"For Companies Operating Under Approved FOCI Mitigation Plans: A Shared Services Plan Checkup Can Avoid Unnecessary Costs"

Most cleared companies operating under formal agreements to mitigate or negate foreign ownership, control or influence ("FOCI") are familiar with the Affiliated Operations Plan ("AOP") or its predecessor, the Administrative Services Agreement ("ASA").  These plans allow cleared companies and their affiliates operating outside the agreement to share services that would otherwise be prohibited.

Prior to 2013, cleared companies submitted draft ASAs to the Defense Security Service ("DSS") (or other Cognizant Security Agencies) for approval of shared services, such as payroll processing, health insurance, 401K administration, certain human resources functions, and even legal services.  In practice, ASAs were as varied as the companies that implemented them. 

In 2013, hoping to bring uniformity to ASAs, DSS required new requests for shared services to be made in the form of an AOP.  The AOP template requires advance DSS approval for shared (1) administrative services, (2) third-party services, (3) employees, and (4) cooperative commercial arrangements ("CCAs").  

Since the announcement of the AOP policy in 2013, however, there have been several important changes to the review and approval process for AOPs, and the AOP template itself has changed in response to contractor and DSS concerns. 

This Stroock Special Bulletin discusses these changes and their implications for companies operating under FOCI mitigation or negation agreements.