Acquiring a Government contractor with Top Secret clearance?

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December 14, 2023

by a searcher from The University of Chicago - Booth School of Business in Chicago, IL, USA

I'm in conversations with an IT services company providing services to Federal and State government agencies that has Top Secret clearance.

What are the implications of acquiring a company like this if I don't have Top Secret clearance at the moment? (e.g., Is it even possible? how would the transition period work?). I've checked and meet the requirements to get the clearance, but understand it can take a while.

Will appreciate any guidance on this.

Carlo

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Reply by a searcher
from The University of North Carolina at Chapel Hill in Raleigh, NC, USA
^redacted‌ I'm a little late to the party and see a few other comments ahead of me. So I will only chime in with the following caution: be mindful of the legal challenges this acquisition will face. The Gov does not have to approve the novation. I went through this when one company split off a division into a stand alone company. Seemed straightforward to spin off your own company but the Government didn't have to approve of the contract novations (see above about Gov contracts not being assignable). The process here will just be more difficult and lengthy than you can anticipate. Best of luck though.
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Reply by a searcher
from University of California, Berkeley in Laguna Niguel, CA, USA
Hi Carlo -I’m not sure exactly how the mechanics or timing of this would work, but two things come to mind.

1. You’d need to work with the seller to determine if the role you envision for yourself (e.g., the new CEO) would need a clearance and what type (e.h., Secret, Top Secret, specific compartment/programs, etc.)

2. The company you’re acquiring would then need to sponsor a clearance for you and then government would conduct a background check to determine if you’re eligible for the clearance the company requested. Common challenges include dual citizenship, credit issues, drug use, etc.
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