Shared Classified Commercial Coworking Spaces
The legislation would establish a pilot program for the Department of Defense (DoD) to establish classified commercial shared spaces (think WeWork or hotels but for cleared small businesses and universities), professionalize industrial security protections, and accelerate the integration of new artificial intelligence (AI) technologies into actual warfighting capabilities. While the impact of this pilot program would be felt across the National Security Innovation Base, this issue is particularly pertinent to the small business and start-up community, for whom access to secure facilities is a major impediment to performing and competing for government contracts.
Challenge and Opportunity
The process of obtaining and maintaining a facility clearance and the appropriate industrial security protections is a major burden on nontraditional defense contractors, and as a result they are often disadvantaged when it comes to performing on and competing for classified work. Over the past decade, small businesses, nontraditional defense contractors, and academic institutions have all successfully transitioned commercial solutions for unclassified government contracts. However, the barriers to entry (cost, complexity, administrative burden, timeline) to engage in classified contracts has prevented similar successes. There have been significant and deliberate policy revisions and strategic pivots by the U.S. government to ignite and accelerate commercial technologies and solutions for government use cases, but similar reforms have not reduced the significant burden these organizations face when trying to secure follow-on classified work.
For small, nontraditional defense companies and universities, creating their own classified facility is a multiyear endeavor, is often cost-prohibitive, and includes coordination among several government organizations. This makes the prospect of building their own classified infrastructure a high-risk investment with an unknown return, thus deterring many of these organizations from competing in the classified marketplace and preventing the most capable technology solutions from rapid integration into classified programs. Similarly, many government contracting officers, in an effort to satisfy urgent operational requirements, only select from vendors with existing access to classified infrastructure due to knowing the long timelines involved for new entrants getting their own facilities accredited, thus further limiting the available vendor pool and restricting what commercial technologies are available to the government.
In January 2024, the Texas National Security Review published the results of a survey of over 800 companies from the defense industrial base as well as commercial businesses, ranging from small businesses to large corporations. 44 percent ranked “accessing classified environments as the greatest barrier to working with the government.” This was amplified in March 2024 during a House Armed Services Committee hearing on “Outpacing China in Defense Innovation,” where Under Secretary for Acquisition and Sustainment William LaPlante, Under Secretary for Research and Engineering Heidi Shyu, and Defense Innovation Unit Director Doug Beck all acknowledged the seriousness of this issue.
The current government method of approving and accrediting commercial classified facilities is based on individual customers and contracts. This creates significant costs, time delays, and inefficiencies within the system. Reforming the system to allow for a “shared” commercial model will professionalize industrial security protections and accelerate the integration of new AI technologies into actual national security capabilities. While Congress has expressed support for this concept in both the Fiscal Year 2018 National Defense Authorization Act and the Fiscal Year 2022 Intelligence Authorization Act, there has been little measurable progress with implementation.
Plan of Action
Congress should pass legislation to create a pilot program under the Department of Defense (DoD) to expand access to shared commercial classified spaces and infrastructure. The DoD will incur no cost for the establishment of the pilot program as there is a viable commercial market for this model. Legislative text has been provided and will be socialized with the committees of jurisdiction and relevant congressional members offices for support.
- Agency: U.S. Department of Defense
- Cost: $0
- Budget Line: N/A
Legislative Specifications
SEC XXX – ESTABLISHMENT OF PILOT PROGRAM FOR ACCESS TO SHARED CLASSIFIED COMMERCIAL INFRASTRUCTURE
(a) ESTABLISHMENT. – Not later than 180 days after the date of enactment of this act, the Secretary of Defense shall establish a pilot program to streamline access to shared classified commercial infrastructure in order to:
- (1) expand access by a small business concern, nontraditional defense contractors, and institutions of higher learning to secret/collateral accredited facilities and sensitive compartmented information facilities for the purpose of providing such contractors with a facility to securely perform work under existing classified contracts;
- (2) reduce the cost and administrative requirements on small businesses concern, nontraditional defense contractors, and institutions of higher learning to maintain access to sensitive compartmented information facilities;
- (3) increase opportunities for small businesses concerns, nontraditional defense contractors, and institutions of higher learning that have been issued a Facility Clearance to apply for federal government funding opportunities;
- (4) identify policy barriers that prevent broader use of shared classified commercial infrastructure, including access to required information technology systems, accreditation, and timelines;
(b) DESIGNATION. – The Secretary of Defense shall designate a principal civilian official responsible for overseeing the pilot program authorized in subsection (a)(1) and shall directly report to the Deputy Secretary of Defense.
- (1) RESPONSIBILITIES – The principal civilian official designated under subsection (b) shall:
- (A) seek to enter into a contract or other agreement with a private-sector entity or entities for access to shared classified commercial infrastructure and to facilitate utilization by covered small businesses and institutions of higher learning.
- (B) coordinate with the Directors of the Defense Counterintelligence and Security Agency, the Defense Intelligence Agency, and the Defense Information Systems Agency to prescribe policies and regulations governing the process and timelines pertaining to how shared commercial classified infrastructure may obtain relevant facility authorizations and access to secure information technology networks from the Department.
- (C) make recommendations to the Secretary in order to modernize, streamline, and accelerate the Department’s approval process of contracts, subcontracts, and co-use or joint use agreements for shared classified commercial infrastructure.
- (D) develop and maintain metrics tracking the outcomes of active and open facility accreditation requests from shared commercial classified infrastructure under the pilot program.
- (E) provide a report to the congressional defense committees, not later than 270 days after the enactment of this act, on the establishment of this pilot program.
(c) REQUIREMENTS.
- (1) As part of the pilot in subsection (a) the Directors of the Defense Counterintelligence and Security Agency, the Defense Intelligence Agency, and the Defense Information Systems Agency shall prescribe policies and regulations governing the process and timelines pertaining to how shared commercial classified infrastructure and facilities may obtain relevant facility authorizations and access to relevant secure information technology (IT) networks from the Department of Defense.
- (2) The pilot program shall include efforts to modernize, streamline, and accelerate the Department’s approval process of shared, co-use, and joint use agreements to facilitate the department’s access for small business concerns, nontraditional defense contractors and institutions of higher learning in classified environments.
(d) DEFINITION. – In this section:
- (1) The term “small business concern” has the meaning given such term under section 3 of the Small Business Act (15 U.S.C. 632).
- (2) the term “nontraditional defense contractor” has the meaning given in section 3014 of title 10, United States Code.
- (3) the term “institutions of higher learning” has the meaning given in section 3452(f) of title 38, United States Code.
- (4) the term “shared commercial classified infrastructure” means fully managed, shared, classified infrastructure, (facilities and networks), and associated services that are operated by an independent third-party, for the benefit of appropriated cleared government and commercial personnel that have limited or constrained access to secret collateral and sensitive compartmented information facilities.
(d) ANNUAL REPORT. – Not later than 270 days after the date of the enactment of this Act and annual thereafter until 2028, the Secretary of Defense shall provide to the congressional defense committees a report on establishment of this pilot program pursuant to this section, to include:
- (1) a list of all active and open facility accreditation requests from entities covered in subsection (a)(1), including the date the request was made to the Department and to the relevant facility accreditation agency.
- (2) a list of the total number of personnel authorized to conduct facility certification inspections under the pilot program.
- (3) actions taken to streamline the Department’s approval process for approval of co-use and joint use agreements to facilitate the department’s access to small business concerns, nontraditional defense contractors, and institutions of higher learning in classified environments.
(e) TERMINATION. – The authority to carry out this pilot program under subsection (a) shall terminate on the date that is five years after the date of enactment of this Act.
Conclusion
Congress must ensure that the nonfinancial barriers that prevent novel commercially developed AI capabilities and emerging technologies from transitioning into DoD and government use are reduced. Access to classified facilities and infrastructure continues to be a major obstacle for small businesses, research institutions, and nontraditional defense contractors working with the government. This pilot program will ensure reforms are initiated that reduce these barriers, professionalize industrial security protections, and accelerate the integration of new AI technologies into actual national security capabilities.
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