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Organization Security Screening & Federal Contractors

​A little over a year ago, I posted about the Canadian Industrial Security Directorate’s (CISD – a division of PSPC) requirement for all independent contractors doing business with the Feds to clear their incorporated entities under the Private Sector Organization Screen (PSOS). Since then, many contractors at Eagle have been through the process and we all learned more about it, including some of the common questions. Here are the answers to some of the questions we hear, as well as a few tips to help you through the PSOS process:

Wait, what’s happening?

Independent contractors working in the Federal Government have always been required to get personnel security screening at some level (ex. Reliability Status, Secret Clearance, etc.). These clearances were completed by the organizations through whom they were subcontracting. For example, when contractors work through Eagle, we either submit a request for a new personnel clearance or duplicate their current one. Regardless of what happens, Eagle ends up “owning” the clearance and, at least in the eyes of CISD, the contractor is considered part of Eagle’s personnel (even though that is not the case). Eagle is able to submit and own security clearances because we have a Facility Security Clearance (FSC), meaning Eagle, as a corporation, is security cleared.

In 2012, CISD implemented a new process. Rather than incorporated independent contractors having a personnel clearance owned by many different organizations, they are instead required to gain clearance for their own corporation. Once that is complete, their corporation will hold their personnel clearance.

What’s the process to get this done?

Upon signing your new subcontract, the prime contractor (often a staffing agency) is responsible for ensuring both your corporation and the personnel completing the work (you) hold the proper clearance. If your corporation is not already cleared, the prime contractor will be responsible for “sponsoring” your corporation to receive the appropriate clearance.

The prime contractor will complete the necessary paper work to initiate the process and submit it to PSPC.  Once that paper work is processed (usually a couple weeks), you will receive an email from PSPC containing some forms.

You will need to complete and submit the forms within 30 days. After which, PSPC may come back to you with some more questions and request a brief interview. You can find the complete step-by-step process here.

What security level will I be cleared to?

Your corporation will either require Designated Organization Screening (DOS) or Facility Security Clearance (FSC).  This will depend on the security requirement of your contract. If you’re only required to hold Reliability Status, you will be cleared for DOS. If you require Classified, Secret or Top Secret Security Clearance, you would require FSC.

In some cases, a contractor’s corporation may already hold one status but require a higher level for the new contract. In this case, the prime contractor would have to sponsor the corporation for an upgrade.

How can I get started?

You cannot be sponsored for PSOS unless you are on an active contract that requires security clearance.

How long will it take?

The process varies, but we’re hearing from contractors who have already completed it that it takes approximately 1 year.

How can I prepare?

If you are expecting to start the process soon, you can prepare by gathering some of the information that will be asked in the initial Application for Registration, including:

  • Business Procurement Number– this is a mandatory requirement to do business with the Federal Government. As long as you have an HST number, you can get your PBN here.

  • The owners of the corporation and their ownership percentage– For an independent contractor, this is usually just themselves and, in some cases, their spouse or a business partner.

  • Company Security Officer (CSO) and Alternate Company Security Officer (ACSO)– The CSO would be the independent contractor (you). The ACSO is only required if you have more than one employee.

  • Any Key Senior Officials (KSOs – owners, officers, directors)– Again, this is usually just the independent contractor and maybe one other person.

  • Security Clearances for the CSO, ASCOs, KSOs, and any personnel who will be performing work– In many cases, you will wear all of these hats. You also probably already have the necessary clearance. If you are in a situation described above where you have another ACSO or KSO and they are not cleared, contact your agency to see if they can help get that process started immediately.

  • Review the other forms that will come your way– some of the initial forms that PWGSC sends you can be found online, including:

Will I need to go through the entire personnel security clearance process again?

No. If you already have a valid personnel security clearance, you will only need to complete the Personnel Security Screening Form. At the top, in Section A, you would select “Transfer” so your personnel clearance would be brought over to your corporation after it gets cleared.

How will this change the way I do business?

There will be very few changes in how you do business, although you will see some benefits such as:

  • You will no longer have to duplicate your clearance every time you start working with a new agency

  • You will be able to work directly with PSPC to issue your own security clearance renewals and ensure it does not expire.

  • You will no longer be considered “Personnel” of your agency, which helps further separate you from being an employee in the eyes of the CRA

Will it affect my current contract?

Your current contract will not be affected by the PSOS process. According to CISD regulations, a subcontract should not begin until PSOS is complete; however, PSPC recognizes that this would have significant impact on business and are allowing a transition period. Your contract will be allowed to start using your personnel clearance owned by your agency.

What if I decide not to do this?

If you choose to ignore the forms and not clear your organization, there is a chance that you will not be able to work on Federal Government contracts that require security clearance.

Hopefully this helps clear things up for you. If you do have any other questions, or would like to share your personal experience with the PSOS process and some tips for getting through it, please feel free to get in touch with us.