    [Senate Hearing 111-991]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 111-991

         SECURITY CLEARANCE REFORM: SETTING A COURSE FOR SUSTAINABILITY

    =======================================================================

                                    HEARING

                                   before the

                      OVERSIGHT OF GOVERNMENT MANAGEMENT,
                         THE FEDERAL WORKFORCE, AND THE
                       DISTRICT OF COLUMBIA SUBCOMMITTEE

                                     of the

                                  COMMITTEE ON
                             HOMELAND SECURITY AND
                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED ELEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               NOVEMBER 16, 2010

                                   __________

             Available via the World Wide Web: http://www.fdsys.gov

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           Printed for the use of the Committee on Homeland Security
                            and Governmental Affairs

            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   JOSEPH I. LIEBERMAN, Connecticut, Chairman
    CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
    DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
    THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
    MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
    MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
    CLAIRE McCASKILL, Missouri           JOHN ENSIGN, Nevada
    JON TESTER, Montana                  LINDSEY GRAHAM, South Carolina
    ROLAND W. BURRIS, Illinois
    CHRISTOPHER A. COONS, Delaware

                      Michael L. Alexander, Staff Director
         Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                      Trina Driessnack Tyrer, Chief Clerk
                Joyce Ward, Publications Clerk and GPO Detailee

      OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE
                       DISTRICT OF COLUMBIA SUBCOMMITTEE

                       DANIEL K. AKAKA, Hawaii, Chairman
    CARL LEVIN, Michigan                 GEORGE V. VOINOVICH, Ohio
    MARY L. LANDRIEU, Louisiana          SCOTT P. BROWN, Massachusetts
    ROLAND W. BURRIS, Illinois           LINDSEY GRAHAM, South Carolina
    CHRISTOPHER A. COONS, Delaware

                         Lisa M. Powell, Staff Director
                    Evan W. Cash, Professional Staff Member
                     Dana Smullen, Minority Staff Director
                    Kristy Brown, Professional Staff Member
                          Aaron H. Woolf, Chief Clerk

                                C O N T E N T S

                                     ------
    Opening statement:
                                                                       Page
        Senator Voinovich............................................     1
        Senator Akaka................................................    10
        Senator Coons................................................    12

                                   WITNESSES
                           Tuesday, November 16, 2010

    Hon. Jeffrey D. Zients, Deputy Director for Management and Chief
      Performance Officer, U.S. Office of Management and Budget......     3
    Hon. James R. Clapper, Director of National Intelligence, Office
      of the Director of National Intelligence.......................     5
    Hon. John Berry, Director, U.S. Office of Personnel Management...     6
    Hon. Elizabeth A. McGrath, Deputy Chief Management Officer, U.S.
      Department of Defense..........................................     7
    Brenda A. Farrell, Managing Director, Defense Capabilities and
      Management, U.S. Government Accountability Office..............     9

                         Alphabetical List of Witnesses

    Berry, Hon. John.:
        Testimony....................................................     6
        Prepared statement...........................................    39
    Clapper, Hon. James R.:
        Testimony....................................................     5
        Prepared statement...........................................    34
    Farrell, Brenda A.:
        Testimony....................................................     9
        Prepared statement...........................................    50
    McGrath, Hon. Elizabeth A.:
        Testimony....................................................     7
        Prepared statement...........................................    44
    Zients, Hon. Jeffrey D.:
        Testimony....................................................     3
        Prepared statement...........................................    27

                                    APPENDIX

    Questions and responses for the record:
        Mr. Zients...................................................    68
        Mr. Clapper..................................................    70
        Mr. Berry....................................................    73
        Ms. McGrath..................................................    78
        Ms. Farrell..................................................    79
    Background.......................................................    82

         SECURITY CLEARANCE REFORM: SETTING A COURSE FOR SUSTAINABILITY

                                  ----------

                           TUESDAY, NOVEMBER 16, 2010

                                     U.S. Senate,
                  Subcommittee on Oversight of Government
                         Management, the Federal Workforce,
                                and the District of Columbia,
                          of the Committee on Homeland Security
                                            and Governmental Affairs,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 10:45 a.m., in
    room SD-342, Dirksen Senate Office Building, Hon. Daniel K.
    Akaka, Chairman of the Subcommittee, presiding.
        Present: Senators Akaka, Coons, and Voinovich.

                 OPENING STATEMENT OF SENATOR VOINOVICH

        Senator Voinovich. [Presiding.] The hearing will come to
    order. I have been asked by Senator Akaka to get the hearing
    started today. We are very, very fortunate to have a very
    distinguished panel of witnesses to talk about a subject that I
    have been working on for a long period of time. And to begin
    with, I would like to say to all of you I really appreciate the
    work that you are doing and your cooperation and your
    receptivity to our request that you keep us informed on a
    pretty regular basis. And today what we are going to try to do
    is find out where we are.
        If you will all stand, as is the custom of our
    Subcommittee, I will ask you to be sworn. Do you swear the
    testimony that you are about to give before this Committee is
    the truth, the whole truth, and nothing but the truth?
        Mr. Zients. I do.
        Mr. Clapper. I do.
        Mr. Berry. I do.
        Ms. McGrath. I do.
        Ms. Farrell. I do.
        Senator Voinovich. I am grateful to Senator Akaka for
    calling this hearing. Yesterday we were in Akron, Ohio, on
    another subject dealing with human capital. And I am grateful
    that we continue the review of the Federal Government's efforts
    to reform the security clearance process. The Chairman and I
    worked a long time together on a bipartisan basis. I try to
    remind people that it looks like sometimes we are not
    functional or we are dysfunctional here, but there are some
    wonderful things that are happening in committees in the
    Senate, and Dan Akaka and I have been friends for a long time,
    and our agenda has been the same for about 10 years, which is
    awesome.
        My hope is that enough progress would have been made on
    this that you all could say that this is off the high-risk
    list. I told General Clapper that you are going to have it off
    for next year. I know you will. And I am going to come back
    when they have the news conference just to be in the room to
    hear it.
        We started these hearings back in 2005 to examine efforts
    in furtherance of the Intelligence Reform and Terrorism
    Prevention Act, the (IRTPA), as well as efforts to remove the
    Department of Defense (DOD) from the high-risk list. But soon
    thereafter, we recognized that the problem was not exclusive to
    the Defense Department but was instead a government-wide issue,
    and it must be addressed collaboratively, such as through the
    Joint Suitability and Security Reform Team.
        I would like to congratulate the team on the significant
    strides it has made in streamlining and improving the
    timeliness of the process. According to the data the Joint
    Reform Team provided to Senator Akaka and me earlier this
    month, in the fourth quarter of fiscal year 2010 Executive
    Branch agencies investigated and adjudicated 90 percent of all
    initial security clearances in an average of 53 days and 90
    percent of initial secret/confidential clearances in 45 days,
    thus exceeding the 60-day benchmark, with an impressive change
    from 2007, just 3 years ago, when it took the Department of
    Defense an average of 208 days to process secret clearance
    requests for contractors.
        While improvement in timeliness of the security process
    should be acknowledged, we must recognize that timeliness is
    just one aspect of the clearance, and the law necessitates a
    number of other actions, including uniform policies regarding
    the security clearance process, reciprocal recognition of
    security clearances among agencies, and an evaluation of the
    use of technology to expedite security clearance processes. I
    am particularly concerned about the lack of progress being made
    in reciprocity. I still consistently hear from individuals who
    have problems with one agency accepting another agency's
    clearance.
        Another issue that gives me some concern is the information
    technology, which is an update of existing technologies,
    despite the fact that these technologies are old and outdated
    as opposed to the fact that these technologies--purchasing new
    technologies would likely better sustain efficiency in the
    security clearance process. And, by the way, Mr. Berry, we got
    into that yesterday in terms of Social Security and the
    technology that you are using in terms of those judges.
        Furthermore, lack of timeliness in budget estimates for
    technology relating to clearance processes is also a concern
    for me. As the Government Accountability Office (GAO) has
    pointed out for several years now, quality, particularly
    completeness of investigative and adjudicative files, has been
    a problem. Fortunately, the team has recognized that more work
    regarding the security clearance process was needed. In
    December 2008, it issued a report identifying its seven-step
    approach for reform, including, but not limited to, validating
    the need for investigation requests, using automated records
    checks to better target investigations, allowing for electronic
    adjudication of less complex cases, and continuously re-
    evaluating individuals who have been granted clearances.
        As requested, the team has provided monthly updates to us,
    as I mentioned, and I am also interested in learning about
    additional efforts that remain before the goal of security
    clearance can be achieved.
        I want to thank our witnesses for their participation. I am
    honored by your presence today. I do not think that everybody
    realizes that this is a top group of people here, and I am
    very, very grateful that you thought enough of what we are
    doing here to come over and spend some time with us. As we have
    the kind of protocol rule at 5 minutes; your testimony will be
    put in the record.
        I would like to start out with Mr. Zients. We will hear
    from you, and, again, thank you for being here.

    TESTIMONY OF THE HON. JEFFREY D. ZIENTS,\1\ DEPUTY DIRECTOR FOR
        MANAGEMENT & CHIEF PERFORMANCE OFFICER, U.S. OFFICE OF
                         MANAGEMENT AND BUDGET

        Mr. Zients. Thank you, Senator. It is my privilege to
    testify in my role as the Chairman of the Suitability and
    Security Clearance Performance Accountability Council (PAC)--
    admittedly, a mouthful--otherwise known as the PAC. Before I
    start, I want to acknowledge my colleagues who are testifying
    with me today: General Clapper, John Berry, and Beth McGrath.
    We have a very strong partnership, and the initiative would not
    be where it is today without their leadership.
    ---------------------------------------------------------------------------
        \1\The prepared statement of Mr. Zients appears in the appendix on
    page 27.
    ---------------------------------------------------------------------------
        In keeping with our partnership, we divided up our time
    this morning, and I will probably run a little longer than the
    5 minutes, but we will make up time as my colleagues will do
    brief updates on their specific areas.
        Since we last appeared before you in September 2009, the
    administration has made critical advances in reforming the
    security clearance process. Today I look forward to sharing our
    accomplishments and discussing the steps necessary to sustain
    our progress moving forward.
        For many years, the backlog of security clearances caused
    tremendous problems and significant expense for the Federal
    Government. In 1994, a Joint Security Commission report noted
    that substantial delays in processing security clearances led
    to unnecessary costs and risks because workers were unable to
    perform their jobs while waiting for a clearance. In light of
    these results, in 2005, the GAO placed security clearances on
    its high-risk list.
        Today, however, much has changed. The Intelligence Reform
    and Terrorism Prevention Act, otherwise known as IRTPA, was
    signed into law in 2004, challenging the Federal Government to
    address longstanding problems that unnecessarily affected the
    timeliness and quality of security clearances. As a result of
    actions taken to meet the objectives of IRTPA, the average time
    for security clearance has decreased dramatically. IRTPA
    required that all agencies complete 90 percent of their
    security clearances in an average of 60 days. At the time that
    IRTPA was enacted, the government-wide average was 205 days. By
    December 2009--so about a year ago--90 percent of the
    government's clearances were completed within the IRTPA-
    required time frame of 60 days. We have met the IRTPA target
    every quarter since. In fact, as you mentioned in your opening
    remarks, Senator, last quarter 90 percent of security clearance
    determinations were completed within 53 days, a 74-percent
    reduction from the 2004 level. Moreover, the backlog of
    investigations is gone.
        Now we must ensure that our progress is sustained in the
    future. The Strategic Framework document we submitted to this
    Committee in February established the path forward. Today I
    would like to emphasize our progress in the most critical areas
    within this larger strategic framework.
        First, we are aligning suitability and security policies
    and processes to limit redundancies in our investigations and
    adjudications. To achieve this, we are modifying the regulatory
    and investigative standards as well as the information
    collection forms that underlie our clearance operations. For
    example, in March, we published a revised Standard Form 86 that
    will capture the information necessary to enable more cost-
    effective security investigations.
        Second, we are working to improve reciprocity through
    initiatives such as enhanced sharing of relevant investigatory
    data among Federal agencies and developing performance metrics
    for tracking reciprocity outcomes. Notably, Office of Personnel
    Management (OPM) and DOD data are now integrated through a
    single interface, allowing agencies to see the data that
    underlies existing security clearances when they are deciding
    whether to grant reciprocity.
        Third, we are improving clearance quality by increasing
    access to information and enhancing training. To ensure that
    our approach on quality is most effective, we are also
    measuring the results. In May 2010, in partnership with GAO, we
    reported to you a set of quality metrics, which we will
    continue to refine and deploy by early next year.
        Finally, we are using enhanced technology to improve
    timeliness and reduce the number of unnecessary questions or
    the possibility of receiving incomplete forms. We have made
    important advances in converting paper-based application
    processes to automated solutions such as Electronic
    Questionnaires for Investigations Processing (e-QIP). Notably,
    over 98 percent of clearance application submissions to OPM are
    now completed electronically.
        Although this reform process has achieved many successes,
    work still remains to be done. We are making progress in
    establishing a five-tier framework for investigations that will
    enable greater reciprocity of clearances among tiers of equal
    or lower work. We expect this new framework to be released
    early next calendar year. Next month, we plan to deploy the new
    Standard Form 86 in an electronic format. And, importantly, we
    will continue to develop and improve metrics to track
    reciprocity and quality.
        Throughout this process, three key principles drove our
    reform effort.
        First, IRTPA set clear, outcomes-based goals, and each
    month, the administration delivers to your Committee a report
    on our progress relative to these goals.
        Second, we hold the appropriate agency leadership
    accountable for results. Since I joined the administration, I
    have met regularly with my colleagues testifying here today as
    well as with their teams who drive the day-to-day effort. The
    administration has also used our High Priority Goal Initiative
    to hold officials at OPM and DOD responsible for their
    respective deliverables.
        And, third, the backbone of the reform effort has been
    effective partnership. The PAC has helped foster collaboration
    among various Federal stakeholders, and the Joint Reform Team
    has provided technical leadership, training, and monthly
    progress reports. The GAO has offered insightful and important
    counsel, and this Subcommittee has held us accountable to the
    goals set forth in IRTPA.
        In closing, we have made significant progress on improving
    the suitability and security clearance processes. In fact, I
    believe that this effort serves as a model for our broader
    government-wide reform initiatives. I would like to thank you,
    Senator Voinovich, for the extraordinary work that you have
    done on this issue and for your leadership throughout your
    Senate career. I think I speak for all of us in saying we will
    certainly miss you.
        I would also like to recognize the talented staff who have
    been instrumental in the security clearance reform effort, in
    particular my Vice-Chair, Beth McGrath, Kathy Dillaman from
    OPM, and John Fitzpatrick from the Office of the Director of
    National Intelligence (ODNI). With their hard work, as well as
    that of the agency leadership testifying with me today, and the
    continued support of this Subcommittee, I am confident that we
    will continue to improve the timeliness, reciprocity, and
    quality of clearance decisions.
        Once again, thank you for the opportunity, and I look
    forward to questions.
        Senator Voinovich. Thank you very much. I think you have
    really done a good job as Director of Management and Chief
    Performance Officer.
        Mr. Zients. Thank you.
        Senator Voinovich. We enjoyed working with you.
        Mr. Zients. Thank you.
        Senator Voinovich. Our next witness is General James
    Clapper, Director of the National Intelligence, Office of the
    Director of National Intelligence, and, General, we are glad
    that you are here today, and we appreciate the fact that you
    are continuing to serve your country.

    TESTIMONY OF THE HON. JAMES R. CLAPPER,\1\ DIRECTOR OF NATIONAL
     INTELLIGENCE, OFFICE OF THE DIRECTOR OF NATIONAL INTELLIGENCE

        Mr. Clapper. Thank you very much, Senator Voinovich. I,
    too, am pleased to be here to highlight the progress we have
    made on security clearance reform. And as Jeff said, I am also
    very pleased to appear beside my principal partners of reform
    with whom I have bonded over the last couple years, and that is
    Jeff, John Berry, and Beth McGrath, as well as our GAO
    colleague, Brenda Farrell, to update you on the work we have
    done together to ensure that improvements to clearance
    timeliness, quality, and reciprocity are institutionalized and
    sustained.
    ---------------------------------------------------------------------------
        \1\The prepared statement of Mr. Clapper appears in the appendix on
    page 34.
    ---------------------------------------------------------------------------
        In both my former role as Under Secretary of Defense for
    Intelligence and now as Security Executive Agent as the
    Director of National Intelligence, I have pushed this effort
    and will continue to do so to transform the end-to-end security
    clearance process across the Federal Government. The
    intelligence community (IC) is a key player in this, and I
    assure you the IC as a whole continues to pay attention to this
    as a top priority.
        As Jeff mentioned, we are all pleased to note that our
    performance continues to meet the timelines set forth in the
    Intelligence Reform and Terrorism Prevention Act.
        As Security Executive Agent, I continue to support the
    Performance Accountability Council's emphasis on sustaining
    timeliness performance by hosting Executive Branch-wide reform
    briefings where we address agencies' performance and progress.
    Together with the Council, we will also continue to develop new
    and meaningful performance measures, including reciprocity, and
    also assess agencies' progress in adopting reform practices in
    the context of their own technology and process improvement
    goals.
        I would be remiss if I did not recognize the crucial role
    that GAO continues to play in keeping the heat on the Executive
    Branch for security clearance reform and also on areas they
    have identified where more work is required. Reform leaders
    have long focused on the goal of removing DOD from GAO's high-
    risk list. In this regard, I also want to recognize the value
    of this Subcommittee's continued attention to this issue, and
    specifically you, Senator Voinovich, for your leadership. You
    leave a lasting legacy that will ensure a secure and capable
    Federal workforce for the future.
        So thanks very much for your efforts to ensure effective
    and efficient processes, and certainly when the time comes, we
    will stand ready to answer your questions. Thank you very much.
        Senator Voinovich. Thank you very much.
        Mr. Berry, Director of the U.S. Office of Personnel
    Management. John, I remember when we first met, and I thought
    you were an eager beaver, and you talked a good game, and I
    thought, if he can just do half as good as it looks like he
    wants to do. And you have done a very, very good job. I have
    dealt with your predecessors, and I am really pleased with what
    you are doing and your outreach to other agencies and working
    with them. It is extremely important. I do not think that this
    country realizes how important your operation is to human
    capital, and you have done a very good job, and I am grateful
    for your service.

     TESTIMONY OF THE HON. JOHN BERRY,\1\ DIRECTOR, U.S. OFFICE OF
                          PERSONNEL MANAGEMENT

        Mr. Berry. Senator, right back at you. It has been an
    incredible honor to serve with you, sir, and I appreciate very
    much your allowing me the opportunity to hold this position,
    and having your support at the beginning meant a lot. You are
    one of those leaders who not only, on this issue, is concerned
    with the effectiveness and the efficiency of our government,
    but your appreciation for the men and women who serve our
    country, both in uniform and in the civilian service, day in
    and day out. And you are amongst a handful who really
    understands and appreciates the importance of their role and
    responsibility in our Republic. And you are going to be sorely
    missed. On behalf of everyone in the civil service, sir, thank
    you for your service to your Nation and for your emphasis on
    quality. It has been an honor, and the Nation has been
    fortunate for your service.
    ---------------------------------------------------------------------------
        \1\The prepared statement of Mr. Berry appears in the appendix on
    page 39.
    ---------------------------------------------------------------------------
        I am going to try to even be briefer than General Clapper,
    sir. I think what this comes down to is four keys. We, in our
    piece of this puzzle, have focused very diligently on
    timeliness, on quality and accuracy, and on cost, because at
    the end of the day we have to bill agencies, and we want to
    make sure that we are doing this in a responsible manner.
        But I think it is the fourth--and it has been alluded to by
    everybody at this table--that has really made the difference on
    this, and that is teamwork. None of us could have taken on this
    task by ourselves and succeeded. We only did it because all of
    the players at this table, and GAO included, really rolled up
    their sleeves, recognized the criticality of this issue, and I
    think are delivering solid progress for you and for the
    country. My promise to you while I remain in this post is that
    I will continue to maintain high attention and focus on this
    and will continue to be a productive member of the team. As
    General Clapper mentioned, we have actually all become, I
    think, good friends over this process as well, which also
    bespeaks the attention that has been focused.
        So with that, sir, I will yield back and look forward to
    discussing more in questions.
        Senator Voinovich. Thank you very much. Thank you for your
    kind words.
        Our next witness is the Hon. Elizabeth McGrath, Deputy
    Chief Management Officer of the U.S. Department of Defense.
    Beth, you have played a key leadership role in bringing folks
    together, and I am very much impressed with your work and your
    leadership. I think that, as I have looked over the last 12
    years and I have observed this, if you can get people to work
    together and develop good interpersonal relationships, it is
    amazing what you can get done. And I think that is what has
    happened here, and that is why I think you are doing as well as
    you are. And it takes somebody like you to understand that and
    keep the team together. Thank you.

      TESTIMONY OF THE HON. ELIZABETH A. MCGRATH,\1\ DEPUTY CHIEF
             MANAGEMENT OFFICER, U.S. DEPARTMENT OF DEFENSE

        Ms. McGrath. Senator, thank you very much. As all of the
    witnesses have mentioned, the teamwork really has gelled over
    the last probably 3 years, so I think General Clapper and I
    have tenure in terms of the clearance reform effort. Certainly
    it would not compete with yours, sir, but it has been very much
    a team effort to enable the progress to have been made, and it
    is not just with--it also includes the Government
    Accountability Office (GAO).
    ---------------------------------------------------------------------------
        \1\The prepared statement of Ms. McGrath appears in the appendix on
    page 44.
    ---------------------------------------------------------------------------
        I, too, appreciate your continued oversight and interest
    and also the opportunity to testify today regarding DOD's
    continued commitment to and progress in reforming the personnel
    security clearance process.
        As the Deputy Chief Management Officer, I am the primary
    agent for improving cross-cutting management of the
    Department's business activities. Secretary Gates and Deputy
    Secretary Lynn have both clearly articulated the pressing need
    for departmental reforms that include: Modernization of our
    financial management strategy; a different, more streamlined
    approach to information technology acquisition; and a
    transformed hiring process to get the right talent on board in
    a timely manner.
        DOD's overarching management agenda is focused on creating
    an effective, agile, and innovative business environment that
    is fiscally responsible.
        The Department has invested a significant amount of
    attention and energy on the improvement of personnel security
    clearance processes, both within the Department and as part of
    the integrated Federal reform effort. As GAO placed the DOD's
    Security Clearance Program on its high-risk list in 2005 due to
    timeliness issues which included extensive backlogs and
    significant delays. Each year since then, the Department has
    taken proactive steps and made improvements. This includes
    direct leadership engagement, sufficient resources to resolve
    risk, a corrective action plan, the presence of a program to
    monitor and independently validate effectiveness and
    sustainability of corrective actions, and the ability to
    demonstrate the implementation of corrective measures. My
    written testimony highlights the activities we have undertaken
    to improve security clearance cycle times and institute
    proactive management and accountability, as well as describes
    the actions the Department has taken to address all of the
    GAO's high-risk list removal criteria.
        To specifically address the issue of timeliness of
    investigations, DOD partnered with its primary Investigative
    Service Provider, OPM, and together has made remarkable
    progress. In 2006, DOD military and civilian clearances
    averaged 155 days and industry clearances averaged
    approximately 196 days. As has been mentioned, the 2004
    Intelligence Reform and Terrorism Prevention Act required all
    agencies to complete 90 percent of their security clearances in
    an average of 60 days by December 2009. DOD has met that
    requirement and has continued to improve.
        This remarkable performance is attributable to several
    initiatives. The first came from OPM and its ability to
    significantly reduce the amount of time needed to conduct the
    investigation portion of the clearance process. OPM's proactive
    processing steps, coupled with DOD's improved clearance
    forecasting capability, enabled effective workload balancing
    for both investigations and adjudications.
        Next came DOD's transition away from hard-copy paper
    reports of investigation to electronic transmission and receipt
    of these documents, eliminating the need to deploy trucks to
    deliver the investigative packages. This process improvement
    alone is estimated to have eliminated up to 15 days of
    processing time for each clearance package.
        We have also made extensive progress in the quality of our
    clearances by focusing on improvements to our policies, use of
    information technology, and training for those involved in
    security clearance and adjudicative processes. In short, I
    believe the Department has taken all the necessary steps to
    warrant removal from the GAO high-risk list for personnel
    security clearances. Our demonstrated and sustained performance
    that exceeds the requirements set by both the IRTPA and the
    Performance Accountability Council is evidence of our ability
    to demonstrate the implementation of corrective measures. The
    decades-old backlog of investigations, which as recently as
    October 2006 stood at almost 100,000 cases, has been
    eliminated.
        I would like to thank Chairman Akaka but also and
    especially Senator Voinovich for your leadership and commitment
    and strong oversight of this issue. Your continued call for an
    efficient, effective Federal security clearance process has
    helped bring positive and lasting change to the way we do
    business at DOD. I wish you all the best as you prepared to
    leave the Senate.
        Thank you for the opportunity again, and I look forward to
    your questions.
        Senator Voinovich. Thank you. Senator Akaka.
        Senator Akaka. [Presiding.] Thank you.
        Now we will hear from Director Farrell.

     TESTIMONY OF BRENDA A. FARRELL,\1\ MANAGING DIRECTOR, DEFENSE
      CAPABILITIES AND MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY
                                 OFFICE

        Ms. Farrell. Thank you, Mr. Chairman. It is good to see you
    again.
    ---------------------------------------------------------------------------
        \1\The prepared statement of Ms. Farrell appears in the appendix on
    page 50.
    ---------------------------------------------------------------------------
        Mr. Chairman, Senator Voinovich, and Members of the
    Subcommittee, thank you for the opportunity to be here today to
    discuss DOD's progress on addressing timeliness and quality
    with its personnel security clearance process. The recent
    unauthorized leak this past year of about 500,000 pages of
    classified documents posted to the Internet related to the
    ongoing wars in Afghanistan and Iraq is an example of the
    inherent risk involved when granting an individual a security
    clearance. We have testified on clearance-related issues in six
    prior hearings that this Subcommittee has had since January
    2005 when we first placed DOD's personnel security clearance
    program, which represents the vast majority of clearances
    adjudicated, on our list of high-risk government programs.
        Over the years, we have conducted a broad body of work on
    clearance issues that gives us a unique historical perspective.
    My remarks today draw on both our ongoing work and prior work
    on the personnel security clearance process. My main message
    today is that DOD has made significant and noteworthy progress
    to reduce delays in granting clearances and taken positive
    steps to integrate quality into its investigative and
    adjudicative processes.
        My written statement submitted for the record is divided
    into two parts. The first addresses DOD's progress in reducing
    delays in its clearance process. In 2007, we found that initial
    clearances for DOD industry personnel took almost a year to
    complete. When I testified before this Subcommittee last year,
    I noted that DOD had made significant improvements in reducing
    delays. However, despite these improvements, we continued to
    designate DOD's program as a high-risk area due to more
    stringent timeliness objectives that were to take effect later
    in the year. As of December 2009, by law the timeliness
    objective is for each Federal agency to process the fastest 90
    percent of initial clearances within an average of 60 days. I
    have good news to confirm. DOD met the 60-day objective for
    each of the first, second, and third quarters of fiscal year
    2010. GAO's ongoing work will continue to examine the
    timeliness for the last quarter.
        The second part of my statement addresses DOD's progress in
    building quality into the process used to investigate and
    adjudicate security clearances. We have stated many times that
    timeliness alone does not provide a complete picture of the
    clearance process. For example, in our prior work, we estimated
    that with respect to initial top secret clearances adjudicated
    in July 2008, documentation was incomplete for most OPM
    investigative reports that DOD adjudicators used to grant
    clearances. Today I am pleased to report that DOD has taken a
    number of positive steps to integrate quality into OPM's
    investigative process and its adjudicative process, including
    issuing guidance and developing tools to measure quality. For
    example, in March 2010, DOD issued guidance to clarify when
    adjudicators may use incomplete investigative reports as the
    basis for granting clearances.
        In addition, DOD created two electronic quality assessment
    tools to track the quality of investigative and adjudicative
    documentation. These tools are embedded in a DOD tracking
    system used by all non-intelligence DOD central adjudication
    facilities. However, these tools have not been fully
    implemented. GAO's ongoing work continues to examine the
    implementation of these tools.
        In conclusion, Mr. Chairman, we are strongly encouraged by
    the progress that GAO has made over the past few years. The
    progress that has been made with respect to the overall
    government-wide reform efforts would not be made possible
    without the committed and sustained leadership of Congress, in
    particular this Subcommittee, and by the senior leaders
    involved in the Performance Accountability Council. Their
    continued oversight and stewardship of the reform efforts is
    the cornerstone to sustaining momentum and making future
    progress.
        Mr. Chairman, this concludes my remarks. I will be happy to
    take questions when you are ready.

                   OPENING STATEMENT OF SENATOR AKAKA

        Senator Akaka. Thank you very much, Director Farrell.
        I want to welcome this panel to the Subcommittee and also
    thank my brother and good friend, Senator Voinovich, for his
    leadership here, and we will begin here with my opening
    statement. I am also going to call on our newest Member to the
    Subcommittee, Senator Chris Coons, for any remarks that he
    would like to make after my statement. Then we will return to
    the questions.
        Just over 5 years ago, in 2005, this Subcommittee held its
    first hearing on the Department of Defense's personnel security
    clearance program after the Government Accountability Office
    designated the program as being at high risk for waste, fraud,
    abuse, or mismanagement. Today, we hold our seventh hearing on
    security clearance issues, and I am pleased to say that we have
    seen tremendous progress throughout the course of our oversight
    work.
        Delays in the clearance process began over 20 years ago. By
    the time this issue was added to the GAO high-risk list, DOD
    industry clearances took over 300 days on average to complete.
    Ongoing delays led to a backlog of hundreds of thousands of
    investigations and adjudications.
        Today, as we will hear from our panelists--and we have
    heard from our panelists--the backlogs are gone and timeliness
    is within the goals laid out in the 2004 Intelligence Reform
    and Terrorism Prevention Act: less than 60 days total for most
    investigations and adjudications.
        The other key aspect of the high-risk designation is
    investigation quality. Until recently, GAO noted that
    incomplete investigation files were routinely sent to
    adjudicators, who would either send them back to OPM or
    adjudicate them with incomplete information. Unfortunately,
    there was no way to monitor or measure investigation quality.
        I am pleased that earlier this year, in response to a
    letter from Senator Voinovich and me, GAO and the Executive
    Branch worked together to identify metrics that would be
    consistent with GAO's recommendations on quality.
        Overall, I have been pleased with the work of the
    Performance Accountability Council to address the high-risk
    designation and to modernize and streamline the security
    clearance process. We will continue to rely on its work to
    sustain the progress and momentum for reform in the future.
        Despite the progress, however, there are remaining issues
    and challenges that I believe are crucial to successfully
    reforming the clearance process. The information technology in
    place, especially at the Office of Personnel Management, must
    be modernized to support 21st Century capabilities--as is
    common across the private sector and other government agencies.
    I look forward to hearing more about this and OPM's enterprise
    architecture modernization project.
        Additionally, it seems reciprocity may be still an issue
    between certain agencies. The intent of several Executive
    Orders on this issue is clear: Agencies need to work together
    to accept clearances from other agencies. This will allow
    national security positions to be filled more quickly with
    right people in the right jobs. Reciprocity for employment
    suitability may need to be addressed as well.
        Senator Voinovich and I introduced legislation to
    institutionalize these reforms to the security clearance
    process. Our bill, the Security Clearance Modernization and
    Reporting Act calls for strategic planning, expanded timeliness
    reporting, and a more formal establishment of the PAC.
        I also look forward to GAO's next high-risk list update in
    the coming months to see where this issue stands. Regardless of
    whether it remains on the list, I think that we can all agree
    that there has been outstanding progress.
        The progress is in no small part a testament to strong
    congressional oversight, which is key to making the Federal
    Government more efficient, more effective, and more responsive.
    I have been proud to work with Senator Voinovich on these
    issues over the years, and I will continue our oversight
    efforts in the future.
        As evidenced by our distinguished panel here today, this
    particular issue has enjoyed high-level leadership attention,
    and I hope your work will serve as a model for addressing other
    high-risk areas and management challenges.
        We are very pleased to have the Acting Office of Management
    and Budget (OMB) Director, the Director of National
    Intelligence, and the OPM Director working so closely together
    with this Subcommittee.
        I am also honored to have my brother and good friend
    Senator Voinovich by my side as we hold this, one of our last
    hearings together. He has been a leader on this issue, as he
    has been on many other complicated management challenges our
    Nation faces. Again, I want to thank him for all of his work on
    these issues over the years, and I thank our entire panel for
    being here today.
        I would like to now call on newest Member, Senator Coons,
    for any remarks that he may have.

                   OPENING STATEMENT OF SENATOR COONS

        Senator Coons. Thank you very much, Chairman Akaka, and my
    purpose today is to join you in this hearing, in part to
    continue the good work of Senator Kaufman of Delaware, in whose
    shoes I attempt to stand today. This is my first day on the job
    as a U.S. Senator. Thank you, Chairman Akaka, thank you,
    Senator Voinovich, for what from the testimony today has
    clearly been an effective and engaged job of oversight, and
    thank you to all the panel members today for demonstrating in
    response to both the identification of issues by the GAO and
    repeated and effective engagement by this group in a
    collaborative process that identified critical steps forward,
    set metrics, and then, in the course of several hearings and
    several years of difficult work, reduced what was a critical,
    longstanding backlog in a way that improved efficiency, reduced
    costs, and delivered an outcome that is important to the
    security of our Nation.
        I am glad to join you in today's hearing and look forward
    to working with you in what time I have left on this Committee.
    Thank you, Mr. Chairman.
        Senator Akaka. Well, thank you. You are certainly welcome,
    and I look forward to working with you.
        We will begin now with the questions. Ms. Farrell, last
    year, Senator Voinovich and I sent GAO and members of the PAC a
    letter asking GAO and the PAC to work together to address
    performance measures for quality of clearance investigations
    which have been suggested by GAO.
        My question to you is: Was GAO satisfied with the resulting
    response from the PAC regarding these measures?
        Ms. Farrell. Thank you, Mr. Chairman. Yes, GAO was
    satisfied with the result. There had been a great deal of
    collaboration that we witnessed among the players that you have
    already acknowledged here, and we have been pleased to see that
    collaboration continue even with the change in the
    administration almost 2 years ago.
        The metrics, the 15 metrics that resulted in the letter to
    you and Senator Voinovich, we have evaluated those against what
    we consider successful--indicators of successful performance
    measures. There are at least nine criteria that GAO has
    identified in prior work that we have used to measure
    performance measures against to see if they are showing
    success, and those consist of, for example, being quantifiable,
    having measurable goals, aligned with an agency's goals,
    reliable, independent, free from bias so that an independent
    party can make the same determination using those performance
    measures, as well as interim goals with measures to show
    progress as the transformation is playing out.
        We found that most of the performance measures had some of
    the criteria as well as baselines and goals for 2010 and 2011.
        The PAC, once it decided that quality was a high priority,
    moved very quickly, I think, to develop these and put a plan in
    place with some guidelines that can be used as measurement. So
    we are very pleased with what the result was, sir.
        Senator Akaka. Thank you for that response.
        General Clapper, I want to follow up with you regarding
    performance measures. Some elements in the Executive Branch,
    including the intelligence community, do their own
    investigations rather than using OPM.
        How will the quality measures apply to these elements? And
    does the PAC plan to standardize quality standards across all
    executive agencies?
        Mr. Clapper. Well, sir, it would be my view that whatever
    performance metrics we agree on for the community would apply
    across the board regardless of who does the investigation or
    how it is done. And I say this since I signed up to those
    standards in my last job, so it would be a little difficult for
    me to fall off that position, so absolutely.
        Senator Akaka. Thank you.
        Director Berry, DOD has initiated the Rapid Assessment of
    Incomplete Security Evaluations (RAISE), a tool to track and
    complete investigation files. This tool measures investigation
    completeness after OPM has delivered its investigation file.
        Does OPM have a system for ensuring the completeness of its
    own investigations? And how do you resolve investigations that
    customers identify as incomplete?
        Mr. Berry. Thank you, Senator. It is great to be here with
    you again today on this important issue.
        The answer is yes, absolutely, we have in place such a
    system. Kathy Dillaman, who is my Associate Director, who
    manages this project for us on a day-to-day basis, has put in
    place, consistent with the Department of Defense's systems and
    these measurements that we've worked out jointly with GAO, a
    couple of ways to sort of triple-check and have some backstops
    that we can know what we can rely upon.
        Most urgently, we put in place an immediate direct line
    ability for DOD to be in touch with sort of a fast call
    complaint issue so that Kathy can have at her--she knows
    exactly where shortfalls are happening, and so we can decide
    whether they are the result of factors that are beyond our
    control. For example we cannot resolve some cases if there is
    an ongoing criminal investigation or a court case. We know that
    is one--we are obviously not moving forward with that, but
    there are others that might be a trend indicator. And so one of
    the most important things we have is for Kathy to be able to
    carefully monitor through all of that feedback system so we can
    identify where there might be a weakness that we need to
    immediately address in our investigations.
        In addition, we are moving forward with upgrading our
    automated systems so that we can share information in an
    electronic format. And that is one we have made substantial
    progress to date on. We have a long way to go. We are
    probably--as I say, you have to balance costs to the customer
    to make sure that we can do this. We have eight components in
    our IT system, and all eight are being upgraded as we speak.
    And those will also greatly assist us in--as we pass this
    information back and forth, we are able to do that in a much
    quicker time frame, sir, so that we can get those complete
    cases, back and forth in such a way that the adjudication by
    the agency can be made off of a complete file.
        Senator Akaka. Thank you.
        I would like to follow up with a question to Director
    Zients on this, and I would like to hear from you as well. Do
    you believe tools should be developed at other agencies that do
    not have the same tools?
        Mr. Zients. Yes, although I am hesitant to say that they
    need to be developed, as we have developed good tools at DOD,
    at OPM, and what we should be doing is taking those tools and
    other best practices beyond technologies and transferring those
    to the smaller-volume agencies so that we can get the same
    efficiencies and quality gains that we have achieved at DOD.
        Senator Akaka. Thank you.
        Senator Voinovich, your questions.
        Senator Voinovich. Thank you, Senator Akaka. Again, thank
    you for holding this hearing. We have one more.
        When Senator Akaka and I met with the Joint Reform Team at
    GAO in the spring, I expressed concern about the lack of
    information regarding budget plans and funding needs for the
    reform effort. In the past, GAO has suggested that the Joint
    Reform Team provide Congress with ``long-term financing
    requirements for security clearance reform.'' With long-term
    funding requirements--and during last year's hearing, Senator
    Akaka and I specifically asked for such information and
    expected to see it in the Security and Suitability Reform
    Strategic Framework. However, the framework States, ``Resources
    from DOD and OPM are sufficient to enable implementation of the
    transformed process designed for the mainstream elements of the
    process.''
        Do you have the resources to continue to do the job that we
    have asked you to do? And, second, is this issue of continuing
    resolution and the omnibus bill or whatever we get, what impact
    is that having on your ability to do this work?
        So that is two questions. In your budgets currently do you
    have the money? In the budget that is proposed, is the money
    there for you to get the job done? And are you being thwarted
    right now in terms of some things you would like to do because
    of not being confident as to when this budget is going to be
    passed, appropriations are passed?
        Ms. McGrath. So I can----
        Mr. Zients. Please.
        Ms. McGrath. Our position on the funding has not changed
    from what we provided the Department--between the Department
    and the Office of Personnel Management, we believe we have
    sufficient resources to sustain.
        I will indicate that the information technology that the
    Department is developing, primarily the DISS, the DISS Program,
    the Defense Information Security System (DISS), does have a
    Program Objective Memo (POM)-12 request that will ensure that
    we have sufficient development dollars. It has not yet been
    locked, but I do believe that we will have that. It was
    previously not funded in 12.
        Having said that, we are not impacted by the continuing
    resolution. The work we have in the budget for 2010 and 2011 is
    continuing. It is not a new start; therefore, we are not
    impacted specifically by the CR.
        And then from the long term, we also have sustainment
    dollars that are in the budget to ensure that we can sustain
    the programs. And as Mr. Zients mentioned earlier, many of the
    information technologies that we are developing within the
    Department are portable, if you will, to other organizations.
    We are ensuring that we have the proper contracting language so
    that these can be utilized by other Federal agencies so we are
    not developing new systems, that we are leveraging existing
    technologies.
        Senator Voinovich. Mr. Berry.
        Mr. Berry. Senator, I would underscore what Beth is saying,
    especially from our information technology (IT) needs, which
    obviously the systems that we discussed we need to upgrade over
    the next period of time. We have been able to keep our rates--
    which is obviously what we charge the agencies for the
    investigations. We have not exceeded the cost of inflation, so
    we have been able to sort of keep our customers happy but build
    into that approach sufficient resources necessary to upgrade
    the technology as we move along. And so, for example, right now
    almost 70 percent of our fingerprints are done electronically.
    That has been a significant time saver for us, and we look
    forward--we are not going to be happy until that number
    continues to increase, but it is great and a great example of
    how we have been able to bring the technology forward.
        Right now, 98 percent of all the submissions are done
    electronically, so a lot of the speed which you have seen in
    these has been in the IT solutions that we have been able to
    bring online over time with this. And because we have been able
    to build a budget that provides for the upgrade of each of
    these eight components of that IT system, we believe we have
    the resources both now and in the future to stay on track with
    the objectives that we all share.
        Senator Voinovich. I think one of the really important
    things about this endeavor is that--General Clapper, you
    understand how important it is, and I think I would be
    interested--and you do not have to do it today, but I would
    really be interested in--you are making this effort, and I
    would like your--we are spending more money, but the issue is
    we are becoming a lot more efficient. And the impact that it is
    going to have, security clearance and having this move the way
    it is supposed to in terms of the warfighter and other people
    that--security and how important it is that we get this system
    to where it should be. And I think you are going to have to do
    a lot more of that because of the tight financial situation
    that you have. And I think that--I know you are all busy, but
    as much as you can do that and share that with Congress, I
    think the better off all of us are going to be.
        Now, Ms. Farrell, I congratulate you. You are working with
    the team. Obviously, you have a good interpersonal type of
    operation here. And I want it off the list. Do you think it is
    possible that--I think you put out your high-risk list in,
    what, February of next year?
        Ms. Farrell. Maybe January.
        Senator Voinovich. There is a possibility that it could be?
    Could you list maybe the one or two things--let us say two
    things that you think really need to be addressed if that were
    to occur?
        Ms. Farrell. Yes, sir. The Acting Comptroller General,
    soon-to-be Comptroller General, will make that announcement in
    January of next year, hopefully, and I believe the written
    statement does reflect a lot of the significant and noteworthy
    progress that DOD has made toward actually implementing actions
    that we are evaluating to make that high-risk determination.
    Sometimes we will take a program off of the high-risk list and
    we will keep monitoring it always, but sometimes we have to
    reapply that designation. Hopefully, it will not happen in this
    case if personnel security clearances are removed. But it has
    happened. The decennial census is an example of one that has
    been on and off, on and off.
        DOD has been very responsive, again, to our
    recommendations, and it is not just our recommendations that we
    look at. It is other solutions that they are putting in place
    regarding timeliness and quality.
        We have seen great progress with the timeliness and the use
    of IT that you have already discussed, and I think the main
    message today is the progress being made to develop metrics
    which can be used to measure the documentation.
        Senator Voinovich. And you all agree on the metrics?
        Ms. Farrell. Yes, we do. We saw those before they were
    submitted to you, and we have--at that time we had not done a
    complete evaluation against our criteria, but we had a number
    of conversations to help facilitate the development of those
    metrics.
        We are looking--and I am not in a position to say it is
    coming off or staying on, but obviously there is progress, as
    you have noted. Whether it stays on or off, I do not think--we
    should not forget how much progress and how far DOD and the
    other agencies have come over the last 5 years. It is truly
    noteworthy.
        We will continue to monitor the implementation of the tools
    that I mentioned in my opening, the tools that are going to be
    used or are being used for investigations and adjudications.
    Those tools are not fully implemented. There is some more
    information that we want to work with DOD and OPM regarding
    those tools' deployment as well as what is the process in place
    for continuous evaluation for the results of those tools.
        Senator Voinovich. Do you think they have the budget to get
    the job done? They both said that they thought they did, but
    how do you feel about that?
        Ms. Farrell. DOD does have a large budget. I think one of
    our concerns has been that as we are moving into more and more
    tightening of dollars, what is going to happen to that large
    budget, not only at DOD but at the implementation of some of
    these IT projects at the smaller agencies? We have heard
    concerns from agencies outside of DOD about how they will be
    able to keep pace with the technology and be responsive.
        We still believe that identifying long-term funding for all
    of the reform efforts would help, especially as the money
    becomes tighter and congressional decisionmakers such as
    yourself have to prioritize.
        Senator Voinovich. Thank you.
        Senator Akaka. Thank you very much, Senator Voinovich.
        Senator Coons, do you have any questions?
        Senator Coons. Thank you, Chairman Akaka.
        If I might, Ms. McGrath, you had spoken previously that the
    Department of Defense was working to achieve some cost savings
    through the streamlining of its processes. Have you, in fact,
    achieved some cost savings? I understand the necessary pressure
    for increased appropriations in order to implement some of
    these reform moves. But have you been able to realize cost
    savings in the adjudication process for security clearances?
        Ms. McGrath. Senator, thank you for the question. All
    along, this reform effort has taken an approach of one that
    puts policy, process, and information technology in the same
    conversation in addition to cost savings, performance
    management, and leadership engagement. And so all of those
    attributes must be present, I believe, in order to have an
    effective outcome. And I think what you have heard today is
    exactly that, and specific to the cost savings question, if you
    do not put the policy, process, and information technology as
    part of the answer, then I think you are falling short of the
    overall outcome.
        And so from specifically the electronic adjudications that
    the Department has implemented for clean secret cases, where
    you have a very clean case, it is coded that way, and the need
    for a human adjudicator to take a look at a very simple case
    was not necessary based upon business rules and data standards.
    We have taken that step using again, policy, process, and
    information technology. We processed last year over 73,000
    cases utilizing this e-adjudication capability. And, again,
    before we launched on the information technology, we ensured we
    had the appropriate standards and business rules, and we also
    did a 100-percent audit for 6 months to ensure that we had the
    process right. And so with that, we certainly have saved
    dollars but, more importantly, increased productivity in the
    use of our professional adjudicators, put their time and
    attention on those cases that needed it more than those.
        Mr. Zients. Might I chime in on cost? I think Beth is
    exactly right. We are getting better and better, both in terms
    of cost and quality. But I think if you really want to think
    about the cost here, it goes beyond the process to eliminating
    the backlog and going from 200 days down to 60 days, which
    allows us to get thousands, tens of thousands, hundreds of
    thousands of people more productive in protecting our national
    security interests.
        So I think we need to be cognizant of the cost, and we
    should be using information technology to drive costs down of
    the process and to improve the quality at the same time, which
    I think can be done. I think they are correlated. At the same
    time--and we at OMB will be very careful on this front--we do
    not want to be penny-wise and pound-foolish because the main
    productivity gain here and national security gain is by
    ensuring we never have a backlog again and by ensuring that we
    get it done within the 60 days.
        Senator Coons. That is right. Thank you for that point. So,
    in other words, if you are saying a look at total cost is not
    just a per transaction cost, but the total benefit to the
    public, to the national security----
        Mr. Zients. And I think the latter is much more weighted.
        Senator Coons. In many ways. What are some of the reasons--
    --
        Mr. Clapper. Senator--oh, excuse me. I was going to, if I
    might just add to that.
        Senator Coons. Certainly.
        Mr. Clapper. One of the underlying features of the whole
    security clearance reform process is actually to reduce the
    need for investigations as a standard uniform requirement and
    do it on a selective, focused basis. So that in itself, I
    think, will over time--as we implement that feature will accrue
    great savings.
        At the same time, we are all concerned about forthcoming
    budget pressures, and I think it is clear, at least as far as
    the intelligence community is concerned, that we are going to
    become smaller and we are going to have a lot less reliance on
    contractors. So the demand here, even though we are going to
    have less funding, so the demand for investigations and
    clearances is also going to go down proportionally.
        I can attest, having spent some time in industry for about
    6 years in one of my sojourns back out of the government, to
    the huge impact this has on industry in the amount of lost
    time, which for a company is money, in waiting for clearances.
    So in a sense, there are opportunity costs there that I think
    are huge by virtue of implementing, fully implementing this
    process.
        Senator Coons. Having had that experience previously in
    private industry, I agree with you.
        What are some of the reasons that even today there might
    still be a lack of documentation about adjudication in these
    cases, Ms. McGrath?
        Ms. McGrath. Although it seems as if an adjudication should
    be an adjudication, it is not. And every adjudicative decision,
    what we talk about, we tend to commingle a hiring adjudicative
    decision and also then a clearance adjudicative decision, and
    then the different levels of adjudications that take place. So
    what decisions are you making? What information do you need?
    And how trained are you and how much risk does a particular
    case have with it based upon the clearance level that you are
    granting? A secret case would have less risk than a top secret
    case, or a moderate-risk public trust position certainly is a
    lesser risk than a high-risk public trust position.
        So I go through that level of detail to make my point that
    adjudication is not exactly the same as you go through.
    Therefore, we rely on many things to ensure that the right
    adjudicative decision is made. At the end of the day, that is
    what we are looking for. We want appropriately trained
    adjudicators having the right information to make the right
    decision. And so depending on the case, that information may or
    may not be slightly different. If the national standards
    indicate that you must look at all, prior history of 10
    employment organizations and you get 9 of 10, technically that
    might be an incomplete investigative package. But if it is 9 of
    10 and you have a seasoned investigator, you can make that
    decision.
        So the risk really is, I am going to say, somewhat on a
    case-by-case basis, recognizing that we want to drive standards
    as much as we possibly can, ensure that the different types of
    investigations or clearances, be it on the hiring side or the
    clearance side, build upon each other so that the adjudicator
    has all the information he or she needs to make the appropriate
    adjudicative decision.
        Senator Coons. Thank you for your responses.
        Senator Akaka. Thank you very much for your questions,
    Senator Coons.
        Director Berry, I understand that OPM has been working on
    transforming its investigation IT systems known as EPIC. The E-
    Gov Office has ranked this investment as a 4 out of 10,
    indicating poor performance related to cost and schedule. Your
    Chief Information Officer (CIO) describes the project as in a
    ``mixed life cycle.''
        Would you please update us on the status of EPIC, the
    anticipated costs, and when could we expect to see a new IT
    infrastructure?
        Mr. Berry. Yes, Senator, if it is OK, we will get you the
    specifics on the costs for the record. What we have, sir, is a
    system that is not sort of one monolith. It is a system that
    has eight components to it, and we are working on all eight in
    terms of upgrading them.
        Right now, we have a game plan that will provide for the
    updating of them within our cost structure to the agencies,
    staying within budget, over the next 3 years. And so we feel we
    are on schedule for that, and we are doing--we are happy with
    where we are at the time, recognizing we need to continue on
    with this and will not be happy until all of them are where we
    need them to be.
        But just to give you an example, sir, of one of the most
    important components--and I think it is one of the ones that
    also goes to the efficiency Senator Coons was discussing. We
    have a central verification system that allows us to automate
    the file, essentially the investigative history, so the
    adjudicator can see exactly where we are and what pieces may be
    missing.
        Right now, there are over 258,000 active cases on this
    system that is linked in what has been, I think, a major step
    forward with DOD's Joint Personnel Adjudication System. And so
    there are potentially over 3,500 people around the world who
    are adjudicating these issues and need to call up a case to see
    and, make sure they can make an appropriate judgment. And right
    now, because we have been able to integrate those systems, they
    can now do that, and that has been one of the leaders in terms
    of increasing our time and accuracy.
        We continue to move forward on all of these. Each of these
    components--for example, one of the systems we talked about is
    electronic fingerprints. That is one of the eight sub-units, if
    you will, getting that data. Getting background checks from
    State and local law enforcement agencies has been one that has
    been a major step forward. That used to take weeks. It is now
    done in 3 to 4 days. And it is because we have been able to
    upgrade that system and integrate it with 50 different State
    systems across the country.
        So you can see, as each one of these components of those
    eight components--and we for the record can break down each of
    the eight for you. But I feel we are making good progress. It
    is bearing fruit. The fruit is being borne in the numbers that
    we are reaching. And we can do this within the budget that we
    discussed, that you mentioned, Senator Voinovich. And anytime
    that we have a savings, the savings is folded into the
    technology. And then our customer, DOD, obviously the largest,
    has agreed with us on that, put that money into those IT
    systems so that we can continue the forward progress. And so I
    think we are on the right track, Mr. Chairman.
        Senator Akaka. Thank you so much for that response.
        Ms. McGrath, DOD also has been in the process of replacing
    its current clearance IT system known as Joint Personnel
    Adjudication System (JPAS) with a new system knows as the
    Defense Information System for Security.
        What is the status of this system, its funding, and what
    capabilities will DOD have after it is implemented?
        Ms. McGrath. JPAS is currently scheduled for sunset or
    retirement in mid-2013. That includes a 6-month parallel
    processing if we need it. So our plan is to deploy the Defense
    Information System for Security in total by the end of 2012,
    and we will run JPAS in parallel for 6 months. So we will cut
    over essentially at the end of 2012. It, too, is a family of
    systems. I do not think it has quite eight parts to it, but it
    has the access to the information, documentation of
    adjudicative decisions that have been made. We are including
    the Case Adjudication Tracking System (CATS), in the family of
    systems so that you have somewhat of an end-to-end process
    within the DISS program. We are leveraging the information
    technology, deploying it across the Department, so from a low
    side, an unclassified perspective, we have singled in on a
    single solution for all of our central adjudication facilities,
    both in IT and then the policy and process, so that it acts as
    if it is a single unit.
        Senator Akaka. Thank you.
        Director Zients, all of OMB's reform team partners--Office
    of the Director of National Intelligence (ODNI), OPM, and DOD--
    are updating various components of their respective clearance
    IT systems. The 2004 Intelligence Reform Act called for a
    single clearance verification database which, as I understand
    it, has not been fully implemented. I would like to hear from
    you, as head of the PAC and the Director for Management at OMB,
    what is being done to ensure that IT investments are
    coordinated across the clearance community and that systems
    work together.
        Mr. Zients. On the actual clearinghouse, or having one
    database, I think we have effectively integrated, as Beth and
    John talked about, their major databases, and that coupled with
    scattered castles is the IC community, the intelligence
    community, has accomplished the same goal or outcome that we
    were looking for in IRTPA.
        So I think as to a single clearinghouse, while we have not
    merged all the databases by putting in front-end search
    capabilities, we have achieved in a very cost-effective way
    while protecting national security interests the same outcome
    that we were looking for.
        Overall, I think that IT here in the security clearance
    process, as is true across government, offers the promise to
    increase efficiency, timeliness in this case, and quality all
    at once if indeed we manage these projects well. So it is a
    major push at OMB working with the E-Gov Office and our Federal
    CIO, Vivek Kundra, to make sure that projects are appropriately
    scoped, that we are using developed software and avoiding
    proprietary development where appropriate, and holding these
    projects to clear milestones and deliverables along the way.
    Too often these projects historically have had years before any
    deliverable was planned or executed upon. We are bringing all
    that forward. That basic philosophy we are applying, as you
    heard in Beth's and John's statements, to the IT work that we
    are doing for security clearance, which I think is going well,
    holds a lot of promise for further efficiencies and quality
    improvements. And as I stated earlier, we are going to take
    what is working at the major agencies and transfer that across
    government.
        Ms. McGrath. Sir, if I might add, through the oversight of
    the Performance Accountability Council, we have asked each of
    the Federal agencies, in addition to the ones that are here, to
    bring forward their implementation plans for clearance reform
    and to identify budgets that are required for implementation,
    information technology, and to make available, as I previously
    mentioned, pre-existing or existing information technology like
    we are deploying at the Department.
        The Department of Energy has taken us up on that offer to
    date, and there are others that are interested, so that we are
    not creating duplicative information technology capability
    across the Federal space; rather, we are leveraging existing
    capability. And it is through the oversight of the PAC that we
    are achieving that.
        Senator Akaka. Mr. Berry.
        Mr. Berry. Mr. Chairman, I would just add that I think what
    was also an item of foresight of the Committee when you created
    this program was conferring on us the revolving fund authority
    that allows us to essentially operate very much like a business
    where we charge the customer for the product and have to meet
    schedules, meet budgets, etc. And that revolving fund authority
    is why, Senator, I think, when we answer your question of do we
    have the resources necessary to do the IT upgrade, at least
    from our component, our piece of this, we do because----
        Senator Voinovich. You charge them.
        Mr. Berry. You have given us the ability to recoup that.
    But as I say, we have never exceeded the cost of inflation. So
    we are trying to be careful with that authority that you allow
    us working with our customer.
        Senator Akaka. Director Berry, as the SF-86 form used for
    applying for a clearance was recently updated. Director Zients
    said in his statement that the electronic form of the new SF-86
    will be released soon.
        What new capabilities will this new electronic form have
    over the current e-QIP system? And why is the new electronic
    form only now being deployed?
        Mr. Berry. Sir, we have had the form. It has been deployed.
    What we are doing is updating it with the changes that we have
    made to the form that the team has worked out. And we are on
    schedule to have those changes online by the end of the year,
    in December. And so we are on schedule and on budget with that
    update.
        So it is really a refresher, sir, of an electronic form,
    but we have made changes to it regarding--through the team
    here.
        Ms. McGrath. If I could add, the most significant
    enhancement--there are two--to the Standard Form 86, the form
    itself was approved back in the March time frame, and the
    deployment that Director Berry is mentioning is the deployment
    of that form through the e-QIP solution, which is on schedule
    for implementation in December of this year.
        The two main attributes of this particular form are the
    branching questions. If you will recall, back in the 2007 time
    frame when we looked at the end-to-end process, part of what
    would make the process better than what we do today is
    collecting more information earlier in the process. And the
    applicant is the most productive source of information, so
    asking those questions as part of the application process was
    felt by everybody that was the best way to initially achieve
    the collection of that information. So we revised the form to
    include branching questions, much like Quicken does, if you are
    familiar with that software tool. If you answer one way for
    something, it takes you down a series of questions, and that is
    what the electronic form would do.
        The other piece is we revised the consent piece. If you
    will also recall, part of the reform process looks and asks for
    at the end of the process more of a continuous evaluation to
    manage the cleared population. In order to do that, we had to
    change the consent form, the existing consent form on the SF-
    86.
        So those are the two main changes that are being made, and,
    again, the information technology, the e-QIP upgrade is on
    schedule for deployment in December.
        Mr. Berry. And, Mr. Chairman, as you can imagine, what Beth
    just described takes a lot of programming, and there are over
    100--there are hundreds of screens through this branching that
    have to be developed and programmed to implement, which is why
    it has taken from March until the end of this year to get this
    done. And we have to test it, obviously, to make sure it works
    and is rigorous. But right now I am told we are on schedule
    with it, and it is looking good.
        Senator Akaka. Thank you very much. Senator Voinovich.
        Senator Voinovich. Thank you, Mr. Chairman.
        I was just thinking about all of this information that you
    are able to get today, and for a long time, the Department of
    Homeland Security (DHS) has been trying to get like four areas
    of information. We were trying to get the States to have better
    driver's licenses to get information, and one of the reasons
    why we have not been able to really crack down on them is
    because the information that they need is not available to
    them. And I was just thinking, through what you are all doing
    here, its applicability to perhaps dealing with their problem
    so that we can do a better job on the State level in terms of
    these licenses that are being granted to individuals. That is
    the big-picture stuff for your shop.
        The other thing is there is reciprocity. It is still a
    problem. Ms. Farrell, do you think we are making--what is the
    stumbling block there? Because I still get complaints from
    folks about the reciprocity, and that is a big deal because
    that--if somebody moves from one agency to another agency and
    they just sit there and cannot do things until they--even in my
    own office, people have come to work for me; they have
    clearances, and they have to go through the whole thing all
    over again in order to come into a meeting with me.
        Ms. Farrell. Senator, I believe everyone has a story, as
    you are conveying, about a neighbor or a friend or a family
    member that has had a security clearance but for some reason it
    does not transfer when they go to another agency. We have noted
    that perhaps the quality of the investigations or adjudications
    could be an underlying cause for reciprocity when it not
    working the way the law intended.
        We do have work ongoing that is looking at reciprocity.
    That work should be completed by the end of this year. Prior to
    that work, there had not been a GAO study or another study that
    we are familiar with that actually gave data on is reciprocity
    a problem or not. What is the extent to which it is a problem?
        Senator Voinovich. The thing is that part of the problem
    that we have had is that some agencies just refuse to do it. In
    other words, they say, ``Your background stuff is not good
    enough for us.'' And I think, General Clapper, or somebody
    needs to just say to them, ``Look, we have decided that if they
    have this kind of clearance, it ought to be acceptable in your
    shop.''
        Ms. Farrell. True, and I think my colleagues will elaborate
    that sometimes agencies are confusing what is needed for
    suitability clearance with the personnel security clearance,
    and that raises another set of issues. But still, whether we
    are talking about suitability or clearances, the granting of a
    clearance to an individual we do not really know at this time
    the extent to which reciprocity is an issue or if the agencies
    are actually refusing. We have work that is ongoing, and we
    have had conversations with agencies outside of DOD about their
    views, and I will say that their intent is to honor the
    reciprocity.
        Mr. Clapper. Senator, as a security executive agent, I can
    say that we have issued reciprocity rules, and, of course, the
    reporting we get back from security managers is that they
    support and follow them. And, of course, this is an area that
    we will always need to pursue improvements to. And as you have
    heard and you have experienced yourself, reciprocity is
    something that lends itself to anecdotes. And so one of the
    things we want to try to do here is to quantify some of these
    anecdotes, and one of the things we are thinking about doing is
    establishing a 1-800 line sort of thing so if people have
    reciprocity complaints, we will have a way to gather some
    actual empirical data on this and just see what the extent of
    the problem is.
        I would also point out that within the intelligence
    community oftentimes there are degrees of access, so for
    special access programs, if someone's initial background
    investigation is, say, 4 years old and under the current system
    it is every 5, a Special Emphasis Program (SEP) program manager
    is authorized--and this pertains both in DOD and the rest of
    the IC--to do an additional check, to do a quick bring-up on
    that initial investigation. Now, hopefully, when we get into
    the continuous evaluation program, some of that will be
    attenuated. But this, again, I would say is a case where it is
    an area that lends itself to anecdotes, and we want to try to
    quantify those anecdotes to see what the actual extent of the
    problem is.
        Senator Voinovich. I would like to say, again, thank you
    very, very much for the good work that you have done. It has
    been an inspiration to me to see the progress that you have
    made and, again, the teamwork that is obvious here at the
    table. I would also like the people that are sitting behind you
    to--I want to let you know how much I appreciate the work that
    you all do. At this stage in my life, I am looking around
    about, how do you get where you are and what can you
    accomplish. And I have found that all I am is a reflection of
    some wonderful people around me that have made a difference for
    me. And so I want to say I know they are sitting there at the
    table, but I know darn well that what they have been able to do
    would not have been able to happen without the great teamwork
    that you have and the support that all of you give them. And I
    just want you to know how grateful I am to you for what you are
    doing
        Senator Akaka, again, thank you for this hearing, and, Ms.
    Farrell, I hope I am back next year. I will even come back from
    Florida, where I expect to be. [Laughter.]
        Senator Voinovich. Thank you.
        Senator Akaka. Thank you very much, Senator Voinovich.
        I want to thank all of our witnesses for appearing today.
    As we have heard and as we have seen, great, great progress has
    been made on this issue, and I want to thank the panelists
    here. You have certainly been great leaders in this. Statistics
    tell us that tremendous progress has been made already through
    your efforts, and I really want to thank you for doing that.
    And this Subcommittee will continue its strong oversight in the
    coming Congress.
        Again, I want to thank my very good brother and friend
    Senator Voinovich for his attention and leadership on this
    issue. In 2005, he chaired the first in this series of
    hearings. As you can see, this continued when I became
    Chairman, and we have worked so well together in a bipartisan
    manner, and I would say accomplished so much doing it, and have
    enjoyed it as well. And I look upon him as a champion in human
    capital, and this will, of course, be part of the legacy of his
    life. And I hope your successor will bring the same dedication
    and energy to all of the high-risk areas and improving
    government management.
        Senator Voinovich. He would be a good one, if we can
    convince him. He was Director of the Office of Budget and
    Management, so he has a pretty good idea of how the system
    works.
        Senator Akaka. Yes. Well, this has been a great experience
    for me and for all of us and for the U.S. Senate as well. And I
    again want to say thank you to the Committee Members, this
    Subcommittee, and I want to say thanks to our staff. Our staff
    has done a tremendous job here on either side of the aisle, and
    I want to say thank you so much. We have made great progress as
    a Subcommittee.
        The record of the hearing will be open for 2 weeks for
    additional statements or questions other Members may have
    pertaining to the hearing.
        This hearing is adjourned.
        [Whereupon, at 12:11 p.m., the Subcommittee was adjourned.]

                                A P P E N D I X

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