Each of the individual services make their own security clearance approval/disapproval decisions, based on the information provided on the Security Clearance Questionaire, and the information provided by DSS.
In order to make their decisions, the services use adjudicative guidelines, which have been approved for use by the President of the United States.
For an overview of how the Department of Defense (DOD) processes security clearances, see the article, Security Clearance Secrets.

