position in the business.

You must also certify your military service with your DD Form 214. You also must validate your disability via documentation from the VA. The certification process is all self-paced and clearly broken down on the VOSB portal under the Small Business Administration link.

           You may ask yourself if this extra work is worth it. Well to date there are over 500,000 SDVOSB throughout the United States of America. There are also some exclusive benefits to this group of business owners. The federal government aims to award at least 5% of all federal contracting dollars to SDVOSBs each year. Competition is limited for certain federal contract opportunities to businesses that participate in the SDVOSB program. Joining the SDVOSB program makes your business eligible to compete for the program’s set-aside and sole source contracts. Veteran-owned small businesses can also access federally owned private property no longer in use through the General Services Administration's (GSA) Federal Surplus Personal Property Donation Program.

Here are some helpful YouTube videos and links:

https://www.sba.gov/federal-contracting/contracting-assistance-programs/veteran-contracting-assistance-programs

https://veterans.certify.sba.gov/

https://www.youtube.com/watch?v=_KZgdcdkq54&t=187s

https://www.youtube.com/watch?v=_Myp0s9JKmg

Government-led Innovation Programs:

These programs play a crucial role in advancing technological progress, stimulating economic growth, and addressing societal challenges. By providing funding, resources, and support to small businesses and research institutions, these programs help drive innovation, create jobs, and enhance competitiveness on a national and global scale. Through continued investment in these initiatives, the US can help catalyze breakthrough technologies and solutions that benefit society as a whole, including small businesses who comprise the lion's share of SBIR/STTR grants and funding.

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are government-led initiatives in the United States that aim to foster innovation and technological advancement by providing funding opportunities for small businesses. The SBIR program specifically focuses on supporting small businesses in conducting research and development (R&D) that has the potential for commercialization. On the other hand, the STTR program requires small businesses to collaborate with research institutions, such as universities or federal laboratories, to facilitate technology transfer from the lab to the marketplace. These programs are administered by various federal agencies, such as the National Science Foundation (NSF), the Department of Defense (DoD), and the National Institutes of Health (NIH). Each agency sets aside a portion of its extramural R&D budget to fund small businesses through the SBIR and STTR programs. This funding can be instrumental in helping small businesses develop new technologies, products, and services that have the potential to address important societal needs or create new market opportunities.

In addition to SBIR and STTR programs, there are other government-led initiatives aimed at fostering innovation and entrepreneurship. In December 2014, Congress passed the Revitalize American Manufacturing and Innovation Act (RAMI Act) into law, which gave Congressional authorization to the Advanced Manufacturing National Program Office and authorized the Department of Commerce to hold “open topic” competitions for manufacturing innovation institutes where those topics of highest importance to industry could be proposed. The resulting initiative Manufacturing USA, institutes lead research and development on critical manufacturing technologies to strengthen U.S. global competitiveness and maintaining the US's edge in all aspects of manufacturing. They accomplish this through a joint effort between private industry, academia, and government entities to ensure innovation and uplift manufacturing and their ensuing workforce remains local strengthening the supply chain and the economy. In total there are 17 manufacturing industries at the moment ranging from Cybersecurity, material manufacturing, to energy. 

Search open SBIR funding topics here: https://www.sbir.gov/sbirsearch/topic/current/research

Or reach out to your CT APEX counselor for more information.

Kendy Tran graduated from UCONN with a BA in Economics focusing on Data Sciences. He previously worked as a SWE and Data Analyst (MDM) Master Data Management for Mayo Clinic.

He is multilingual: fluent in Vietnamese, and Chinese Mandarin & French (Conversational)

Past experience leading a team: Lead/Manager and Supervisor of production in a Health Manufacturing Company, administered data and monitored production trends, and participated in cross-functional teams.

He is a quicker learner, extremely tech savvy, well versed in software language coding, data analysis, hardware knowledge and stocks.

Welcome to the CTAPEX team, Kendy! We are so glad to have you as a critical part of what we do.