[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


                         [H.A.S.C. No. 110-113]
 
READINESS AT RISK: THE DEPARTMENT OF DEFENSE SECURITY CLEARANCE PROCESS

                               __________

                                HEARING

                               BEFORE THE

                         READINESS SUBCOMMITTEE

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                           FEBRUARY 13, 2008

                                     
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

43-684 PDF                       WASHINGTON : 2008 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
Washington, DC 20402-0001 


                                     
  



















                         READINESS SUBCOMMITTEE

                   SOLOMON P. ORTIZ, Texas, Chairman
GENE TAYLOR, Mississippi             J. RANDY FORBES, Virginia
SILVESTRE REYES, Texas               WALTER B. JONES, North Carolina
LORETTA SANCHEZ, California          MIKE ROGERS, Alabama
ROBERT A. BRADY, Pennsylvania        JOHN M. McHUGH, New York
JIM MARSHALL, Georgia                HOWARD P. ``BUCK'' McKEON, 
MADELEINE Z. BORDALLO, Guam              California
MARK UDALL, Colorado                 ROBIN HAYES, North Carolina
DAN BOREN, Oklahoma                  FRANK A. LoBIONDO, New Jersey
NANCY BOYDA, Kansas                  TOM COLE, Oklahoma
CAROL SHEA-PORTER, New Hampshire     ROB BISHOP, Utah
JOE COURTNEY, Connecticut            TRENT FRANKS, Arizona
DAVID LOEBSACK, Iowa                 CATHY McMORRIS RODGERS, Washington
GABRIELLE GIFFORDS, Arizona          DOUG LAMBORN, Colorado
KATHY CASTOR, Florida                ROB WITTMAN, Virginia
ELIJAH CUMMINGS, Maryland






















                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2008

                                                                   Page

Hearing:

Wednesday, February 13, 2008, Readiness at Risk: The Department 
  of Defense Security Clearance Process..........................     1

Appendix:

Wednesday, February 13, 2008.....................................    19
                              ----------                              

                      WEDNESDAY, FEBRUARY 13, 2008
READINESS AT RISK: THE DEPARTMENT OF DEFENSE SECURITY CLEARANCE PROCESS
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Boyda, Hon. Nancy, a Representative from Kansas, Readiness 
  Subcommittee...................................................     1
Forbes, J. Randy, a Representative from Virginia, Ranking Member, 
  Readiness Subcommittee.........................................     2

                               WITNESSES

Dillaman, Kathy L., Associate Director, Federal Investigative 
  Services Division, Office of Personnel Management..............     6
Edwards, Jack E., Acting Director, Defense Capabilities and 
  Management, Government Accountability Office...................     8
Romero, Ben G., Chairman of the Intelligence Committee of the 
  Information Technology Association of America, Lockheed Martin 
  Corporation....................................................     9
Torres, Gregory, Director of Security, Office of the Under 
  Secretary of Defense for Intelligence, Department of Defense...     4

                                APPENDIX

Prepared Statements:

    Dillaman, Kathy L............................................    40
    Edwards, Jack E..............................................    45
    Forbes, Hon. J. Randy........................................    26
    Ortiz, Hon. Solomon P., a Representative from Texas, 
      Chairman, Readiness Subcommittee...........................    23
    Romero, Ben G................................................    64
    Torres, Gregory..............................................    29

Documents Submitted for the Record:

    Report on Improved Annual Reporting Would Enable More 
      Informed Congressional Oversight submitted by Mr. Edwards..    81
    Security Clearance Survey 2008 by the Information Technology 
      Association of America and National Defense Industrial 
      Association................................................   122

Questions and Answers Submitted for the Record:

    Mrs. Boyda...................................................   145
    Mr. Forbes...................................................   142
    Mr. Ortiz....................................................   137
READINESS AT RISK: THE DEPARTMENT OF DEFENSE SECURITY CLEARANCE PROCESS

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                                    Readiness Subcommittee,
                      Washington, DC, Wednesday, February 13, 2008.

 OPENING STATEMENT OF HON. NANCY BOYDA, A REPRESENTATIVE FROM 
                 KANSAS, READINESS SUBCOMMITTEE

    The subcommittee met, pursuant to call, at 2:05 p.m., in 
room 2118, Rayburn House Office Building, Hon. Nancy Boyda 
presiding.
    Mrs. Boyda. The hearing will come to order.
    Welcome to today's Readiness Subcommittee hearing on 
security clearances.
    I want to thank our witnesses for taking the time to appear 
before us today, and we all look forward to your testimony.
    The title for today's hearing is ``Readiness at Risk: The 
Department of Defense Security Clearance Process.'' Those words 
simply summarize why we are here today. It does not take a 
rocket scientist to know that every delay in properly 
processing clearances can hurt our national security.
    The problems in the Department of Defense (DOD) security 
clearance process have been on our radar screen for years. And 
the sudden stoppage of processing clearances for industry in 
2006, certainly got our attention.
    That led to a reprogramming request for $90 million that 
Congress quickly approved. We approved another reprogramming 
last summer to avert another crisis. And we have required the 
Secretary of Defense to submit a report with the President's 
budget submission on the status of the industry's security 
clearances.
    But these actions are only the tip of the iceberg. 
Currently, DOD is responsible for about two million active 
personnel security clearances. Approximately 34 percent is held 
by industry personnel working on DOD contracts.
    In 2005, DOD transferred responsibility for conducting the 
initial investigation to the Office of Personnel Management 
(OPM). This was intended to speed the process. DOD accounts for 
about 80 percent of the investigations now handled by OPM.
    However, timeliness of the DOD clearance process continues 
to be a significant issue. And that is why it landed on the 
Government Accountability Office (GAO) high risk list in 2005, 
and it remains there today.
    We are very concerned with the budgetary implications of 
the DOD's apparent inability to measure the current backlog and 
accurately predict future requests. And we do not want any more 
surprise stoppages.
    We do not believe DOD can simply rely on reprogramming 
requests to keep the program limping along year after year.
    Why can't DOD get it right when it comes to predicting its 
budget needs for processing clearances? What technology 
improvements do we need? What are the costs? Is DOD budgeting 
for these costs now?
    If there are technology solutions, then let us not push 
those further down the road. We should not have to continue to 
plod along with these outdated systems.
    So, we are all interested in hearing more about what OPM is 
doing to reduce delays. And I am very interested in the Tiger 
Team that was set up to review and make recommendations for 
improving the process. Perhaps this will lead to a better 
system across the board.
    And just last week, the President signed a memo asking for 
a plan to speed up the clearance process. He wants that plan by 
the end of April. And I hope our DOD and OPM witnesses can tell 
us more about what they are going to do to get that plan done. 
Continued delays increase risks to national security and add to 
the cost of classified work for the government.
    To me, this is unacceptable, so let us work together to 
find these solutions.
    Now, I would like to turn to my good friend from Virginia, 
Mr. Forbes, the subcommittee Ranking Member, for any opening 
comments that he might like to make. Thank you very much.

   STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE FROM 
        VIRGINIA, RANKING MEMBER, READINESS SUBCOMMITTEE

    Mr. Forbes. Thank you, Ms. Boyda. And let me just say, I 
appreciate you chairing this hearing, and I look forward to 
being a part of it.
    I am sorry the chairman could not be here today. I join you 
in welcoming our distinguished group of witnesses. And I want 
to thank you and Chairman Ortiz for holding a hearing on what I 
believe is a critical challenge to the readiness of our force.
    The process of granting access to our Nation's secrets 
through security clearances is not one that this committee and 
the Department of Defense take lightly. Even this week, we 
learned of allegations in Virginia and New Orleans, where 
individuals with access to top secret information conspired to 
provide military secrets to Chinese intelligence services.
    We do not know the full impact of these failures, but it is 
clear that these compromises may have seriously or gravely 
damaged the national security of our country.
    It is imperative that we have an effective screening 
process in place to clear trustworthy individuals while weeding 
out those who would not be safe custodians of our country's 
secrets.
    The process for determining security clearance eligibility 
should not only be effective, but we must make it as efficient 
as possible. Every day that a personnel billet that requires 
access to classified information is filled by someone without a 
security clearance, our readiness suffers.
    According to the GAO, it took an average of 276 days to 
complete end-to-end processing of a top secret clearance in 
2007. That is a full nine months this employee may not fully 
contribute on the job site.
    Our security clearance program must be focused, funded and 
responsive to the dynamics that shape the work force. The 
transfer of personnel security investigations functions from 
the Defense Security Service (DSS) to the Office of Personnel 
Management seems to have, at least in the onset, made things 
worse.
    Added to the strain of an already enormous backlog of 
hundreds of thousands of pending investigations, are several 
issues I will call ``fact of life'' challenges. These 
challenges include interagency coordination, incompatible 
Information Technology (IT) systems and coping with the 
transfer of 1,600 staff members from DSS to OPM. These are 
enormous hurdles for both agencies, and I know they are 
actively working to deal with these things.
    However, what we see today offers little improvement in the 
personnel security clearance process. While it appears that 
increased staffing at OPM has reduced the backlog and improved 
clearance processing time, more needs to be done to improve the 
efficiency and effectiveness of the clearance program.
    We also see that the Department is still struggling to 
determine their baseline clearance work load and funding 
requirements. In recent years, this has resulted in 
insufficient funding for security clearances and out-of-cycle 
reprogramming requests. Insufficient funding causes breaks in 
security clearance processing. That is the last thing we need 
when we are still dealing with the backlog of requests.
    I believe I can speak for my colleagues on this when I say 
that we take the readiness needs of our military very 
seriously. The repeated challenges in the security clearance 
programs are ones that threaten to undermine our capability to 
confront the security challenges we face today.
    I look forward to hearing from our witnesses, and I am very 
interested in their views on how we right the process and 
eliminate these clearance delays, so that we can get a fully 
qualified, trusted work force fielded for our national defense.
    Madam Chairman, thank you for the time, and I yield back 
the balance of my time.
    [The prepared statement of Mr. Forbes can be found in the 
Appendix on page 26.]
    Mrs. Boyda. Thank you, Mr. Forbes.
    Today, we have a panel of distinguished witnesses, who will 
discuss the Department of Defense security clearance process.
    Our witnesses today are Mr. Greg Torres, Director of 
Security for DOD's Office of Counterintelligence and Security.
    Welcome.
    Ms. Kathy Dillaman, Associate Director of the Field 
Investigative Services Division of the Office of Personnel 
Management.
    Welcome.
    Mr. Jack Edwards, the Director of the Defense Capabilities 
and Management Team for the GAO, General Accountability Office.
    Welcome.
    Mr. Ben Romero of Lockheed Martin Corporation, who is 
representing the Security Clearance Reform Coalition.
    Without objection, all the written testimony will be 
included in the record.
    Mr. Torres, welcome, and please proceed with your opening 
remarks.

 STATEMENT OF GREGORY TORRES, DIRECTOR OF SECURITY, OFFICE OF 
THE UNDER SECRETARY OF DEFENSE FOR INTELLIGENCE, DEPARTMENT OF 
                            DEFENSE

    Mr. Torres. Thank you.
    Representative Boyda, Ranking Member Forbes and members of 
the subcommittee, it is my pleasure to appear before you today 
to discuss the DOD security clearance process and the progress 
we are making toward the goals outlined in the Intelligence 
Reform and Terrorism Prevention Act (IRTPA).
    As the director of security in the Office of the Under 
Secretary of Defense for Intelligence within the Department of 
Defense, my office is responsible for the development of 
personnel security policy and oversight of the personnel 
security program.
    Over the past year, under the leadership of the Office of 
Management and Budget (OMB), the Department and its primary 
partner for this process, the Office of Personnel Management, 
made significant progress.
    First, I would note that within the Federal Government, DOD 
comprises approximately 90 percent of the investigation 
requests submitted to OPM for security clearances. On an annual 
basis, DOD processes over 700,000 clearance eligibility actions 
at its adjudication facilities.
    The process begins with a determination that an individual 
requires access to classified information for the performance 
of their official duties. The individual completes a security 
questionnaire, and submits it for investigation.
    During the submission review process, we continue to 
expedite interim clearances for our military, civilian and 
contractor work force, enabling eligible personnel to begin 
working on classified programs quickly, with minimal risk to 
national security. The electronic submissions, a request for 
investigation for DOD military and civilian personnel, are 
already at 82 percent, up from approximately 65 percent at this 
same time last year.
    The planned modification to the Joint Personnel 
Adjudication System (JPAS), which is the DOD system of record 
maintained by the Defense Security Service, will add an 
electronic fingerprint submission capability for industry by 
June of this year--reducing the time an electronic case is 
suspended at OPM, waiting for hard copy fingerprints to be 
mailed and catch up to the electronic submission of the 
investigative forms.
    The completed investigation is then sent to one of DOD's 
adjudication facilities to determine whether to grant, deny or 
revoke access to classified information.
    DOD has also reduced the time to adjudicate 80 percent of 
the completed investigations from an average of 53 days in the 
first quarter of fiscal year 2007 to an average of 30 days in 
the first quarter of fiscal year 2008. In December of 2007, 
DOD's overall end-to-end timeliness of the security clearance 
process was 80 percent and an average of 112 days.
    DOD policy also requires the reciprocal acceptance of 
existing investigations and clearance determinations rendered 
by other executive branch agencies. The Department fully 
embraces OMB's reciprocity policy.
    In regard to the funding for industry personnel security 
investigations, DSS is now fully funded. This is due in part to 
the DSS's enhanced ability to predict requirements and tie them 
to the budget process.
    Clearance transformation is one of the Secretary of 
Defense's top 25 priorities for the Department. The Secretary's 
call for improvement to the security clearance process is 
matched by the Director of National Intelligence (DNI), who has 
placed security clearance reform in his 100- and 500-day plans.
    Together, these senior leaders established the Joint 
Security Clearance Process Reform Team, charging this expert 
group to develop a transformed, modernized, fair and reciprocal 
security clearance process. The joint team conducts its 
activities with the oversight and concurrence of OMB.
    The team recently assessed that the processes for 
determining eligibility for access to classified information 
and suitability for Federal employment rely on very similar 
background data. However, the processes for collecting and 
analyzing that data are not sufficiently integrated.
    Therefore, the overall scope of the reform effort expanded 
to encompass security clearances and Federal employment 
suitability, to ensure the executive branch executes these 
authorities within a framework that maximizes efficiencies and 
effectiveness.
    The importance of this project was underscored on February 
5, 2008, when the President issued a memorandum acknowledging 
the work of this group, and directed that the heads of 
executive departments and agencies provide all information and 
assistance requested by the director of OMB in this important 
endeavor.
    Every related component within the Department of Defense 
has made improving this process a top priority. Of particular 
note, and as part of the reform team demonstration projects, 
the Army is validating the efficiencies to be gained by 
receiving completed investigations from OPM electronically, 
eliminating mail and handling time.
    They are also scheduled to conduct a demonstration project 
using automation to make adjudicative decisions on 
investigations that have no significant or actionable 
derogatory information. If viable, this process could 
demonstrate an automated decision for up to 30 percent of our 
investigations.
    While we must clearly continue to improve our current 
clearance process, unless there is a concerted effort to change 
what we do, and not just how we do it, we will not have done 
our jobs. The Joint Security Clearance Process Reform Team is 
that effort.
    I am confident that sufficient executive commitment exists 
to ensure that security clearance reform will be achieved.
    Thank you for the opportunity to appear before you and 
testify on the Department's security clearance process and 
ongoing reforms. We look forward to working with the committee 
on this very important matter, as we continue to improve the 
security clearance process.
    This concludes my statement.
    Thank you.
    [The prepared statement of Mr. Torres can be found in the 
Appendix on page 29.]
    Mrs. Boyda. Thank you.
    Ms. Dillaman.

  STATEMENT OF KATHY L. DILLAMAN, ASSOCIATE DIRECTOR, FEDERAL 
INVESTIGATIVE SERVICES DIVISION, OFFICE OF PERSONNEL MANAGEMENT

    Ms. Dillaman. Madam Chairperson, Ranking Member Forbes, it 
is my pleasure to be here today to talk to you about OPM's 
support of the Department of Defense's security clearance 
program and the progress we have made in complying with the 
Intelligence Reform Act of 2004.
    As the agency responsible for 90 percent of the Federal 
Government's background investigations, OPM continues to ensure 
that the goals and expectations set by Congress and President 
Bush are met.
    And I am especially glad to be here today with an 
opportunity to correct for the record two recent news articles 
that inaccurately reflected where we are in terms of 
timeliness. Although retractions were printed and apologies 
made, they are often overlooked.
    On February 20, 2005, the Department of Defense's personnel 
security investigations program and staff were successfully 
consolidated with OPM's investigations program. As a result of 
this merger, OPM absorbed over 1,600 Defense Security Service 
employees, 145,000 investigations in process, and all ongoing 
background investigation work loads for DOD.
    Overall, in 2007, OPM conducted almost two million 
background investigations, half of which were for DOD, 
including 640,000 that supported security clearance 
determinations for civilian, military and contractor personnel.
    Since this merger, we have been working closely with DOD in 
four critical areas that must be managed effectively: work load 
projections, submission of requests for investigations, the 
investigations process and the adjudications process. 
Significant progress made in these areas has improved the 
overall timeliness for making security clearance 
determinations, and we are continuing to work together on any 
remaining issues that may hinder or delay the process.
    First, work load projections.
    To staff the investigation and adjudication programs 
responsibly, it is critical that agencies accurately project 
their investigation needs. Work loads may vary significantly 
year-to-year, depending on hiring patterns and contracting 
efforts. We have been working closely with DOD to refine this 
process, and they have improved the accuracy of their 
projections significantly.
    Next, the submission for investigations.
    OPM and DOD are now using online technology to speed the 
time it takes to process the paperwork required to conduct an 
investigation. OPM's electronic questionnaires for 
investigations processing allows subjects to submit their 
background information electronically, improving both the 
timeliness and the quality of the information supplied.
    During the first quarter of the fiscal year, DOD submitted 
82 percent of all their security clearance investigations 
through eQIP, reducing the processing time for submission from 
30 to 14 days.
    The Intelligence Reform and Terrorism Prevention Act 
established a goal that 80 percent of the background 
investigations for initial security clearances be completed 
within an average of 90 days or less by the end of 2006. OPM 
has met and exceeded that goal.
    In fact, of the 586,000 initial clearance investigations 
OPM received in 2007, 80 percent were processed in an average 
of 67 days. That is 92 days for top secret and 63 days for 
secret and confidential level clearances.
    Our success in meeting this goal is due to our increased 
staffing, the work we have done with federal, state and local 
record providers, the standup of our international program and 
the automation of many of our support functions within 
investigations. While shortening the time it takes to complete 
investigations, we have not compromised the quality of the 
investigations we do.
    And finally, the adjudication phase.
    We are also supporting agencies' efforts to adjudicate 
completed investigations timely. In 2007, we developed an 
electronic delivery process that provides agencies with the 
option to receive their completed investigations in a 
combination data, text and imaged format--electronically, 
rather than by hard copy through the mail.
    Last August, the Department of the Army began receiving 
their completed investigations online, and to-date, over 
113,000 completed investigations have been transmitted to them, 
making the process between Army and OPM virtually paperless. We 
have also linked with many agencies' in-house records systems 
to our processing system, to update their adjudication actions 
electronically into the clearance verification system.
    OPM is continuing efforts to improve processing through 
greater use of information technology. This year, eQIP--which 
is OPM's suite of automation tools that support the 
investigations and adjudications process--will allow for total 
end-to-end paperless processing for those agencies equipped to 
implement them.
    As Greg mentioned, we are also partnering with the Office 
of the Director of National Intelligence (ODNI) and the 
Department of Defense for more significant reforms to the 
overall security clearance process. This reform effort is 
challenging traditional processing from application through 
adjudication.
    The ultimate outcome of this effort will be a 
governmentwide system for determining security clearance 
eligibility that continues to protect national security through 
more modern processes that are secure, dependable, scalable and 
time and cost-efficient.
    This concludes my remarks. I would be happy to answer any 
questions you may have.
    [The prepared statement of Ms. Dillaman can be found in the 
Appendix on page 40.]
    Mrs. Boyda. Thank you.
    Mr. Edwards.

    STATEMENT OF JACK E. EDWARDS, ACTING DIRECTOR, DEFENSE 
 CAPABILITIES AND MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Edwards. Madam Chairwoman and Ranking Member Forbes, 
thank you for this opportunity to be here today to talk about 
the DOD personnel security clearance process.
    We have documented that DOD and other agencies have taken 
some positive steps forward to improve the clearance processes. 
These steps include greater use of technology and increasing 
the investigative work force.
    While such steps are encouraging, DOD's clearance program 
still faces some of the same challenges that led us to put the 
program on our high risk list in 2005. The most visible such 
challenge is eliminating clearance delays and backlogs.
    I will cover two other important issues. They are, one, 
improving the projections of clearances needed; and also, 
demonstrating quality in all clearance processes. My full 
statement additionally discusses delays, funding and the need 
for a comprehensive plan to address these challenges.
    DOD has had a longstanding challenge in accurately 
projecting the number of clearance investigation requests that 
it will make of OPM, and before that, DSS. In 2004, we found 
some inaccuracies there and recommended that DOD improve its 
projection. Two years later, in 2006, OPM reported that DOD's 
actual number of clearance investigation requests was about 59 
percent higher than the number of projected needs that it was 
going to have.
    In contrast, the governmentwide goal for agencies is to 
have their projected and actual clearance investigation 
requests to be about five percent from one another.
    Recently, DOD have taken some steps to improve those 
projection procedures. These steps include: one, getting more 
industry facilities to provide information about the number of 
clearances they estimate that they will need in the future; and 
two, looking at statistical enhancements to their procedures 
they use to calculate the projections.
    It is still too early right now to determine whether these 
steps will be successful, and how successful. Improved 
projections are, however, critical for the issue that you 
mentioned earlier about the funding and making sure that we 
have a good measure of funding into the future. And also, for 
work load and work force planning.
    Let us move now to the second challenge that I talked 
about, and that is, demonstrating quality.
    We have cautioned that the government cannot afford to 
achieve its goal of eliminating clearance delays by providing 
investigative and adjudicative reports that are incomplete in 
certain key areas. Concerns about quality can undermine the 
government's efforts to achieve reciprocity. And reciprocity is 
the process whereby one agency will accept the clearance that 
another agency has issued.
    The lack of full reciprocity is an outgrowth of agencies' 
concerns that other agencies may have granted a clearance based 
on an inadequate adjudication or investigation. If needless 
investigations or adjudications are re-performed, that wastes 
government money. Also, that uses some of the resources that we 
can use to try to get the clearances done more quickly.
    In the report that we are issuing today along with this 
testimony, we recommended that DOD develop quality measures and 
report the statistics from those measures to Congress. We are 
happy to say that DOD concurred with that recommendation and 
will be issuing those metrics to the government and to Congress 
in the near future.
    In conclusion, we are encouraged by some of the DOD-
specific and governmentwide efforts that have been taken to 
improve the clearance process. At the same time, the clearances 
that I have discussed, and the additional challenges cited in 
my full statement, indicate that much remains to be done. 
Therefore, we will continue to monitor DOD's program as part of 
our high risk series.
    This concludes my remarks. I would be happy to answer any 
questions.
    [The prepared statement of Mr. Edwards can be found in the 
Appendix on page 45.]
    Mrs. Boyda. Thank you.
    Mr. Romero.

   STATEMENT OF BEN G. ROMERO, CHAIRMAN OF THE INTELLIGENCE 
COMMITTEE OF THE INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA, 
                  LOCKHEED MARTIN CORPORATION

    Mr. Romero. Good afternoon, Madam Chairwoman and Ranking 
Member Forbes.
    My name is Ben Romero, and I speak to you as the chairman 
of the intelligence committee of the Information Technology 
Association of America, ITAA, and on behalf of the Security 
Clearance Reform Coalition.
    I would like to thank you for the opportunity to discuss 
reform of the clearance-granting process. In addition to these 
oral comments, I ask that the committee accept our attached 
written recommendations that expand upon many of the issues we 
in industry feel are critical to addressing the persistent 
problem.
    Industry has used a simple mantra to explain what we 
believe will bring about transformation of the clearance-
granting process: one application, one investigation, one 
adjudication and one clearance.
    We seek an Internet-based application that collects 
information electronically and forms the basis for an end-to-
end digital process that creates a record that can be amended 
by investigators, adjudicators, security officers for the life 
of the clearance; an investigation that would be timely, 
uniform, thorough in its process and product; an adjudication 
where an applicant is judged using updated, viable, post-Cold 
War criteria, and a clearance that is accepted across the 
Federal Government with minimal additional vetting.
    In looking at the clearance-granting process and its 
effectiveness, the committee should examine the reports of the 
industry-led working group of the National Industrial Security 
Program Policy Advisory Committee, or NISPPAC, which recently 
analyzed actual results from clearances processed through DSS 
and the Defense Industrial Security Clearance Office.
    This task force found that on the average, secret 
clearances still took more than 200 days. Top secret clearances 
took more than 300 days. This is in 2007.
    This was an end-to-end analysis measuring from the time an 
applicant was given the form to complete--that is the SF-86--on 
the electronic questionnaire for investigations processing Web 
site, to the point where the adjudicators determined whether or 
not a clearance was to be granted.
    Even more alarming is the finding of the working group 
regarding investigations for top secret clearances, where the 
trend line has grown for more than a year and currently tops 
out at 540 days.
    Reinvestigations are the periodic review of the current 
clearance holders, and those delays impact on their ability to 
continue supporting the national security programs.
    I would like to commend the President for his February 5, 
2008 memo that calls for the submission of a plan to transform 
the clearance-granting process. This memo memorializes the 
activity of the joint task force coordinated by the Under 
Secretary of Defense for Intelligence (USD(I)), OMB, ODNI and 
OPM. All of them are participating.
    This task force has proceeded under the premise that we 
need to bring about total transformation of the way we 
determine whether or not someone is trustworthy enough to 
handle the Nation's critical and crucial information. The 
effort would change what we ask, the way we ask it, how we ask 
it and the way we grant and maintain clearances once granted.
    This approach is different, because it does not seek to fix 
the parts that are already broken in the system today, but 
instead creates a new, more efficient process going forward.
    Industry has been apprised of the work of this group, and 
we fully support the initiative. We are optimistic that the 
work of this Tiger Team, and work--and wait to evaluate their 
report in April. But further action is needed now.
    The IRTPA was passed by Congress in 2004, and the delays in 
the clearance-granting process has long been recognized, but we 
are still calling for a plan. Further delays--be they 
bureaucratic, legislative, budgetary--cannot be tolerated.
    The nine associations of the Security Clearance Reform 
Coalition again thank the committee for this opportunity to 
highlight our perspectives in this deliberation, and we hope 
that 2008 will finally be the year that we will see a solution 
implemented.
    Thank you.
    [The prepared statement of Mr. Romero can be found in the 
Appendix on page 64.]
    Mrs. Boyda. Thanks to all of our witnesses.
    Mr. Forbes and I are kind of--since it is just the two of 
us, we can go back and forth fairly informally.
    There have been a couple of calls for reports here. The one 
that the President has just done, I believe had an action plan 
of April 30th. In addition, the 2007 National Defense 
Authorization Act (NDAA) also called for a report to be 
submitted with the budget.
    So, can one of you give me an update on where that process 
is?
    Mr. Torres. Yes, ma'am. The NDAA report has been submitted. 
The report that is due on the 30th is currently underway with 
the reform team. And at this point, they expect that they will 
meet the timeline set by the President for that particular 
report.
    Mrs. Boyda. Do you summarize what is in the report for 
the--what was submitted with the budget resolution in terms of 
what--is it just basically a summary of what you had just said, 
that some progress has been made? Or where are we on addressing 
the entire process?
    Mr. Torres. Yes, ma'am. I will tell you that the efforts of 
the reform team speak specifically to the conversation that 
just took place here.
    It is really geared toward a total transformation. It is 
not an effort to try to fix the pieces that are broken. It is 
an effort to try to transform how we do business, not just what 
we do.
    So, the report should include a plan that outlines where we 
think we need to go. And it is also going to be based on an 
assessment of some demonstration projects that are underway 
right now.
    Mrs. Boyda. Thank you.
    Mr. Romero, have you seen that report that was submitted 
with the budget? Have you had a chance to look at that one?
    Mr. Romero. I have not, but some of the members of the 
coalition have had an opportunity to at least see glimpses of 
it.
    And the one interesting part that we are looking forward to 
is the replacement of JPAS with a complete new system.
    Mrs. Boyda. When is that expected to be done?
    Mr. Torres. The replacement of JPAS, we do not have a 
specific date yet for that system. But that system is funded. 
The development of that system has been transferred from the 
Defense Security Service to the Business Transformation Agency, 
a part of DOD.
    And most of that process and most of that development will 
be based on the results of the report to the President, because 
that is really what is designing our way forward in this 
particular effort.
    Mrs. Boyda. All right. Thank you very much. I will have 
some additional.
    Mr. Forbes.
    Mr. Forbes. Thank you, Madam Chairman.
    Mr. Romero, when Congress passed the Intel Reform Act, we 
specifically addressed reciprocity of clearances, to address 
the longstanding problem.
    Has the contractor community seen an improvement in the 
willingness of agencies to accept the clearances issued by 
other agencies? And what, if any, reciprocity related problems 
remain?
    And just the third part of that, if there are problems, 
which agencies seem to be least willing to accept clearances 
issued by other agencies? And what reasons are given for that 
lack of reciprocity?
    Mr. Romero. Sir, I can give you a personal example.
    I hold an intelligence community green badge, which allows 
me to visit the various intelligence offices of the members of 
the community. And I have had no problem going from one place 
to the other. That is, in my estimation, remarkable, because up 
to six months ago, I could not do that.
    As far as one of the areas that continues in industry's 
estimation to be a problem is primarily with the Department of 
Homeland Security. They have too many different parts that do 
not even recognize their own reciprocity, much less reciprocity 
from those in industry that are coming in to work at the 
various parts.
    Whether we hold Justice clearances or DOD clearances, they 
still have to vet--yet again--that we are trustworthy enough to 
go work their systems.
    Mr. Forbes. GAO has indicated that there are costs 
associated with delays in determining clearance eligibility. 
Can you provide us with any concrete examples of the monetary 
and non-monetary costs that contractors have incurred from the 
delays, so that we can get an idea of how much effect the 
delays are having?
    Mr. Romero. Sir, we are in the process of collecting data 
as we speak to update our records on what the issue is. We did 
a data call within the last two weeks. I would like to take 
that for the record and get something back to you.
    [The information referred to can be found in the Appendix 
beginning on page 142.]
    Mr. Forbes. That would be great if you could do that.
    And Mr. Edwards, what steps need to be taken to remove 
security clearances from the GAO high risk list?
    Mr. Edwards. GAO has a set procedure to go through and 
evaluate every different program or different area that is on 
the high risk list. That is done every two years. We will be 
issuing a new high risk list in January 2009.
    At that time, we will go through and look at the status of 
the problems that originally got the programs on the high risk 
list. We will look at efforts that they have had to improve the 
process, look at the plans that are in place for moving 
forward, and also look at the high level involvement and other 
factors which can influence whether we are going to see a 
continued improvement in those areas.
    Mr. Forbes. Good.
    And Ms. Dillaman, it has been reported that OPM initiated a 
pilot program with the Army to electronically transfer 
applications for adjudications. What have been the results of 
this pilot program? And are there plans to extend the program 
to other agencies?
    Ms. Dillaman. Yes, sir. Yes, sir, it has been highly 
effective.
    As I said in my testimony, well over 110,000 investigations 
have been transmitted to the Army electronically--no paper, no 
mail. And I believe the Army would attest to the fact that that 
is a successful initiative.
    We have another ten agencies who are interested in signing 
on this year. We are in the current process of adding 
Department of Transportation and Transportation Security 
Administration (TSA).
    Mr. Forbes. And just one more question before I yield back 
to the chairman.
    Mr. Torres, should the responsibility for handling all 
aspects of processing security clearances for DOD employees and 
contractors be returned to DOD? And why or why not?
    Mr. Torres. I do not think we are yet at a position where 
we could answer that question. Whether that would be a better 
solution or not, we do not have that data. The Department is 
currently not pursuing that particular avenue or that approach.
    But we suspect that, as a result of the reform team 
efforts, a unified, single process, way of doing business, will 
eventually have an impact on the types and numbers of 
investigations or leads that we submit to the Office of 
Personnel Management. But we do not have a separate effort 
ongoing to make that decision.
    Mr. Forbes. Madam Chairman, I yield back to you.
    Mrs. Boyda. Thank you.
    I just would like to ask a few more questions to try to 
just understand a little bit more what is going on on the 
ground.
    Right now, it sounds as if the goal is to have 80 percent 
of the applications serviced or performed in 90 days. That is 
the current goal.
    Ms. Dillaman. Yes, ma'am.
    Mrs. Boyda. Okay.
    Mr. Romero, is that a reasonable goal?
    Mr. Romero. Yes, ma'am. I think it would be a reasonable 
goal. But as looked at through the NISPPAC and some of the 
reviews that they have done, it is going to be very, very hard 
to reach that goal unless the system is reformed.
    Mrs. Boyda. We are meeting it now.
    Ms. Dillaman. If I may, ma'am, yes, we are.
    And I think one of the things that complicates the data is, 
not only are we meeting that goal now for new applications that 
began through the process starting in fiscal year 2006, but 
over the past year we have effectively eliminated the entire 
backlog of initial clearance investigations.
    We put out about 150,000 more initial clearance 
investigations than we received. Now, those had been in the 
process. They were the backlog. And that contributed to the 
overall age of the clearances granted in 2007.
    But clearly, if you started through the process on or after 
October 1, 2006, 80 percent of all initial clearance 
investigations are being completed in an average of mid-60 
days.
    Mrs. Boyda. Thank you.
    Any comment on that?
    Mr. Romero.
    Mr. Romero. I will reserve comment.
    Mrs. Boyda. Mr. Edwards, do you----
    Mr. Edwards. Yes. You know, one thing to consider there, 
the interpretation on the Intel Reform Act, OPM and OMB are 
interpreting the law to deal strictly with the 90 days and 120 
days total to apply to just the initial investigations and 
adjudications.
    However, we would see a higher level if we were also 
considering the reinvestigations. And the decision has been 
made about putting a higher priority on the initials, and we do 
not take exception with that. We are just saying that there is 
a little bit more happening there.
    Mrs. Boyda. Right. I would just--again, I am curious.
    If 80 percent of them are being done in 90 days or less--
and that sounds like a good goal--what happens to the other 20 
percent? Are there any standards or goals with regard to that 
20 percent?
    Ms. Dillaman. Ma'am, while there are no standards 
established, of course it is in everyone's best interests to 
complete all investigations as quickly as possible.
    I think there is a recognition, though, that there is a 
portion of the population that, either due to the types of 
issues developed or the complex nature of the background that 
we are conducting, they were going to take longer. And I think 
the 80 percent goal was a good place to start. This year, 
internally, we are upping that goal, so that a bigger portion 
of the population will get done more quickly.
    But I think, no matter what we do, there will still be a 
small segment that we will need to invest time and resources in 
to do it right. And that has to be our first priority.
    Mrs. Boyda. Are the 20 percent more of the Top Secret and 
the higher clearances, then?
    Ms. Dillaman. Typically, because they are much more 
intensive and in terms of the effort put in to doing the 
interviews.
    Mrs. Boyda. Mr. Edwards, if you were--is it appropriate to 
say if you were a betting man?
    Do you think this would be off the GAO high risk list in 
2009, and the manner with which we are proceeding?
    Mr. Edwards. At this point, I am probably not a betting 
man, one way or another. We would like to keep an open mind and 
to consider what will happen in a future job that we have 
planned.
    Ms. Garman has talked to us about some of the issues that 
this committee in particular is interested in. And we are 
looking at how can we best address those issues which would 
allow us to come to an informed decision, probably in about 
December, about whether it would stay on the high risk list or 
not.
    Mrs. Boyda. Do you expect a reprogramming request for this 
year?
    Mr. Torres. No, ma'am. Defense Security Service is fully 
funded, and the processes that they have designed and improved 
on to reject requirements has brought their accuracy up 
extremely well. So, we expect no reprogramming requests.
    Mrs. Boyda. The reason I ask again is, you know, I think 
each member present today--or not present today--certainly 
appreciates the massive amount of work and the influx of--you 
know, not even being able to predict for quite a little while 
what your work load was going to be.
    Certainly, we are all interested in making sure that we are 
ready to do whatever it takes, either from a DOD personnel or 
from a defense contractor personnel. So, we are interested in 
knowing what legislative--you know, we are here to help you, as 
well. What can we do to make this better?
    I understand you will be doing your report. It will be out 
by April 30th. And we are hoping that you make it very clear 
what we can do to make sure that you have the resources that 
you need. We do not want to put you in a position of not being 
able to get that done.
    So, do you know of any other legislative fixes or resources 
that you will need to move this forward?
    Mr. Torres. I am not currently aware of what legislative 
recommendations may come out of that particular reform effort, 
but that particular requirement is in there, as well. So, if 
there are legislative changes that need to be recommended, that 
will part of that report.
    Mrs. Boyda. Mrs. Dillaman, as well, too. I mean, that is 
part of the purpose of this hearing, is to make sure that we 
are all on the same page, and we know where we are all heading, 
and we are all heading for a system that is new and improved 
and works better, and ends up with a more secure America.
    Ms. Dillaman. Yes, ma'am. And I am highly optimistic.
    Many of the things that are being looked at are even being 
incorporated in the ``As-Is'' today. And that will all make for 
positive improvement.
    Mrs. Boyda. Mr. Romero, what question have I not asked?
    Mr. Romero. I think that we have been looking at the 
backlogs and the problems. And we are continuing to fix a 
system that was established during the Cold War.
    What policies need to be addressed? What are we really 
looking at and looking for? How much risk can we afford to 
take?
    And the most important one is, if you look at Homeland 
Security Presidential Directive (HSPD)-12 and the background 
investigations that are going to come in, what is the impact on 
those types of background investigations going to have on the 
clearance-granting process as they start molding?
    Mrs. Boyda. Any comments?
    Ms. Dillaman. Yes, ma'am. Last year, we experienced a bump 
of about 200,000 investigations annually that we attribute to 
the HSPD-12.
    Now, those investigations do draw on the same investigative 
resources. They pull records from the same records systems at 
the federal, state and local levels. And all of those records 
systems have to increase their output capacity in order for us 
to complete these investigations on time.
    But by and large, the new investigations that are being 
introduced into this process are electronic. They are not the 
labor-intensive field investigations that support the Top 
Secret clearances. And so, the impact on the investigative work 
force I do not believe will be significant.
    Mrs. Boyda. Thank you.
    Mr. Forbes, did you have others?
    Mr. Forbes. Just a couple more, Madam Chairman, if I could.
    Mr. Edwards, the chairman asked you if you were a betting 
man. You indicated you were not a betting man, but we know that 
you are forecasting and an analytical man.
    And based on that forecasting capabilities and your 
analytical capabilities, do you believe that DOD, OMB and OPM 
made the necessary commitments to improve the security 
clearance process? And what steps do you think need to be taken 
to ensure that ongoing initiatives continue?
    Mr. Edwards. In the last few years, we have seen 
improvements. We have seen more use of technology. We have seen 
an increase in the adjudicative and investigative work force. 
But as I mentioned, we do see some challenges that are still 
out there.
    The idea that we are going to reform the entire clearance 
process--that is a large undertaking. You know, I do not think 
any of us can think about all of the things that are required 
with the risk that is incurred whenever we grant somebody a Top 
Secret clearance.
    So, at this point, trying to forecast into the future 
exactly when this system might be able to come on line and what 
it would look like, when I have not even gotten a briefing on 
this, because we have not been involved in that particular 
area, I think would be premature.
    But we certainly are looking forward to seeing this system 
as it is developed. And should you and other Members of 
Congress desire us to go in and look at that system, then we 
certainly are available to do that.
    Mr. Forbes. And Madam Chairman, just one more question.
    Ms. Dillaman, I asked Mr. Romero about the reciprocity 
issue. And we know that OMB has had a major role in trying to 
ensure greater reciprocity of clearances. And just a series of 
little questions, if you could answer whichever one of them you 
could.
    But who is currently keeping the database of the number of 
instances of non-reciprocity? And what agencies have the most 
cases of non-reciprocity?
    And in the last fiscal year, what was the number of waivers 
granted to allow agencies to conduct new investigations or 
adjudications?
    And then finally, why isn't this type of information 
provided in OMB's annual report to Congress mandated by the 
Intelligence Reform and Terrorism Prevention Act?
    And I do not expect you to have all those at your 
fingertips today. But if you cannot answer them today, could 
you just supply those back to us in a written form, if that 
would be easier for you? Whichever one would be best.
    Ms. Dillaman. I would be happy to, but the application of 
reciprocity really is outside of OPM's visibility. We conduct 
the investigations.
    And I will tell you, though, that we have a stop system, 
that if an agency attempts to request an investigation that is 
not needed, because the investigative requirements have already 
been met, we will not open a new investigation and do 
redundant, unnecessary.
    And last year I believe there were about 25,000 
investigation requests in total that we rejected, because the 
investigative requirements have already been met.
    Under OMB's guidance, I believe it was Bill Leonard and the 
NISPPAC committee established a reporting system where 
contractors could report violations of the rules of 
reciprocity. But I do not have access to that data, and I am 
not sure that there is any central data maintained.
    Mr. Forbes. Well, if I could just leave it as an open 
question to all four of our witnesses. Again, you can just 
reply in writing if you want to.
    But where is our data on looking at that? Or does it just 
not exist at this particular point in time? And is it important 
for us to have that kind of data?
    Mr. Romero, I would think this would be an important thing 
for your industry to know and to be able to look at. Is it all 
anecdotal evidence, or do we have someplace that we can go to 
get some objectivity? Because the chairman and I have to work 
on just a few facts--you know, at some point in time that we 
can get our hands around to make sure this is working.
    So, to the extent that any of the four of you have this or 
could tell us who we need to go to, to get that information, 
that would be helpful for us at some point in time.
    Mr. Romero. I think what we will do is make sure that we 
add that as one of the questions that we ask from our industry 
members, and see if we can collect that type of information to 
provide back.
    [The information referred to can be found in the Appendix 
beginning on page 142.]
    Mr. Forbes. That would be useful.
    Thank you, Madam Chairman.
    Mrs. Boyda. We are going to have votes here in a minute. I 
have a couple more questions.
    It is my understanding of the President's budget that we 
saw a decrease of about 34 percent into the Defense Information 
Systems for Security, DISS.
    Does that ring a bell?
    Mr. Torres. Yes, ma'am, it does.
    We can get you some specific numbers on DISS. But DISS was 
transferred to, as I mentioned before, the Business 
Transformation Agency. There was money transferred. There is 
additional monies that need to be transferred, as well. So, the 
actual numbers of going up or going down are not easily defined 
right now.
    We can get back to you and take that as a question for the 
record----
    Mrs. Boyda. I would certainly appreciate this----
    Mr. Torres [continuing]. And provide that specific data to 
you.
    [The information referred to can be found in the Appendix 
beginning on page 145.]
    Mrs. Boyda [continuing]. Just to know where we are--what 
our overall funding among the different agencies.
    And again, when you say you do not anticipate a 
reprogramming request, on what basis are you predicting that we 
will not need a reprogramming request? Are you fairly certain 
about that?
    Mr. Torres. Yes, ma'am. We are quite certain of that. 
Defense Security Services made numerous changes.
    One of the critical changes, I think, is that they are now 
monitoring this on a weekly basis, so they know exactly how 
much is going out, how much work is going out to the Office of 
Personnel Management. They can see the burn rates on a weekly 
basis.
    And based on projections that are now more accurate, 
because they have a new collection methodology, we feel very 
certain that there will not be a request for reprogramming.
    Mrs. Boyda. Thank you very much.
    Any additional questions?
    Mr. Forbes. No. Thank you, Madam Chairman, for the hearing.
    Mrs. Boyda. All right. Thank you.
    Thank you so much for your time today.
    [Whereupon, at 2:55 p.m., the subcommittee was adjourned.]
      
=======================================================================

                            A P P E N D I X

                           February 13, 2008
=======================================================================

              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                           February 13, 2008

=======================================================================
      
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
      
=======================================================================

                   DOCUMENTS SUBMITTED FOR THE RECORD

                           February 13, 2008

=======================================================================
      
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
          
=======================================================================

             QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD

                           February 13, 2008

=======================================================================
      
                    QUESTIONS SUBMITTED BY MR. ORTIZ

    Mr. Ortiz. In 2004, GAO recommended, and DOD concurred, that the 
Office of the Under Secretary of Defense for Intelligence develop a 
comprehensive plan to address numerous challenges faced by the industry 
personnel security clearance program. Why hasn't DOD issued such a plan 
in the four years since then?
    Mr. Torres. In response to the 2004 GAO report, Department of 
Defense (DOD) has studied how to improve the security clearance 
process. One example of how the Department is addressing the concerns 
outlined in the GAO report is the development of the DOD Security 
Clearance Program Assessment Rating Tool (PART), which was submitted to 
the Office of Management and Budget on January 15, 2008. The PART is a 
rating tool that continually assesses and reviews all factors that 
affect program performance including program purpose and design; 
performance measurement, evaluations, and strategic planning; program 
management; and program results. In essence, it provides a long-range 
plan for security clearance program management and improvement. The 
PART will help DOD better assess and manage the program using 
performance measures. These measures include the cost, timeliness, and 
quality for the submission, investigation and adjudication phases of 
the security clearance process. The Department expects to have baseline 
data on these measures by end of this FY and use this data to set 
aggressive goals for performance improvement in the out years.
    Mr. Ortiz. The John Warner National Defense Authorization Act for 
Fiscal Year 2007 required that DOD provide Congress with annual reports 
on five aspects of industry personnel clearances. GAO's evaluation of 
that report noted that the information on funding, timeliness, and 
quality was limited. What steps will DOD take to address those 
shortcomings and help Congress in its oversight role?
    Mr. Torres. The GAO report asked the Department to provide 
information outside of the 2006 Congressional mandate. The Department 
agrees the additional information will aid Congress in its oversight 
role. DOD continues to develop the processes needed to address the 
shortcomings identified in the areas of funding, timeliness and 
quality:

        An extensive review within DOD by the Comptroller and 
Program Analysis and Evaluation determined the funding for the Defense 
Security Service (DSS) was not sufficient. A fix was implemented for 
the FY08 and FY09 funding lines, and the entire DSS program will be 
reevaluated for the FY10 Program Objective Memorandum (POM). Therefore, 
showing any numbers beyond FY09 in the 2008 report would not have 
reflected accurate information.

        The DSS Clearance Oversight Office reviews and 
evaluates end-to-end timeliness of industry personnel clearances, 
annually surveys cleared industry's clearance requirements, and tracks 
actual submissions against projections.

        DSS is working with DOD Personnel Security Research 
Center to develop a quality metrics tool for the DOD Central 
Adjudication Facilities to identify quality deficiencies. The DSS 
Clearance Liaison Office will track the quality deficiencies and work 
with the community and Office of Personnel Management, as necessary, to 
identify and resolve systemic issues.

    Our future annual reports will include this information as 
suggested. The additional information will be provided in the 
Department's 2009 report since the GAO recommendations were received 
after submission of the 2008 report.
    Mr. Ortiz. The backlog of overdue clearances has never been fully 
eliminated. Since top secret clearances need to be renewed every five 
years, what types of analyses has DOD performed to see if there will be 
a large number of top secret clearances needing to be renewed in the 
next few years? Will the current system be able to handle those 
requests?
    Mr. Torres. The Defense Security Service (DSS) is responsible for 
reviewing and reporting the DOD projective investigative needs to the 
Office of Personnel Management (OPM). We believe our security clearance 
system will handle the upcoming investigative requests. The Department 
is reducing its backlog of cases and is taking steps towards meeting 
the OMB goal of keeping our backlog to an average of less than 10% of 
its monthly submissions. Considering our steps towards reducing our 
backlog and the work of the Joint Clearance Reform Team, we do not 
anticipate periodic reinvestigate requirements to strain our 
adjudicative resources.
    Mr. Ortiz. The Intelligence Reform Act set a goal of 2009 for 
completing 90% of all security clearances within 60 days. What progress 
have you made in meeting that goal?

        What challenges do you face in meeting that goal--in 
terms of funding, staffing or electronic needs?

    Ms. Dillaman. In the first quarter of fiscal year 2008, OPM 
conducted 80% of the initial security clearance investigations in 
average of 67 days. In pursuit of the 2009 goal, for September 2008, we 
are holding ourselves accountable for providing 90% of the initial 
investigations within an average of 65 days. We believe we have 
sufficient staff to complete the investigations, but our ability to 
close the cases within the required timeframe will depend on timely 
responses from third party record providers, such as the FBI's Record 
Management Division. For its September 2008 goal, the FBI has been 
directed by the Office of Management and Budget (OMB) to provide 90% of 
responses within an average of 30 days. It is critical the FBI make 
such a dramatic improvement in processing times so we can meet our 
future goals. In addition, we continue to work with other Federal, 
State, and local record providers to improve the timeliness of their 
responses.
    Mr. Ortiz. We are aware of the formation of an interagency security 
clearance process reform team in June 2007. The teams' memorandum of 
agreement indicates that it seeks to develop, in phases, a reformed DOD 
and intelligence community security clearance process that allows the 
granting of high-assurance security clearances in the least time 
possible and at the lowest reasonable cost. The team's terms of 
reference indicate that the team plans to deliver ``a transformed, 
modernized, fair, and reciprocal security clearance process that is 
universally applicable'' to DOD, the intelligence community, and other 
US. government agencies.

        What support is your office providing to this ``tiger 
team''?

        Please describe what the government plans and give us 
an idea of when each of the major steps is projected for completion.

        When will the system be operational, and what agency 
will be charged with the responsibility for maintaining the system?

    Ms. Dillaman. OPM is partnering with the Office of the Director of 
National Intelligence and the Department of Defense to reform the 
overall security clearance process. In support of the group's efforts, 
a number of OPM employees are working directly with the ``tiger team'' 
to provide subject matter expertise in information technology, policy, 
and case processing. Other OPM employees are supporting the reform 
team's efforts by conducting research, and identifying opportunities 
for streamlining existing processes and procedures.
    The initial set of recommendations will be submitted to President 
George W. Bush no later than April 30, 2008. These recommendations will 
describe the government's plan for reforming the security process and 
will identify ongoing efforts and may provide a timeframe for offering 
additional recommendations over the next several months.
    Mr. Ortiz. What steps does OPM take to build quality into its 
clearance investigations?

        How are these processes different from those that 
resulted in the large number of incomplete investigative reports that 
GOA documented in its September 2006 report?

    Ms. Dillaman. We recognized early in the transfer of DOD's 
personnel security investigation (PSI) function to OPM that the Defense 
Security Service (DSS) and OPM did not have a consistent interpretation 
of the coverage requirements. We conducted training for the field 
agents and quality review staff to standardize the scope and content of 
the investigations. The training has continued for new FISD field 
agents and other investigative staff. (Please see response below 
concerning training for contractor personnel.) In addition, we 
developed an investigator's handbook in partnership with DOD and the 
stakeholders that includes common baseline standards for conducting 
background investigations.
    We also put an internal quality review process in place. In March 
2006, we formed the Quality Management Group that is responsible for 
handling the most serious quality concerns. Recently, we expanded QMG 
to conduct random quality review of employees' work. QMG was forming 
when the GAO conducted its audit and we are confident GAO would see 
significant improvements in the quality of the background 
investigations currently being produced.
    Mr. Ortiz. GAO has stated in multiple reports that the percentage 
of investigative reports returned for deficiencies is not--by itself--
an adequate measure of quality. In its August 2007 Annual Report to 
Congress on Personnel Security Investigations for Industry and the 
National Industrial Security Program, DOD stated, ``DSS, OPM, and the 
DOD adjudicative community are gathering and analyzing quality metrics 
to provide the national security community with a better product.'' 
What additional quality measures have been developed, and what do they 
indicate?
    Ms. Dillaman. In addition to recording and tracking the 
investigations returned by adjudicating offices for corrective actions, 
there are a number of quality ``indicators'' that are tracked and 
recorded.

        OPM routinely conducts customer assessment surveys to 
obtain feedback from agencies on the products and services we provide. 
Over 300 agency program level or security offices responded to the 
November 2007 survey. Of these, 91 percent reported being satisfied 
with the content and quality of OPM's background investigations and 95 
percent were satisfied with the overall services we provide.

        OPM's Integrity Assurance program includes contacting 
personal and record sources of information for quality feedback on our 
Federal and contractor field agents. Overall, approximately 3% of all 
sources obtained by a field agent are recontacted by a written inquiry 
soliciting performance feedback. Both positive and negative feedback 
are used for individual performance management.

    Mr. Ortiz. It is our understanding that the OPM PIPS system is an 
antiquated data management system that is not interoperable with modern 
IT systems. What steps is OPM taking to replace PIPS?
    Ms. Dillaman. OPM has no plans to replace PIPS. The system is 
stable, reliable and secure, providing efficiencies in processing a 
tremendous volume of information within seconds. PIPS executes on an 
IBM z900 Enterprise Server under the control of z/OS operating system. 
It is capable of processing 450 million instructions per second and 
averages 1.8 million transactions by 1,650 customers logged on daily. 
There are over 10,000 authorized users, to include 1,200 customers and 
over 7,000 field investigators. The system is integrated with the other 
applications that make up the entire investigative application suite, 
called EPIC, and is accessible to agencies through direct link or the 
Department of Defense's Joint Personnel Adjudications System (JPAS). 
The system is able to adjust to the changing needs of the investigative 
process and OPM has continually been modernizing PIPS and will continue 
on this path to ensure the system is meeting the ever changing needs 
and demands of the investigative community.
    Mr. Ortiz. In prior years, OPM's contractors supplying 
investigative reports were experiencing double-digit turnover of staff.

        What is the current level of turnover and what types of 
problems does this present when trying to deliver timely, high-quality 
investigative reports?

    Ms. Dillaman. The attrition rate for our contractors is between 15 
to 20 percent. While this does put a burden on the contract companies, 
they ensure the quality of the investigative products they provide to 
OPM by managing robust training programs and relentless quality 
control.
    Mr. Ortiz. How does OPM monitor the initial and continuing training 
and knowledge of in-house and contractor investigative staff? For 
example, who approves the training materials, methods, etc. used to 
promote high-quality performance of clearance-related staff? What 
training-related consistencies and inconsistencies have been found for 
this quality control issue?
    Ms. Dillaman. OPM's Federal Investigative Services Division (FISD) 
takes an active role in ensuring the investigative staff is adequately 
trained. It is of the utmost importance to ensure staff members 
understand current policies and procedures to ensure a quality 
investigation. In January 2006, FISD established the Training and Staff 
Development Group (TSDG). This training group is comprised of subject 
matter experts within the background investigation field. FISD 
management approves the training programs TSDG develops. The TSDG 
primary goal is to develop and execute the staged training program for 
the federal staff and audit the materials/training provided to the 
contractors' investigative staff.
    The contractual agreements between OPM and the contractors outline 
the specific competencies, skills, and policies that must be 
incorporated into their training program. As with most contracts in the 
Federal Government, it is the contractor's responsibility to adequately 
train their staff. The following steps have been taken to make certain 
the contract investigators are exposed and understand theses elements.

    1.  TSDG provided language to be inserted into the field contacts 
to standardize the training provided to investigative staff.

    2.  TSDG provided the contractors with all materials used to train 
federal staff.

    3.  TSDG reviews and approves all material utilized by the 
contractors' training programs prior to implementation.

    4.  TSDG provides oversight of the contractors' training programs 
on a continual basis to ensure they are accurately instructing on the 
appropriate policies and procedures.

    To ensure all training programs expose investigators to current 
policies/procedures and address areas of concern, the TSDG works 
closely with the FISD's Operational Policy Group and Quality Assurance 
Group. Analysis of case deficiencies and program challenges are 
conducted routinely and incorporated into the training programs.
    Mr. Ortiz. In the report that GAO \1\ issued today to this 
committee and your testimony statement, you discussed a need for more 
emphasis on quality in clearance products and processes. What have 
agencies been using as quality measures, and are they sufficient?
---------------------------------------------------------------------------
    \1\ GAO, DOD Personnel Clearances: DOD Faces Multiple Challenges in 
Its Efforts to Improve Clearance Processes for Industry Personnel, GAO-
08-470T (Washington, D.C.: Feb. 13, 2008).
---------------------------------------------------------------------------
    Mr. Edwards. Through our reports and testimonies, we have 
emphasized a need to build more quality and quality monitoring into the 
clearances process. As we have reported, since 1999 government agencies 
have relied on a measure of quality--the percentage of investigative 
reports returned by requesting agencies to the investigating agency 
because of incompleteness--and this measure is insufficient. We find 
this measure to be problematic because the number of investigations 
returned for rework is not by itself a valid indicator of the quality 
of investigative work. One reason for this is that according to 
adjudication officials, they were reluctant to return incomplete 
investigations in anticipation of further delays.\2\ Additionally, this 
metric pertains only to the investigation phase of the clearance 
process, and there are no metrics for the other five phases of the 
investigative process (the clearance process has six phases: the 
requirements setting, application-submission, investigation, 
adjudication, appeal, and clearance updating).
---------------------------------------------------------------------------
    \2\ For example, GAO, DOD Personnel Clearances: Additional OMB 
Actions Are Needed to Improve the Security Clearance Process, GAO-06-
1070 (Washington, D.C.: Sept. 28, 2006); DOD Personnel Clearances: 
Government Plan Addresses Some Long-standing Problems with DOD's 
Program, But Concerns Remain, GAO-06-233T (Washington, D.C.: Nov. 9, 
2005); and DOD Personnel: Inadequate Personnel Security Investigations 
Pose National Security Risks, GAO/NSIAD-00-12 (Washington, D.C.: Oct. 
27, 1999).
---------------------------------------------------------------------------
    Mr. Ortiz. Do you believe that DOD, OMB, and OPM have made the 
necessary commitment to improve the security clearance process? What 
steps need to be taken to ensure that on-going initiatives continue 
past this Administration?
    Mr. Edwards. As noted in our February 13, 2008 report,\3\ we are 
encouraged by some department-specific and governmentwide efforts that 
have improved DOD's personnel security clearance program. Examples of 
improvements to the process include (1) DOD's ability to electronically 
submit a clearance applicant's form authorizing the release of medical 
information and (2) a governmentwide effort that has resulted in the 
increased use of the Office of Personnel Management's (OPM) Electronic 
Questionnaires for Investigations Processing.
---------------------------------------------------------------------------
    \3\ GAO, DOD Personnel Clearances: Improved Annual Reporting Would 
Enable More Informed Congressional Oversight, GAO-08-350 (Washington, 
D.C.: Feb. 13, 2008).
---------------------------------------------------------------------------
    In addition, as we have previously reported, we have been 
encouraged by the commitment that the Office of Management and Budget 
(OMB) and OPM have demonstrated in the development of a governmentwide 
plan to address clearance-related problems.\4\ The OMB Deputy Director 
met with us to discuss OMB's general strategy for addressing the 
problems that led to our high-risk designation for DOD's clearance 
program. Demonstrating strong management commitment and top leadership 
support to address a known risk is one of the requirements for us to 
remove DOD's clearance program from our high-risk list.
---------------------------------------------------------------------------
    \4\ GAO, DOD Personnel Clearances: Questions and Answers for the 
Record Following the Second in a Series of Hearings on Fixing the 
Security Clearance Process, GAO-06-693R (Washington, D.C.: June 14, 
2006).
---------------------------------------------------------------------------
    Nevertheless, as we noted in our February 13, 2008 statement, we 
have identified a number of challenges in our past work that will 
require long-term commitment from this and subsequent administrations 
to further improve the security clearance process. Specifically, in our 
statement we emphasized the need for initiative in five areas: (1) 
improvement in projecting future industry investigation needs, (2) 
eliminating delays in the clearance processes, (3) supplementing the 
limited information on quality of clearance products and procedures, 
(4) increasing the amount of clearance-related funding information 
available to Congress to improve oversight, and (5) developing and 
implementing a department-specific plan to address clearance 
problems.\5\
---------------------------------------------------------------------------
    \5\ GA0-08-470T.
---------------------------------------------------------------------------
    In another recent testimony,\6\ we emphasized that current and 
future efforts to reform personnel security clearance processes should 
consider, among other things, the following four key factors: (1) 
determining whether clearances are required for a specific position, 
(2) incorporating quality control steps throughout the clearance 
processes, (3) establishing metrics for assessing all aspects of 
clearance processes, and (4) providing Congress with the long-term 
funding requirements of security clearance reform.
---------------------------------------------------------------------------
    \6\ GAO, Personnel Clearances: Key Factors to Consider in Efforts 
to Reform Security Clearance Processes, GAO-08-352T (Washington, D.C.: 
Feb. 27, 2008).
---------------------------------------------------------------------------
    Mr. Ortiz. The Intel Reform Act requires that timeliness statistics 
be reported to Congress. Do the timeliness statistics provide a full 
picture of how quickly clearances are being issued? If there are 
additional statistics that would add to the Congress's oversight of 
clearance timeliness, what types of factors should be considered in 
identifying additional metrics?
    Mr. Edwards. The timeliness statistics that OMB and OPM have 
provided to Congress may not convey the full magnitude of the time 
required to complete clearance investigations and adjudications. In May 
2007, we reported the following five concerns with the transparency of 
the government's timeliness statistics: (1) limited information on 
reinvestigations for clearance updating, (2) not counting the total 
number of days to finish the application-submission phase, (3) shifting 
some investigation-related days to the adjudication phase or not 
counting them, (4) not counting the total number of days to complete 
closed pending cases, and (5) not counting the total number of days to 
complete investigations sent back for rework.\7\ Our preliminary 
observations of OMB's February 2008 Report of the Security Clearance 
Oversight Group and recent OPM congressional testimony indicate that 
there may be continuing problems in these areas.
---------------------------------------------------------------------------
    \7\ GAO, DOD Personnel Clearances: Delays and Inadequate 
Documentation Found for Industry Personnel, GAO-07-842T (Washington, 
D.C.: May 17, 2007).

        Limited information on reinvestigations for clearance 
updating: In previous OMB reports and OPM congressional testimony, the 
government provided limited information on the time to complete 
reinvestigations. However, OMB included in its 2008 Report of the 
Security Clearance Oversight Group information on the timeliness of 
---------------------------------------------------------------------------
reinvestigations.

        Not counting the total number of days to finish the 
application-submission phase: Our preliminary observations of OMB's 
February 2008 report raise concerns that some activities occurring in 
the initial part of the application-submission phase may not be 
included when counting the time to complete the application-submission 
phase. For example, OMB's February 2008 report noted that investigation 
timeliness was ``calculated from receipt of the full request for 
investigation;'' however, some activities may be excluded in timeliness 
measurements depending on how OMB interprets the ``full request for 
investigation.''

        Shifting some investigation-related days to the 
adjudication phase or not counting them: In our September 2006 report, 
we raised concerns about how the time to complete the adjudication 
phase was measured because OMB included mailing time in reporting the 
timeliness of the adjudication phase.\8\ This practice continues as 
noted in OMB's February 2008 report to Congress: timeliness statistics 
for adjudications ``include . . . up to 15 days in mail and handling 
between OPM and the adjudicating agency.'' Including time to mail and 
handle investigative reports from OPM to adjudicating agencies shifts a 
portion of the time to complete the investigation to the adjudication 
phase.
---------------------------------------------------------------------------
    \8\ GAO, DOD Personnel Clearances: Additional OMB Actions Are 
Needed to Improve the Security Clearance Process, GAO-06-1070 
(Washington, D.C.: Sept. 28, 2006).

        Not counting the total number of days to complete 
closed pending cases: OPM may be combining two kinds of investigations, 
which may overstate the timeliness of completed investigations. In her 
February 13, 2008, congressional testimony statement, the Associate 
Director in charge of OPM's investigations unit did not indicate 
whether the investigation timeliness statistics presented in her 
statement included closed pending investigations in the calculation of 
the average times to complete all investigations. Closed pending 
investigations are investigative reports sent to adjudication 
facilities without one or more types of source data required by the 
federal investigative standards. In our February 2004 report, we noted 
that closed pending cases should continue to be tracked separately in 
the investigations phase of the clearance process because a closed 
pending investigation may be reopened when the missing data are 
supplied. The time measurement of a closed pending case is suspended 
for an undetermined amount of time, which is not accounted for if the 
pending cases are reopened later and included in the timeliness 
---------------------------------------------------------------------------
calculations of fully completed investigations.

        Not counting the total number of days to complete 
investigations sent back for rework: In 2006, we reported that in 
instances when investigative reports are returned to OPM to address 
investigative insufficiencies, OPM's procedure has been to replace the 
investigative time recorded for providing the initial report to the 
adjudication agency with the investigation time to rework the report to 
address the insufficiencies. Reworking the investigative report could 
take less time than the earlier effort to complete the initial 
investigative report. While reworking cases occurs approximately in 1 
to 2 percent of investigative reports, replacing the initial 
investigative time with the time to complete the reworked 
investigations as the total number of days to complete investigations 
does not provide a full picture of how quickly clearances axe being 
issued. OMB's February 2008 report does not clarify its timeliness 
statistics to show how or if it is addressing this issue.
    Mr. Ortiz. OPM and DOD have reported decreases in the delays for 
providing clearances. What, if any, measurable improvements for 
contractors have resulted from these improvements in timeliness?
    Mr. Romero. It is my pleasure to report to you, following a survey 
conducted of the member companies of both ITAA and NDIA, that we 
believe there have been some measurable improvements for contractors 
that have resulted from improvements in the timeliness for providing 
security clearances. Most notably, the majority of member companies of 
both ITAA and NDIA agree that the E-Quip system that has been put in 
place has generally expedited clearances in government agencies. Most 
believe that allowing for internet application submittal not only 
speeds up the clearance process, but that it also makes it easier to 
access the necessary forms. However, the member companies have 
expressed certain concerns with this system and tend to agree that the 
E-Quip system does have flaws. I have provided a list of 
recommendations pertaining to E-Quip as well as the clearance process 
as a whole; that document, as well as the results to the survey, is 
attached.
    [The information referred to can be found in the Appendix on page 
122.]
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. FORBES
    Mr. Forbes. Can you provide us with any concrete examples of the 
monetary and non-monetary costs that contractors have incurred from the 
delays, so that we can get an idea of how much effect the delays are 
having?
    Mr. Romero. There was a study conducted some years ago that 
estimated the cost of the delays to process clearances was $192M. 
Details about the study are explained in the study titled ``The Cost to 
Industry of Security Clearance Delays'' and is included below:

           THE COST TO INDUSTRY OF SECURITY CLEARANCE DELAYS

 Executive Summary: Continuing delays in issuing security clearances to 
defense contractor employees are driving substantial ``lost labor'' 
costs for Industry. A recent AIA study estimates $152M was lost at nine 
facilities examined in a small but representative sample. The study 
indicated timeliness of final clearance output for Industry is not yet 
improving despite concerted efforts by DOD since mid-1999. 
Extrapolation of sample data to all of defense industry would put the 
labor costs wasted, while employees await final clearance, into the 
billions of dollars annually. Senior corporate management should 
consider elevating concern to the incoming administration. Greater 
emphasis needs to be placed on: (1) more rapidly reducing DOD's 
administrative processing and field investigative time to an average of 
90 days, and (2) on expediting the processing of ``issue cases'' which 
require special adjudication.

 Background: For well over two years the Department of Defense has 
struggled with a huge backlog of background investigations (BIs) for 
initial security clearances and for periodic clearance updates. DOD's 
administrative process for managing BIs is apparently broken and their 
repair effort has yet to take full effect as inordinate delays in the 
timely completion of BIs continues. These delays drive a significant 
cost impact for defense firms doing classified business with the U.S. 
Government.

    The DOD BI agency, Defense Security Service (DSS), signed up to a 
get-well schedule with the Defense Management Council last year. That 
schedule now appears to industrial observers not to be aggressive 
enough, and a recent study raises the question of whether DSS' progress 
is still tracking to plan.
    Since August 2000 a group of Industrial Security organizations\1\ 
has tracked DOD's BI backlog reduction and production timeliness at 
nine representative industrial facilities. Based on data from this 
sample it's estimated that DOD's failure to complete timely clearances 
on just the 2271 sampled Top Secret BIs has cost Industry in excess of 
$152M in lost or wasted labor at these nine facilities alone. If the 
sample is extrapolated to the more than 10,000 cleared industrial 
facilities in the U.S., the total annual cost to Industry reaches the 
billions of dollars.\2\
---------------------------------------------------------------------------
    \1\ The six industrial security organizations are: Aerospace 
Industrial Association's Industrial Security Committee, the American 
Society for Industrial Security's Government Security Committee, the 
Contractor SAP Security Working Group, the Industrial Security Working 
Group, the National Classification Management Society and the National 
Defense Industrial Association's Industrial Security Committee.
    \2\ The pricing model used to develop the cost figures cited in 
this paper applies a typical burdened salary for an aerospace 
professional employee. It assumes that a large percentage of the 
uncleared employee's time, after having waited an initial 90 days for a 
clearance, is ``wasted labor'' because the employee's services are 
being denied to the classified program to which he is assigned. That 
waste can be attributed to the delay in clearance completion. Details 
of the pricing model as applied to survey project data can be supplied 
on request.
---------------------------------------------------------------------------
    The nine-facility study revealed that it currently takes 249 days 
on average (over eight months) for a contractor employee to receive a 
``Final Secret'' clearance. That span is measured from the time the 
employee's clearance request is transmitted by the contractor's 
Security Office to DOD until a ``Letter of Consent'' is received back 
from DOD authorizing the employee's access to classified 
information.\3\
---------------------------------------------------------------------------
    \3\ The adverse impact of delay in receiving a Final Secret 
clearance is mitigated to some extent by DOD's timely issuance of 
``Interim Secret'' clearances to qualified applicants. For that reason 
the Final Secret pending backlog is not included in the cost impact-
pricing model used in this paper. DSS' concerted effort to improve and 
maintain their timely performance in this regard is deserving of 
praise. However, certain restrictions on Interim Secret clearances 
limit their value in many industrial job situations. Specifically, they 
cannot be used for access to classified NATO or COMSEC information, and 
they do not provide a basis for access to Special Compartmented 
Information (SCI) or Special Access (SAP) programs.
---------------------------------------------------------------------------
    For a Final Top Secret clearance, the current average wait is 343 
days, or almost eleven and a half months from submittal of the request 
to DOD.
    The four-month survey also raised some trend questions:

  CASE COMPLETION TIMELINESS did not move toward any 
significant improvement over the four months examined.\4\
---------------------------------------------------------------------------
    \4\ Monthly averages for Final Secret LOC issuance were 243, 293, 
267, and 249 days over the course of the study. Monthly averages for 
Final Top Secret LOC issuance were 381, 342, 348 and 343 days.

---------------------------------------------------------------------------
  PENDING CASE BACKLOG showed signs of aging even further.

      
      The percentage of Secret clearance cases in pending status for 
OVER ONE YEAR increased steadily over the survey period, from 8.6% of 
the total pending backlog in August to 13.0% in November.

      
      Secret clearance cases over one year will likely increase, since 
the percentage of pending Secret cases in the Nine-to-Twelve Month age 
category also increased steadily, and more than doubled over the four 
months surveyed, from 11.6% to 22.9% of the total backlog. This may 
indicate a continuing DOD process problem with the older cases.

      
      The percentage of Top Secret eases pending for OVER ONE YEAR went 
from 26.1% of the total pending backlog in August to 31.5% in November. 
Thus, in just four months, the number of Top Secret pending cases over 
one year old went from about one-quarter to nearly one-third of the 
entire backlog.

    Most of DOD's recent remedial efforts have focused on fixing the BI 
process problems at DSS where the great majority of cases are bogged 
down. That is proper. However, an added delay invariably occurs as a 
result of ``issue cases'' \5\ stacking up on adjudicators' desks. DSS' 
job is finished once it writes the BI report. However, there is 
virtually no visibility to Industry when an issue case on one of our 
employees moves to the Defense Office of Hearings and Appeals (DOHA) 
for issue adjudication. Yet our employee in this situation, seeking an 
initial clearance, remains unable to perform work on classified 
programs while ``due process'' plays itself slowly out. About 23% of 
Industry's current pending case backlog is old enough in the system to 
indicate most of those matters are probably pending issue adjudication 
at DOHA.\6\ That is a significant enough figure to indicate that DOD 
needs also to focus greater attention on the resources needed for more 
timely adjudicative output by DOHA.
---------------------------------------------------------------------------
    \5\ An ``issue case'' is one where the BI has revealed some piece 
of potentially adverse information about the subject. That triggers a 
formal review of the investigation report against presidential-approved 
adjudicative guidelines. If the government adjudicator then decides the 
derogatory information is significant enough to require denial of an 
initial clearance, or revocation of an existing clearance, it moves 
into a ``due process'' phase. In this phase the subject is offered an 
opportunity to appeal the denial or revocation at an administrative 
hearing prior to a final decision. Such cases have been known to drag 
on for years.
    \6\ The 23% would include most of the 13% of all currently pending 
Secret cases over one year old, and most of the 10% of all pending Top 
Secret cases over 18 months old. However, due to Industry's lack of 
visibility on matters pending with DOHA, the exact backlog there can 
only be estimated. We only know that a case remains pending within the 
government.
---------------------------------------------------------------------------
    Mr. Forbes. Who is currently keeping the database of the number of 
instances of non-reciprocity? And what agencies have the most cases of 
non-reciprocity?
    And in the last fiscal year, what was the number of waivers granted 
to allow agencies to conduct new investigations or adjudications?
    And then finally, why isn't this type of information provided in 
OMB's annual report to Congress mandated by the Intelligence Reform and 
Terrorism Prevention Act?
    Mr. Torres. The Department of Defense (DOD) does not keep a 
database on instances of non-reciprocity. However, the Department is 
committed to the reciprocal recognition of investigations or 
adjudications for security clearances conducted by other U.S. 
Government Agencies, as outlined in Title III or Public Law 108-458 
(The Intelligence and Reform Terrorist Prevention Act (IRTPA) of 2004) 
and Executive Order 13381, Strengthening Processes Relating to 
Determining Eligibility for Access to Classified National Security 
Information.
    DOD implementation of Office of Management & Budget (OMB) guidance 
on reciprocal recognition of existing security clearances specifically 
stipulates that any DOD component that determines it necessary to 
impose additional investigative or adjudicative requirements must 
notify the Office of the Deputy Under Secretary of Defense for 
Counterintelligence and Security; this office has received no such 
notifications.
    Additionally, DOD is a participating member of the National 
Reciprocity Working Group which ensures reciprocal recognition of 
existing security clearances across the Federal government.
    Mr. Forbes. Who is currently keeping the database of the number of 
instances of non-reciprocity? What agencies have the most cases? In the 
last fiscal year, what was the number of waivers granted to allow 
agencies to conduct new investigations and adjudications? Why isn't 
this type of information provided in OMB's annual report to Congress 
mandated by the Intelligence Reform and Terrorism Prevention Act?
    Ms. Dillaman. The application of reciprocity is often outside of 
OPM's visibility. OPM's role is to conduct the investigations, and we 
have a process in place that stops an investigation from being 
initiated when the same or a higher level investigation is currently 
pending or recently completed. Our automated system will not open a new 
investigation when the investigative requirements have already been 
met. We are also expanding our record system to capture additional 
adjudicative information that will provide better transparency into a 
subject's suitability and/or security determination. This will assist 
agencies in achieving full reciprocity.
    Mr. Forbes. Who is currently keeping the database of the number of 
instances of non-reciprocity? And what agencies have the most cases of 
non-reciprocity?
    And in the last fiscal year, what was the number of waivers granted 
to allow agencies to conduct new investigations or adjudications?
    And then finally, why isn't this type of information provided in 
OMB's annual report to Congress mandated by the Intelligence Reform and 
Terrorism Prevention Act?
    Mr. Edwards. We are not aware of a database maintained by any 
government agency that records information on reciprocity.
    Mr. Forbes. Where is our data on looking at that? Or does it just 
not exist at this particular point in time? And is is important for us 
to have that kind of data?
    Mr. Romero. As noted by Ms. Dillaman, issues related to reciprocity 
were managed by Mr. Bill Leonard and the ISOO office at the National 
Archives. Mr. Leonard convened several government/industry sessions 
where specific instances and experiences related to reciprocity were 
discussed and new standards were developed as a result of those 
discussions.
    Unfortunately, reciprocity is still determined by security officers 
that can be several layers removed from the agency security officers 
and variances in application of reciprocity still occur. Mr. Leonard 
and ISOO created a voluntary reporting mechanism where industry could 
report instances of non-reciprocity. Unfortunately, in practice, 
contractor personnel were extremely reluctant to report non-reciprocity 
by their government customers for fear of retaliation during the period 
of contract performance. Some in industry, however, have taken 
advantage of the reporting mechanism, so there should at least be 
anecdotal evidence available.
                   QUESTIONS SUBMITTED BY MRS. BOYDA
    Mrs. Boyda. It is my understanding of the President's budget that 
we saw a decrease of about 34 percent into the Defense Information 
Systems for Security, DISS. Does that ring a bell?
    Mr. Torres. Program management and development responsibility for 
the Defense Information System for Security (DISS) moved from the 
Defense Security Service (DSS) to the Business Transformation Agency 
(BTA) in November 2007 at the direction of the Deputy Secretary of 
Defense. Upon achieving full operational capability, the system will 
transition to DSS for sustainment. DSS and BTA are working to ensure a 
smooth transition from the existing Information Technology (IT) systems 
to the next generation system.
    The Operations & Maintenance (O&M) program has not decreased but 
instead has experienced a 68% increase between FY07-FY08. This increase 
was related to DISS legacy system sustainment in FY08. The O&M portion 
of DISS represents the cost of sustaining the existing systems such as 
the Joint Personnel Adjudication System (JPAS).
    Between FY08 and FY09 there was a decrease of 66% versus 34% 
($34.2M--$11.5M) in Research, Development, Test & Evaluation (RDT&E) 
funding. The decrease is because the ``old'' DISS should have been 
developed and operational by FY09. Once a program is developed it drops 
out of RDT&E funding and goes into sustainment/maintenance O&M funding. 
This would explain the drop in RDT&E funding between FY08 and FY09.
    The remaining RDT&E funds, other than those needed to maintain the 
existing systems, will be transferred to BTA for DISS development. That 
transfer is expected in FY08.

                                  
