The SSA replaces the previous proxy agreement for QinetiQ North America. A Proxy Board is a requirement imposed under a U.S. Department of Defense Defense Security Service proxy agreement on foreign investors wishing to acquire certain U.S. companies. This is done for national security reasons and applies mainly to defense companies that participate in top secret contracts. The proxy agreement is between the foreign company, the U.S. subsidiary, which holds classified contracts, and DSS. Under the agreement, QinetiQ`s U.S. defense and security operations will be consolidated into a single unit. QinetiQ has signed a new Special Security Agreement (SSA) with the U.S.
Security Defense Agency (DCSA). A variant is a Special Security Agreement (SSA) in which the company`s board of directors can be composed of both U.S. citizens and nationals of the parent company`s country. In this case, when national security issues are discussed, only U.S. managers can participate. SSAs require companies to be managed in accordance with U.S. law and by U.S. citizens.  In May 2006, the CEO of BAE Systems described the «firewall status» of BAE`s U.S. subsidiary, BAE Systems Inc.: «The British members of the company`s management, including me, get to see the financial results; but many areas of technology, product and program are not visible to us. The SSA effectively allows us to be a U.S.
company in the U.S. and offers maximum security and integrity in some of the most sensitive areas of national security.  Steve Wadey, CEO of QinetiQ Group Plc, said: «Building on the acquisition of MTEQ, this new special security agreement allows us to fundamentally reshape the way we are in the market as an integrated defence and security company. This is an important step in QinetiQ`s growth strategy. During the period during which the special security agreement is in force, appointments of new or replacement directors become final only when they have been approved by the DSS. Recently, QinetiQ North America won the U.S. Army`s Robotic Combat Vehicle Light (RCV-L) program. Policies and procedures must also ensure that «electronic communications» (as defined in the Special Security Agreement) are not used by any of the related undertakings to exercise influence or control over the business or management of the undertaking in a manner that may affect the performance of classified contracts. In a separate development, QinetiQ announced the acquisition of software development and data analytics company Naimuri. A proxy board is a board composed exclusively of American citizens responsible for the day-to-day operation of the company. The company`s classified information is thus «isolated» from foreign exploitation, but the parent company still benefits from the profits of its subsidiary.
«The SSA will enable a much higher level of cooperation, which will facilitate the establishment of integrated business capture teams and the use of investments across the group. . . .