The Defense Counterintelligence and Security Agency (DCSA) recently announced the approval of a revised and expanded Standard Form (SF) 328 (SF-328). The SF-328 is a Certificate Pertaining to Foreign Interests, a standardized form used by the Government for disclosing information about foreign ownership, control, or influence (FOCI) by contractors working for the United States.
What is FOCI?
FOCI inquiries by DCSA focus on foreign investment in companies serving the U.S. Government. While foreign investment is important to the strength of the U.S. contractor base, the Government has an interest in protecting the United States from national security risks.
A company is typically evaluated under FOCI by DCSA whenever a foreign power has the ability, “direct or indirect, whether or not exercised, and whether or not exercisable, to direct or decide matters affecting the management or operations of that company in a manner which may result in unauthorized access to classified information or may adversely affect the performance of classified contracts.”
What is the SF-328?
FOCI is evaluated through a contractor’s completion of the form SF-328, known as the “Certificate Pertaining to Foreign Interests.” This is a government form that has been used to evaluate if a company or individual is eligible to access classified information. It addresses issues related to FOCI. Essentially, it’s a disclosure form where contractors provide details about possible foreign involvement in their businesses.
New Changes to the SF 328
While previously used for cleared government contractors, the form will now be required for government contractors in unclassified spaces for certain types of contracts. According to DCSA, “The SF-328 is a key element of DCSA’s evaluation of foreign ownership, control, and influence (FOCI). This updated form is intended to be used by entities for purposes outside the traditional national security clearance requirements. The form is expected to require broader disclosures to provide DCSA with greater depth of information for use in the evaluation of entities’ foreign relationships.”
New Form Published May 12
The new SF-328 was published on May 12, 2025. There are some differences between the last version of the form published in November of 2018 and the one just published. The form consists of 9 questions versus the previous version, which contained 10 questions and was last updated in November of 2018.
Differences in the November 2018 and May 2025 SF-328 Forms
There are a few differences between the new and old SF-328. Question 1 of the new version essentially combines the previous inquiry into the 5% foreign ownership provision. Question 2 remains the same. Question 3 simplifies the question about foreign participation in the management or control of the company. Question 4 essentially remains the same as before. Question 5 adds disclosures related to foreign grants and side letters. Question 6 remains the same. Question 7(a) adds a disclosure requirement for “tuition, gifts or endowments” from foreign persons that the previous version did not. Question 7(b) lowers the aggregate foreign revenue threshold from 30% to 15%.
The old Question 8 has been eliminated in the new version of SF-328. The new Question 8 is a revised version of the old Question 9, which focuses on whether individuals having management positions hold or serve as consultants for any foreign persons. The information sought here is less broad than before. Question 10 is reworded slightly but essentially remains the same.
Rationale for Changes
DCSA believes that the changes will allow it to process submissions more quickly by providing greater clarity to contractors about the nature of the information that DCSA is looking for. For this purpose, DCSA has provided implementation guidance. One important note to consider is that existing SF-328s do not need to be resubmitted at this time by contractors. However, following the deployment of the new SF-328 as of May 12, industry users seeking an initial facility clearance, facility clearance upgrade, or reporting a material change in accordance with 32 C.F.R. Part 117 will require a new or updated SF-328.
Final Thoughts
The SF-328 brings more detail to the issue of FOCI for a broader array of national security concerns. It is important for contractors to seek counsel if they run into FOCI concerns or related foreign ownership issues.
This article is intended as general information only and should not be construed as legal advice. Although the information is believed to be accurate as of the publication date, no guarantee or warranty is offered or implied. Laws, regulations, and government policies are always subject to change, and the information provided herein may not provide a complete or current analysis of the topic or other pertinent considerations. Consult an attorney regarding your specific situation.
