[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
WHAT'S THE HOLD UP? A REVIEW OF SECURITY CLEARANCE BACKLOG AND
RECIPROCITY ISSUES PLAGUING TODAY'S GOVERNMENT AND PRIVATE SECTOR
WORKFORCE
=======================================================================
HEARING
before the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
MAY 6, 2004
__________
Serial No. 108-199
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
95-869 WASHINGTON : 2004
_________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866)512-1800;
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
CHRIS CANNON, Utah DIANE E. WATSON, California
ADAM H. PUTNAM, Florida STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia C.A. ``DUTCH'' RUPPERSBERGER,
CANDICE S. MILLER, Michigan Maryland
TIM MURPHY, Pennsylvania ELEANOR HOLMES NORTON, District of
MICHAEL R. TURNER, Ohio Columbia
JOHN R. CARTER, Texas JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee ------ ------
PATRICK J. TIBERI, Ohio ------
KATHERINE HARRIS, Florida BERNARD SANDERS, Vermont
(Independent)
Melissa Wojciak, Staff Director
David Marin, Deputy Staff Director/Communications Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
C O N T E N T S
----------
Page
Hearing held on May 6, 2004...................................... 1
Statement of:
Shenoy, Sudhakar V., chairman, Northern Virginia Technology
Council; Bobbie G. Kilberg, president, Northern Virginia
Technology Council, accompanied by Gary Nakamoto, NVTC; and
Douglas Wagoner, chairman, Intelligence and Security Task
Group, Information Technology Association of America....... 83
Wilshusen, Gregory C., Acting Director, Defense Capabilities
and Management, U.S. General Accounting Office; Stephen C.
Benowitz, Associate Director, Division for Human Resources
Products and Services, U.S. Office of Personnel Management;
Heather Anderson, Acting Director of Security, Office of
the Under Secretary of Defense for Intelligence; and J.
William Leonard, Director, Information Security Oversight
Office..................................................... 12
Letters, statements, etc., submitted for the record by:
Anderson, Heather, Acting Director of Security, Office of the
Under Secretary of Defense for Intelligence, prepared
statement of............................................... 50
Benowitz, Stephen C., Associate Director, Division for Human
Resources Products and Services, U.S. Office of Personnel
Management, prepared statement of.......................... 43
Davis, Chairman Tom, a Representative in Congress from the
State of Virginia, prepared statement of................... 4
Leonard, J. William, Director, Information Security Oversight
Office, prepared statement of.............................. 63
Shenoy, Sudhakar V., chairman, Northern Virginia Technology
Council, prepared statement of............................. 85
Wagoner, Douglas, chairman, Intelligence and Security Task
Group, Information Technology Association of America,
prepared statement of...................................... 120
Waxman, Hon. Henry A., a Representative in Congress from the
State of California, prepared statement of................. 8
Wilshusen, Gregory C., Acting Director, Defense Capabilities
and Management, U.S. General Accounting Office, prepared
statement of............................................... 15
WHAT'S THE HOLD UP? A REVIEW OF SECURITY CLEARANCE BACKLOG AND
RECIPROCITY ISSUES PLAGUING TODAY'S GOVERNMENT AND PRIVATE SECTOR
WORKFORCE
----------
THURSDAY, MAY 6, 2004
House of Representatives,
Committee on Government Reform,
Washington, DC.
The committee met, pursuant to notice, at 10:24 a.m., in
room 2154, Rayburn House Office Building, Hon. Tom Davis of
Virginia (chairman of the committee) presiding.
Present: Representatives Tom Davis of Virginia, Platts,
Schrock, Miller, Blackburn, Waxman, Maloney, Cummings, Tierney,
Clay, Watson, Van Hollen, and Norton.
Also present: Representative Moran of Virginia.
Staff present: David Marin, deputy staff director and
director of communications; Ellen Brown, legislative director
and senior policy counsel; Robert Borden, counsel and
parliamentarian; John Cuaderes, senior professional staff
member; Mason Alinger, professional staff member; Teresa
Austin, chief clerk; Brien Beattie, deputy clerk; Jason Chung,
legislative assistant; Kristin Amerling, minority deputy chief
counsel; Earley Green, minority chief clerk; Jean Gosa,
minority assistant clerk; and Andrew Su, minority professional
staff member.
Chairman Tom Davis. Good morning. A quorum being present,
the Committee on Government Reform will come to order.
I want to welcome everybody to today's hearing on the
issues surrounding the Federal Government's ability to issue
security clearances in a timely manner. This hearing continues
the committee's review of personnel security clearance
processing and reciprocity. I want to thank Chairman Shays and
his staff for their work on this issue.
Today we are concentrating on clearances granted to the
defense contractor community and how delays in the process
cause major inefficiencies, which eventually lead to higher
costs for taxpayers and ultimately harms national security.
This hearing will also delve into the issue of reciprocity,
more specifically, how despite Executive orders and
Presidential directives mandating reciprocity, turf battles and
trust issues have plagued our Government's agencies, resulting
in delays and contributing to the overall backlog.
As a result of the terrorist attacks of September 11, 2001,
the country has increased the awareness of threats to our
national security. We have developed new programs, new
technologies, and even new government agencies to deal with the
threats appropriately. It is not surprising, then, that the
demand for security clearances for both Government employees
and industry personnel has dramatically increased over the last
few years. Unfortunately, the Government mechanisms that
investigate and adjudicate personnel security clearances have
not caught up with the necessity to process security clearance
requests for industry personnel quickly and efficiently.
Industry personnel face additional challenges once they have a
security clearance from one agency but then need to work on a
project on behalf of a different agency. Often agencies do not
recognize clearances granted by their sister agencies and
therefore require industry personnel to go through the security
process once again, which contributes more to the backlog.
As a result, many defense contractor companies are unable
to hire otherwise qualified employees because the security
clearance process is requiring, on average, over a year to
complete, with all signs pointing to continued increases if
something does not change. Defense contractor companies often
rely on hiring, almost at a premium already cleared employees
from other firms, thus increasing contract costs, which are
then passed on to the taxpayer. Ultimately, these backlogs hurt
national security. When industry employees are hired to work in
security programs but cannot work on projects while they are
waiting to be cleared, the contracts are not being completed
and national security is jeopardized.
The security clearance process is composed of four parts:
pre-investigation, initial investigation, adjudication, and
periodic reinvestigation. The General Accounting Office,
Department of Defense, Office of Personnel Management, and the
private sector all agree that there are serious problems in
each of these stages. As of the end of March 2004, DOD has
identified roughly 188,000 backlog cases affecting contractors.
To put this number into proper context, DOD has stated that the
number of overdue requests for reinvestigations of clearances
is unknown, and was believed to have grown from 300,000 in 1986
to 500,000 in 2000.
DOD's performance for completing the security clearance
process is 75 days for an initial secret clearance, 120 days
for an initial top secret, and 180 days for a reinvestigation
of a top secret clearance. Yet in fiscal year 2003, on average,
it took 375 days for a security clearance to make its way
through the whole process. So let me be blunt: 375 days for a
security clearance is unacceptable, and I am hoping that today
we will all agree on a solution, or solutions, not only to
reduce the backlog but also to process clearances efficiently
and effectively from here on out.
To a certain extent, the backlog is caused by a human
capital shortage in the investigation state of the process. In
an effort to improve the security clearance issuing process, in
November 2003, Congress authorized a proposed transfer of DOD's
personnel security investigative functions and more than 1,800
investigative employees to the Office of Personnel Management
[OPM]. To date, this transfer has not occurred, and it is my
understanding that an even larger backlog is developing because
this hand-off has not been completed. I hope that by the end of
the day this committee will get some concrete answers as to why
the transfer has not taken place, and even more importantly
when it is going to occur. I hope more than a mere interagency
disagreement is to blame.
There are other ways to reduce our backlog shortage. In
many ways the clearance process is still highly dependent on an
outdated system in which paper shuffling is still king. We need
to bring this process into the 21st century. An effective, all-
encompassing, electronic system which allows for seamless
information collection and extraction will go a long way in
reducing backlog and, more importantly, reducing the time it
takes to get a security clearance. I understand that DOD and
OPM have on their plates aggressive plans to get us away from a
paper driven process to one that is electronically accessible.
This last Monday, OPM announced the progress it has made in the
programs supporting the e-Clearance initiative. I am hopeful
the witnesses here today can expand on these programs and tell
this committee when we will see the seamless automation of
information gathering and sharing promised under the
initiative.
Finally, the committee is aware that the lack of true
reciprocity is a major factor in the backlog. For agencies to
deny a transfer just because of turf issues is just
inexcusable. The mandate from the 1995 Executive Order 12968
that background investigations and eligibility determinations
would be mutually and reciprocally accepted by all agencies
needs to be strictly enforced, and since it is not, perhaps
legislation mandating reciprocity should be in the offing.
Throughout this hearing we will also hear proposals for
improvements, not just from the agencies but from our private
sector witnesses as well. We should take heed of these
suggestions, and if they make sense we should embrace them.
Through this hearing, the committee hopes to learn about
the processes that are in place to alleviate some of the
backlog the system now faces. Furthermore, what standards are
in place where reciprocity may be granted across Federal
agencies? What metrics exist to measure an agency's compliance
with reciprocity requirements? What are DOD and OPM doing to
ensure that clearances are granted in a timely manner? What
measures have they planned under the e-Government Initiatives
to provide for reciprocity and a reduction of the backlog? What
communication is taking place between industry and Government
to provide for a better understanding of these issues? The
committee also hopes to learn what policy guidance is needed
from the administration in order to provide for reciprocity and
cohesiveness between agencies.
We have two impressive panels of witnesses before us to
help us understand the issues surrounding the backlog of
security clearances. First, we are going to hear from the
General Accounting Office, followed by the Office of Personnel
Management, and then the Department of Defense and the
Information Security Oversight Office. We will then hear from
our second panel of witnesses, representing the Northern
Virginia Technology Council, and the Information Technology
Association of America. I want to thank all of our witnesses
for appearing before the committee. I look forward to their
testimony.
[The prepared statement of Chairman Tom Davis follows:]
Chairman Tom Davis. I ask unanimous consent that
Representative Moran be allowed to sit and ask questions of the
panel. And without objection, so ordered.
I now yield to the Ranking Member, Mr. Waxman.
Mr. Waxman. Thank you, Mr. Chairman. I am pleased you are
holding this hearing. Like you, I am concerned about the
increasing backlog in processing security clearance requests
and I want our committee to continue to focus on this issue.
An effective security clearance system is integral to our
national security. We need a sufficient pool of individuals who
can carry out the research, investigations, and other myriad
tasks necessary to protect our citizens, and we need to know
that security clearances are up to date so we can be confident
that untrustworthy individuals cannot access our Nation's
sensitive information. That is why the tremendous backlog
regarding the processing of security clearance applications and
renewals is so troubling. Qualified applicants, whether they
are civil servants, service members, or industry contractors,
should not have to wait over a year to obtain the necessary
clearance to start their work. Yet, that is exactly where we
stand today. The estimated backlog of security clearances is
hundreds of thousands of applications, and this is simply
unacceptable.
I look forward to learning more about how we can address
this problem from today's hearing and working with you and our
colleagues on this committee so that we can change the
situation.
[The prepared statement of Hon. Henry A. Waxman follows:]
Chairman Tom Davis. Thank you very much. Any other Members
wish to make opening statements? Mr. Schrock.
Mr. Schrock. Mr. Chairman, I can do it now or I can wait
until the time comes, although if it takes my time I would
rather do it now.
Chairman Tom Davis. Go ahead.
Mr. Schrock. OK. Thanks, Mr. Chairman, for holding this
hearing. This is a topic I hear a lot about with the folks that
I represent in the Hampton Roads area of Virginia. Let me thank
the witnesses for coming here today and helping us address and
improve a program that is really quite vital to our national
security. In today's world, I am hard pressed to think of any
issue more important than ensuring that our national secrets
are protected and shared with only those citizens who truly
have a need to know and who are vetted as trustworthy.
In my naval career I was frequently confronted by the issue
of security clearances and have seen many improvements in
programs over the years. I recall once upon a time when a full
scope investigation required that every interview be conducted
in person and that each and every reported investigation
included long narrations of each interview. Such a report was
reviewed by an adjudicator who then made clearance
recommendations based upon what was referred to as the ``whole
person'' concept. The process, understandably, was lengthy,
manpower intensive, and time consuming. Today's investigations
have been significantly streamlined and reports, unless
derogatory issues surface, are brief and to the point. The
investigative process has been expedited and in many cases
reference interviews can be conducted over the telephone.
The age of computers is here and so much more can be done,
and should be done, electronically. This fact, too, should be
contributing to an expedited security clearance process. It
stands to reason that the investigative process should be
considerably shorter than in the past, yet I am confounded to
hear that an average investigation can now exceed a full year.
We in Congress have a duty to ensure our Federal expenses
are appropriate and getting us the best return on our dollar.
National security should not be compromised as a function of
saving money. However, we are duty bound to oversee that the
executive agencies are wisely spending such funds and providing
the taxpayer the best return on investment. Such cases as Ames,
Nicholson, and Hansen of only a few years ago are daily
reminders of the importance of the security clearance process
and we must ensure the integrity is fully integrated into that
process.
I had the occasion to speak at length with a former Defense
Investigative Service agent about this matter. I had some
deficits in the program brought to my attention. Probably the
greatest was the accountability of the field agents to produce.
While all sorts of statistics relative to productivity are
maintained, rarely are field agents admonished in a meaningful
way for lack of productivity, and similarly, nor are their
supervisors. While I would never encourage statistics to be the
lone factor in the investigative process, recognizing that more
difficult or, as they are called, derogatory cases take
considerably more time, field agents need to be held
accountable for their productivity. Continued Federal
employment and, indeed, our national security which suffers as
a result of backlog investigations should depend on it. I
expect that the witnesses would agree with me. And when my time
comes I will have several questions. Thank you, Mr. Chairman.
Chairman Tom Davis. Thank you very much. Any Members wish
to make statements? Mr. Moran.
Mr. Moran. Thank you very much, Mr. Chairman, and thank you
for once again bringing to light an issue that desperately
needs to be addressed. I think we have a crisis situation here
and it is a national security issue because we have such a
backlog. We have heard from a great many new and innovative
firms that have services that are undoubtedly invaluable to the
Federal Government, but they are getting benched because it is
going to take up to a year to be cleared for security reasons.
We were notified last month that DOD has a backlog of 188,000
cases for defense industry personnel. As a result, things have
bogged down and it is hurting us in the field in any number of
areas.
As the chairman knows, I am on the Defense Appropriations
Subcommittee and, as DOD knows, they have not asked us for any
personnel to fix the situation. Here we are told that you wants
to contract out basically to OPM to do the investigative
process. But that is going to take more than a year before that
transfer is completed. We do not know what the cost is going to
be. We do not even know that OPM is going to be able to do it
more efficiently and effectively. We have another
appropriations hearing today. I want to find out why you have
not asked for the people that could have relieved this backlog
when it really has substantially affected the ability of DOD to
carry out its mission. Thank you, Mr. Chairman.
Chairman Tom Davis. Thank you. Any other Members wish to
make statements? Ms. Watson.
Ms. Watson. Thank you so much, Mr. Chairman. I, too, must
join with my colleague. We are hearing that there is going to
be a request for anywhere from $25 billion to $50 billion for
Iraq. I am wondering if there is some way we can put into that
appropriation money for security, not only there but here as
well. As I read the analysis in front of us, it says that
defense contract companies are unable to hire. And the
contractors--and I have a question about them which I will
raise later--but we need to be sure that we are contracting
with people with integrity, people with character, and so on.
It takes time. It takes money. And so I am going to ask as you
make your presentations, if there are proposals for additional
funding so that we can have the man and woman power to be able
to staff the security sites adequately.
I want to thank you, Mr. Chairman, for holding this
hearing. Now is the time, and what is the hold up? Thank you.
Chairman Tom Davis. Thank you. Mr. Van Hollen.
Mr. Van Hollen. Thank you, Mr. Chairman. Thank you for
holding this hearing because I, too, am hearing from lots of
people in my district on this issue, and not just from the
contracting community, but also people who are working in the
administration. I do think that we are seeing lots of
initiatives designed to protect our homeland security, to
protect our defenses being stalled as a result of this backlog.
It is kind of a strange irony that the security clearance
process and the backlogs in the security clearance process
would actually be hindering our efforts to enhance the security
of our country. And again, we are hearing not just from people
and companies who have innovative ideas, but also from
representatives from the U.S. Government, Department of
Defense, Department of Homeland Security, who want to engage
these contractors and they are experiencing this terrible
backlog with security clearances. So it seems to me the answer,
obviously, is not to shortcut the security clearance process or
to change those standards, but the obvious answer is to put the
resources that we need into getting this done.
I just want to thank the chairman and my other colleagues
here for moving ahead on this issue, because every day that the
backlog grows is a day that important initiatives to protect
homeland security go unmet. Thank you.
Chairman Tom Davis. Thank you very much.
We now move to our first panel of witnesses. I want to
thank Gregory Wilshusen, Acting Director of Defense
Capabilities and Management, U.S. General Accounting Office;
Stephen Benowitz, the Associate Director of the Division for
Human Resources Products and Services, U.S. Office of Personnel
Management; Heather Anderson, Acting Director of Security,
Office of the Under Secretary of Defense for Intelligence; and
J. William Leonard, Director, Information Security Oversight
Office, for taking time from their busy schedules to be here
today. It is a policy of this committee that all witnesses be
sworn before you testify. So if you would rise and raise your
right hands.
[Witnesses sworn.]
Chairman Tom Davis. Let me just identify Mr. Wilshusen from
GAO has brought a couple of assistants.
Mr. Wilshusen. Mark Pross and Jack Edwards.
Chairman Tom Davis. OK. Mark Pross and Jack Edwards have
taken the oath, too. Thank you very much.
The rules of the committee is your entire testimony is part
of the record and questions will be based on that. You have a
clock of sorts in front of you, when it is green, it is go;
when it is yellow, it means that 4 minutes are up, when it is
red it means 5 minutes are up, and if you could move to summary
as you get the red light things could move expeditiously.
Again, thank you all for being with us.
Mr. Wilshusen, we will start with you and move straight
down the table.
STATEMENTS OF GREGORY C. WILSHUSEN, ACTING DIRECTOR, DEFENSE
CAPABILITIES AND MANAGEMENT, U.S. GENERAL ACCOUNTING OFFICE;
STEPHEN C. BENOWITZ, ASSOCIATE DIRECTOR, DIVISION FOR HUMAN
RESOURCES PRODUCTS AND SERVICES, U.S. OFFICE OF PERSONNEL
MANAGEMENT; HEATHER ANDERSON, ACTING DIRECTOR OF SECURITY,
OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR INTELLIGENCE; AND
J. WILLIAM LEONARD, DIRECTOR, INFORMATION SECURITY OVERSIGHT
OFFICE
Mr. Wilshusen. Thank you, Mr. Chairman and members of the
committee. I am pleased to be here today to discuss our
preliminary observations on the Department of Defense's process
for determining the eligibility of industry personnel for
security clearances.
Individuals working for industry are taking on a
significant role in national security work for DOD and other
Federal agencies. Because many of these jobs require access to
classified information, industry personnel need security
clearances. As of September 30, 2003, industry workers held
about one-third of the approximately 2 million DOD-issued
clearances.
The timeliness of the Department's personnel security
clearance process has historically been at issue. Our reviews,
as well as those of others, including this committee, have
identified backlogs and delays in determining clearance
eligibility for service members, Federal employees, and
industry personnel. In response to your request, we reviewed
DOD's process for determining clearance eligibility for
industry personnel, and a report with our recommendations is
forthcoming.
Mr. Chairman, based on our preliminary observations, my
main message today is that DOD continues to experience sizable
backlogs and delays in processing clearance requests for
industry personnel, and that these delays can have adverse
effects for national security and contractors performing
classified work.
As of March 31, 2004, the backlog for industry personnel
was estimated to be roughly 188,000 cases. To provide
perspective on the size of the backlog, DOD made about 100,000
eligibility determinations for industry personnel in fiscal
year 2003. DOD is also taking longer to determine clearance
eligibility. From fiscal year 2001 through 2003, the average
time increased by 56 days to over 1 year, significantly
exceeding the timeframes established for making these
determinations.
Delays in completing reinvestigations of industry personnel
and others who are doing classified work can increase national
security risks because the longer individuals hold clearances,
the more likely they are to be working with critical
information and systems. In addition, delays in determining
clearance eligibility can affect the timeliness, quality, and
cost of contractor performance on defense contracts.
Several factors impede DOD's ability to eliminate the
backlogs and delays. These include the large number of
clearance requests, an increase in the proportion of requests
for top secret clearances, inaccurate workload projections, and
an imbalance between the investigative and adjudicative work
forces and their workloads.
In addition, industry contractors cited under-utilization
of reciprocity as an obstacle to timely eligibility
determinations. Although reciprocity of clearances appears to
be working throughout most of DOD, reciprocity of access to
certain information and programs within DOD and by certain
agencies is sometimes problematic for industry personnel.
DOD is considering several initiatives that might reduce
the backlogs and processing times. For examples, DOD is
considering conducting phased reinvestigations, establishing a
single adjudicative facility for industry, and reevaluating
investigative standards and adjudicative guidelines.
Although DOD has several plans to address elements of the
backlog problem, it does not have an integrated, comprehensive
management plan for eliminating the backlog, reducing delays,
and overcoming the impediments that allow such problems to
recur. Without such a comprehensive plan, DOD's success in
eliminating the backlog may be limited.
Mr. Chairman, this concludes my opening statement and I
will be happy to answer any questions you or other members of
the committee may have.
[The prepared statement and accompanying report of Mr.
Wilshusen follow:]
Chairman Tom Davis. Thank you very much.
Mr. Benowitz.
Mr. Benowitz. Mr. Chairman and members of the committee, I
am pleased to testify today on behalf of Office of Personnel
Mangement [OPM] Director Kay Coles James on this important
topic. Personnel background investigations play an important
and unique role in determining whether individuals are suitable
for Federal employment, and contribute to an agency's ability
to decide whether security clearances can be granted. Taken in
this light, the background investigation process is a vital
part of our national security efforts, helping ensure that
employees and contractors who work for the Federal Government
possess the loyalty, experience, training, and skills that our
citizens expect and deserve and pose no risk to national
security or public trust.
OPM Director James has made the personnel background
investigation process a high priority for all Federal agencies,
and has taken a leading role in ensuring that OPM staff and
each of the agencies understand and take seriously their
responsibilities under the Executive order governing security
requirements for Government employement. She has worked closely
with the heads of all executive branch departments and agencies
in this effort to strengthen every link in this program and to
aggressively remind her colleagues of the vital need to keep
OPM fully informed of the adjudication decisions as prescribed
by that Executive order.
OPM conducts background investigations for many Federal
agencies on a reimbursable basis. Since the late 1990's, OPM
has also performed a substantial number of background
investigations for the Department of Defense [DOD]. We receive
about 1.1 million investigation requests a year from our client
Federal agencies. We witnessed a spike in fiscal year 2002,
following the September 11 terrorist attacks on our Nation,
when we received nearly 2 million requests. We provide a
variety of investigative services, ranging from the basic
investigation to determine if individuals are suitable for
positions that do not require security clearances, to those for
positions which are among the most sensitive in Government. The
former are performed largely through our modern and
sophisticated computer systems and by mail contacts with State
and local police departments, colleges, and universities to
confirm education, and former employers to check on experience.
For positions requiring a higher level of clearance, we also
conduct field investigations that often reach across the
country and even to other nations.
Our work flow is always dynamic. New investigation requests
are received, as current workload is completed. Our staff
members and contract field investigators and support staff team
to perform the various tasks associated with the process. Our
current pending workload is approximately 340,000 cases,
representing a mix of investigation types in various stages of
work, ranging from complete case submissions just received from
our client agencies to cases where all of the investigative
work has been completed and are undergoing the final quality
control checks.
Taken together, the total national resources for conducting
background investigations for Federal agencies are stretched as
a result of the increases we have experienced since fiscal year
2002. Simply put, the demand for background checks currently
exceeds our capacity to provide these services. Under Director
James' leadership, we have issued a Request for Proposal [RFP],
to increase the number of qualified contractor staff to conduct
investigations. National capacity has been an issue the
Director has consistently raised, along with strong
reservations over the lack of a large base of qualified
competition in the investigative industry. We are currently
analyzing the proposals and expect to make award decisions
fairly soon. Under the requirements of this RFP, the bidders
must demonstrate how they will actually increase the number of
investigators available. That is, we expect them to recruit and
retain new staff to this field, and not simply raid their
competitors for employees. The RFP requirement is at least one
step toward developing additional trained capacity within the
industry. Our estimate is that on a Government-wide basis, we
need to increase our field investigation staff by up to 50
percent to meet current and projected demand.
As part of the Defense Authorization Act of 2004,
legislation was enacted that would permit Director James, at
her discretion, to accept a transfer of function of the DOD
investigative staff. She has not yet determined whether she
will accept this transfer. However, as part of our efforts to
improve the overall coordination of background investigation
work in the Federal Government, in February 2004, Director
James agreed to provide pending case management and automated
processing services for the Department of Defense background
investigation program. Under this agreement, Defense Security
Service [DSS] staff prioritize their incoming workloads, and
forward them to OPM, and they are scheduled on our automated
case management system, the Personnel Investigation Processing
System [PIPS]. We are training DSS staff at this time to use
the system and we expect that training will be completed by
June 30, at which time DOD will be able to manage all of their
new cases on PIPS.
Mr. Chairman, this concludes my remarks and I would be
happy to respond to any questions the committee may have.
[The prepared statement of Mr. Benowitz follows:]
Chairman Tom Davis. Thank you, Mr. Benowitz.
Ms. Anderson.
Ms. Anderson. Chairman Davis and members of the committee,
I appreciate the opportunity to testify today regarding the
improvements the Department of Defense [DOD] is making in the
personnel security process and the status of the investigations
backlog at the Defense Security Service. I have met with many
industry representatives to discuss their concerns and to
explain our ongoing initiatives and have received positive
feedback. I believe that the improvement initiatives detailed
in my prepared statement will resolve the fundamental problems
that have plagued this program for several years, including the
issues that industry will mention today.
First and foremost, I want to assure the committee members
that we understand the impact from the inefficiencies that have
been inherent in the past personnel security process. As you
know, we have been working to identify and solve these
fundamental problems and have been actively working to
implement our solutions. Briefly, let me address the following:
Reciprocity for industry, the investigations backlog, and our
key initiatives to improve the personnel security process.
On reciprocity. Department of Defense implements
reciprocity as defined in the National Industrial Security
Program operating manual that identifies security requirements
for industry. DOD ensures reciprocity through established
security policies and procedures that are detailed in my
statement. Basically, DOD accepts any previously granted
clearance from any other Federal agency. Our policy of issuing
interim clearances on a routine basis mitigates the lengthy
processing of the final investigation and adjudication.
Additionally, our policies permit industry to put their
employees to work immediately once their company confirms the
individual's clearance from their prior employer or agency. We
understand our industry partners are working on special access
and sensitive compartmented information programs may not
currently experience the same benefit, and we are working with
these communities to improve reciprocity. Our Joint Personnel
Adjudication System will further improve this process and will
virtually eliminate any time delay, since industry will be able
to obtain clearance eligibility and access information online
through this web-based system.
On the investigative backlog. Our backlogs in
investigations from prior years has been nearly eliminated.
While the overall work in process remains near 400,000 cases
DOD-wide, DSS currently only has 86,700 prior year
investigations in their inventory, of which 28,600 are industry
cases, and many of these are in the hands of DSS' private
sector contractors. Through an interim arrangement and
agreement with the Office of Personnel Management [OPM], the
current fiscal year investigations are being processed using
OPM's case management system and they are being worked by DSS
investigators. Due to the increase in demand for
investigations, we expect our on-hand inventory to remain at
this relatively high level until we are able to put more
resources on task. To that end, DOD is currently working to
increase the number of Federal investigators and we will
continue to augment these resources with private sector
providers. It may well take up to 24 months to increase the
capacity to that required level.
Next I will cover four initiatives to improve the process
for personnel security investigations.
The first is the phased periodic reinvestigation for single
scope background investigations. It is basically a two-phased
approach where the second phase of field work is conducted only
when significant potentially derogatory information is
uncovered during the first phase. The pilot test and analysis
show that substantial resources will be saved with a minimal
loss of adjudicatively significant information. The personnel
security working group of the National Security Council is
currently considering this two-phased method for Government-
wide implementation.
Our second process improvement is the Department of Defense
automated continuing evaluation system. This automated
assessment tool will allow the Department to identify issues of
potential security concern. Currently in beta test, this system
will be used initially to check our cleared population between
reinvestigations, but ultimately will allow the Department to
take an event-driven managed risk approach to reinvestigation,
thereby eliminating purely periodic reinvestigations.
Third is DOD's adoption of OPM's Web-based personnel
security questionnaire for Government-wide use. We expect to
implement e-QIP within the Department as soon as possible,
currently anticipated to be August 2004.
And, last, is the electronic reports for adjudication. The
DOD Personnel Security Research Center is conducting a study on
our behalf on how to develop criteria for electronic
adjudication. The backbone of this effort will be an electronic
report for adjudication that allows online review and
adjudication DOD-wide. It will also allow for automated sorting
and tracking of cases based on issue and complexity.
These initiatives will result in a personnel security
process that is easier to use, more efficient, and take less
time.
We were also asked to comment on the status of the
transfer. As my colleague, Mr. Benowitz, has already mentioned,
DOD stands ready to finalize any actions related to the
transfer of the PSI function to OPM, should the Director of OPM
choose to accept this function from the Department of Defense.
The interim agreement in place with OPM allows for DOD to use
their case management system and provides for agent training.
The training has already begun and will be completed by the end
of June 2004.
In conclusion, we have been working diligently for several
years to meet the needs of our DOD customers, including
industry. We owe a great deal to our industry partners who keep
us informed of their concerns and upon whom we rely heavily for
recommendations and feedback. Although slow in coming, I
believe that significant progress has been made in improving
the PSI process and that industry will soon benefit from our
key initiatives. There is much more to accomplish, and we will
continue to work with industry to ensure we understand and
address their concerns as well as keep them informed of our
progress on PSI process improvements.
Mr. Chairman, I ask for your continued patience, support,
and assistance as we proceed to implement the improvements in
the PSI process. This concludes my testimony. I appreciate the
opportunity to appear before you today and will answer any
questions you may have. Thank you.
[The prepared statement of Ms. Anderson follows:]
Chairman Tom Davis. Thank you very much.
Mr. Leonard.
Mr. Leonard. Chairman Davis, members of the committee,
thanks very much for the opportunity to be here with you this
morning. As Director of the Information Security Oversight
Office, one of my responsibilities is to oversee Government
agency actions with respect to the National Industrial Security
Program [NISP]. In addition, I serve as the Chair of the
National Industrial Security Program Policy Advisory Committee
[NISPPAC], which is comprised of both Government and industry
representatives. The NISPPAC advises me on all matters
concerning the policies of the NISP and serves as a forum for
discussing policy issues.
The overall framework for the NISP is set forth in
Executive Order 12829. This Presidential directive recognizes
the obvious imperative to ensure that classified information in
the hands of industry is properly safeguarded. However, what is
equally significant is its recognition that our industrial
security program must also promote the economic and
technological interests of the United States. As such, an
essential element of the NISP is its acknowledgement that
redundant, overlapping, or unnecessary requirements imposed
upon industry can imperil national security as readily as can
the improper safeguarding of classified information. A common
cause of unnecessary requirements is the inability of agencies
to reciprocally honor a similar action taken by another agency,
such as a personnel security investigation or a personnel
security clearance involving the same individual--a practice
commonly referred to as reciprocity.
Before the creation of the NISP, each agency had its own
individual industrial security program. Each program had
processes that were unique. The NISP has helped to create an
atmosphere of cooperation for both Government and industry by
eliminating duplicative processes. More than 10 years after its
inception it would be hard to imagine an environment without
the NISP. However, notwithstanding past successes, today's
challenges require constant attention and effort from
participating agencies in order for the NISP to achieve its
full potential in promoting the economic and technological
interests of our Nation. This is especially so in recognizing
industry's critical role both in the current war efforts as
well as many of the transformational activities currently
underway in much of the Federal Government. In this regard,
agencies' inability to accomplish actions such as clearing
defenses contractor employees in a prompt manner, or to honor
reciprocally a similar action by another Government agency has
a significant and deleterious impact upon cleared industry's
capability to support their Government customers.
Oftentimes, agencies cite fear of accepting an unknown
potential security risk as a basis for not embracing
reciprocity. I know of no empirical basis to support a claim
that reciprocity reduces security or increases risk. Instead, I
contend that the failure to achieve full reciprocity can
actually increase the overall security risk for the Nation.
Lack of reciprocity needlessly distracts limited resources that
can be devoted to the current unacceptable delays in processing
new, initial clearance requests, as well as the backlog
periodic reinvestigations.
In addition, reluctance on the part of Government agencies
to forego some agency prerogatives and fully embrace all the
tenets of the NISP, especially reciprocity, hampers industry's
ability to recruit and retain the best and the brightest in
their disciplines as well as its capability to rapidly deploy
and field the latest technology when performing on classified
contracts. As a result, contractors are hampered in putting
forth the best conceivable efforts in both cost and capability
in supporting their Government customers' needs. The Government
effectively ends up with less for more.
In order to assist in reducing clearance delays in
industry, my office, through the NISPPAC, has served as a forum
for industry to provide their concerns and recommendations to
the Government's current working groups addressing personnel
security clearances. Even more specifically, we have recently
initiated a renewed effort to have NISPPAC issue and publicize
a clear articulation of what reciprocity is, and is not, with
enough specificity and substance that industry can hold
Government agencies accountable for their actions in this area.
I am pleased to report that we have succeeded in garnering
senior level support within NISP Government agencies for these
efforts and I anticipate formal promulgation within a matter of
weeks. This declaration is not a silver bullet. However, it
should allow contractors who experience reluctance on the part
of a Government program or contract office to honor
reciprocally a clearance action by another Government agency to
seek immediate redress.
Again, thank you for inviting me here today, Mr. Chairman.
I would be happy to answer any questions.
[The prepared statement of Mr. Leonard follows:]
Chairman Tom Davis. Thank you very much.
In 1981, GAO issued a report citing the national security
threat posed by the backlog as well as the contract cost
overruns caused by the delay, and they estimated at that point
it was about $1 billion a year. Since that time my son has been
born, he is graduating from college this year, and the Federal
Government is in the same boat, in fact, the backlog has
increased during that time. Let me start with you, Ms.
Anderson, why is the Federal Government in relatively the same
boat with the same issues 23 years later? I know you were not
old enough to work for the Government 23 years ago, so you were
not part of it then but you are there now. [Laughter.]
Ms. Anderson. Thank you, sir. The Department of Defense has
taken a really hard look, certainly within our purview, at the
end process. One of the fundamental problems with security
clearances, and it really was highlighted after September 11,
is that you need people immediately. We are in the business of
being agile and to have a defined process that requires you to
go through a lengthy vetting is inherently mismatched with the
immediate need. This is compounded by the belief, I believe
historically, that this year was always going to be the peak
year.
One of the problems is we have looked at this series of
requirements year over year. One of the things we are finally
going to bite the bullet on is to actually verify the
requirement as it is submitted. It is the one place where we
will have the opportunity to actually get conformed data. We
are going to introduce both macro economic models and bottom-up
models to actually try to get the projection correct.
Chairman Tom Davis. So you said you are afraid to staff up
because you may not need the people in the out years?
Ms. Anderson. If you go back into a lot of the responses
historically, there has been some of that indicated. One of the
reasons that we believe that a partnership between Federal
investigators and contractor augmentation is actually to allow
more flexibility with that number. But who is kidding who? The
number of clearances has not gone down in quite a while and we
seem to move more and more in that direction.
Chairman Tom Davis. Well, understand this, somebody with a
security clearance, we are paying them a lot more than
taxpayers ought to be paying because there are so few people
that are eligible to do it. We cannot get work done. Taxpayers
are paying more money. DOD is going to come up here for another
$25 billion in a supplemental this year. It was $1 billion in
1981, it is several billion dollars it is costing taxpayers
today. My opinion is that nobody is really paying attention.
Everybody is shuffling things back and forth. This is a huge
problem. It is costing us billions of dollars and we are
sitting here with OPM and pointing back and forth. Congress, we
can pass a very strong bill, we take it away from both of you.
I am not sure how we handle this, but it is costing a lot of
money at this point and it is jeopardizing security. I
understand how we got there. What are we going to do about it?
Ms. Anderson. Interestingly enough, as I alluded to in my
verbal statement and in my written testimony, we are in the
process of putting more investigators on the street. The
strategic partnership between OPM and DOD, their Request for
Proposal that is being evaluated now, the DSS PSI program has
reengineered their organizational structure and their business
processes to allow more of their people to be on the street
doing investigations. We recognize that is not enough. Also
understand that part of the inherent lag is it takes a good 6
months to train an investigator. So while we are recruiting
these people now, they will not be up to full productivity for
probably at least 6 months.
Chairman Tom Davis. We have given additional Civil Service
authority to the Department of Defense. We passed this last
year. A tough vote for a lot of us. OK? You can bring people
who used to do this back into Government. You can do these kind
of things and you do not have to retrain them.
Ms. Anderson. Correct, sir. We believe that
organizationally, and I will defer to my colleagues from OPM to
confirm this, we believe that we have tapped out the number of
people who were prior investigators coming back to do this
work.
Chairman Tom Davis. Have you brought prior investigators
back in? Do you know how many?
Ms. Anderson. I do not have the facts with me.
Chairman Tom Davis. Can you get that to us?
Ms. Anderson. Yes. But that is primarily what the
contractor investigators, that is what their resource pool is.
Chairman Tom Davis. OK. From the testimony you would think
industry personnel were able to get the clearances they need
quickly. You said contractor companies can apply for a
clearance up to 180 days in advance of an employee starting
work, they can obtain an interim secret clearance within 3 to 5
days of applying for a clearance, they can nearly automatically
transfer a clearance when a worker moves from one job to
another. But we continue to receive complaints, the GAO has
confirmed it, Mr. Leonard says the same thing, that the process
is not working. Now you recognize the process is broken?
Ms. Anderson. Yes, sir.
Chairman Tom Davis. How about you, Mr. Benowitz, do you
recognize the process is broken, or is everything just fine
over there?
Mr. Benowitz. Mr. Chairman, we believe the process is one
that needs substantial improvement. Director James is as
concerned with national security as DOD, and the contractors
who will testify later today. My colleague, Ms. Anderson, has
spoken of some of the steps we are taking. My view of the RFP
that OPM has under evaluation right now is that we will begin
to see substantial increases in the number of contract
investigators on the streets trained and doing the work about 6
months after the contracts are awarded. Our intent there, if
possible, is to make multiple awards to multiple firms so that
we can increase that contractor base.
Chairman Tom Davis. Let me just make one point before I
yield. There is an article yesterday in Government
Executive.Com that basically talks about you are holding off on
the plan to absorb the unit of DOD. This is a move that some
experts had thought might speed up the backlog security
clearance process. You had planned last year to take over
Defense Security Services, now an OPM official said the agency
decided not to bring the unit under its umbrella, that the DSS
business practices were not up to the standard we had hoped
for.
You have discussed the transfer of the investigative
functions from DOD to OPM. But it appears that DOD views this
transfer as a complete divestiture and OPM views it more as a
partnership. I guess the question is, which one is it? In
addition, as I said, yesterday OPM announced it would not
accept the transfer this year. Why was this decision made? And
does DOD have a backup plan for dealing with the backlog?
Mr. Benowitz. Mr. Chairman, when the Director of OPM and
the Secretary of Defense agreed to explore such a transfer of
function, which began before the legislation was enacted, we
began sharing information with each other. We determined
subsequent to that that this should be staged. The first stage,
as I indicated today, was that we have given DOD access to our
online case management system, PIPS, that their staff will be
fully trained by the end of June, and they will be managing all
of their new caseload on this system. We began this in advance
of a formal agreement that was signed in February of this year.
We will be conducting evaluations of the productivity of the
DSS staff in June and September when they will have had an
opportunity to perform their work under PIPS, and we are----
Chairman Tom Davis. But everybody is still studying
everything. Is that what I take away from this, that we are
still studying this and it is going to take a few more months?
Mr. Benowitz. I expect that we will have information
available for our final evaluation by the end of the fiscal
year.
Chairman Tom Davis. So that is October. You are still
studying it and hope to get something.
Ms. Anderson, can you give us any encouragement here?
Again, just to go back to the report, in 1981 this was
identified in the report, and we hope to get some information
by the end of the fiscal year and maybe get the top honchos
together. Can you give me any encouragement here?
Ms. Anderson. Sir, in reference to your earlier question
about DOD's plan while we discuss the transfer function, the
Department of Defense is processing its current caseload. A
significant proportion of that is already on OPM's system and
is being worked by the DSS investigators. OPM is processing the
military accessions and the civil populations, as they have the
civilians for a number of years now. The industry cases, in
particular, are being worked by the DSS agents off of the OPM
system. We can work in this configuration for a length of time,
an indeterminant length of time under the current agreement
with OPM. So the cases are being worked. We are tightening down
as far as trying to improve the efficiencies, improve the
reporting, improve the insight into the process while we look
at and reexamine all of our policies and procedures to make
sure that we are the most efficient organization we can be.
Chairman Tom Davis. Do we have a chart blown up on this?
Let me ask our representative from GAO, what do you think of
all of this? I have a chart I want to put up here that talks
about all the rigmarole we are going through to get a clearance
now in this system. We are just going to have more of a backlog
if we keep going. What do you think, Mr. Wilshusen?
Mr. Wilshusen. Looks like a rather elaborate chart.
[Laughter.]
Chairman Tom Davis. This chart is actually simplified from
what really happens.
Mr. Wilshusen. What this chart appears to show, Mr.
Chairman, is that there are a number of agencies involved in
determining what the requirements for clearances are and that
they appear to be going over to OPM and DSS in terms of having
the investigations performed. It looks as though that as part
of that, the chart shows some of the activities that both OPM
and DSS have to conduct and the volume of pages of information
they review.
Chairman Tom Davis. They are the bottlenecks though
basically, are they not?
Mr. Wilshusen. There are a few bottlenecks, yes, sir. And
the chart shows each of the three processes of determining the
requirements, the investigation stage as well as adjudication
stage.
Chairman Tom Davis. Do you hear any encouragement in what
we are hearing today about any immediate relief? Or do we just
say to the contractors and taxpayers you are just going to have
to pay a little more because the people that we put in these
positions are still studying this?
Mr. Wilshusen. I think in terms of some of the initiatives
that DOD is considering, some of them do hold promise. One of
the recommendations that we may be making as part of our draft
report is that they continue to look at those initiatives to
see if they are feasible and implementable.
Chairman Tom Davis. That is long term. What do you do short
term to bring this thing down for the guy who has been waiting
a year for a clearance and still does not have a job, and the
task needs to be performed for the country?
Mr. Wilshusen. Well, one of the things that DOD has done is
issued interim clearances. But there are some problems in terms
of interim clearances in that often they do not allow access to
certain types of information or for certain programs. In
addition, there is also an inherent security risk in issuing an
interim clearance, because you are allowing an individual
access to classified information without going the full range
of investigation over that individual which could yield some
derogatory information.
Chairman Tom Davis. Essentially, this is manpower-driven,
is it not?
Mr. Wilshusen. No question about it.
Chairman Tom Davis. And we do not have enough people on it.
Mr. Wilshusen. The underlying reason for many of these
things and the No. 1 challenge is for them to match the size of
their adjudicative and investigative work forces with their
workload.
Chairman Tom Davis. And is it not cheaper to have people at
the front end getting these clearances done than paying more at
the back end because we do not have enough people to do it and
so we overpay? Does that make sense?
Mr. Wilshusen. Well, it does indeed. It is very important
to make sure that process is done in a timely and effective
manner.
Chairman Tom Davis. Yes. It is a people problem. I do not
think it is a budget issue.
Ms. Watson, your questions, then we will get Mr. Schrock,
and then Mr. Moran.
Ms. Watson. I want to move away from the backlog and into
the responsibilities and accountability of the Department of
Defense Security Services. I will address my questions to Ms.
Heather Anderson, Acting Deputy Director. Once you are able to
complete the process, background check and certifying, clearing
this person, who has the oversight? Who is accountable? Who
then holds the control of this employee after this employee
goes into the investigative mode? In reading from your
statement, you are suggesting that the responsibility for
conducting leads overseas will be with the Department of
Security Services. Is that correct?
Ms. Anderson. Currently, the overseas leads are executed by
the military services. One of the things that we have taken an
initiative on is to augment the military services, who are
rather busy around the globe, especially in certain theaters,
and put Defense Security Service agents who are trained
investigators to run those leads in their place in order to
reduce the number of longstanding cases and in order to process
cases in general.
Ms. Watson. You say in your statement, ``To compensate,
during March 2004, DSS began sending investigative personnel to
Europe and to the Far East on an intermittent basis to conduct
overseas leads.'' And that DSS is now developing a long-term
plan to address the conduct of overseas investigations.
Ms. Anderson. What it is, as part of our national standards
there are certain leads, like neighborhood checks, subject
interviews, that are run. In cases in particular where the
subject is overseas, we want an investigator to be there to do
the subject interview. Historically, those leads have been run
by the military services and then the results of those leads
written up and returned to Defense Security Service for
inclusion in the reports for adjudication. What we are
considering is whether or not it would be more efficient and
more practical to have either a series of travel assignments
overseas or a standing group of investigators overseas to
service those leads. It is not so much----
Ms. Watson. If I might interrupt you for a minute. You are
saying that you have already done this, you have started.
Ms. Anderson. Yes.
Ms. Watson. That, at least, is what your written statement
says.
Ms. Anderson. Right. They were authorized to do a pilot to
look at the feasibility and utility of it. The initial results
from that pilot were very encouraging and the services welcome
the opportunity for DSS to run those leads. So now we are
working through how we implement it and substantiate it.
Ms. Watson. You say in your written statement, ``DOD is
also working with the State Department to update and refine the
scope and sources of overseas investigations.'' Who is
responsible for those investigators, interrogators, the
security forces that you have sent overseas to investigate
leads?
Ms. Anderson. In the case where we are talking about the
investigators from Defense Security Service, they are under the
cognizance of the Director of Defense Security Service. We have
not sent them into areas where there is conflict. The two pilot
programs where there was the largest body of leads outstanding
were in the Pacific theater, specifically Korea and Japan, and
so we have teams there, and also in the European theater,
particularly in Germany and the U.K.
Ms. Watson. All right. Let me get directly to where I am
going. I see that you are involved with intelligence. Would
your department, would you with the people under you have
anything to do with the interrogators that would have been sent
to Iraq as contract employees to do the investigation,
interrogations, questioning, etc?
Ms. Anderson. Under the Under Secretary of Defense for
Intelligence, we do have oversight for a large piece of the
service intelligence organizations. More specifically to your
question with regard to contractor investigators, the
investigations on those personnel, the background
investigations on those personnel may very well have been done
by Defense Security Service.
Ms. Watson. By your unit?
Ms. Anderson. But not the unit that was overseas
necessarily. For the most part, they would have been United
States.
Ms. Watson. Well who would have done that? Who do they
answer to? Who oversees them? Who has a responsibility for
them? I am trying to follow a trail. We have a very elaborate
chart here, very graphically done, artistically done, but I am
trying to follow a trail and I cannot get there from here.
Ms. Anderson. I will start from the beginning. If, in this
case, the Army were going to let a contract for services with a
contractor provider, they would let the contract, depending on
what the clearance level required, so let us assume it is
secret, they are going to write the contract with security
requirements in it. The contractor then, as part of the
execution at the stand-up of that contract, will put in their
employees for background investigations. Those background
investigations would be sponsored under this because of the
NISPAM, the Industrial Security program, they will be processed
by DSS, they are funded for centrally because there is a number
of benefits to that, the results of an investigation would go
to the Defense Industrial Security Clearance Office for
adjudication. If there were derogatory issues that needed to be
determined from a statement of reasons or from an eligibility,
it may very well go to the Defense Office of Hearings and
Appeals. They will render a determination of eligibility. That
is then returned to the contractor who is told, if it is
favorable, that they may access the person to secret
information. The oversight of the execution of a contract
belongs to the entity that let the contract.
Ms. Watson. And that is?
Ms. Anderson. In this case, you are talking about the Army.
We have contracts for Navy. I have people on my staff where
they are contractor support, we sponsor them and we are
responsible for the oversight. The security manager from the
company also has some responsibility to make sure that person
is adequately aware of their responsibilities and duties as a
cleared person. Does that help answer your question? Probably
not from the look.
Ms. Watson. No.
Chairman Tom Davis. OK. Thank you. Followup?
Ms. Watson. Can they give orders to our troops, your
contractees?
Ms. Anderson. Not normally, ma'am.
Ms. Watson. Thank you.
Chairman Tom Davis. OK. Mr. Schrock.
Mr. Schrock. Mr. Chairman, I am so confused at this point I
am not sure what I should ask. I was doing great until I got
this thing. [Laughter.]
I do not know if anybody here created this, but I sure
would like to get into that person's mind.
Chairman Tom Davis. I think it came from DOD. Ms. Anderson,
not to point fingers here, but you are the DOD rep.
Mr. Schrock. I do not have a clue what this means. All
these nice little lightening strikes and all that, there are
going to be lightening strikes all right, but it is not going
to be on this chart. This is nonsense, really. I heard Mr.
Wilshusen say, as I understood him, there is no plan to get rid
of the backlog. I heard Mr. Benowitz say that there is an RFP
out there and if it gets addressed or awarded, it is going to
take 6 months to get it in place. And I heard Ms. Anderson say
there are 180,000 folks in DOD backlogged, 24 months to
increase capacity, and for us to be patient and that we have to
be agile. Folks, we are not agile, we are comatose right now. I
do not know what the answer is to this. Chairman Davis is going
to have a grandson graduating from college before this gets
done. [Laughter.]
I know it sounds funny, but this is ridiculous. At some
point we have to get this thing resolved. I am wondering to
what extent are field agents held responsible, those in the
field, to get productivity done. And study, study, study, gosh,
that is all we do. The pillars of this Government stand on
studies. I feel certain we have studied this thing to death. At
what point do we knock off the studies and start putting pen to
paper and get this work done. Who is being held accountable for
this? And how many agencies are doing it? Mr. Moran, Mr. Davis,
and I have thousands and thousands of constituents who are
negatively impacted by the inactivity in all this stuff. At
some point the rubber has to meet the road. How do we get this
resolved not 6 months, not 24 months, but tomorrow. How do we
get this resolved? The silence is deafening.
Chairman Tom Davis. GAO, what would you recommend?
Mr. Schrock. Yes, what do you recommend?
Chairman Tom Davis. The GAO is the neutral party here.
Mr. Wilshusen. Indeed, there are a number of actions that
DOD can do to address this issue. First and foremost, as we
recommended in our February report, they need to match the size
of their investigative and adjudicative work forces with their
respective workloads. And closely attendant to that is
developing the capability and improving their models for
projecting what their future requirements are going to be.
Until you know what your requirements are--in fact, at present,
DOD has not been able to even determine what their full backlog
is DOD-wide, not just industry contractors but DOD-wide, what
their full backlog is. That is definitely a first step.
Chairman Tom Davis. Would the gentleman yield. Let me just
ask, statutorily, what could we do? We have a defense
authorization bill coming up before the House. We are obviously
involved in that from this committee's perspective. What could
you do very quickly to put some mandates on this and make it
move over the short term? If you want, we will let you get back
to us.
Mr. Wilshusen. Yes, Mr. Chairman, we will do so.
Chairman Tom Davis. But I think we are as frustrated as
taxpayers are, as contractors are, as people who are awaiting
clearances are in terms of how we get out of this.
Mr. Schrock. Mr. Chairman, may I?
Chairman Tom Davis. It is your time.
Mr. Schrock. May I give you an example of how ludicrous
this is. I several months ago hired a young man who had been in
the nuclear navy, probably had the highest clearance any human
being on the face of the Earth could have, but he left the Navy
1 day and came to work with me the next day and, suddenly, his
clearance was not any good. Now what happened to him overnight
to make him a risk? And he had to go through this whole process
again. That is nonsense.
Mr. Wilshusen. Yes, sir, that is one of the problems.
Mr. Schrock. Why is that the case? Can DOD answer why that
is the case?
Ms. Anderson. Sir, your background investigations and your
adjudications are not done by the Department of Defense. Within
the Department of Defense, we are taking the steps to make sure
that does not happen. Under our Joint Personnel Adjudication
system, we are specifically making sure that the entities that
are the gaining and losing entities have flexibility, the
gaining entity in particular, whether that is a contractor, a
military service, any organization within our affiliation
structure, that as soon as they have an obligation document, so
in your case, when your employee agreed that he was going to
come to work for you, which is generally just by tradition
sometimes a few weeks if not a month in advance, at that point
your security manager could actually identify the association,
at that point you are a part owner, as it were, in that
process. So if an investigation were ongoing, or if you needed
to access that person, we make sure that it does not fall
through the cracks. We are devolving that responsibility down
to the lowest level because they are generally the ones that
know what is going on. That is exactly why we have taken that
step. But with regard to your specific example, I am afraid I
do not have a good answer.
Mr. Leonard. If I could add, Congressman.
Mr. Schrock. Please, Mr. Leonard.
Mr. Leonard. You are absolutely right, it is ludicrous. And
it has been the policy for over 10 years now that situation
should not occur. There is a long history in terms of agency
prerogatives and this and that. One of the things that I am
somewhat optimistic on, and I temper that optimism with a lot
of reality, but I am optimistic in terms of I personally within
the past several months have visited with all the senior
security officials of the NIST signatories, at least dealing
with industry, and everyone recognizes that reciprocity is just
plain good Government and makes good sense. But today, it makes
even better sense when there are so many perturbations and
strains on a personnel security process. I got a commitment
from all four senior security officials to convene a working
group, which we have done within the past month.
That working group has offered up a declaration, a specific
articulation of exactly what reciprocity is, that I anticipate
that we shall be able to promulgate hopefully within a matter
of weeks. This will be publicly disseminated. All of industry
will get it. They will know exactly what the standards are.
They will know precisely when a Government agency is failing to
comply with it. And part and parcel of this will be a single
point of contact with every agency in terms of when a program
office fails to comply who do I go to in DOD, CIA, DOE, or
whatever, with a copy to my office and we will followup on
that. Now this is not a silver bullet. It is not going to
address all the issues. But at least this will get us away from
wasting resources on people we have already determined to be
trustworthy and reliable.
Mr. Schrock. I agree. Mr. Chairman, just let me make one
more comment. It is kind of ironic, but everybody that sits
from that desk back, the minute we get sworn in we can get any
briefing we want, no matter how good or bad we have been before
we got here. So there is a fallacy in the thing right now.
Maybe some of us should not have clearances.
Mr. Leonard. Actually, the vetting process I think you went
through, Congressman, is a whole lot more than we go through.
Mr. Schrock. Well, I was a career naval officer, so I went
through that process. But there are a lot of people here that I
look at and say, Hmm, should they have it. [Laughter.]
Chairman Tom Davis. I do not think we need to go there.
[Laughter.]
Mr. Schrock. But that shows how out of whack this whole
system is.
Chairman Tom Davis. Let me also just tail on. What if we
codified the Executive order for reciprocity, would that help?
Mr. Wilshusen. That is certainly a valid option to try. One
of the things that have not been able to quantify is the extent
to which these reciprocity issues exist. But, certainly, that
would be one option.
Chairman Tom Davis. We are going to hear on the next panel
some issues. I am going to recognize Mr. Moran now, who is on
the Defense Appropriations Committee, and that may be something
that we would want to work on, Jim. We could get an
authorization, you could put some language there that would
help in some of these areas. I am going to recognize my friend
from Virginia who has been very active on this issue as well.
Mr. Moran.
Mr. Moran. Thank you very much, Mr. Chairman. I know that
you and apparently Ed as well, our district offices are
inundated with these security issues. My district office
director, and I have to believe it is exactly the same in your
district office and probably with Ed's in the Tidewater area,
said there are hundreds of people. And we are only taking the
most egregious, the ones that do not make any sense. If there
is any rationality to the process, we tell them you have just
got to trust the system and at some point you are going to get
the clearance. But we are only taking the egregious ones that
do not make sense and we are overwhelmed with them. There is
something wrong. Something has been wrong for quite a while
here.
You have been giving us numbers and promises, and when I
say us I am talking about the Congress. Chairman Davis is only
holding this hearing because it has gone way past the point of
any reasonable expectation of patience and deferring it to the
executive branch. But DOD's performance standard, and there has
been a lot of emphasis, sitting on Defense Appropriations,
everybody that comes up talks about all the performance
standards they are implementing and they are shaping everything
up at DOD, and we have managers in there and we are going to do
it right, and so on. So the DOD performance standard is 75 days
for the initial secret clearance, 120 days for an initial top
secret, and 180 days for reinvestigation of top secret. I
wonder why it has to be 6 months for a reinvestigation. But the
timeframe is now 375 days in fiscal year 2003, more twice than
what the performance standard is. And this has been going on
for years.
One of the problems is that there was an Executive order
that was issued in 1995 that mandated that there be mutually
and reciprocally accepted by all agencies. And yet, for some
reason, this administration decided in April 2001 to disband
that Executive order and to issue a brand new one. It was
supposed to set up a different organization that was going to
streamline this and it did just the opposite. And we now have a
national security issue. We have a war going on and you are
telling us to be patient--that is the word you used, Ms.
Anderson--be patient, we are working it out, maybe next year we
will transfer it over to OPM but we are still studying whether
they can do the job or not. That is not acceptable. When you
have almost 200,000 personnel that need to get to work serving
this country and they cannot get their security clearance, it
really is inexcusable. If you were on the other side of the
aisle and you were looking at this, you would say somebody is
not doing their job.
You have known this was the problem. As Chairman Davis has
said, this was a report in 1981. But we have a war now, we have
two wars going on and we cannot get the people we need out in
the field. You come up here and tell us, well, we are working
on it, be patient, we are studying it. The answer should be,
``No excuses, sir.'' And what is most frustrating, you have
never asked for any people. The Secretary never identified
this, did not want anymore people provided to get the job done.
Why? Why did you not ask for any people to get the job done?
You know that we have an almost 200,000 backlog and you do not
want any more people to do it. Do you want the backlog? Is
there something we are missing here? Is there some explanation
we are not figuring out, that you do not want these people
cleared? Ms. Anderson, what?
Ms. Anderson. Sir, certainly, we want the people cleared.
We will do nearly a million investigations this year. The
request for additional personnel at Defense Security Service
has been a longstanding debate within the Department of
Defense. We believe that the decision to use more contractor
resources will allow us the same degree of quality, better
flexibility, and improved ability to increase the capacity.
Mr. Moran. It sounds like I am reading something from a
brochure, frankly. We believe that using more contractor
personnel, why has it not happened? If you think that contract
personnel are going to fix it, then why did you not just fix
it? If you are not asking for more people or Federal employees
because you are going to contract it out, then why is it not
contracted out? Why is it not getting done?
Ms. Anderson. DSS does have three contracts with contractor
providers that have been immeasurably useful in helping reduce
the numbers outstanding.
Mr. Moran. Immeasurably useful.
Chairman Tom Davis. If the gentleman would yield?
Mr. Moran. Yes, I would be happy to yield.
Chairman Tom Davis. GAO has identified this as a manpower
problem to a great extent. So if you are not going to staff up
because you are concerned about the ebb and flow, which you
testified, and the highs and the lows, then over the short term
you can contract this out. And it is unlimited. It would seem
to me this is where, over a short term, you fire a contractor
like that. But, clearly, you need more people for what is going
on. And we do not have them. And what I am telling you, what
Mr. Moran is telling you, and Mr. Schrock is telling you, we
could get a lot of people in here to say let us get on with it.
Let us not study it and get back by the end of the fiscal year,
and then we can try maybe to hire somebody to put in a computer
system. That is not going to cut it.
This backlog is huge and it is costing us more money
everyday for people that we should not have to pay. You are
taking money, my mother worked two jobs, she was a waitress at
night and took care of other people's kids during the day, and
you are taking money out of people like her's paycheck and
overpaying, misspending it because you will not hire the people
up front to do it. It is wrong. We want you to address it. This
is serious.
Mr. Moran. I could not have expressed it as well as you
did, Mr. Chairman. Do you think for a moment that Defense
Appropriations Committee, if you told us we need some staff or
we need more money to contract out, you would not have gotten
it? It is a $421 billion request. We will give you anything you
need to get it done, and yet you do not want it. It is
inexplicable and it is inexcusable. I do not know whether you
are going to take this back to the Secretary, but somebody
needs to write a note to the Secretary that we are going to
present this stuff to the staff, and the Secretary is going to
be pretty upset when he finds out that the Government Reform
Committee had this hearing, Defense Appropriations wants to
know what is going on, and he has never asked for anything from
us to fix the situation. The situation is broken. The word is
``broken.'' It is not working and you have to fix it. And it is
going to take more than sweet talk and nodding. It has to be
done now.
We have soldiers out in the field. They did not wait for a
year. They were sent out there, some of them without adequate
equipment, and we have contractors who could help them a whole
heck of a lot with the technology we have available and they
cannot go out because they have to wait more than a year for a
security clearance. They have to go do other things. Most
people that we really need are not going to wait around for a
year till they get their security clearance. Thanks, Mr.
Chairman.
Chairman Tom Davis. Thank you. Let me just make a comment.
I remember the District of Columbia a few years ago was running
short on police. So to do their background checks, they just
let everybody in and a couple of years later we had a huge
scandal when a lot of these people who did not go through the
clearances ended up stealing money and everything. So that is
not the answer. The answer is we have to go through this. It
does take some time. But we need personnel to do it. Get back
to us, tell us what you need. And these decisions are made at a
higher level. I do not mean to beat up on you. You drew the
short straw today and you are here. [Laughter.]
We understand it and we appreciate your being here. And
legislative action is coming. But this is costing us a lot of
money and we are not as secure a country because of this, too.
So, basically, the end result is we are getting less security
and it is costing us more. So we need to address it.
And to OPM, this has to be given a high priority. This
cannot be whenever. Everybody has a lot of priorities. We want
to move this to the top of the stack because long term we
cannot afford it.
Since 1981 it has been a problem. But now fighting a war on
terror, it is very serious and the repercussions could be
strong. And I do not want to get into what Ms. Watson got into
about contracting and Iraq; I know where she was trying to go
with this. Believe me, something goes wrong on this, it is
going to come back to the clearances being backed up and
everything else and there are serious ramifications. And from a
cost-avoidance point of view, you ought to be up here at least
asking for the money, and then if you do not get it, you are on
record.
So thank you for being here. We appreciate it.
Mrs. Maloney, do you want to ask any questions? I will just
yield to my friend from Virginia first, and then we will get to
you, Mrs. Maloney.
Mr. Moran. Just 30 seconds. D.C. is an excellent analogy.
For years they went without hiring people, all kinds of
bureaucracy, the few people there were overpaying them, they
were sitting behind a desk. Reach a crisis situation and then
we over-react and we dumped all these people without adequate
training. And that could be what happens here. We are saying do
the security clearances but figure out how to do them
responsibly and expeditiously. Thank you, Mr. Chairman.
Chairman Tom Davis. The gentlelady from Manhattan, Mrs.
Maloney.
Mrs. Maloney. I thank the chairman for yielding. I would
like to be associated really with the comments of Mr. Moran and
Mr. Davis. It could not be stated more clearly. This is a
scandal. You have to get on this and put the proper people,
hire more people. Just get the job done.
I would like to raise one question of security clearance
that deals specifically with Iraq. When I was there with the
chairman on two oversight visits, some of the generals and top
people really requested more people who spoke the language that
they could trust. They felt they sometimes were, and there were
even allegations of spies in some of their units and so forth,
relying on people they did not really know to be interpreters.
Maybe it has gotten better. But very few people really spoke
the language. We have two, State Department and DOD, schools. I
want to know how many people are we training to speak the
language? And are we getting people over there? That was a
specific request to our delegation, to get more people over
there who spoke the language who they would trust to interpret
appropriately and would trust with inside information on where
they are moving their vehicles and so forth. So, specifically,
security clearance and training for language-speaking officials
for Iraq and Afghanistan, where does that stand?
Ms. Anderson. Ma'am, we understand the importance of having
trusted, vetted individuals in country to serve as the
linguists. I know that the Defense Intelligence Agency has put
the vetting of those individuals at the top of their list. We
know that the services and agencies are recruiting people
within their own ranks. I do not have specific numbers with me,
but we are happy to get those over here.
Mrs. Maloney. But my question--they said they are trying to
vet as best as they can, but it was a real weakness in our
operation over there and that they needed more people speaking
the language. And they requested us to go back and get more
people trained out of America or in Qatar or some place that
they could get over there. And I just wonder, are our language
schools focusing on that? How many people are we training in
the language now? They obviously are going to have security
clearance coming from our country. So if you could get back to
us maybe on how we are training in our country or in Qatar or
wherever to get people over there that they can trust and they
can work with. Thank you.
Chairman Tom Davis. Thank you. Anyone want to add anything
at this point? You want to get out of here, don't you?
[Laughter.]
Thank you all for being with us.
We will take about a 2-minute recess as we get our next
panel ready.
For our second panel we have a very distinguished panel. We
have Sudhakar V. Shenoy, chairman of the Northern Virginia
Technology Council, a graduate of the Indian Institute of
Technology. We have Bobbie Kilberg, president of the Northern
Virginia Technology Council. And Bobbie, I understand that Gary
Nakamoto is going to be sworn in as well. If we have any tough
questions, we can go to Gary, our go-to guy. And also with us
is Douglas Wagoner, the chairman of the Intelligence and
Security Task Group of the Information Technology Association
of America. You all have heard the previous testimony. I almost
wish that I could have put you first so that they could,
instead of no problem, we are working on it, they could
understand the seriousness of this. I know Mr. Moran is going
to be back, Members are going to be back. We may have a vote in
between, but I want to get the testimony here on the record as
quickly as we can. So I need to swear you in. Mr. Nakamoto, you
are there as well.
[Witnesses sworn.]
Chairman Tom Davis. I think you know the rules on the
lights.
Mr. Shenoy, we will start with you. Thank you very much for
being here and for coming forward. I know you are speaking for
a lot of businesses, not just in Northern Virginia but all
across the country, that are experiencing these difficulties.
STATEMENTS OF SUDHAKAR V. SHENOY, CHAIRMAN, NORTHERN VIRGINIA
TECHNOLOGY COUNCIL; BOBBIE G. KILBERG, PRESIDENT, NORTHERN
VIRGINIA TECHNOLOGY COUNCIL, ACCOMPANIED BY GARY NAKAMOTO,
NVTC; AND DOUGLAS WAGONER, CHAIRMAN, INTELLIGENCE AND SECURITY
TASK GROUP, INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA
Mr. Shenoy. Thank you, Mr. Chairman. Good morning, Mr.
Chairman and committee members. The Northern Virginia
Technology Council wants to personally thank you for holding
this hearing and for your leadership on national security and
the issues raised by the Federal Government's present security
clearance process.
I appear before you this morning as chairman of the
Northern Virginia Technology Council [NVTC], and also as
chairman and CEO of Information Management Consultants, Inc., a
northern Virginia based company. I am accompanied by Bobbie
Kilberg, who is the president of NVTC. The Northern Virginia
Technology Council is the membership and trade association for
the technology community in northern Virginia and is the
largest technology council in the Nation, with over 1,200
member companies representing about 160,000 employees.
From the late 1990's through 2001, the northern Virginia
region saw an incredible boom in business driven largely by
investment in technology. Our community saw enormous expansion
of existing companies and the creation of hundreds of new
entities. Our work force needs exceeded the supply of available
workers and unemployment rates dipped as low as 1.5 percent.
NVTC's work force initiatives sought to attract talented and
qualified workers to the region through various incentives and
programs.
Since the tragic events of September 11, northern Virginia,
like many other high-tech regions, experienced downturns in
investment and significant lay-offs of employees. Fortunately
for the region, many of the businesses have been able to retool
and innovate in areas that can be of assistance to the national
security efforts of the United States. Our companies have been
able to develop new technologies for use in the defense of our
country and have been able to pull out of a recessionary
climate through participation in Federal Government contracts.
Herein lies the work force dilemma.
After thorough consultation with NVTC's technology company
members, the NVTC Workforce Committee has determined that the
major causes for the delays in the security clearance process
are as follows: Lack of resources at the agency level to timely
process applications; unnecessary increases in the level and
number of security clearances involved in many contracts;
inability to move a secured worker from one agency contract to
the contract of another agency without going through another
separate clearance process; disparate adjudication methods at
the agencies; antiquated methods of conducting background
checks; and lack of technology-based processing of contractor
security clearances.
The inability of NVTC member companies, which are Federal
Government contractors or wish to enter that market, to obtain
security clearances in a timely and efficient manner has the
following ramifications: Inability of companies to enter the
Government contracting arena because of the lack of a cleared
work force; inability of companies who are Government
contractors to fill many open positions by hiring highly
skilled workers, who have been laid off in the region and who
would qualify for these open positions, because of the
excessive length of time required to obtain security
clearances. Companies cannot afford to keep skilled workers
``on the bench'' while awaiting the completion of a security
clearance; competition for workers with security clearances is
intense with Government contractors hiring away each others'
employees at ever increasing wages; cleared workers are
recruited away from the military and other Government agencies
where they are performing important functions; and increased
costs to companies for hiring cleared workers translate into
increased costs presented in contract bids to Government
agencies.
In December 2003, NVTC conducted a security clearance
survey of its membership to formalize the anecdotal evidence we
had compiled. We developed a 15 question electronic survey
which we sent to 703 of our member companies, receiving an
overall response rate of 22.5 percent. We found that more than
one half of the respondent companies had over 50 percent of
their business in Government contracting. We also found that
small businesses were highly represented in the survey sample.
In response to questions about the number of unfilled positions
due to inability to find cleared workers, 73 percent of the
responders reported open positions in secret, top secret, and
sci/poly clearance categories. In response to questions about
the ability of companies to find cleared employees, the
majority of respondents indicated that it was either ``somewhat
difficult'' or ``very difficult'' to find cleared workers. When
asked about hiring methods for finding new employees with
clearances, nearly 70 percent of the respondents reported that
they recruit directly from the Government or other Federal
contractors. In addition, more than half of the respondents
said they paid a minimum 10 percent premium to recruit cleared
workers for their companies. If a security clearance
application was submitted, 50 percent of the respondents were
required to wait 6 months or longer for a response. For the top
secret and sci/poly clearances, our members indicated a 12 to
18 month wait period.
It is of critical importance that this committee require
reform of the Nation's security clearance system and we
recommend that the following reforms be instituted through
administrative and/or legislative action: 1Reciprocity among
agencies--codification of Executive Order 12968; portability
between agencies--again, codification of Executive Order 12968;
re-evaluation of clearance requirements to be certain they are
necessary; provision for self-initiated pre-processing of
security clearance with a Letter of Intent to hire; re-
examination of funding sources to pay costs for clearances; re-
examination of the factors for disqualification; and investment
in and better use of technology to conduct efficient, secure,
and consistent background checks.
NVTC and its member companies are willing to assist in any
way that is helpful to the committee, and we thank you for
inviting us to testify before you today. Thank you.
[The prepared statement of Mr. Shenoy follows:]
Chairman Tom Davis. Thank you very much.
Ms. Kilberg.
Ms. Kilberg. I took some notes based on the testimony
before from the Government and I would love to spend a few
minutes just making some comments.
Chairman Tom Davis. OK. I would love to hear you.
Ms. Kilberg. OK. No. 1, one of the things we have not
focused on but we should is that much of the innovation and
cutting-edge technology to fight terrorism comes from small-
and mid-sized companies. The security clearance debacle means
that it is simply not competitive for most of those companies
to be able to get those contracts. They shy away from competing
because with the security clearance problem they cannot
succeed. That is not good for innovative solutions and we
really need to look at that.
Second, I want to take a few minutes to go through our
member company survey just to give you a real indepth feel. For
secret level clearances, our companies report that more than 6
months is required from our member companies' perspectives.
Fifty-nine percent said it takes more than 6 months to get
those clearances. Top clearance level, 70 percent say it takes
12 to 18 months, and 33 percent said it takes 18 months or
longer. Sci/poly clearance level, 90 percent said it takes more
than 12 months, and 56 percent said it takes 18 months or
longer.
Third, I think I heard the gentleman from OPM saying that
they now have a RFP out for contractors. I think that is a way,
an approach to deal with this issue. However, the investigators
that the contractors are going to use themselves have to be
cleared themselves. And if I heard him correctly, in the RFP
the contractor applying cannot raid or recruit people from the
Government or other contractors. So if they cannot themselves
get people who are already cleared to be the investigators to
do the clearances, you are just going to get yourself more and
more in a catch-22.
Next point, DOD. Twenty-five months for reform. As
Congressman Schrock said, that is just frightening. That is
truly, truly scary.
Next point, and I was not going to bring it up but
Congressman Moran mentioned it, what do our companies do in
this region when they have people problems? They go to their
Congressmen. They go to all of you and they put insistent
pressure and say help us, help us, we cannot get cleared. That
is not the way the system should work. But that is their only
way to get clearances in a timely manner now, and that is going
on throughout the country.
Codifying Executive orders. That is very important. But, as
Congressman Davis said, if that is not accompanied by
additional Federal money, we are only codifying something on
paper and nothing is going to change.
Two final points. I do not mean to be pejorative, but
obviously, as Congressman Davis said, Heather Anderson drew the
short straw and that is why she is here today. And I worry
about how long it is going to take her to get through the
Department of Defense bureaucracy to let Secretary Rumsfeld
know what happened today at this hearing. And if it takes her 6
months to do that, you are another 6 months behind.
And finally, we need to use technology to help solve this
problem and we are not presently using it as effectively as we
can. One very quick example. One of the things that was not
discussed but is obviously important is re-clearances, a person
has a clearance and then they have to be re-cleared. One of the
things that the White Paper which ITAA, NVTC and all of us in
the coalition developed, discusses is the fact that, if you
could develop a standard structure for security clearance
requirements, then you could facilitate a system to monitor the
continuing validity of clearances. And given the technology you
have today in data mining, you could have an ongoing data base
that would be able to tell you immediately whether there is a
change in status--an arrest, a bankruptcy, an unexplained
affluence--things that might indicate a potential security risk
even before you normally would do that re-clearance or that
reevaluation. If you could do that and you could identify
potential security issues quickly and efficiently through
technology, then you could reduce reinvestigation time and you
could free up resources to focus on new clearances.
Those are just some points from my notes and from listening
this morning. Thank you.
Chairman Tom Davis. Thank you very much. My instinct is
that Secretary Rumsfeld probably has other things on his mind
today than just worrying about expediting security clearances.
But we can get this word to the appropriate people in Defense
that can take action, it does not have to start at that level,
and we intend to do that. So I appreciate your remarks.
Mr. Wagoner, thank you for being with us.
Mr. Wagoner. Mr. Chairman and members of the committee,
thank you for inviting ITAA to testify today on the challenges
industry faces in obtaining Federal security clearances. This
panel is a positive step forward for creating actionable
solutions to challenges that have plagued this process for
decades, a process that keeps highly qualified people from
working in high paying jobs of national importance. My name is
Doug Wagoner, and I serve as chairman of the ITAA Security
Clearance Task Group. I also bring the perspective as a small
business IT executive from Fairfax struggling with this issue
everyday.
As you may know, ITAA is the Nation's leading trade
association focused on the IT industry, providing public policy
and national leadership to promote its growth. ITAA represents
firms large and small, including virtually every major Federal
contractor. I have included more detail on ITAA's solutions to
this problem in my written statement along with a copy of the
detailed White Paper that ITAA and seven other industry
associations prepared that provides five recommendations on how
to improve this complicated process without sacrificing
security.
While the pressures placed on an already stretched system
have significantly increased following September 11, the
challenges we face have been the same for decades. Since the
1980's, Congress, the executive branch, and GAO have been
looking at the problem with no reformed policy to make
substantive changes. The Government rightfully demands high
standards from its contract personnel, and ITAA does not want
to reduce the standards to obtain a clearance. National
security is priority one for industry.
I would like to focus on three main issues in ITAA's
recommendations to improve this process. ITAA recently
completed a survey of its membership on clearances and I will
highlight the results in this statement.
The first issue is with consistently elongated time to
grant initial clearances. As with NVTC, 70 percent of
respondents state that it is taking more than 270 days to
obtain a top secret clearance, and that is for a clean case,
and 16 months for those needing more extensive investigations
or polygraph. These delays are costing people jobs. Almost 22
percent of our survey respondents had over 500 open positions
right now, and 70 percent are saying that they have seen
significant increase in the need for these cleared personnel
over the last 5 years. With an increasing demand and a
constrained supply, industry is poaching employees where they
can, sometimes paying referral bonuses of up to $10,000 per
cleared person. Fifty-three percent of our respondents state
that they primarily recruit cleared personnel away from other
contractors, 10 percent say they primarily hire away from
Government. That means almost two-thirds of the cleared people
industry hires leave another cleared opening to be filled.
Government has created a zero-sum game that creates instability
in critical programs and drives up cost to both industry and
Government, as I will discuss in more detail.
ITAA recommends several solutions. First, we recommend that
agencies work through the procurement process to authorize
bench strength of cleared personnel. An example of this is if a
contract requires 20 cleared slots, we recommend that
procurement officials authorize 24. These ready replacements
would ensure that critical programs stay on schedule and do not
get bogged down because of staff turnover. An industry-wide
bench strength would also increase the supply of cleared
people, removing the zero-sum game and price pressures.
Second, ITAA would recommend that a statutory performance
metric of 120 days be established to complete a top secret
clearance, and that a Government industry advisory panel be
tasked to create the policies and reforms to achieve that
metric. Standardization and reciprocity are also enormous
issues. ITAA has identified more than 20 agencies in the
Federal Government that have clearance requirements and most
with unique items of inquiry. Often a clearance is granted at
one agency that will not be recognized by another. For example,
at DOJ, a DEA clearance is not honored by FBI, and vice versa,
because of different requirements even though they are within
the same Department. This also creates problems for our first
responders who need multiple clearances to share information
with the Federal Government. It would seem logical, Mr.
Chairman, that when one Federal agency grants you a clearance
it should be honored by all of government to work at the same
security level.
ITAA recommends that a consistent baseline requirement be
established across Government to specify data requirements and
investigation methods. The Defense Science Board could also be
tasked to create policies governing security clearances for the
defense and intelligence community.
Cost is the third issue that we need to consider. High
demand and low supply of cleared people is rapidly increasing
labor costs. Over half of the people in our survey said that
they pay up to 25 percent more for a cleared employee who
performs the same job as an employee without a clearance. This,
coupled with increased recruiting costs, creates higher costs
for Government in the form of higher labor rates and contract
delays due to unstable work force. Clearance delays
significantly affect a company's ability to grow. Twenty-two
percent of our survey told us that the clearance process alone
impacts annual revenue by $10 million. It has prevented the
growth in my small business by 20 percent this year. GAO has
estimated the cost to Government in the billions of dollars
annually. But more importantly, Mr. Chairman, GAO and others
have pointed to direct risks to national security. It is clear
that business as usual cannot continue. Changes to policy,
technology, and management processes must exist to reform this
antiquated process.
Two final snippets from our survey. Ninety-six percent told
us that if Government could issue a top secret clearance in 120
days or less, they could better serve the national security
needs. And 85 percent told us it would be easier to bring the
best and the brightest to Government if we could get that 120-
day mark.
ITAA members value their partnership with Government and
are committed to improve this process that is critical to
national, economic, and personal security. Thanks again for
your invitation, and I am happy to answer your questions.
[The prepared statement of Mr. Wagoner follows:]
Chairman Tom Davis. Thank all of you for your testimony and
for some very specific recommendations for what we might do. It
is incredible to me that the representatives from the Federal
Government did not have specific recommendations except to keep
studying, when you have given I think some fairly quick fixes
and which everybody identifies as being human capital, manpower
related. I am not sure as followup to this we ought to insist
on DOD sitting down with a group of contractors, understanding
what these problems are; everybody is talking about it but
there is no communication.
DOD has told us about some clearance facilitation programs
that it says assists industry contractors. Some of these
include the ability to apply for security clearance up to 180
days before an employee starts a job, quick turnaround on
interim secret and top secret clearances, and nearly automatic
transfers of clearances when an employee moves from one job to
another. That is what they testify is working. Does this work?
Mr. Shenoy. Right now, based on the testimony that the lady
gave, I think it is mathematically impossible for them to meet
some of those goals they have. For example, the 75 days for a
secret clearance, by my calculation, they have a little over
4,000 people who do these investigations, there were 86,700
cases pending, which means that it is an average of 22 cases
per investigator, and if they take even 15 days per case, each
of those investigators have over 330 days worth of work. So
which means that after the fifth person has been cleared, the
rest are all going to be outside that range.
Chairman Tom Davis. You also made a good point I think in
your testimony that some of the work that is required for
secret clearances and top secret clearances does not really
need to be designated that way. The Government could get this
job done, they could get the product done at lower cost to
them, higher quality product by not requiring this. So are they
going overboard on what is required as secret?
Mr. Shenoy. One of the problems I think is in the
definition of what secret and what top secret constitutes. My
company has clearances with various agencies and every time we
get another project which has certain level of clearance, that
agency may not accept the other agency's clearance. On one
occasion I asked the investigator who was there who had come to
interview me about one of my employees, I said, ``Why do you
need to do this again?'' And he explained to me that what is
top secret at a particular agency may not be top secret at
another one, so that is the reason why they have to redo the
investigations. I think what we need is a Government-wide
definition of what secret is and what top secret is. I do not
believe that exists.
Chairman Tom Davis. Does the contractor decide if it is
going to be, in this case, the Government agency decides or the
procurement officer decides what is needed to be secret and top
secret?
Mr. Shenoy. I believe the program office decides what it
needs to be and the contracting officer basically passes it
down.
Chairman Tom Davis. Let me ask you this, all of you, have
your organizations had informal discussions with DOD about
this, calling attention to the problems and the waste?
Mr. Wagoner. Yes.
Chairman Tom Davis. And what has been their response, what
we heard today?
Mr. Wagoner. Basically, we are working on the issue. Here
is our plan. Here are the things we want to do. But we ask,
well, what is the specific timeframe? OK, you are going to put
this new system in place. When? What is the specific timeline?
And that is where it breaks down.
Chairman Tom Davis. I did not want to really embarrass
anybody today on the first panel. But if you take a look at the
GAO report that came out in 1981 and you hear the responses
from the agencies at that point, it was that we are working on
it then, too. Sooner or later, you just get tired of them
working on it.
Mr. Wagoner. The seats still warm here, Mr. Chairman.
Chairman Tom Davis. Yes. OK. [Laughter.]
From the testimonies it is clear that a pseudo black market
exists when it comes to employees with security clearances. Can
you tell the committee how the dynamics work between large,
medium, and small companies? It would seem that the small and
medium companies would always lose out to larger companies in
these bidding wars or at least have a propensity to lose out.
And Mr. Nakamoto, before you testify, I do want to note for the
record, I think a positive thing, that we still have GAO and
DOD still here. I think they are listening to this. So at least
the people we have here today are interested or they would not
still be here. The question may be in filtering this up higher.
But in this case, talk about the pseudo black markets that
exist. I think it is important for these agencies to understand
why we end up paying more money for a product, why taxpayers
end up paying more money for a product. Gary, if you want to
sit at the end, we will get a chair there for you. I think that
is a warm seat, too.
Mr. Nakamoto. I think one of the things that happens is a
smaller company may have fewer employees to spread out their
cost. So a larger company may go in and bid, actually just pay
the cleared employee a higher rate and spread that over the
cost of the contract. So your smaller and medium-size companies
will lose out to that employee. But what that means to the
taxpayer and the Government overall is what was alluded to
earlier in testimony, is that the actual cost escalations for
security-type projects continues to grow, and it means that
companies that may have open slots on smaller projects remain
unfilled. So what you have is an imbalance both in cost
escalation and the fact that there are not services being
provided to the Government agency.
So I think overall, at the very end of the day, when you
weigh these two components out, as well as all the other
turmoil that it may cause for a smaller vendor, I think it
hurts the business' ability to make money, I think it hurts the
Government's ability to have service provided to them, and I
think it hurts the taxpayers' investment because they are
paying more for a service that they should not have to pay. And
when you have a situation where business loses, Government
loses, and the taxpayer loses, it is the worst of all worlds.
Chairman Tom Davis. Let me understand this. Maybe you hire
somebody, your company, a good company but you are not
Lockheed-Martin. You are a good level, performing well, good
small or mid-size company, you hire somebody for $75,000 a year
and they have a clearance and they start working on a contract.
But there are thousands of other jobs that require people with
clearances. And what can happen then, as I understand it, is
one of these other companies will come in, they need somebody
with a clearance, they go after your guy and they can pay him
more.
Mr. Nakamoto. That is right.
Chairman Tom Davis. And then you cannot complete your
aspect of the contract, or you get in a bidding war for
somebody that is worth something, but the clearance is what
makes it worthwhile. It ends up costing money, contracts do not
get completed on time, and the work product suffers. Is that
fair?
Mr. Nakamoto. Yes, it is. And the other dilemma is, for
instance, touching on the one situation where someone will get
an interim clearance at one agency and be able to perform an
appropriate level of work, and then another agency will make
that employee wait even though they have an interim clearance
and there is work that they could perform, they are still
sitting on the bench. And I would say that it affects all
levels of business--large, small, and medium. So I think the
situation is deep and it is widespread. I really do believe
that it does begin with the manpower situation, human power,
but I also believe that it is going to take the Government to
recognize the problem and act.
Chairman Tom Davis. I had the CEO of Northrop Grumman in my
office yesterday just saying the same thing. They probably have
an advantage in bidding over you, but they cannot get the
people either. So you have these contracts just drying on the
vine. The Government needs the service now. They cannot get it
now. And what they are getting they are overpaying for.
Ms. Kilberg.
Ms. Kilberg. Mr. Chairman, we talked before about much of
the cutting-edge technology coming from small- and mid-size
companies, most of our companies of that size cannot afford to
put people just on the bench in a hold while they are waiting
for their clearances, where the large companies can if they
have to.
The other thing is, in our survey, nearly 70 percent of the
respondents recruit only cleared workers from Government or
other contractors--70 percent. So that tells the story right
there.
Chairman Tom Davis. So what do you do if you want to get in
the business, you are a smart person, you do not have a
clearance? It is hard to get a clearance if you do not have a
contract lined up.
Ms. Kilberg. You cannot.
Chairman Tom Davis. You cannot just go up and say, you
know, I have just graduated from college, I want to get a
security clearance. It does not work that way.
Ms. Kilberg. That is the chicken and egg, that is your
catch-22.
Mr. Shenoy. That is where the problem comes in. A small
company cannot afford to have a bench.
Chairman Tom Davis. Because you have to carry them in the
meantime and you cannot bill them.
Mr. Shenoy. You have to carry them. And every time we have
one person on the bench, the cost to the Government for that
person goes up by almost 8 percent for every month for that
first year. Basically, his cost goes into overheads.
Chairman Tom Davis. I guess the way I would understand it,
it is kind of like Albert Bell getting $11 million sitting on
the bench last year for the Orioles. You just cannot afford to
do that.
Mr. Shenoy. Yes. Something like that. [Laughter.]
Chairman Tom Davis. I am just trying to put it in terms,
you understand. Mr. Schrock and then Mr. Moran.
Mr. Schrock. Thank you, Mr. Chairman. I think everything
has pretty much been said. I really appreciate all of your
coming here today. It sounds to me like standardized clearances
might be, Gary, what you just said, standardized clearances
would probably help this situation. I guess it is because there
are not enough people to do the clearances and that is why it
takes so long; is that the basic problem, Bobbie?
Ms. Kilberg. Well, it is partially that you do not have
enough people doing the clearances, and it is also partially
that you are reinventing the wheel every time. Your example of
the young employee who came out of the military, that is not
unusual. That is normal for the course.
Mr. Wagoner. And if I may, sir. I think Bobbie brought up a
good point, which is that the folks here are dealing with
policy that was written probably in the Eisenhower
administration on how to do these clearances. And you take a
look at data mining, how much can we just off-load, at least do
triage on some of these cases and so if the person has bad
credit, they have a criminal conviction, have the data mining
find that first and get them out of the system.
Mr. Schrock. We heard the last panel talk about studies.
How do you account for all the studies? What are they studying?
I mean, it seems pretty cut and dry. There is a problem, we
know what it is, we need to get it fixed. What are they
studying?
Ms. Kilberg. I think they are studying the inevitability of
giving up their own bureaucratic turf in different agencies and
departments.
Mr. Schrock. Bingo.
Ms. Kilberg. But then I am not very politically correct
usually.
Mr. Schrock. Well I am not either, so that is fine. That is
why you and I have always gotten along.
That is all I have to say, Mr. Chairman.
Chairman Tom Davis. OK. Mr. Moran.
Mr. Moran. Thank you, Mr. Chairman. I think Ms. Kilberg
answered it quite accurately. This is in large part a matter of
turf and trust, particularly with regard to reciprocity. There
are just so many things that seem inexplicable here. Why, when
somebody has just gotten out of the military or some other
position where we know they have already been screened, why you
cannot facilitate the process of review, why you have to go all
the way back. And then, even worse, when another Government
agency has already gone through the process but yet the new
agency will not accept the work that they have done. Talk about
inefficiency and waste. Of course, the worst waste is the end
result, where we are paying so much more for people and where
our ability to fight wars, to provide needed services and
technology to troops in the field and to make this country's
citizens more secure is not being accomplished because we have
gotten ourselves inundated in this mountain of paperwork, much
of it unnecessary.
Now it was mentioned, I think you just mentioned it, Mr.
Wagoner, about the technology that is available. Why you cannot
do an initial screening, we have all that information
available, we do it for other purposes currently--DOT, in
intelligence--we are doing it, we have the software, you can
immediately kick out people that have criminal convictions,
people that have associations with organizations or individuals
that are suspect. You can immediately kick those people out.
What you are then left with is a group that should probably be
given the benefit of the doubt but at least you should be able
to facilitate an investigation of those. And yet, we are not
doing it. What we are doing for 6 months, actually, it is 375
days, so for a full year to spin wheels, reinventing the wheel
is just beyond us.
I guess I want to ask witnesses here, before this became
such a problem, did you have any people that you found
compromised your mission, your operations, your ability to meet
the Government specifications and requirements?
Mr. Wagoner. If I may. One point I do not think we have
talked about is most of our members do our own pre-screening
even before, and it is another cost that we have not talked
about, because we do not want to take the time and the money to
send somebody that we know is going to be rejected. Almost
every single one of our companies does at least a credit and a
criminal conviction check that we pay for, and many more even
do a drug check as well. And then on top of that, to answer
your question, from what we understand, the rejection rate is
less than 1 percent. So there is not a lot of cases being
rejected here.
Mr. Moran. So, and that is really the bottom line, how
likely is it that we are going to find any problems when the
corporations have already done the screening. And it would be
insane for you to take chances with anybody that you thought
might be a security risk, because not only does it jeopardize
that contract, it jeopardizes your credibility in being able to
go after other contracts. So you are going to do everything
possible to screen the people you are hiring anyway. And so now
we go through this overlay of more and more investigations,
lack of reciprocity, and what seems to be an unjustifiable
bureaucratic delay.
I think the chairman has identified something that is in
desperate need of correction. And if you have some suggestions,
we can put some language in defense appropriations. You hate to
have to do that. You wish that the executive branch would fix
their own problem. But it looks like it is time to mandate that
it be fixed with timeframes and providing whatever resources
are necessary, even though I know DOD is going to say we do not
need any more money. But if you want to work with us on some
language that would go through Chairman Davis so that it would
be consistent with what the authorizing committee wanted to
see, I am confident that the Defense Appropriations Committee
would be happy to put it in that and/or the defense authorizing
committee.
Mr. Wagoner. We would be happy to do that. And we already
have, as I mentioned in my testimony, our White Paper is
already signed by nine other organizations and so we will work
with that coalition we already have together to take you up on
the opportunity, and we appreciate that.
Mr. Shenoy. I just wanted to make a comment on what Mr.
Wagoner just said. Many companies do their background research
but most small companies do not go through that process. It is
prohibitively expensive for smaller companies to do. So we will
not try to second guess what goes on in the investigative
process; however, we do feel it is necessary that the
investigations are to be thorough and properly done. The kind
of investigations that we as companies do is probably not
adequate. I just want to throw that in there.
Mr. Moran. But you and Mr. Nakamoto, for example, would be
looking at an employee pool that in some ways would have been
pre-screened. I mean, you are not looking at groups of people
to hire that would be likely security risks.
Mr. Shenoy. Absolutely. But there is another problem here.
Even when we hire people with top secret clearance from another
company, it still takes between 2 to 4 weeks to have that
person start on the project simply because there is a process
that you are to go through on each task order. It is not like
we can pick up the phone, call the contracting office and say,
OK, I have hired a top secret guy and we are going to start him
on the project. That does not happen.
Mr. Moran. If you can give us some suggested wording, maybe
we can do that, if it meets with the approval of the chairman
of this committee.
Mr. Shenoy. Thank you.
Chairman Tom Davis. I think one of the things we can do is
start by codifying, maybe closing some loop holes in the
Executive order on reciprocity and moving some of that. And
then you have the manpower, I guess, more appropriately, I
would call it the dedicated human capital resources that are
needed in this as well. Those are some things that we will try
to address.
In the meantime, I just hope that OPM and DOD will continue
to meet with industry and look at ways that on their own,
without congressional intervention, they can move this along.
It is a serious, serious problem that every day makes our
country less safe and costs taxpayers unneeded billions of
dollars.
We appreciate your being here to set the record straight
from your perspective and to lend what I think are some very
fruitful ideas in terms of how we may be able to correct this
over the short term. The long term, who knows, it has been
since 1981. So we need to do some things immediately that can
move this backlog. Thank you all for being here today.
The meeting is adjourned.
[Whereupon, at 12:25 p.m., the committee was adjourned, to
reconvene at the call of the Chair.]
[Additional information submitted for the hearing record
follows:]