Revelation of NSA Surveillance Programs Means Increased Scrutiny for Government Contractors

  Revelation of NSA Surveillance Programs Means Increased Scrutiny for
  Government Contractors

 Fluet Huber + Hoang PLLC Partner Francis Hoang Identifies Contractors’ Most
                               Urgent Concerns

Business Wire

WASHINGTON -- June 24, 2013

The biggest intelligence leak in the history of the National Security Agency
occurred this month with revelations regarding the agency’s expansive
surveillance efforts, including the publication of a secret court order giving
the government access to telephone records of millions of Americans and
documentation of a previously undisclosed “PRISM” program through which the
NSA gathered user data from Google, Facebook, and other popular Internet

Those initial leaks were provided to The Guardian by Edward Snowden, the
now-fired former employee of defense contractor Booz Allen Hamilton. While
Snowden continues to communicate with the media, and with his leaks stirring
continued controversy in Washington, government contractors will become an
important part of the debate.

Francis Hoang, partner at Fluet Huber + Hoang PLLC, has extensive experience
representing clients in the defense, intelligence, and homeland securities
industries. A former Associate Counsel to the President of the United States,
he holds an active TS-SCI security clearance. Below, he answers the most
pressing questions facing government contractors in the wake of the
NSA-related leaks:

In response to these leaks, do you expect the government to investigate not
just Snowden, but Booz Allen Hamilton itself?

Investigators will certainly be looking at Booz Allen—and particularly whether
its compliance and security programs were lax. And you can expect the response
to be much wider than that. Before working at Booz Allen, Snowden worked at
Dell, which just points to the fact that the leaks and the government’s
response to them are something for the entire defense and government
contracting community to be concerned about.

What should contractors be focused on as they prepare for enhanced government

Contractors should be reviewing their compliance programs on all fronts. That
would include a close look at obvious concerns such as the physical and
electronic security of sensitive material and of course employee hiring
procedures. It should also extend to their compliance with export regulations,
the degree of access contractors grant to visitors, and other security issues
not immediately implicated by the NSA leaks. They should also examine the
security requirements of their current contracts.

How can a contractor audit its own performance on those different fronts?

At minimum, they should be ensuring that their existing policies address
operational risks, that their training programs educate employees on security
issues, and that they provide an adequate framework for employees to report
and resolve those issues. In many cases, contractors can benefit from an
outside audit of their security practices and procedures, or from consulting
with a lawyer or other specialist in corporate compliance.

Do you expect a wave of new restrictions on contractors to go into effect as a
result of these leaks?

I don’t believe so. Existing regulations provide plenty of enforcement tools
for the government to encourage contractor compliance and penalize wrongdoing.
These range from contract termination to informal sanctions to formal
suspension and debarment. I would expect, however, that agencies would use
those existing tools more aggressively following the NSA leak.

Will recent events increase the price of contractor services, due to their
increased risk of liability?

Probably, but not in the way you might think. The number of contractors that
pay a penalty or other direct cost will be relatively small. In contrast, many
contractors will see their costs increased indirectly, through increased
insurance premiums, increased legal and other compliance costs, and more
customer scrutiny, which will require time and energy in response. There also
will be heightened scrutiny of areas not related to the recent leak. There may
be an increase in Defense Contract Audit Agency audits, for example, or
Defense Contract Management Agency investigations of issues that previously
might have gone overlooked. These will all drive up overhead costs and G&A

About Fluet Huber + Hoang PLLC

Fluet Huber + Hoang was started by former big firm lawyers with the vision of
a full service law firm that focused on (1) improving lives; and (2) helping
businesses grow. From 1 lawyer in 1 office with 1 client, FH+H has rapidly
grown to 25 lawyers and staff with 146 years of legal experience in 3 offices
serving 250+ individuals and 100+ businesses, from startups to multinational
corporations. For more information, visit


Fluet Huber + Hoang PLLC
Emily Taggart, 703-590-1234
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