[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

                                 ______


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95-869                 WASHINGTON : 2004
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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:]


    

                                 
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