[Senate Hearing 113-316]
[From the U.S. Government Publishing Office]







                                                        S. Hrg. 113-316

  SAFEGUARDING OUR NATION'S SECRETS: EXAMINING THE SECURITY CLEARANCE 
                                PROCESS

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

                             JOINT HEARING

                               before the

                   SUBCOMMITTEE ON THE EFFICIENCY AND
      EFFECTIVENESS OF FEDERAL PROGRAMS AND THE FEDERAL WORKFORCE

                                  and

                     SUBCOMMITTEE ON FINANCIAL AND
                         CONTRACTING OVERSIGHT

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 20, 2013

                               __________

                   Available via http://www.fdsys.gov

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




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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                  THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan                 TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin             KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota

                   Richard J. Kessler, Staff Director
               Keith B. Ashdown, Minority Staff Director
                     Laura W. Kilbride, Chief Clerk
                   Lauren M. Corcoran, Hearing Clerk


 SUBCOMMITTEE ON THE EFFICIENCY AND EFFECTIVENESS OF FEDERAL PROGRAMS 
                       AND THE FEDERAL WORKFORCE

                     JON TESTER, Montana, Chairman
MARK L. PRYOR, Arkansas              ROB PORTMAN, Ohio
CLAIRE McCASKILL, Missouri           RON JOHNSON, Wisconsin
MARK BEGICH, Alaska                  RAND PAUL, Kentucky
TAMMY BALDWIN, Wisconsin             MICHAEL B. ENZI, Wyoming
HEIDI HEITKAMP, North Dakota
                      Tony McClain, Staff Director
                 Brent Bombach, Minority Staff Director
                       Kelsey Stroud, Chief Clerk
        .........................................................

          SUBCOMMITTEE ON FINANCIAL AND CONTRACTING OVERSIGHT

                  CLAIRE McCASKILL, Missouri, Chairman
CARL LEVIN, Michigan                 RON JOHNSON, Wisconsin
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          MICHAEL B. ENZI, Wyoming
MARK BEGICH, Alaska                  KELLY AYOTTE, New Hampshire
TAMMY BALDWIN, Wisconsin
                     Margaret Daum, Staff Director
                 Rachel Weaver, Minority Staff Director
                       Kelsey Stroud, Chief Clerk
                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Tester...............................................     1
    Senator McCaskill............................................     2
    Senator Portman..............................................     4
    Senator Johnson..............................................     5

                               WITNESSES
                        Thursday, June 20, 2013

Hon. Patrick E. McFarland, Inspector General, U.S. Office of 
  Personnel Management; accompanied by Michelle B. Schmitz, 
  Assistant Inspector General for Investigations, U.S. Office of 
  Personnel Management...........................................     7
Merton W. Miller, Associate Director of Investigations, Federal 
  Investigative Services, U.S. Office of Personnel Management....     8
Stephen F. Lewis, Deputy Director, Security Directorate, Office 
  of the Under Secretary of Defense (Intelligence), U.S. 
  Department of Defense; accompanied by Stanley L. Sims, 
  Director, Defense Security Service, U.S. Department of Defense.    10
Brenda S. Farrell, Director, Defense Capabilities and Management, 
  U.S. Government Accountability Office..........................    11

                     Alphabetical List of Witnesses

Farrell, Brenda S.:
    Testimony....................................................    11
    Prepared statement...........................................    45
Lewis, Stephen F.:
    Testimony....................................................    10
    Prepared statement...........................................    41
McFarland, Hon. Patrick E.:
    Testimony....................................................     7
    Prepared statement...........................................    31
Miller, Merton W.:
    Testimony....................................................     8

                                APPENDIX

Article submitted by Senator Johnson.............................    57
OPM's White Paper submitted for the Record.......................    59
Questions and responses for the Record from:
    Mr. Miller...................................................    69
    Mr. Lewis....................................................    91
    Ms. Farrell..................................................    93

 
                   SAFEGUARDING OUR NATION'S SECRETS: 
                         EXAMINING THE SECURITY 
                           CLEARANCE PROCESS 

                              ----------                              


                        THURSDAY, JUNE 20, 2013

                               U.S. Senate,        
        Subcommittee on the Efficiency and Effectiveness of
          Federal Programs and the Federal Workforce,      
                          and Subcommittee on Financial and
                             and Contracting Oversight,    
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittees met, pursuant to notice, at 2:30 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Jon Tester, 
Chairman of the Subcommittee, presiding.
    Present: Senators Tester, McCaskill, Portman, and Johnson.

              OPENING STATEMENT OF SENATOR TESTER

    Senator Tester. I call to order this joint hearing of the 
Subcommittee on Efficiency and Effectiveness of Federal 
Programs and the Federal Workforce and the Subcommittee on 
Financial and Contracting Oversight. I want to say thank you to 
Senator Johnson for being here. Senator McCaskill will be here 
shortly as well. I am sure Senator Portman will be, too.
    This afternoon's hearing is titled, ``Safeguarding Our 
Nation's Secrets: Examining the Security Clearance Process'' I 
want to thank my colleagues who I mentioned previously as well 
as their staffs for helping us organize this hearing, and I 
want to thank our witnesses for being here today. Thank you for 
your time.
    Recent events have forced us all to take a closer look at 
the programs carried out by this government in the name of 
national security. As we move forward, it is critical for us to 
examine the scope of these programs to determine whether they 
properly balance our security and our essential liberties. But 
it is also incumbent upon us to raise critical questions about 
how our government is vetting the individuals, whether they are 
Federal employees or contractors, who have access to our 
Nation's most sensitive data.
    Last week, I asked General Keith Alexander, the Director of 
the National Security Agency (NSA), a pretty straight-up 
question: After the outcry of WikiLeaks, after the Presidential 
Executive Order (EO) calling for improved classified network 
security, and after spending tens if not hundreds of billions 
of taxpayer dollars to keep outsiders from accessing our 
Nation's secrets, how in the world does a contractor, who had 
been on the job for less than 3 months, get his hands on 
information detailing a highly classified government program 
that he subsequently shared with foreign media outlets?
    The long answer is one that we will ultimately require a 
great deal of soul searching by the folks in this room and 
throughout our government. But the short answer is that, in 
terms of securing classified information, we don't just have an 
external problem; we have an internal one.
    Today there are nearly 5 million individuals inside and 
outside of our government who have been granted security 
clearances and access to our Nation's most sensitive data; 1.4 
million hold a top secret security clearance. Given the 
increasing amount of classified information produced and 
maintained by our government and the increasing number of folks 
with access to that information, we have a real problem on our 
hands if we cannot get this right. And because of the national 
security implications involved, there is simply no margin for 
error. None.
    Today's joint hearing builds upon the previous work of this 
Subcommittee as well as the work of our colleagues on the 
Senate Armed Services Committee and the Senate Select Committee 
on Intelligence. We will examine the efficiency and 
effectiveness of the security clearance process, and we will 
discuss the management and oversight of the Federal employees 
and contractors tasked with carrying out investigations for the 
granting of clearances.
    I hope for and expect an open and frank discussion with our 
witnesses today about the particular roles they play in the 
security clearance process. We need to know what we are doing 
right, and we need to know what we can do better. A lot of 
progress has been made in recent years, but we certainly still 
have a ways to go.
    I would now like to turn it over to my good friend and 
Chairman of the Financial and Contracting Oversight Committee, 
Senator Claire McCaskill, for her opening statement. Welcome, 
Claire.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. Thank you very much. Thank you, Senator 
Tester, and I hope this is the first of many joint hearings we 
have with Senator Portman and Senator Johnson. I think all four 
of us have demonstrated a desire to get after various problems 
that are sometimes embedded in our government without adequate 
oversight, and I am very happy to work with all three of you in 
this regard today.
    Earlier this month, a contractor working for NSA, Edward 
Snowden, released classified information regarding the NSA 
program. Mr. Snowden had access to this information because he 
had received a security clearance. That security clearance was 
issued following an investigation of Mr. Snowden's background.
    Over 90 percent of the background investigations for both 
government employees and contractors are conducted by the 
Office of Personnel Management (OPM), including all background 
investigations for members of the military and Defense 
Department, civilian and contractors.
    In preparation for today's hearing, we received information 
regarding how the government plans, conducts, oversees, and 
pays for background investigations. This information portrays a 
government agency where there is fraud, limited accountability, 
and no respect for taxpayer dollars. Conducting and managing 
background investigations costs the Federal Government over $1 
billion per year.
    The Office of Personnel Management's Federal Investigative 
Services Division uses a Revolving Fund structure in which 
Federal agencies pay OPM for the different investigations each 
agency needs, both for its employees and for its contractors. 
As a former Missouri State auditor, I was shocked to learn that 
this fund has never been audited. The Inspector General (IG) 
will testify that he has tried several times, but the agency 
simply does not have or keep the records that would allow him 
to do an audit.
    We also learned that at least 18 investigators have been 
convicted of falsifying investigations since 2007. These 
convictions called into question hundreds of top-secret-level 
clearances as well as hundreds of lower-level clearances. There 
are more than 40 other active and pending investigations into 
fabricated investigations, and it is possible that there are 
far more.
    We also learned that approximately 75 percent of all the 
government's investigations are conducted by contractors, and 
just one contractor, U.S. Investigations Services (USIS), 
conducts 65 percent of those investigations.
    Now, USIS also has a contract to provide support to the 
Office of Personnel Management in managing and overseeing 
investigations, work which appears to put USIS in the position 
of being a contractor to do the investigations and then to be 
the contractor overseeing their own employees doing the 
investigations.
    For its work for the Office of Personnel Management, USIS 
received more than $200 million last year. We have received 
information that USIS is currently under criminal investigation 
by the Office of Personnel Management Inspector General. We 
have also received information that this investigation is 
related to USIS' systematic failure to adequately conduct 
investigations under its contract.
    We have also learned that USIS conducted a background 
investigation for Edward Snowden in 2011, part of the time 
period that is under review.
    We are limited in what we can say about this investigation 
because, clearly, it is ongoing. But it is a reminder that 
background investigations have real consequences for our 
national security.
    Federal agencies like the Department of Defense (DOD) rely 
on these background investigations to make assessments of 
whether people should be trusted with our Nation's most 
sensitive information. This hearing will attempt to answer this 
important question: Are we handling background investigations 
in our government effectively and in a way that is deserving of 
our trust?
    I thank the witnesses for being here, and I look forward to 
their testimony.
    Senator Tester. Thank you, Senator McCaskill.
    I will turn it over to Senator Portman, the Ranking Member 
of the Federal Programs and Federal Workforce Subcommittee, for 
his opening statement. Welcome.

              OPENING STATEMENT OF SENATOR PORTMAN

    Senator Portman. Thank you, Mr. Chairman, and I thank my 
Chair from the last Congress who is here with us and the 
Ranking Member, my colleague from Wisconsin.
    This is timely. It is a really important topic and 
obviously timely given the Snowden disclosures and the 
inadequacy of the system that they demonstrated.
    The security clearance process, performed well, is critical 
because it protects our Nation's most valuable information 
while ensuring that we have the necessary personnel to handle 
and safeguard it.
    Done poorly, it can be incredibly damaging. Damaging leaks 
can hamstring our agencies' abilities to fulfill their 
missions, as we have seen in cases over the last couple years, 
harming our allies and our ability to build alliances around 
the world.
    This Committee has had a long history of looking into this 
issue, oversight of the processes that now manage almost 5 
million government and contracted personnel who are authorized 
to have some form of security clearance--5 million people.
    Given the many challenges in the past, it is only 
appropriate that followup today to see how these agencies are 
progressing and, again, in light of what just happened, to see 
why it is not working as well as it should be.
    For 6 years, the Government Accountability Office (GAO) had 
the Department of Defense Personnel Security Program on its 
high-risk list. It is now off the high-risk list. It got off in 
2011. But there is a long list of concerns and recommendations 
for the Department of Defense, for OPM, and for other agencies 
involved in the security clearance process. These include 
incomplete and poorly synchronized fielding of electronic case 
management systems and other tools across government, 
shortcomings in metrics for reciprocity, a sound requirements 
process to determine positions that require a clearance, and 
most troubling, I think, is the pressure to meet timeliness 
metrics impacting the quality of investigations.
    Additionally, our Inspectors General, have also identified 
issues of concern from the financial oversight of OPM's $2 
billion annual Revolving Fund, numerous cases of fraudulent 
investigations conducted by government and contractor 
investigators, and inadequate steps taken to prevent the risks 
posed by these negligent investigators from continuing.
    We must have adequate, effective, efficient, timely 
completion of background investigations. While attention has 
been paid in recent years to timeliness, there remain many 
questions as to the effectiveness and efficiency of this 
process.
    I look forward to hearing a progress report, Mr. Chairman, 
on meeting these recommendations that were provided and the 
actions that have been taken to avoid further mismanagement. 
Thank you to the witnesses for being here, and I thank the two 
Subcommittees and the Chairs for bringing this issue before us.
    Senator Tester. Thank you, Senator Portman.
    Now we will turn it over to Senator Johnson, who is Ranking 
Member of the Financial and Contracting Oversight Subcommittee. 
Welcome, Senator Johnson.

              OPENING STATEMENT OF SENATOR JOHNSON

    Senator Johnson. Thank you, Mr. Chairman. I would also like 
to thank the witnesses for appearing. I did not count how many 
times I heard the word ``process,'' but that is exactly what 
this is all about. How do you develop a process that actually 
works? Coming from a manufacturing background in business, 
there are all kinds of processes that we have standardized. For 
example, International Organization for Standardization (ISO) 
certification works amazingly well. We all adhere to it. It is 
standardized. And there are things like surveillance audits on 
an ongoing basis.
    As I was reviewing the information prior to this hearing, 
that is what kept jumping into my mind. If we could apply these 
standardized type of processes across the government, I think 
we would be in a far better place.
    Probably the best piece of preparation material I read was 
an article written on February 28, 2013 by John Hamre,\1\ a 
former Deputy Secretary of Defense. The article describes how 
this gentleman went through a clearance process. He had already 
filed his electronic version of an SF86. But it was somewhere 
on a government computer and could not be retrieved. He had to 
fill it out again, a 4-hour process. His subsequent review was 
a government employee or a contract employee going through 
question by question. He contrasts that with his experience in 
the private sector, answering five questions which had a 99-
percent reveal rate in terms of whether that person was 
committing fraud.
---------------------------------------------------------------------------
    \1\ Article referenced by Senator Johnson appears in the Appendix 
on page 57.
---------------------------------------------------------------------------
    So, again, in the private sector, we can get to this, we 
can get to a process that works, and my question is: Why can't 
we get that in the government? Hopefully what this hearing is 
about is coming up with that standardized process that actually 
works because, I agree with all three of you, this is critical 
if we want to protect our national secrets.
    Thank you, Mr. Chairman.
    Senator Tester. Thank you, Senator Johnson.
    Now for our witnesses. I would like to welcome all of you 
here today. I would like to point out that we extended an 
invite to the Office of the Director of National Intelligence 
(ODNI). They were unable to provide us with a witness. I know 
that they are under huge demands right now, and I acknowledge 
that the notice was short, but hopefully it can happen next 
time, because I am sure there will be a next time.
    However, we are fortunate to have assembled a great panel 
this afternoon. We will start with Patrick McFarland, who is 
the Inspector General of the United States Office of Personnel 
Management. He has served in this capacity since 1990, making 
him the longest tenured Federal Inspector General. As Inspector 
General of OPM, he heads up the audit and investigative 
programs seeking to identify fraud, waste, abuse, and 
mismanagement in programs administered by OPM.
    Mr. McFarland, I understand you were a police officer in 
St. Louis at one time. Hopefully your path did not cross 
Senator McCaskill's.
    Senator McCaskill. Only if we were combining up to put a 
criminal in jail. [Laughter.]
    Senator Tester. OK.
    Mr. McFarland. That is correct.
    Senator Tester. Very good. Mr. McFarland is also 
accompanied by Michelle Schmitz, OPM's Assistant Inspector 
General for Investigations. Welcome to you both.
    Merton Miller is Associate Director of Investigations for 
OPM's Federal Investigative Services (FIS), the Federal 
Government's larger provider of background investigations and 
services. Mr. Miller is responsible for FIS operations, policy 
development, and contractor oversight of OPM's investigations 
program. Before joining OPM, Mr. Miller served a long and 
distinguished career in the United States Air Force. As a side 
note, if you are looking to fly a C-130 again, please come to 
Montana. We are going to be looking for pilots.
    And then we have Stephen Lewis, who is Deputy Director for 
Personnel, Industrial, and Physical Security Policy in the 
Office of the Under Secretary of Defense for Intelligence. 
Welcome. That office exercises planning policy and strategic 
oversight over Defense Department intelligence, 
counterintelligence, and security matters, including the 
security clearance process. Today Mr. Lewis is accompanied by 
Stanley Sims, Director of the Defense Security Service (DSS) at 
the Defense Department. Welcome to both you, Mr. Lewis, and Mr. 
Sims to the hearing today. Thank you for your service.
    And then last, but certainly not least, we have Brenda 
Farrell, who is the Director of Defense Capabilities and 
Management at the Government Accountability Office. In that 
capacity she is responsible for overseeing the military and DOD 
civilian personnel issues, including governmentwide personnel 
security clearance issues. She has worked extensively on a 
number of national security issues since she began her career 
at the GAO in 1981. Welcome, Brenda.
    Thank you all for being here today.
    It is the custom in this Committee to swear in the 
witnesses who appear before it, so if you do not mind, I would 
ask you all to stand, including Mr. Sims and Ms. Schmitz, and 
repeat after me. Raise your right hand. Do you swear that the 
testimony you will give before this Subcommittee will be the 
truth, the whole truth, and nothing but the truth, so help you, 
God?
    Mr. McFarland. I do.
    Ms. Schmitz. I do.
    Mr. Miller. I do.
    Mr. Lewis. I do.
    Mr. Sims. I do.
    Ms. Farrell. I do.
    Senator Tester. Let the record reflect they all answered in 
the affirmative.
    Now, each one of you are going to have 5 minutes for your 
oral statements. Your entire written testimony will be a part 
of the record, and you can add more to that complete written 
testimony up until July 8.
    We will start with you, Mr. McFarland, and if you can keep 
it to 5 minutes, we would sure appreciate it. Patrick.

   TESTIMONY OF THE HON. PATRICK E. MCFARLAND,\1\ INSPECTOR 
 GENERAL, U.S. OFFICE OF PERSONNEL MANAGEMENT; ACCOMPANIED BY 
     MICHELLE B. SCHMITZ, ASSISTANT INSPECTOR GENERAL FOR 
      INVESTIGATIONS, U.S. OFFICE OF PERSONNEL MANAGEMENT

    Mr. McFarland. Chairmen Tester and McCaskill, Ranking 
Members Portman and Johnson, and other distinguished Members of 
the Subcommittees, good afternoon. My name is Patrick 
McFarland, and I am the Inspector General at the U.S. Office of 
Personnel Management. Thank you for inviting me here today to 
speak about our oversight work related to OPM's Federal 
Investigative Services Program Office.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. McFarland appears in the Appendix 
on page 31.
---------------------------------------------------------------------------
    In 1978, the U.S. Congress took a bold step in passing the 
Inspector General Act--bold in that it was an experiment born 
out of a multitude of governmentwide mistakes, serious 
problems, and just plain wrongdoing. In the face of much 
opposition from entrenched government bureaucracy, it was, I 
believe, a Congress' pledge to the American citizen that their 
expectations of good government and their tax money would be 
protected.
    The Inspector General concept is transparency at its core 
functionality. It must be transparency without any shades of 
gray. Indeed, it is with this understanding that each Inspector 
General's organization honors the independence required of them 
free of any political influence, which Congress mandated.
    Today you have asked me here because of concerns about the 
lack of transparency in an organization that plays an integral 
part in protecting our national security and the integrity of 
the government's workforce.
    OPM Federal Investigative Services conducts approximately 
90 percent of these background investigations for the Federal 
Government. These investigations are used by agencies to 
determine whether to grant a Federal employee or contractor a 
security clearance.
    Due to recent events, a key discussion point in recent 
public debates has become: Who should we trust with sensitive 
information related to national security? The very first step 
the government takes in answering this question is to conduct 
background investigations.
    I am here to inform you that there is an alarmingly 
insufficient level of oversight of the Federal Investigative 
Services program. The lack of independent verification of the 
organization that conducts these important background 
investigations is a clear threat to national security. If a 
background investigation is not conducted properly, all other 
steps taken when issuing a security clearance are called into 
question.
    Every day I have the privilege of leading an organization 
of people dedicated to a work ethic that embodies our 
organizational pledge to know our business and responsibilities 
better than anyone else, and at the close of the day to be able 
to say that we did what was right for the American taxpayer.
    This having been said, what is most noteworthy for your 
Subcommittee's understanding is that our oversight of OPM's 
Federal Investigative Services program has been thwarted by 
virtue of an agency funding decision.
    Under current law, the Federal Investigative Services must 
price its products and services in a manner that allows it to 
recover its actual costs of administering the program. OPM uses 
a Revolving Fund as the financing vehicle for these activities. 
For several years, OPM has taken the position that oversight is 
not considered to be an administrative cost, and, thus, our 
office has been denied access to the Revolving Fund. I do not 
think that anyone here would argue that oversight, financial 
audits, performance audits, and investigative activity are not 
a crucial part of the Administration of any government program.
    To compensate, we have used the $3 million we have for non-
trust fund work to maintain a modicum of oversight viability in 
the Revolving Fund programs, with special emphasis on the 
Federal Investigative Services program because of the national 
security implications.
    Please be assured even with bare resources that, because of 
recent developments discussed in my written testimony, we feel 
compelled to engage our office in a joint initiative between 
the Audit and Investigation Divisions to thoroughly oversee the 
policies and procedures of the quality review practices of the 
Federal Investigative Services program.
    I am pleased to say that with the support of former 
Director John Berry, the Administration has included a 
legislative proposal in the President's Fiscal Year (FY) 2014 
budget that would grant us access to the Revolving Fund.
    I close by also requesting your Subcommittee's support for 
the proposal so that our office will have the resources to 
finally do the job with which we have been entrusted.
    Thank you.
    Senator Tester. Thank you, Patrick.
    We will go with you, Merton.

     TESTIMONY OF MERTON W. MILLER, ASSOCIATE DIRECTOR OF 
INVESTIGATIONS, FEDERAL INVESTIGATIVE SERVICES, U.S. OFFICE OF 
                      PERSONNEL MANAGEMENT

    Mr. Miller. Thank you, Chairman.
    Chairmen Tester and McCaskill, Ranking Members Portman and 
Johnson, thank you very much for the opportunity to testify 
today regarding OPM's role in the Federal Government's secret 
clearance process.
    In response to 2004 legislation authorizing the transfer of 
DOD's personnel security investigations function to OPM and the 
enactment of the Intelligence Reform and Terrorism Prevention 
Act, OPM has continued to enhance the background investigation 
process by improving timeliness, quality, and efficiency. Our 
successes are due in large part to our partnership with the 
Office of Management and Budget (OMB), ODNI, Department of 
Defense, and other agencies that require investigations for 
security clearances. We have no backlogs, are meeting 
timeliness mandates, and have increased automation.
    OPM's Federal Investigative Services conducts background 
investigations to support Executive Branch hiring, security 
clearances, credentialing determinations, among others. The 
processes supporting these investigative activities are highly 
integrated, automated, consistently measured against timeliness 
and quality performance standards for Federal hiring and 
security clearance process reforms.
    Performance data for these background investigation 
products are largely reported to ODNI, Executive Branch 
agencies, OMB, and Congress. These products and services are 
then utilized as a basis for making security clearance 
suitability and fitness and credentialing determinations by 
agencies.
    Since absorbing DOD's background investigative program in 
fiscal year 2005, DOD personnel security clearances have been 
removed from the Government Accounting Office's high-risk list. 
And OPM has conducted over 95 percent of the background 
investigations required by the Federal Government.
    OPM manages, oversees the Federal employees and contractors 
responsible for conducting investigations. Now, pursuant to 
Executive Order 13467, the ODNI, as a security executive agent, 
is responsible for directing the oversight of investigations 
and determinations and for developing uniform and consistent 
policies and procedures to ensure the effective, efficient, and 
timely completion of investigations and adjudications relating 
to the determinations of eligibility for access to classified 
information or eligibility to hold a sensitive position. And 
actual clearance decisions themselves are adjudications that 
are made by the sponsoring agencies. Agency heads apply uniform 
adjudicative guidelines which were approved by President 
Clinton and subsequently amended in 2005 by President Bush.
    Conducting background investigations is one of OPM's core 
missions. FIS provides background investigations for over 100 
Federal agencies with approximately 10,000 separate submitting 
offices worldwide. Currently we have more than 2,500 Federal 
employees and 6,700 contractors that form a nationwide network 
of field investigators, support staff, as well as a cadre of 
Federal agents that we have working abroad.
    OPM manages to balance nationwide Federal and contract 
workforce to provide a flexible, responsive, and cost-effective 
investigative program. Our core Federal investigators present 
us the opportunity to manage highly sensitive and inherently 
governmental investigation requirements while our contractor 
workforce permits us to expand and contract operations as the 
workload and locations dictate.
    Information technology has been and will continue to be a 
crucial ability to support us in balancing our timeliness, 
quality, and cost goals. It plays a key role in reducing costs, 
streamlining operations, improving efficiencies, eliminating 
waste, and providing a better service for the agencies that 
require these investigations.
    In addition, we consult with the security community in 
developing new policies and standards concerning the security 
clearance investigations program, to ensure governmentwide 
reciprocity, and address program needs, guaranteeing superior 
investigative products.
    Security clearance and suitability process reform has 
provided program enhancements particularly in the timeliness 
and quality of investigative products and has laid policy 
groundwork structure to support dramatic enhancements in the 
coming years. The enhancements to date have strengthened the 
government's ability to recruit top talent and effectively put 
Federal and contractor employees to work.
    Last, FIS is working with OMB, ODNI, and DOD, and the other 
Federal agencies to establish and important Executive Branch-
wide training standards, revise investigative and adjudicative 
standards and processes, and develop reciprocity standards and 
metrics to gauge improvements and demonstrate savings.
    I thank you for the opportunity to be here today to discuss 
this important issue, and I will be happy to respond to any 
questions.
    Senator Tester. Thank you for your testimony, Mr. Miller.
    Mr. Lewis, you may proceed.

  TESTIMONY OF STEPHEN F. LEWIS,\1\ DEPUTY DIRECTOR, SECURITY 
     DIRECTORATE, OFFICE OF THE UNDER SECRETARY OF DEFENSE 
  (INTELLIGENCE), U.S. DEPARTMENT OF DEFENSE; ACCOMPANIED BY 
   STANLEY L. SIMS, DIRECTOR, DEFENSE SECURITY SERVICE, U.S. 
                     DEPARTMENT OF DEFENSE

    Mr. Lewis. Thank you. Good afternoon. Chairmen Tester and 
McCaskill, and Members of the Committee, thank you for inviting 
me to testify today. My name is Steve Lewis. I am the Deputy 
Director of the Security Policy and Oversight Directorate 
within the Office of the Under Secretary of Defense for 
Intelligence. We appreciate the Committee's continued interest 
in the effectiveness of the personnel security clearance 
process. Because of your commitment to this critical function 
of our government and its ability to protect national security, 
we have achieved major improvements over the years and look 
forward to even more gains in the future.
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    \1\ The prepared statement of Mr. Lewis appears in the Appendix on 
page 41.
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    I am here today on behalf of Dr. Michael Vickers, the Under 
Secretary of Defense for Intelligence, and I would also like to 
introduce Mr. Stan Sims, the Director of Defense Security 
Service, who is accompanying us today.
    The Under Secretary of Defense for Intelligence is the 
Principal Staff Assistant to the Secretary and Deputy Secretary 
for security matters and is responsible for setting overall DOD 
policy to implement national policies for access to and the 
protection of classified national security information. In 
addition, he is the senior official for DOD's personnel 
security program and has responsibility for policy and 
procedures governing civilian, military, and industrial base 
personnel security programs.
    Executive Order 13467 designates the Director of National 
Intelligence as the security executive agent with the 
responsibility to develop uniform policies and procedures to 
ensure effective completion of investigations and 
determinations of eligibility for access to classified 
information, as well as acceptance of those determinations on a 
reciprocal basis across the government.
    With regard to the oversight roles and responsibilities 
within DOD, the heads of DOD components are responsible for 
establishing and overseeing implementation of procedures to 
ensure protection of classified information and taking prompt 
and appropriate management action in cases of compromise of 
classified information. Such actions are required to focus on 
correcting or eliminating the conditions that caused, 
contributed to, or brought about the incident. This 
responsibility encompasses military service members, DOD 
civilians, and embedded contractor personnel.
    Under the National Industrial Security Program, the Defense 
Security Service is responsible for conducting oversight of 
companies cleared to perform on classified contracts for DOD 
and 26 other Federal agencies which use DOD industrial security 
services.
    The Department has instituted various process improvements 
that have resulted in greater efficiencies and effectiveness 
with regard to initiating and adjudicating background 
investigations, and this has helped to result in the removal of 
DOD from the high-risk list for its personnel security program.
    We have deployed multiple initiatives to ensure consistent, 
high-quality investigative products, highly skilled and 
professionally certified personnel security adjudicators, and 
robust documentation of adjudicative rationale in support of 
these adjudicative decisions. This helps to ensure appropriate 
oversight and reciprocity.
    In October 2012, DOD consolidated its adjudicative 
functions and resources except for the DOD intelligence 
agencies in a centralized adjudication facility to realize 
efficiencies and standardize practices of this critical 
inherently governmental function.
    You specifically asked for the costs of obtaining security 
clearances for the Department, and in fiscal year 2012, DOD 
paid the Office of Personnel Management a total of $753 million 
for security clearance investigations and approximately $471 
million for military service members, $30 million for DOD 
civilians, and $252 million for cleared industry.
    Thank you for your time.
    Senator Tester. Thank you for your testimony, Mr. Lewis.
    Ms. Farrell, you may proceed.

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

    Ms. Farrell. Chairmen Tester, McCaskill, and Members of the 
Subcommittee, thank you for the opportunity to be here today to 
discuss the governmentwide personnel security clearance 
process. As you know, we have an extensive body of work on 
issues related to the security process dating back several 
decades.
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    \1\ The prepared statement of Ms. Farrell appears in the Appendix 
on page 45.
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    Since 2008, we have focused on the governmentwide effort to 
reform the security clearance process. My statement today is 
based on GAO reports issued between 2008 and 2013 on DOD's 
personnel security clearance program and personnel security 
reform efforts.
    Personnel security clearances allow government and 
contractor personnel to gain access to classified information 
that through unauthorized disclosure can in some cases cause 
exceptionally grave damage to U.S. national security.
    As you know, a high number of clearances continue to be 
processed. The Director for National Intelligence reported this 
year that more than 4.9 million government and contractor 
personnel held clearances, making it a formidable challenge for 
those deciding who should have a clearance. My written 
statement addresses three areas for improvement to the process.
    The first area addresses having a sound requirements 
determination process in place. Agencies need an effective 
process for determining whether positions require a security 
clearance and, if so, at what level. Underdesignating positions 
can lead to security risks while overdesignating can also lead 
to security risks and result in significant cost implications.
    Last year, we found guidance did not exist to help agencies 
determine whether or not a civilian position should require a 
clearance and, importantly, no requirement exists to review 
existing positions with clearances. We made recommendations to 
the Director of National Intelligence, to develop such 
guidance.
    The second part of my statement addresses quality 
measurement. Since the 1990s, we have emphasized the need to 
build quality and quality metrics into the clearance process. 
Executive Branch efforts to reform the process have focused 
more so on timeliness than quality. We have seen programs on 
speeding up the processing of initial clearances, but not on 
developing metrics for qualitative investigations, implementing 
those metrics, or reporting on those metrics' findings.
    We have reason for concern about the quality of 
investigations. For example, in May 2009, GAO reported that 
documentation was incomplete for most OPM investigative reports 
we reviewed, about 87 percent of 3,500 total. We have made 
recommendations in this area, but those recommendations have 
not been implemented.
    The last area of my statement addresses the guidance to 
enhance efficiencies of the clearance process. Governmentwide 
personnel security reform efforts have not yet focused on 
potential cost savings, even though the stated mission of these 
efforts includes improving cost savings. For example, OPM's 
investigative process, which represents a portion of the 
security clearance process and has significant costs, has not 
been studied for process efficiencies or cost savings. In 
February 2012, GAO reported that OPM received over $1 billion 
to conduct more than 2 million background investigations in 
fiscal year 2012.
    We have raised concerns about transparency of costs and 
investments in technology while maintaining a less efficient 
and duplicative paper-based process. We have made 
recommendations in this area, but actions have still not been 
realized.
    This concludes my opening statement. I would be pleased to 
take questions. Thank you very much.
    Senator Tester. Thank you all for your opening statements.
    We will put 7 minutes on the clock, and we will go from 
here.
    I am going to start with you, Mr. McFarland. Without making 
any specific statements that could compromise the ongoing 
investigation, could you confirm that the Office of Personnel 
Management's Office of the Inspector General (OIG) is currently 
investigating USIS? They are one of the three major contractors 
conducting background checks on behalf of the U.S. Government?
    Mr. McFarland. Yes, Senator, we are.
    Senator Tester. Can you also confirm that USIS carried out 
the background investigation on Mr. Snowden?
    Mr. McFarland. Well, I am not sure regarding that question.
    Senator Tester. OK. It is my information that there were 
two. There was an initial investigation and then a----
    Mr. McFarland. Oh, I am sorry. Yes, the re-investigation, 
absolutely.
    Senator Tester. So USIS did do the re-investigation.
    Mr. McFarland. Yes.
    Senator Tester. But you are not sure who did the initial 
investigation?
    Mr. McFarland. That is correct.
    Senator Tester. Would it be possible to get that 
information?
    Mr. McFarland. Yes, it is.
    Senator Tester. OK, good. Are there any concerns that Mr. 
Snowden's background investigation by USIS may not have been 
carried out in an appropriate or thorough manner?
    Mr. McFarland. Yes, we do believe that there may have been 
some problems.
    Senator Tester. OK. And when more information gets 
available on this, I would assume it is going to be made 
public. Is that correct?
    Mr. McFarland. Well, it will all depend on the time and 
situation, but we will do our best to keep you informed.
    Senator Tester. OK, that is good. So let me ask you this: 
USIS is under investigation. But yet they are given the re-
investigation of Mr. Snowden. How does that happen?
    Ms. Schmitz. It is our understanding that the periodic re-
investigation was done in 2011, which would have pre-dated the 
initiation of our investigation.
    Senator Tester. OK. When did you initiate your 
investigation of them?
    Ms. Schmitz. It was later in 2011.
    Senator Tester. OK. If I am correct--I believe it was in 
one of your opening statements--USIS conducts about 65 of the 
75 percent of investigations that is contracted out. Is that 
correct?
    Ms. Schmitz. That question is probably best answered by 
FIS. I understand the number varies depending on whether you 
are talking about all investigative products or those which 
include significant field work.
    Senator Tester. OK. Merton.
    Mr. Miller. USIS conducts 45 percent of the overall 
contract workload.
    Senator Tester. OK. Very good.
    I am going to go with you, Mr. Lewis, and then I will kick 
it over to Senator McCaskill. I touched in my opening statement 
how much classified data is being generated and maintained and 
the increasing number of individuals granted access to that 
data. DOD currently accounts for a vast majority of the initial 
personnel security clearances. Since 9/11, heightened security 
has obviously led to an increased number of background checks. 
I am not challenging that at all.
    What I am asking is, given our redeployment of troops in 
Iraq and now the drawdown in Afghanistan, do you anticipate 
that DOD security clearances are going to decrease in the 
future, maintain, or increase?
    Mr. Lewis. It is hard to have a crystal ball on that 
subject. One would think that as the drawdown processes, there 
would be less of a requirement for clearances. And we are 
engaging with the military services and others to look at 
scrubbing the requirements for clearances and validating need 
more aggressively than we have in the past. But I cannot 
predict what is going to happen with any degree of certainty.
    Senator Tester. Now, understanding that the clearances are 
driven by specific needs, is that scrubbing what you are using 
to monitor or manage the number of overall clearances for the 
DOD? Or what kind of metrics are you using? Or are there 
metrics to use?
    Mr. Lewis. We are looking at the number of clearances and 
engaging with the military services to validate those needs. So 
we do not have metrics at this point on that issue.
    Senator Tester. OK. Senator McCaskill, go ahead.
    Senator McCaskill. Mr. Miller, have you read Ms. Farrell's 
testimony today?
    Mr. Miller. I just heard it for the first time.
    Senator McCaskill. I am not going to start now, but I would 
appreciate if you would read and respond to it with 
specificity. It is overwhelming to me the amount of 
recommendations that have been made in this area that have been 
ignored by your agency. If you want to address why the 
recommendations have been ignored now, you are welcome to. I 
have spent a lot of time around GAO reports and looking at 
recommendations and whether or not they are implemented. And, 
typically, agencies that have the least amount of oversight by 
Congress have the worst record of thinking that what GAO says 
matters.
    Is there some kind of cogent answer you can give to why all 
these recommendations have been basically wholesale ignored?
    Mr. Miller. We take what GAO recommends through their 
audits very seriously----
    Senator McCaskill. When is the last time you implemented 
one of their recommendations?
    Mr. Miller. We have implemented all this fiscal year a 
number of recommendations regarding--I will take the last 
audit--cost transparency. We have done a number of things to 
support cost transparency for our customers. We submitted our 
first annual stakeholder report, a 33-page report that details 
not only workload and resources but also talks specifically 
about where our money goes to support the program. We----
    Senator McCaskill. If you would be so kind, Ms. Farrell, to 
do a scorecard for us, list the recommendations that GAO has 
made in this area and give us an actual score as to how many of 
them have been implemented and when, by your estimation, and 
then I will have a chance to share that with you, Mr. Miller, 
and you can argue as to whether it is accurate or not.
    Senator McCaskill. How many times has the IG asked to try 
to audit the Revolving Fund that pays for all these background 
investigations?
    Mr. Miller. I do not have a number of times they have asked 
to audit, but my understanding is we are very amendable to 
moving forward with the process. The issue was determining 
whether there was a legal basis to provide Revolving Fund 
dollars for the audit.
    Senator McCaskill. According to Mr. McFarland, the 
documents do not exist to audit the fund.
    Mr. Miller. Oh, there are lots of documents, financial 
reports----
    Senator McCaskill. OK. So I need some kind of agreement 
here as to why this fund has never been audited. It is $1 
billion a year. It is outrageous that it has never been 
audited. And so what is your rationale as to why this fund has 
never been audited?
    Mr. Miller. My understanding is OPM--we support the current 
request by the OIG for Revolving Fund dollars to support audits 
in the future. The issue in the past was there was not a legal 
basis for Revolving Fund dollars to be given to the IG for 
audit purposes. We welcome the IG's oversight.
    Senator McCaskill. Well, these are all public dollars.
    Mr. Miller. They are public dollars. They are not 
appropriated dollars. And, honestly, I cannot speak to----
    Senator McCaskill. Well, they were appropriated at some 
point.
    Mr. Miller. Yes, ma'am, they were.
    Senator McCaskill. Because you cannot get them unless they 
were appropriated.
    Mr. Miller. Yes, ma'am.
    Senator McCaskill. So what you are saying is all somebody 
has to do in government is give some of the money that has been 
appropriated to another agency and, presto, whamo, no audit?
    Mr. Miller. No, ma'am.
    Senator McCaskill. Well, that is what you are saying. You 
are saying that there was some legal question as to whether 
this money was auditable by an IG just because it had been 
transferred to your agency by another agency.
    Mr. Miller. It was absolutely auditable. The issue was 
whether Revolving Fund dollars could be given to the IG to 
resource additional personnel to actually conduct the audit. 
They could have used appropriated dollars at any time to audit 
the Revolving Fund.
    Senator McCaskill. OK. Let me see if I understand. What is 
your view of this, Mr. McFarland and Ms. Schmitz, as to why the 
audits have not occurred? He seems to be saying that this was 
an acknowledgment by you that you did not have the resources to 
do it. Is that the problem?
    Mr. McFarland. We absolutely have the resources to do it.
    Senator McCaskill. So what from your view is the reason why 
this fund has never been audited?
    Mr. McFarland. When you say ``the fund,'' you are 
speaking----
    Senator McCaskill. The Revolving Fund.
    Mr. McFarland. Our intent, as always, is to get involved as 
deeply as we can in any subject matter. The problem that we 
have is that we could not identify--excuse me just a second, 
please. I want to give you as correct an answer as possible.
    Ms. Schmitz. My understanding--and this may be subject to 
later correction because audits is not my area--is that they 
were attempted in the late 1990s, and there was insufficient 
documentation. Since that time the OIG has not had the 
financial resources to pay to do an audit.
    Senator McCaskill. OK. Well, we need to get that figured 
out, because if we are actually saying to the American people 
that there are not the resources available to audit a fund that 
holds $1 billion worth of public money, we have a real problem. 
So I am going to need you to come up with the specific answer 
that you believe is holding you back from auditing this fund, 
and I would need the same kind of specificity from you, Mr. 
Miller, as to your willingness and your capability of being 
audited. We know the Department of Defense cannot be audited. 
We are working on that. It has been decades long process trying 
to get them audited. This seems to me to be a discrete fund for 
which an audit ought not be very expensive. It ought to be as 
easy as brushing your teeth for the tens upon thousands of 
government auditors we have working right now. So let us get to 
the bottom of that.
    I want to talk just for a minute, before my time is up, 
about the number of convictions for falsifications. You have 
had 18 people convicted for falsifying investigations since 
2007. Of those, 11 were government employees, 7 were 
contractors. Eighteen convictions seems high to me for an 
office as small as this is. Do you believe you are catching 
most of the fraud, Mr. McFarland? Or do you believe there is 
more?
    Mr. McFarland. No, I believe there may be considerably 
more. I do not believe that we have caught it all by any 
stretch.
    Senator McCaskill. OK. My time is up. I will wait for my 
second round. Thank you.
    Senator Tester. Senator Portman.
    Senator Portman. Thank you, Mr. Chairman.
    One thing we have heard today which is disturbing is that 
we cannot confirm the quality of Mr. Snowden's investigation. 
This leads to a broader question about whether the pressure 
that you all feel to speed up investigations and the backlog 
that occurs is leading to lower quality. And I am wondering 
about whether you are measuring those metrics.
    You have been pressed on timeliness, I am sure, but here is 
some data. In 2009, GAO assessed from a sample that 87 percent 
of investigative reports that DOD adjudicators used to make 
clearance decisions were missing background documentation--87 
percent. GAO subsequently recommended OPM measure the frequency 
with which investigative reports meet Federal investigative 
standards. It seems like a pretty straightforward and 
commonsense recommendation.
    GAO also notes that OPM is developing a tool similar to 
DOD's Rapid Assessment of Incomplete Security Evaluations. Ms. 
Farrell, you talked more about that in your testimony. You 
basically stated that from GAO's observation, OPM continues to 
assess quality based on voluntary reporting from customer 
agencies.
    In light of what has just happened and in light of this 
information from GAO now going back 4 years, Mr. Miller, how do 
you measure quality?
    Mr. Miller. Senator, we have a number of ways that we 
measure quality, but if I could address just up front the 87 
percent number: You probably saw OPM's response to that audit. 
There are challenges associated with capturing every element of 
a background investigation, and let me just explain very 
quickly.
    An employment check, that was one of the areas where there 
was the highest number of elements missing in background 
investigations. Employers can choose not to cooperate with the 
government when we conduct a background investigation. I am not 
saying Federal agencies. I am talking all kinds of commercial 
entities where individuals may have previously worked.
    One of the challenges is actually getting cooperation. If 
an employer either goes away, does not exist any longer, or 
chooses not to provide information to the government, that 
information has to be documented in a Report of Investigation, 
but you do not get that employment coverage that is required.
    There are issues regarding the 87 percent subject 
interviews that were not accomplished. Many of those subjects 
had been deployed into a hostile environment where 
investigators could not go to conduct those interviews. So 
there is documentation in the Report of Investigation saying 
this subject was not available due to deployment, and that case 
is closed.
    And, Senator, you are exactly right. Every time we initiate 
an investigation, we put what we refer to as a close date, a CD 
date, because that date must be met to meet the mandated 40-day 
challenge that we are given for timeliness. So all 
investigative leads must be accomplished in that period of 
time, and the case is then closed.
    Senator Portman. Let us followup on this a little bit, and, 
Ms. Farrell, jump in here. Eighty-seven percent is a high 
figure for incomplete reports. Given that we are trying to 
protect some of our most valuable classified information and we 
have seen some of the impact of this recently, do you agree 
with what Mr. Miller just said, that the major problem is that 
employers in the private sector do not want to respond to 
questions and/or that people have been deployed into hostile 
environments? Is that the reason 87 percent of these are not 
properly completed?
    Ms. Farrell. The documentation was not in the files. We 
recognize that it may be challenging to track down people who 
may be deployed, and if the documentation is there, then that 
could explain it. We found the same types of incomplete 
documentation with DOD's adjudication files. We recommended 
they offer guidance in these situations, and that if there are 
difficulties, you document it so that the adjudicator or 
whoever does a review will know why that was left blank, the 
person was deployed.
    DOD implemented our recommendation----
    Senator Portman. So if the person was deployed, for 
instance, and that was the only reason that there was an 
incomplete investigation, that would not be part of the 87 
percent?
    Ms. Farrell. If it were documented.
    Senator Portman. If you simply had that documentation.
    Ms. Farrell. If they had that documentation. The Federal 
Investigative Guidelines, like the Federal Adjudicative 
Guidelines, look at it as a baseline. So we had our staff 
attend investigative training. We used GAO-certified 
adjudicators to help us do these file reviews, so we made sure 
that the relevant staff had the competency to see what was 
missing and what should be there. So this is about 
documentation, not having to look at a file and guess.
    Senator Portman. And your recommendation was that they 
develop tools to be able to deal with that? Mr. Miller, just 
quickly, what tools have you developed to be able to close this 
gap?
    Mr. Miller. There are a number of initiatives ongoing 
currently as well as our own quality process. We have quality 
procedures for contracts and Federal employees that include 
several stages and layers of review while a background 
investigation is being worked and when it is finalized.
    There are a number of requirements within a contract for a 
full quality review of the investigation before it is delivered 
to the government. As each lead is accomplished there is a 
review conducted by our reviewers. We have 400 Federal 
employees whose sole role is quality assurance of our products 
that do a full review of each investigation.
    When that is finalized and the final review and the 
delivery is to our customers, there is a subsequent review--the 
most important review, quite frankly--the adjudicative decision 
made by the agency itself. So they review the investigation and 
make a determination whether all elements are there required to 
make a determination. They can make an adjudicative decision--I 
am not an adjudicator--claiming a deviation, meaning that there 
are certain elements not there, but based on the whole of the 
investigation, they determine to grant that person either a 
clearance or the Federal employment.
    Senator Portman. And are you now providing these metrics to 
all of your adjudicators? And are you providing this 
documentation so that when GAO looks at your process the next 
time, they are going to be able to know why somebody was not 
provided all the information?
    Mr. Miller. We have not had any followup recently with GAO. 
We would welcome a followup on that, as well as to address 
quality standards. We have an interagency working group chaired 
by the ODNI, at DOD and OPM that is working on establishing 
clear and concise standards for evaluating background 
investigations to meet the quality standard. Today quality is 
in the eye of the beholder, depending on the agency, depending 
on the adjudicator, whether it is complete, whether it is not. 
So there is a lot of gray area that, quite frankly, I advocated 
in standing up this quality working group to give us defined 
roles. I can tell you, give us quality standards we understand 
that are clear and we will absolutely meet them.
    Senator Portman. I think one would be not to have the vast 
majority of the reports be incomplete. But thank you for your 
testimony. We will be back on the second round. Thank you, Ms. 
Farrell.
    Senator Tester. Thank you, Senator Portman.
    Senator Johnson.
    Senator Johnson. Thank you, Mr. Chairman.
    Mr. Miller, what does it mean, case closed?
    Mr. Miller. Case closed means all the elements of the 
background investigation have been obtained and completed and 
passed on to the customer.
    Senator Johnson. Or you have not gotten all of them and you 
are still closing the case when 40 days is up?
    Mr. Miller. If they are not obtainable, like an employment 
check, that will be documented in the Report of Investigation, 
and it will be closed and----
    Senator Johnson. So how many of those case-closed, 
incomplete investigations then are actually adjudicated and 
clearances granted?
    Mr. Miller. Well----
    Senator Johnson. Do you keep any metrics on that?
    Mr. Miller. Yes, sir. When a customer comes back to us and 
says, ``You are missing elements, there is information we do 
not have here to make the decision, we are asking you to reopen 
that investigation,'' that is----
    Senator Johnson. What percent do you get back then?
    Mr. Miller. That is less than 1 percent, sir.
    Senator Johnson. So then do you know how many clearances 
are granted based on your case closed with incomplete 
documentation?
    Mr. Miller. No, sir. The only way we would know what is 
granted would be what would be updated in our----
    Senator Johnson. You have 87 percent of cases that are 
incompletely documented, considered case closed, and then only 
1 percent get kicked back with a request for more information? 
So we could potentially have 86 percent of investigations 
incomplete and then security clearances granted. That is 
probably what is happening, right? Yikes.
    Ms. Farrell, something pretty disturbing in your testimony 
is the lack of guidance in terms of what is a requirement for a 
security clearance being granted.
    Ms. Farrell. That responsibility falls on the Director of 
National Intelligence. He is responsible for oversight of the 
security area by providing guidance regarding efficiencies, 
effectiveness, and timeliness of----
    Senator Johnson. There is no standard for even requesting a 
security clearance?
    Ms. Farrell. The guidance, I must say, is under draft. We 
have a recommendation, and I want to acknowledge that.
    Senator Johnson. We have been granting security clearances 
for how many decades?
    Ms. Farrell. Decades.
    Senator Johnson. And there is literally no standard, no 
guidance for what circumstances require a clearance. None.
    Ms. Farrell. You are correct. In the absence of any 
guidance, it is left up to the agencies to determine how they 
are going to classify those jobs, and what you find is 
inconsistency. We also found that some of the agencies were 
using an OPM tool that helps determine the sensitivity of a job 
position. The sensitivity of a position does not tell you the 
classification, but by knowing the sensitivity, then you can 
translate that into whether or not a security clearance is 
needed.
    Unfortunately, this tool is geared more toward determining 
suitability for the job rather than if the job requires a 
security clearance. It was developed without a lot of 
collaboration with ODNI.
    Senator Johnson. Does anybody want to challenge this in 
terms of no standards, no guidance, in terms of what is a 
requirement for even seeking a security clearance? Mr. Miller, 
help me out here.
    Mr. Miller. Sir, OPM did create a position designation tool 
that was focused on suitability and determining what type of 
level of investigation is required for the position in 
question.
    Senator Johnson. Mr. Lewis, in the Department of Defense, 
is there a guidance, is there a standard?
    Mr. Lewis. The key focus is on what level of access is 
required to perform the duties associated with the job, and 
that is going to depend upon what those duties are. For 
industry it is very carefully and closely scrutinized by 
Defense Security Service when they inspect contractor 
facilities. Within DOD, it is going to depend on what level of 
access is determined to be required to perform the duties.
    Senator Johnson. Isn't that somewhat of a guidance, Ms. 
Farrell? We have classifications of different secrecy levels, 
and if your job description says you need X classification, 
isn't that a guidance?
    Ms. Farrell. The guidance does not exist, is what I am 
telling you, for governmentwide determination whether or not a 
civilian position needs a clearance. You will find that 
individual agencies thus have developed their own rules or 
procedures. What we found from our audit last year was 
inconsistency in their application. In fact, even the OPM IG 
reviewed use of the OPM position tool that Mr. Miller mentioned 
and found that, for the majority of the cases reviewed applying 
OPM's tool came up with a different determination. Quite 
alarming.
    Senator Johnson. Security clearances, we have clearances 
for individuals, but we also have them for contractors and for 
facilities, correct? I mean, you also are basically certifying 
contractors to be able to handle classified material. Is that 
correct? Mr. Miller, can you just step me through an 
investigation of a contractor or facility versus an individual?
    Mr. Miller. Yes, sir. For an individual, there is a 
determination whether that the contractor needs a clearance. It 
is sponsored by the Department of Defense. They submit the 
individual----
    Senator Johnson. OK. I am really more interested in 
facilities right now.
    Mr. Miller. OK. I cannot speak to facilities, sir. We are 
not involved with that.
    Senator Johnson. Because I want to find out how often--if 
the certification is granted, are there surveillance audits on 
a regular basis? Because I think that is kind of the crux of 
the problem potentially, with the most recent incident. Mr. 
Lewis.
    Mr. Lewis. I would like to defer to Mr. Sims on that as his 
agency exercises that oversight.
    Senator Johnson. OK. Thank you.
    Mr. Sims. Thank you, Senator. I appreciate the opportunity. 
I oversee the Defense Security Service for contractors and 
facilities. As Mr. Lewis stated up front, as part of the 
National Industrial Security Program, the Defense Security 
Service oversees the granting of facility clearances. The 
facility clearance is actually required by for the government. 
If the contractor is operating on a contract that requires a 
certain level of clearance, for example, secret or top secret, 
then they submit those requirements to DSS, but it is sponsored 
by the government.
    We then look at the facility, the company, if you will, and 
we look at the contract and the requirements of the contract. 
If the contract requires a secret clearance we evaluate the 
facility by a number of different criteria and then grant the 
facility clearance first.
    Once the contractor gets a facility clearance, that caps 
the level of access an individual working their can acquire. 
For example, if there is a level of effort, however many 
contractors are required to perform on that government 
contract, and then that facility clearance is at the secret 
level, that is only the level that the individual can even 
apply for.
    We audit or do security reviews on a routine basis of all 
the contract facilities out there. There are about 13,500-plus 
facility clearances that we oversee, awarded to about 10,000 
companies. We do routine security reviews, and when our 
investigative organization or our agents go to those 
facilities, we look at those contracts. We verify on a routine 
basis whether they have personnel operating above the clearance 
level specified by the facility clearance. For example, if we 
find that they have a person that is cleared at top secret, 
that is trying to work on a secret contract, then we mandate 
the lowering of or removal from the----
    Senator Johnson. OK. I am out of time, and I am going to 
have to leave. Just a quick question. How many man-hours does 
the first certification process take? How many man-hours are 
involved in a surveillance audit? I am just trying to get some 
sort of feeling of how rigorous these certifications are.
    Mr. Sims. Senator, it depends on the size of the facility. 
Those 10,000 facilities range from Mom-and-Pops all the way up 
to Lockheed-Martin?
    Senator Johnson. Is this a day-long process? Is it a 3-
month process?
    Mr. Sims. For some of the smaller companies, it could be a 
day or two. For the larger companies, facilities like a 
Lockheed-Martin, a large manufacturing facility, we have done 
at least 2 to 3 weeks onsite with a team of security 
professionals from my agency.
    Senator Johnson. OK. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Tester. You bet. Thank you, Senator Johnson.
    I am going to read the second paragraph on page 3 of Mr. 
McFarland's testimony, and this will be a question for you, Mr. 
Miller. The testimony goes like this:
    ``The problem that [Patrick McFarland's] office has 
encountered is that the Office of Inspector General oversight 
costs are not permitted to be charged against the Revolving 
Fund.''
    This is a followup on Senator McCaskill's question. This $1 
billion or $2 billion fund, somebody has made a call that none 
of that money can be used for things like annual financial 
audits or any basic oversight. Who made that call?
    Mr. Miller. I cannot answer that, sir.
    Senator Tester. Mr. McFarland.
    Mr. McFarland. Yes, I can speak to that, Senator. This has 
been probably the most frustrating thing that has happened 
regarding the Revolving Fund for us, because it has almost 
literally taken us out of the picture. We have a limited amount 
of money from salaries and expenses--in our case, it is $3 
million right now--to spend on non-trust fund issues, and the 
Revolving Fund is a non-trust fund issue.
    So what we have tried to do as best we can is stay tuned in 
to what is going on, and that is kind of a sad State of affairs 
for an IG to have to say, stay tuned in. We want to be in depth 
in all of these things. But we have not been able to simply 
because it was decided by the General Counsel's office and then 
supported by the Director of OPM that we do not fit into the 
category that would allow us to have funds from the Revolving 
Fund.
    Now, we take total disagreement with that, of course. We 
feel just the opposite.
    In order to try to remedy the situation, I suggested a 
couple years ago the Director of OPM should suspend his 
decision in agreement with the General Counsel's office, that, 
we are not entitled to those funds.
    Senator Tester. We have a confirmation hearing on the new 
Director of OPM on July 12, and I have a notion that is going 
to be a question that is going to be asked right out of the 
gate: Are you going to support using some of those monies?
    Let me ask you one more thing, and I want you to be very 
brief, if you can.
    Mr. McFarland. Sure.
    Senator Tester. When you do an oversight, an audit, or 
whatever it may be, is typically the cost paid for by the fund 
that you are doing the audit on?
    Mr. McFarland. Everything we do for health insurance, 
retirement, and life insurance is done out of those trust 
funds.
    Senator Tester. OK. Is there any other fund out there that 
you know of that has been declared off limits for reimbursement 
for your duties?
    Mr. McFarland. No. We are using our salary and expenses to 
do what we can in the Revolving Fund. That is why it is so 
limiting.
    Senator Tester. I understand that. But when you do any 
other audits on any other funds, I assume you are getting paid 
out of those funds that you are auditing.
    Mr. McFarland. That is correct.
    Senator Tester. Are there any other funds that you are 
auditing that you are not able to get your costs reimbursed 
from those funds?
    Mr. McFarland. No. In general. I think----
    Senator Tester. OK. That is what I needed to know. The 
hearing is July 16, not July 12.
    I have a question to followup on Senator Johnson's, if I 
could to you, Ms. Farrell. Short of the President of the United 
States, I do not know who is responsible for these security 
clearances. There are different standards, there are different 
responsibilities, different metrics, different everything.
    So this incident comes up with Snowden. We should not be 
surprised at all. Where does the buck stop on this situation? 
Does the buck stop with Congress? Are we falling back? Should 
we be dictating what you should be doing? Or who should be 
doing this?
    Ms. Farrell. Well, we were encouraged when a governance 
structure was put in place by Executive Order back in 2008. The 
Executive Order established a Performance Accountability 
Council (PAC) to drive reform efforts toward effectiveness, 
efficiency, keep it going. And the Deputy for Management at OMB 
is the Chair of the Performance Accountability Council.
    The order also established the Director of National 
Intelligence as the Security Executive Agent. It also 
established OPM as the Suitability Executive Agent.
    So that question we asked many times after the Council was 
formed, when we were looking at the reform efforts and who is 
in charge. It comes down to the Performance Accountability 
Council, headed up by the Deputy Manager at OMB.
    Senator Tester. Very quickly, Mr. Miller, should I be 
concerned about this, concerned that there is no apparent 
metrics or standards or----
    Mr. Miller. Sir, there are standards.
    Senator Tester. Yes, but they vary between each agency, so 
consequently there is no reciprocity, and the standards could 
go from soup to nuts.
    Mr. Miller. Yes, sir. There has been a great deal of effort 
under the Performance Accountability Council to align standards 
and get consistency across Federal agencies.
    Senator Tester. Have we been successful in that to develop 
a single measurable standard?
    Mr. Miller. Sir, we are better than we have been. There is 
still work to do.
    Senator Tester. OK. Senator McCaskill.
    Senator McCaskill. Let me go back to the convictions. When 
you have convictions of people who falsify investigations, what 
kind of processes are in place, Mr. McFarland or Ms. Schmitz, 
as to the investigations that the person was responsible for?
    Ms. Schmitz. The Federal Investigative Services has an 
integrity assurance process in place, which is how most of 
these cases are initially detected. When they suspect that 
falsification is occurring, they do what they call a recovery 
effort, which is to identify the scope of the falsifications 
and then they have a federally employed background investigator 
go back and redo every single investigation that was assigned 
to that person, both to make sure that a quality product 
replaces the possibly defective product and to identify what is 
falsified for further criminal investigation and potential 
prosecution.
    Senator McCaskill. For the people who are in the parameters 
of the investigation around these criminal convictions for 
falsification, I assume that their access to classified 
material is cutoff while that is done? Or are they allowed to 
keep their clearance while you look into it?
    Ms. Schmitz. You mean the individuals who hold the security 
clearance?
    Senator McCaskill. Correct.
    Ms. Schmitz. Mert may know more than I do, but to my 
knowledge, they are not affected while the investigation is in 
process.
    Senator McCaskill. Is that true? They are allowed to keep 
their classification even though you have discovered that 
during the period of time their security clearance was given 
that somebody was criminally falsifying?
    Mr. Miller. Yes, ma'am, that is correct. The recovery 
process that was just mentioned is the top priority. Our 
integrity assurance program, as Michelle testified, is how 
these falsifications are uncovered.
    Senator McCaskill. And you are doing that by recontact 
letters? Is that how this happens?
    Mr. Miller. Yes, ma'am. That is one of the processes, the 
recontact letters.
    Senator McCaskill. How many people get recontact letters?
    Mr. Miller. Three percent a month of all investigations 
receive recontact activity, and that is for every agent we have 
employed. So there is not any agent that does not receive some 
recontact activity on their investigations.
    Senator McCaskill. And when you say ``agent,'' you mean 
government employee or contractor?
    Mr. Miller. Yes, ma'am.
    Senator McCaskill. So everybody who is doing background 
checks, 3 percent of their work every month, the people who 
they say they interviewed, you do recontact letters to confirm 
they have been interviewed.
    Mr. Miller. Yes, ma'am.
    Senator McCaskill. What if they falsify who they contacted 
and they are the ones getting the recontact letter?
    Mr. Miller. Then we will uncover the fraud.
    Senator McCaskill. How?
    Mr. Miller. If the individual that we recontact was the 
individual, the lead that was falsified, typically the response 
is they were never spoken to by OPM.
    Senator McCaskill. No. I mean what if the person making the 
falsification falsifies the person they contacted, makes up 
that it is them, and puts down a phone number that is a phone 
number they have access to or an address they have access to, a 
post office box, and they actually get the letter and say, 
``Yes, they contacted me,'' when in reality the whole thing was 
made up? How do you catch that?
    Mr. Miller. That is an interesting scenario. But we know 
where our agents reside. We know where our agents----
    Senator McCaskill. Well, aren't some of these post office 
boxes?
    Mr. Miller. Some of the contacts are post office boxes, 
yes, ma'am.
    Senator McCaskill. I know your background, and I know that 
you are through and through an investigator. It worries me that 
we have this many criminal falsifications, which means that 
there are people that are employed, by contractors or by you, 
that are not doing the work, and you are catching them 
sometimes. But if you are catching as many as you are, that 
means there are a lot you are not catching. If I was going to 
falsify something, I would not be stupid enough to put down the 
name and the address of the person who is going to say, ``No, 
they never contacted me.'' I would put down a name and address 
where I would be able to control the receipt of that document 
and handle it so that I would go along undetected.
    Mr. Miller. One of the challenges for that scenario is that 
when they fill out their SF86, they identify references, the 
individual we are investigating, references and specific leads. 
So we are actually contacting the people that the individual 
being investigated has referred us to speak to. So that would 
help keep that problem from occurring.
    Senator McCaskill. OK. Have you given any thought to 
shutting off the classification as you look at the 
investigation?
    Mr. Miller. Yes, ma'am. There has been some discussion 
about that. In fact, we have gone back and reviewed--I saw the 
handout that Mr. McFarland put out. It talks about the level 
and extent of investigations that were involved. But what we 
have determined is through the recovery process there have been 
no serious issues out of all the cases involved that resulted 
in a change in access. And so we expedite the recovery process 
and coordinate that with the agency and update the background 
investigation to make sure it is correct.
    Senator McCaskill. Well, since these background checks are 
potentially falsified, I think we should consider during the 
pendency of your investigation into the falsification 
suspending clearance temporarily for any of the people that 
could be impacted by the falsification just because I think it 
would be easy for us to have a disaster in that area.
    I am curious about paying for these for contractors; $250 
million, I think Mr. Lewis said, was paid just for security 
clearance for contractors in 1 year.
    Now, you have a price sheet here. Are the contractors being 
asked to identify this separately in their contracts, the 
defense contractors, so that those costs are being delineated 
in their contracts? Or are they absorbed in their contract 
price and we just cover the cost? Which is it, Mr. Sims?
    Mr. Sims. Ma'am, those costs are paid for by public 
dollars. We do not charge contractors for the costs of their 
security clearance. Part of our budget is the cost for funding 
cleared contractors in industry, and that is what that $252 
million was for fiscal year 2012.
    Senator McCaskill. All right. Well, then here is the 
question: If we are doing this for the contractors, which I 
question--it seems to me that this would be something that they 
should pay for. If they want to do business with the government 
in a classified setting, it seems like this should be their 
dime and not ours. But assuming that we are paying for it, then 
why in the world are we paying a premium for those that already 
have it? It sounds like to me we are paying for it twice. 
Because I know in defense contracts, they get extra money for 
having employees who have the clearance. So not only are we 
paying to give it to them, we are paying them again the second 
time that they already have it.
    Mr. Sims. Yes, ma'am, I see your point. I cannot address 
that last part of the question, but I can address the first 
part. We have done extensive research as to what is the most 
cost-effective way to pay for security clearance within the 
Department. The analysis shows that if we were to allow the 
contractors to build the cost of clearances into the contract 
then they would add overhead on the management of that. So the 
most cost-effective way was to manage it from the Department, 
we pay those costs, because we pay it either way.
    Senator McCaskill. That makes some sense. It does not make 
sense that we pay them for it since we did it in the first 
place. I mean, that does not make any sense. So I guess the 
contractors say, ``Well, we are not going to make you pay for 
it again, so therefore you need to pay us more.'' Gee, that is 
a good deal if you can get it. And it sounds like to me our 
contractors are getting it.
    So I would like you, Mr. Lewis, to get back to the 
Committee with why you cannot cease and desist paying a premium 
to contractors who have clearance since they did not pay for it 
in the first place.
    Mr. Sims. Ma'am, maybe I am confused. The $250 million that 
we pay for contractor clearances on government contracts, those 
funds go to OPM through the Revolving Fund.
    Senator McCaskill. No, I understand. I understand that 
public dollars are being used to provide clearances for private 
contractors. So the government, the taxpayers are providing 
clearances for contractors. Now, I know that in the area of 
defense contracting, you get a premium on your contract if the 
people who are working on your contract have clearance. That is 
what is irritating me, because they are getting a premium for 
something that the taxpayers provided them.
    Mr. Sims. You are correct.
    Senator McCaskill. It would be one thing if they were 
getting a premium for something they had paid for, but they are 
not. They are getting a premium for something we paid for. That 
seems dumb to me. That is why I would like to figure out why we 
are doing that.
    Mr. Lewis. Ma'am, if I could just add in there, that is an 
issue we would have to address with the acquisition community, 
and we will be happy to come back to you with more information 
on that.
    Senator McCaskill. I would love that, and the next time I 
see Ash Carter, I will mention it to him, too. It does not make 
any sense to me that we would do that.
    I am out of time.
    Senator Tester. Mr. Lewis, what measures or safeguards are 
in place to monitor the military personnel, DOD civilians, 
private contractors with security clearances?
    Mr. Lewis. If you are talking about their day-to-day access 
to classified information, for contractors DSS does its 
oversight. From the standpoint of a military servicemember or a 
DOD civilian, that is the responsibility of the component head 
to establish a program to monitor and conduct oversight of 
their own operations.
    Senator Tester. Do you know what kind of criteria is used 
in these cases?
    Mr. Lewis. There is a DOD Information Security Program 
Manual which establishes criteria for not only how classified 
material is to be protected, but also issues of security 
concern that need to be reported to the central adjudication 
facility about an employee.
    Senator Tester. When we are talking about clearances that 
are potentially revoked, can you tell me what the biggest 
disqualifiers are?
    Mr. Lewis. Often it is for financial issues and individuals 
who have been involved in criminal activity.
    Senator Tester. OK. How many clearances have been revoked 
in the last year, or two, or three?
    Mr. Lewis. I would have to come back to you with those.
    Senator Tester. That would be good if you could.
    In response to a previous question, I think Ms. Schmitz 
said that USIS was under investigation since late 2011. Did I 
hear that correctly?
    Ms. Schmitz. Yes, sir.
    Senator Tester. And they are still under investigation now?
    Ms. Schmitz. Yes, sir.
    Senator Tester. A year and a half later? How long do these 
investigations typically take?
    Ms. Schmitz. A complicated contract fraud case typically 
takes several years.
    Senator Tester. And during that time business goes on as 
usual with these contractors even if they are under 
investigation?
    Ms. Schmitz. It depends on the investigation. In this case, 
FIS has been aware of what we have been investigating since the 
beginning, and----
    Senator Tester. Can you tell me what that investigation is 
about? Can you legally tell me that?
    Ms. Schmitz. Since it is ongoing, sir, I really do not want 
to risk jeopardizing the potential to----
    Senator Tester. That is fine. I do not want you to.
    Senator McCaskill, do you have any further questions?
    Senator McCaskill. I do. Just a couple.
    I want to get at USIS in terms of not only having the 
biggest contract to do the background checks; but also having 
this program support contract. And these contracts are one of 
my nemeses in my job of overseeing contracts. All through our 
government there has been an easy way to augment personnel by 
doing these program support contracts, and at one point in 
time, and probably still at Homeland Security, you could not 
tell the contractors from the employees. They were doing the 
same functions. They were sitting at the same desks. They were 
working on the same things. One was a contractor and one was 
not, and partly it was because supposedly they were easier to 
get rid of.
    So my question is: Why is USIS getting this $45 million a 
year for program support? And what is that?
    Mr. Miller. Yes, ma'am. USIS, it is one of our primary 
support contracts. We provided some background to your staff 
about the costs associated with it. But our front-end operation 
has a number of routine activities it has to conduct, and much 
of it is manual based on the way the records come to us in 
paper style. We actually have 999 personnel that work the 
front-end operation for us. That is everything from scoping the 
investigation pre-review, inputting the data, and ensuring that 
the investigation gets distributed to our investigators in the 
field.
    Senator McCaskill. OK. So we are paying USIS several 
hundred million dollars a year to do background checks, and we 
are paying them $45 million a year to do the office work.
    Mr. Miller. Yes, ma'am.
    Senator McCaskill. What percentage of that 999 are 
contractors and what percentage of them are Federal employees?
    Mr. Miller. We have 35 personnel that oversee the contract, 
the support contract.
    Senator McCaskill. So of the 999, 35 of them are employees 
and 965 are contract people?
    Mr. Miller. Yes, ma'am.
    Senator McCaskill. Why are we paying contractors instead of 
hiring people?
    Mr. Miller. As we add automation, we are able to downsize 
the staffing, and so year to year we have seen a decline in the 
contract staff required for our support services. Also, based 
on the low-level jobs that they are, it is more financially 
beneficial for us to have contractors doing that work than 
bringing on full-time----
    Senator McCaskill. So you have a cost/benefit analysis that 
you could give to me?
    Mr. Miller. Not one I can give you, no, ma'am.
    Senator McCaskill. You don't? Because there is not one?
    Mr. Miller. There is not one.
    Senator McCaskill. OK. Well, then how do you know they are 
cheaper?
    Mr. Miller. Well, we will do a cost/benefit analysis and 
provide----
    Senator McCaskill. Well, it sounds like to me you have not 
done one, but yet you said they were cheaper.
    Mr. Miller. Yes, ma'am, because we----
    Senator McCaskill. Well, how do you know that?
    Mr. Miller. We can contract our workforce very quickly on 
the contract side, so as the automation gets added, we can go 
ahead and downsize those requirement within----
    Senator McCaskill. So you are telling me 999 is downsized?
    Mr. Miller. Yes, ma'am.
    Senator McCaskill. So it is lower than it was?
    Mr. Miller. Yes, ma'am.
    Senator McCaskill. What was it last year?
    Mr. Miller. I would have to get that number to you. It is 
over 1,000, but that is the only----
    Senator McCaskill. OK. Well, I am going to dig in here, 
just to warn you. I want the numbers. I want a cost/benefit 
analysis. I am tired of this assumption being made that 
contractors are cheaper, because I have been at this for 6 
years, and I guarantee you about half the time I have looked 
hard, they have not been cheaper. In fact, there have been 
studies done that they are more expensive.
    So I would like to take a hard look at that and make sure 
that that is the case, and that was the last line of 
questioning I wanted to make sure I covered today. I know all 
of you want to make this as good as possible, and we do not 
have these hearings to make everyone feel awkward and 
uncomfortable. We have these hearings because we know oversight 
is needed in this area, and I think all of you will acknowledge 
oversight.
    I know that my friend from GAO and my friend from the IG's 
office know that oversight is needed, and I think even you all 
will acknowledge that this is an area that we have neglected 
oversight in. And, it takes one incident for all of us to 
realize that here is a whole area of the government that most 
Americans don't know about and most Members of Congress have no 
idea how it actually works. The more we dig in, the more we 
realize more work needs to be done.
    So I appreciate all of your public service. I know we asked 
some specific questions, and I know the Chairman may have 
others he wants to ask now. But I would appreciate getting that 
information back, and I am going to stay on this, Mr. Miller, 
about the cost/benefit analysis, because you know what? I bet 
we are going to figure out you can hire those people for less.
    Thank you, Mr. Chairman.
    Senator Tester. Thank you, Senator McCaskill. I want to 
close now. If you have any closing remarks, have at it.
    I just want to thank all of you for being here. I think 
Senator McCaskill said it well. We have these hearings to try 
to get information so we can make things run better. I 
appreciate you, given the short notice especially, all being 
here today because I know you are busy. Oversight is critically 
important. I think that has been brought up several times 
today, and making sure that we have the proper metrics, do the 
proper oversight, making sure we hold both government employees 
and contractors accountable is critically important.
    What we are talking about here is the intelligence of the 
Nation. We have a ways to go to make sure that we have the kind 
of oversight in place and the kind of reciprocity in place, the 
kind of metrics in place that will ensure that our intelligence 
stays solid even to folks inside the Department.
    We look forward to working with you, to constructively move 
forward in a way that makes sense for this country. Once again 
I want to thank you for your testimony. The record will remain 
open until July 8 for any additional comments or any questions 
by any of the Subcommittee Members.
    With that, this hearing is adjourned. Thank you all.
    [Whereupon, at 4:01 p.m., the Subcommittee was adjourned.]









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