Challenges of FOCI Mitigation

The National Industrial Security Program (NISP) proposes three options for companies to mitigate FOCI issues depending on the level and participation of the foreign ownership. These options were developed for larger companies with substantial time, resources  and capital to implement.​ Tech startups, looking for quick access to US Federal Marketplace, are quickly faced with a lengthy bureaucratic process requiring millions of dollars in investment with little to no revenue.

---

Lengthy Bureaucratic Process

• Extensive coordination with approving authorities

• Expensive Outside Counsel Engagement - FOCI Experts

• Eventual creation of an entity and board operating independent of the parent

• $3M annual expense during FOCI mitigation

Government Sponsor (End User)

• Identify an end user willing to sponsor entity

• End user must be a committed stakeholder to overcome issues with approving authorities

Independent Entity

• Entity ceases to be controlled by the parent - complete parent separation and isolation

• Briefings to foreign ownership documented and reported

• Complete replication and separation of IT, business, and support systems/processes

• $3M to $5M operating expense after FOCI mitigation

Entity Staffing

• Highly disruptive to morale and culture for employees assigned to the new entity

• Entity employees banished from parent culture, events, and systems (Salesforce/Slack/Teams)

• Challenging to hire a Facility Security Officer and specialized staff into this environment

Learn more about the experiences and solutions provided by Bearing, reach out.