[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


DOING BUSINESS WITH DHS: INDUSTRY RECOMMENDATIONS TO IMPROVE CONTRACTOR 
                            EMPLOYEE VETTING

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

                                HEARING

                               BEFORE THE
                               
                            SUBCOMMITTEE ON
                             OVERSIGHT AND
                         MANAGEMENT EFFICIENCY

                                 OF THE

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 27, 2018

                               __________

                           Serial No. 115-51

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

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

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                     COMMITTEE ON HOMELAND SECURITY

                   Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Peter T. King, New York              Sheila Jackson Lee, Texas
Mike Rogers, Alabama                 James R. Langevin, Rhode Island
Lou Barletta, Pennsylvania           Cedric L. Richmond, Louisiana
Scott Perry, Pennsylvania            William R. Keating, Massachusetts
John Katko, New York                 Donald M. Payne, Jr., New Jersey
Will Hurd, Texas                     Filemon Vela, Texas
Martha McSally, Arizona              Bonnie Watson Coleman, New Jersey
John Ratcliffe, Texas                Kathleen M. Rice, New York
Daniel M. Donovan, Jr., New York     J. Luis Correa, California
Mike Gallagher, Wisconsin            Val Butler Demings, Florida
Clay Higgins, Louisiana              Nanette Diaz Barragan, California
John H. Rutherford, Florida
Thomas A. Garrett, Jr., Virginia
Brian K. Fitzpatrick, Pennsylvania
Ron Estes, Kansas
Don Bacon, Nebraska
                   Brendan P. Shields, Staff Director
                   Steven S. Giaier, General Counsel
                    Michael S. Twinchek, Chief Clerk
                  Hope Goins, Minority Staff Director
                                 ------                                

          SUBCOMMITTEE ON OVERSIGHT AND MANAGEMENT EFFICIENCY

                  Scott Perry, Pennsylvania, Chairman
Jeff Duncan, South Carolina          J. Luis Correa, California
John Ratcliffe, Texas                Kathleen M. Rice, New York
Clay Higgins, Louisiana              Nanette Diaz Barragan, California
Thomas A. Garrett, Jr., Virginia     Bennie G. Thompson, Mississippi 
Ron Estes, Kansas                        (ex officio)
Michael T. McCaul, Texas (ex 
    officio)
               Diana Bergwin, Subcommittee Staff Director
      Erica D. Woods, Interim Subcommittee Minority Staff Director
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Scott Perry, a Representative in Congress From the 
  State of Pennsylvania, and Chairman, Subcommittee on Oversight 
  and Management Efficiency:
  Oral Statement.................................................     1
  Prepared Statement.............................................     2
The Honorable J. Luis Correa, a Representative in Congress From 
  the State of California, and Ranking Member, Subcommittee on 
  Oversight and Management Efficiency:
  Oral Statement.................................................     3
  Prepared Statement.............................................     4
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Prepared Statement.............................................     5

                               Witnesses

Mr. Charles E. Allen, Senior Intelligence Advisor, Intelligence 
  and National Security Alliance:
  Oral Statement.................................................     6
  Prepared Statement.............................................     8
Mr. Marc Pearl, President and CEO, Homeland Security and Defense 
  Business Council:
  Oral Statement.................................................    14
  Prepared Statement.............................................    16
Mr. David J. Berteau, President and CEO, Professional Services 
  Council:
  Oral Statement.................................................    22
  Prepared Statement.............................................    23
Mr. Brandon LaBonte, President and CEO, ArdentMC:
  Oral Statement.................................................    28
  Prepared Statement.............................................    29

 
DOING BUSINESS WITH DHS: INDUSTRY RECOMMENDATIONS TO IMPROVE CONTRACTOR 
                            EMPLOYEE VETTING

                              ----------                              


                       Tuesday, February 27, 2018

             U.S. House of Representatives,
                    Committee on Homeland Security,
                             Subcommittee on Oversight and 
                                     Management Efficiency,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:12 p.m., in 
room HVC-210, Capitol Visitor Center, Hon. Scott Perry 
(Chairman of the subcommittee) presiding.
    Present: Representatives Perry, Higgins, Estes, Correa, and 
Rice.
    Mr. Perry. The Committee on Homeland Security, Subcommittee 
on Oversight and Management Efficiency will come to order.
    The purpose of this hearing is to examine the Department of 
Homeland Security's contractor fitness requirements, vetting 
process, and reciprocity of fitness examinations between 
components.
    The Chair now recognizes himself for an opening statement.
    DHS relies on thousands of contractor employees every day 
to achieve its mission. From IT services to construction and 
janitorial services, DHS and contractor employees work hand-in-
hand to secure our Nation. Given DHS's daunting task of 
securing our Nation's borders, airports, and much, much more, 
it is of the utmost importance that everyone working for DHS, 
be it a Federal employee or contractor employee, is 
appropriately vetted to ensure that he or she will uphold the 
integrity of the Department.
    However, I am concerned that DHS's process to vet the 
character and conduct of contractor employees, known as a 
fitness determination, is bureaucratic in the worst ways: 
Inefficient, inconsistent, and lacking transparency.
    The Office of Personnel Management or OPM sets minimum 
fitness standards for all contractor employees in the Federal 
Government. However, DHS components apply those standards 
differently based on the nature of each position. This causes 
difficulties for contractors with employees providing services 
to multiple DHS components.
    For example, if a contractor employee who has received a 
favorable fitness determination from the Transportation 
Security Administration, or TSA, is tasked to perform work on a 
separate contract for the U.S. Customs and Border Protection, 
or CBP, the CBP may not reciprocally accept TSA's fitness 
adjudication. Therefore, the contractor employee must undergo 
an additional fitness determination specific to CBP standards.
    Differing applications of fitness standards causes 
headaches due to lost time, increased costs, and inefficient 
communication between DHS and industry. Often, industry 
representatives are left in the dark and are unaware of how a 
particular DHS component will apply fitness standards when 
vetting contractor employees. This makes it difficult for 
industry to know if their current personnel meet the 
qualifications to earn a favorable fitness determination for a 
specific component or how to seek out employees who could 
qualify.
    Moreover, any time spent waiting for work to begin while a 
fitness determination or preliminary check is being conducted 
is a cost industry must bear, which in turn, increases the 
price to DHS. Delayed fitness determinations not only waste 
taxpayer dollars, but also keep contractor employees from 
providing DHS with much-needed services and oftentimes, I would 
add, the most appropriate personnel.
    Additionally, communication between DHS and industry during 
this process is inefficient. In order for industry to receive 
information on the status of a pending fitness determination, 
industry must place the request with the Contracting Officer 
Representative or COR, who then forwards the request to the 
office conducting the review. The office conducting the review 
then provides the requested information to the COR, who in turn 
gives it to industry who asked in the first place.
    This not only creates an unnecessary middleman, but also 
places a burden on industry's relationship with the COR whose 
main job is to manage the contract and provide technical 
direction to industry.
    Aside from the complications I just detailed, I am also 
concerned that this convoluted process deters non-traditional 
Government partners from wanting to do business with DHS. Why 
would a company, large or small, choose to involve itself in 
such a disparate and confusing process that directly impacts 
their personnel and bottom line?
    With the ever-increasing threat environment we face today, 
DHS should work with both traditional and non-traditional 
Government partners to ensure that robust market competition 
provides the best services and technology at a competitive 
price.
    I want to reiterate that I support DHS's need to 
appropriately vet its contractor work force that supports a 
variety of missions. However, there should be a more 
transparent and efficient way to do so. Other agencies actually 
use better and more efficient ways.
    So I look forward to hearing from our witnesses regarding 
their experiences with fitness determinations and any 
suggestions they may have to improve the current process at 
DHS.
    [The statement of Chairman Perry follows:]
                   Statement of Chairman Scott Perry
                           February 27, 2018
    DHS relies on thousands of contractor employees every day to 
achieve its mission. From IT services to construction and janitorial 
services, DHS and contractor employees work hand-in-hand to secure our 
Nation. Given DHS's daunting task securing our Nation's borders, 
airports, and much more, it is of the utmost importance that everyone 
working for DHS, be it a Federal employee or contractor employee, is 
appropriately vetted to ensure that he or she will uphold the integrity 
of the Department. However, I am concerned that DHS's process to vet 
the character and conduct of contractor employees--known as a fitness 
determination--is bureaucratic in the worst ways: Inefficient, 
inconsistent, and lacks transparency.
    The Office of Personnel Management (OPM) sets minimum fitness 
standards for all contractor employees in the Federal Government. 
However, the application of the standards differs across DHS components 
as it relates to the nature of the specific position. This causes 
difficulties as many contractor employees provide services for multiple 
DHS components. For example, if a contractor employee who has received 
a favorable fitness determination from the Transportation Security 
Administration (TSA) is tasked to perform work on a separate contract 
for Customs and Border Protection (CBP), CBP may not reciprocally 
accept TSA's fitness adjudication. Therefore, the contractor employee 
would have to undergo an additional fitness determination specific to 
CBP standards.
    Differing applications of fitness standards cause headaches in 
terms of lost time, increased cost, and lack of communication for both 
DHS and industry. Often, industry is left in the dark, and is unaware 
of how one particular DHS component will apply fitness standards when 
vetting contractor employees. This makes it difficult for industry to 
know if their current personnel meet the qualifications to earn a 
favorable fitness determination for a specific component, or for 
industry to proactively find employees that do.
    Moreover, any time spent waiting for work to begin while a fitness 
determination or preliminary check is being conducted is a cost 
industry must bear, which in turn, increases the price to DHS. Delayed 
fitness determinations not only waste taxpayer dollars but also keep 
contractor employees from providing DHS with much-needed services.
    Additionally, communication between DHS and industry during the 
process is inefficient. In order for industry to receive information on 
the status of a pending fitness determination, industry must place the 
request with the Contracting Officer Representative (COR), who then 
forwards the request to the office conducting the review. The office 
conducting the review then provides the requested information to the 
COR, who in turn gives it to industry. This not only creates an 
unnecessary middle-man, but also places a burden on industry's 
relationship with the COR whose main job is to manage the contract and 
provide technical direction to industry.
    Aside from the complications I just detailed, I am also concerned 
that this convoluted process deters non-traditional Government partners 
from wanting to do business with DHS. Why would a company, large or 
small, choose to involve themselves in such a disparate and confusing 
process that directly impacts their personnel and bottom line? With the 
ever-increasing threat environment we face today, DHS should work with 
both traditional and non-traditional Government partners to ensure that 
robust market competition provides the best services and technology at 
a competitive price.
    I want to re-iterate that I support DHS's need to appropriately vet 
its contract workforce that supports a variety of missions. However, 
there should be a more transparent and efficient way to do so. I look 
forward to hearing from our witnesses regarding their experiences with 
fitness determinations and any suggestions they may have to improve the 
current process at DHS.

    Mr. Perry. The Chair now recognizes the Ranking Minority 
Member of the subcommittee, the gentleman from California, Mr. 
Correa, for his statement.
    Mr. Correa. Thank you, Chairman Perry, for holding this 
most important hearing. I want to thank the witnesses for being 
here today.
    As you know, the Federal Government is one of the world's 
largest marketplaces. In fiscal year 2017, DHS service 
contractors reported more than 54,000 full-time employees 
employed under the DHS contracts. Given the vast nature of the 
DHS mission, the Department must also use contractors 
throughout the components to fulfill its critical needs. With 
vacancies in the Trump administration at such a high level, DHS 
should have transparent, practical policies designed to get 
contractors on-board as quickly as possible.
    Contracting companies have indicated that DHS is not 
transparent with its fitness standards, hindering the firm's 
abilities to understand the personnel needs of DHS. Companies 
have also indicated that fitness standards vary across DHS 
components or agencies, precluding reciprocities of favorable 
fitness assessments when a contractor joins a contract with a 
different DHS component.
    These areas require proper oversight and management and can 
do better by eliminating redundancies in the fitness 
adjudication process and setting up consistent criteria 
Department-wide and effective communication with contractor 
employers.
    Unfortunately, these administrative remedies appear to have 
fallen low on the Department's priority list. At a time when 
DHS resources are already spread thin, effective use of 
taxpayer dollars should be centered on ways the Department can 
operate and fulfill its mission in the most suitable, efficient 
manner.
    Contractors are an important piece of our mission. My 
district is home to several companies with contract work at 
DHS, especially small businesses with information technology in 
the service area.
    I look forward to speaking with witnesses today about their 
interaction to DHS and how we can make this experience a more 
positive one and how DHS can manage and develop opportunities 
for small businesses. Again, I want to thank the witnesses for 
appearing here today. Again, I thank the Chairman for this 
hearing and I yield back the remainder of my time.
    [The statement of Ranking Member Correa follows:]
               Statement of Ranking Member J. Luis Correa
                           February 27, 2018
    The Federal Government is one of the world's largest marketplaces. 
In fiscal year 2017, DHS service contractors reported that more than 
54,000 FTE were employed under DHS contracts.
    Given the vast nature of the DHS mission, the Department must use 
contractors throughout the components to fulfill critical needs.
    With vacancies in the Trump administration at such a high level, it 
goes without saying that DHS should have in place transparent, 
practical policies designed to get contractors on board in a reasonable 
amount of time.
    Contracting companies have indicated DHS is not transparent with 
its fitness criteria, hindering firms' ability to understand the 
personnel needs of DHS components. Companies have also indicated that 
fitness standards vary across DHS components, precluding reciprocity of 
favorable fitness assessments when a contractor joins a contract with a 
different DHS component.
    These areas require proper oversight and management and can 
certainly be corrected by eliminating unnecessary redundancy in the 
fitness adjudication process, setting up consistent criteria 
Department-wide, and effectively communicating with contractor 
employees.
    Unfortunately, these administrative remedies have fallen low on the 
Department's priority list, namely because of misplaced focus on 
ineffective, costly campaign promises, such as a billion-dollar border 
wall.
    At a time when DHS resources are already spread thin, effective use 
of taxpayer dollars should be centered on ways the Department can 
operate and fulfill its mission in the most suitable, efficient manner.
    I certainly understand the importance of contractors to the DHS 
mission.
    My district is home to several companies with contract work at DHS, 
particularly small businesses in the information technology and service 
fields.
    During my time in the California legislature and my time in 
Congress, I have worked hard to develop solutions to help keep 
California's small businesses competitive and thriving, so that we can 
create more good jobs and grow our economy.
    I look forward to speaking with witnesses today about their 
interactions with DHS and how we can move the Department's contracting 
practices in a more positive direction across the board, not only just 
in contractor vetting, but also with how DHS manages and develops 
opportunities for small businesses.

    Mr. Perry. Chair thanks the gentleman. Other Members of the 
subcommittee are reminded that opening statements may be 
submitted for the record.
    [The statement of Ranking Member Thompson follows:]
             Statement of Ranking Member Bennie G. Thompson
                           February 27, 2018
    Throughout my tenure on this committee, oversight of the Department 
of Homeland Security's contracting practices has been one of my 
priorities.
    The Department's mission compels the agency to use contractors 
throughout the components.
    The personnel security clearance process and ambiguities in the 
suitability standards across DHS are challenges for both DHS components 
and contractors that support the agency's mission.
    During the 113th and 114th Congresses, I introduced legislation to 
streamline security clearance process at DHS.
    Also, I asked the Government Accountability Office to examine the 
process--which led to the personnel security process being placed on 
the High-Risk List.
    I certainly believe it is important to properly and timely vet 
contractor employees to ensure they are fit to work at the Department, 
and I hope to have a productive discussion on this issue today.
    Today's witnesses will testify that having transparent policies for 
contractors is a very manageable standard of operation and essential 
for the success of the DHS mission.
    However, nothing from this administration signals that improving 
the contracting process is a priority.
    Many of the Department's most recent public statements serve as an 
extension of President Trump's campaign trail, placing a misplaced 
focus on a border wall and deportation force.
    Also, President Trump's budget places politics over priorities.
    The Trump budget slashes the already feeble budget of the Office of 
Inspector General, which as former Assistant Secretary Berteau 
testifies, is essential for oversight in this area.
    Furthermore, aside from the vetting and reciprocity issues in 
contracting, there are other pressing contracting issues facing DHS.
    For example, last year Puerto Rico and the U.S. Virgin Islands 
experienced some of the most devastating hurricanes to the non-
contiguous United States.
    DHS has a responsibility to provide to the territories an array of 
life-saving items--including medical supplies, meals, and tarps. 
Contractor support is essential in obtaining these vital needs.
    Unfortunately, there have been serious problems with the contracts 
awarded to date.
    For example, a newly-created Florida company with an unproven 
record, Bronze Star LLC, was awarded $30 million by FEMA to provide 
emergency tarps and plastic sheeting in Puerto Rico.
    Bronze Star failed to deliver those urgently-needed supplies, which 
even months later remain in demand by hurricane victims on the island.
    Similarly, FEMA improperly awarded $156 million to Tribute 
Consulting, LLC, a company with no experience in large-scale disaster 
relief and with at least five prior-cancelled Government contracts.
    Of the over 30 million meals needed for Puerto Rico, Tribute 
provided just 50,000 before the contract had to be canceled due to non-
performance.
    The Department of Homeland Security must do better when it comes to 
contracting oversight and adherence to the laws, policies, and 
procedures in place to ensure these gross errors do not occur.
    In response, on February 8, 2018, I introduced H.R. 4995, the ``Due 
Diligence for FEMA Disaster Contractors Act of 2018,'' a bill requiring 
the administrator of FEMA to establish a contractor review process for 
disaster contracts valued at $1 million or more.
    This legislation was co-sponsored by every Democratic Member of 
this committee.
    We can hold hearings and file legislation to improve the 
contracting process, but we also have to have buy-in from the 
administration.
    We need to hear from the administration about contracting oversight 
procedures and what they need from Congress to improve the process.
    We also need to receive a commitment from Secretary Nielsen that 
improving the contracting process is a priority.

    Mr. Perry. We are pleased to have a distinguished panel of 
witnesses before us today. The witnesses' entire written 
statements will appear in the record. The Chair will introduce 
the witnesses first and then recognize each of the witnesses 
for their testimony.
    Mr. Charles Allen is the senior intelligence advisor for 
the Intelligence and National Security Alliance or INSA. He 
previously served at DHS as the assistant secretary for 
Information and Analysis from 2005 to 2009 and was the 
Department's first under secretary for intelligence and 
analysis. Mr. Allen served nearly 50 years in the Central 
Intelligence Agency before joining DHS. Welcome, sir.
    Mr. Marc Pearl is the president and CEO of the Homeland 
Security and Defense Business Council or HSDBC. The HSDBC 
brings together industry and Government officials to share best 
practices and perspective on pressing National security issues. 
Mr. Pearl joined HSBDC in 2008. Thank you, sir.
    Mr. David Berteau is the CEO of the Professional Services 
Council or PSC. The PSC represents over 400 member companies of 
all sizes that provide services to the Federal Government. 
Prior to joining PSC, Mr. Berteau served as assistant secretary 
of defense for logistics and material readiness. Thank you, 
sir.
    Mr. Brandon LaBonte is CEO of ArdentMC. His small business 
provides technology and geospatial solutions to almost every 
DHS operational component. ArdentMC has employees in 14 States 
and the District of Colombia to support its DHS contracts. 
Welcome, sir.
    Thank you, all, for being here today.
    The Chair now recognizes Mr. Allen for your opening 
statement, sir.

  STATEMENT OF CHARLES E. ALLEN, SENIOR INTELLIGENCE ADVISOR, 
          INTELLIGENCE AND NATIONAL SECURITY ALLIANCE

    Mr. Allen. Thank you, Mr. Chairman, Ranking Member Correa, 
Members of the subcommittee, for this opportunity to talk about 
something that I think is very important for the Department of 
Homeland Security.
    As the Chairman said, I am Charlie Allen. I served for 
almost 50 years at the Central Intelligence Agency. I am here 
representing the Intelligence and National Security Alliance as 
it senior intelligence advisor, which is a nonpartisan forum 
for advancing National security priorities through public-
private relationships. Also, I chair the INSA Security Policy 
Reform Council, which seeks to improve Government security 
policies and programs.
    Fitness requirements may be needed to screen new hires and 
contractors who are unknown to the U.S. Government. But I 
believe they are completely unnecessary for personnel holding 
security clearances.
    Moreover, the lack of uniform fitness criteria among DHS 
components is illogical and counterproductive. Components who 
refuse to accept others' fitness determinations leads to 
duplication of effort, lost time, wasted resources, which 
undermine the Department's ability to fulfill its mission. I 
saw these problems when I was DHS's chief intelligence officer 
about 10 years ago. They still exist and I applaud the 
committee for holding this hearing.
    Before starting at work on a DHS contract in any capacity, 
the contractor must receive favorable fitness determination 
based on a background investigation. But the investigative and 
adjudicative processes have shortcomings that undermines the 
Department's effectiveness.
    First, DHS fitness criteria are not consistent across the 
Department. There is no rationale for component-specific 
criteria. CBP, which intercepts drug traffickers as you know, 
argues that anyone involved in drug trafficking is unfit to 
work for CBP. But I would argue that a drug trafficker would 
not be fit to work for any component whether it is TSA or FEMA.
    Second, the lack of uniformed criteria prevents for 
reciprocity among components. Contractors supporting multiple 
DHS components must therefore be assessed multiple times, which 
is a waste of time and resources.
    Third, fitness assessments of contractors who hold security 
clearances are a complete waste of time and resources, 
particularly since clearance investigations are far more 
comprehensive. I was just reinvestigated by the Department of 
Defense and it took 35 months for me to be upgraded again to 
receive Top Secret SCI information, but it is a real problem.
    Contractors are harmed by an inefficient process that waste 
time and money and impedes their work. First, lengthy fitness 
investigations make it difficult for firms to fulfill their 
contracts. Contractors routinely wait 3 or 4 months for a 
fitness determination.
    Second, firms incur substantial costs when staff wait for 
fitness determinations, using average figures provided by one 
large firm consulted by INSA, a company would lose $27,000 in 
revenue for each employee who waits 30 business days for a 
fitness determination. On a 50-person contract, which is 
ordinary, the firm could lose over $1 million in revenue.
    Third, fitness requirements deter firms for bidding on DHS 
contracts. I have had a number of companies, particularly 
smaller firms, can't weather the delays or incur additional 
cost. The impact on Government is manifest. These efficiencies 
undermine the Department's effectiveness. By impeding 
contractors' work, the fitness process hinders DHS's ability to 
execute its missions. Lost revenue increases firms' cost which 
result in less value for the Government. DHS wastes time and 
money investigating people unnecessarily.
    Recommendations. What should we do about this? First, DHS 
should eliminate fitness requirements for contractors who are 
already cleared, who hold security clearances Secret or Top 
Secret SCI.
    Second, DHS should set uniform fitness criteria across the 
Department. Consistent standards are a prerequisite for 
reciprocity. Last January, the House passed this committee's 
DHS Clearances Management and Administration Act H.R. 697, 
which requires DHS to set uniform clearance adjudication 
standards. DHS should take the same steps regarding fitness 
standards. The committee should direct it to do so.
    Third, DHS should mandate and implement fitness reciprocity 
across all components. Fourth, a single DHS entity, preferably 
the chief security officer with whom I worked closely at the 
time when I was at the Department, should set Department-wide 
standards for all fitness determinations. Fifth, Congress 
should rescind the TSA-specific fitness requirements, which has 
been enshrined in law.
    Thank you for the opportunity, Mr. Chairman, for testifying 
today. I look forward to your questions.
    [The prepared statement of Mr. Allen follows:]
               Prepared Statement of Charles E. Allen\1\
---------------------------------------------------------------------------
    \1\ Charles E. Allen, a principal at the Chertoff Group, is the 
senior intelligence advisor to the Intelligence and National Security 
Alliance (INSA), a non-partisan, non-profit forum dedicated to 
advancing intelligence and National security priorities through public-
private partnerships. He serves as chairman of INSA's Security Policy 
Reform Council, which applies private sector expertise and commercial 
best practices to improve the efficiency of U.S Government policies 
regarding security clearances and related matters. From 2005-2009, he 
served as the Department of Homeland Security's under secretary of 
intelligence and analysis and chief intelligence officer. He concluded 
47 years of service at the Central Intelligence Agency by serving as 
the assistant director of central intelligence for collection.
---------------------------------------------------------------------------
                           February 27, 2018
                              introduction
    Chairman Perry, Ranking Member Correa, Members of the subcommittee, 
thank you for the opportunity to testify today. My name is Charlie 
Allen. I am the senior intelligence adviser at the Intelligence and 
National Security Alliance (INSA), a nonpartisan, nonprofit forum for 
advancing intelligence and National security priorities through public-
private partnerships. I serve as chair of INSA's Security Policy Reform 
Council (SPRC), which brings together industry and Government 
stakeholders to improve the effectiveness of security policy and 
programs and to enhance industry's ability to support National 
security. The SPRC has been a thought leader for modernizing the 
security clearance process. We have championed clearance reciprocity, 
the adoption of continuous monitoring and evaluation for cleared 
personnel, and other transformative steps to bring our trusted 
workforce into the 21st Century. Many of the challenges associated with 
the security clearance process apply to the DHS fitness and suitability 
assessment process.
    My testimony is informed by input from INSA's membership, which 
includes small, medium, and large firms that have contracts with the 
Department of Homeland Security and with individual DHS components, as 
well as with the intelligence community and the Department of Defense. 
My testimony is also informed by more than 40 years in the intelligence 
community, which I concluded by serving as the Department of Homeland 
Security's under secretary of intelligence and analysis and its chief 
intelligence officer from 2005 to 2009.
    Fitness determinations of contractor employees are essential to 
developing a workforce the American people can trust to protect them. 
Unfortunately, however, the inefficiency of this process deters some 
companies from seeking work with the Department of Homeland Security; 
hinders companies' ability to execute their contracts; increases 
companies' costs; and ultimately undermines DHS's mission. The 
Department's processes must be responsive to its industry partners, as 
the Department depends on contractors' unique skills, expertise, and 
experience for may critical functions.
    I am here today to advocate for a number of reforms that would 
eliminate inefficiencies in the DHS fitness/suitability process, 
including: (1) Standardizing the suitability and fitness requirements 
across the Department, consistent with the ``unity of effort'' campaign 
undertaken by DHS Secretaries from both the current and previous 
administrations, (2) making those requirements publicly available, (3) 
empowering the Department's chief security officer to determine and 
implement consistent requirements across the Department, and (4) 
eliminating the requirement to conduct a fitness/suitability assessment 
on Government or contractor personnel who possess a valid, in-scope 
security clearance.
                               background
    Before characterizing the challenges presented by DHS's fitness/
suitability requirements, it would be helpful to define some key terms 
and explain the investigative and adjudicative process.
Fitness/Suitability Assessment
    Before starting work on any DHS contract in any capacity, a 
contractor must receive a fitness determination, based on a background 
investigation, from the specific DHS component being supported. If the 
contractor seeks to support a second DHS component organization, he or 
she must go through a second fitness assessment.
    The need for a fitness determination applies to everyone. It does 
not only apply to contractors who are working at a DHS site and 
accessing DHS networks and databases--people whom the Department would 
understandably want to vet. It includes copy editors who review a 
report written for DHS under contract. It includes program managers 
overseeing project staffing and budgets. It includes security guards 
checking IDs for a DHS-contracted conference at a contractor facility--
someone who will never access DHS information or facilities. There is 
little, if any, need for contractors in such roles to be investigated 
by the Department.
    In the Department's Instruction Handbook on the DHS Personnel 
Suitability and Security Program, DHS's chief security officer defines 
``suitability/fitness'' as ``an assessment of an individual's character 
or conduct that may have an impact on promoting the efficiency and the 
integrity of the Federal service.''\2\ Assessments are conducted at 
three levels--high-, medium-, and low-risk--depending on whether the 
position has the potential for exceptionally serious, serious, or 
limited impact ``on the integrity and efficiency of Federal 
service.''\3\
---------------------------------------------------------------------------
    \2\ Department of Homeland Security, Office of the Chief Security 
Officer, The Department of Homeland Security Personnel Suitability and 
Security Program, DHS Instruction Handbook 121-01-007, June 2009, p. 5. 
As of February 21, 2018: https://www.dhs.gov/sites/default/files/
publications/instruction-121-01-007-personnel-suitability-and-security-
program.pdf.
    \3\ Department of Homeland Security, The Department of Homeland 
Security Personnel Suitability and Security Program, p. 14.
---------------------------------------------------------------------------
    As the U.S. Citizenship and Immigration Services (USCIS) website 
\4\ describes the process of gathering information to conduct a fitness 
assessment, the Department will investigate a wide range of past 
behavior by the person requesting access, including ``illegal drug use, 
financial delinquencies, employment history, residences, education, 
police record, alcohol use and counseling, among other things.'' The 
investigation involves interviews of ``close personal associates, 
spouse, former spouse(s), former employers, co-workers, neighbors, 
[and] landlords,'' and it involves checks of references and records 
related to one's education, credit history, military service, tax 
payments, and police interactions.
---------------------------------------------------------------------------
    \4\ U.S. Citizenship and Immigration Services, ``Q&A Regarding 
Background Investigations,'' website. Updated March 18, 2008. As of 
February 16, 2018: https://www.uscis.gov/faq-page/qa-regarding-
background-investigations#t12832n40208.
---------------------------------------------------------------------------
Security Clearance
    If a contractor needs access to Classified information, he or she 
will first have to be granted an appropriate level security clearance, 
which differs from a fitness/suitability determination. The DHS 
Suitability and Security Instruction Handbook defines a security 
clearance as ``a determination that a person is able and willing to 
safeguard Classified National security information''\5\--the release of 
which, according to Executive Order 13526, could cause ``exceptionally 
grave'' or ``serious'' damage to U.S. National security.\6\
---------------------------------------------------------------------------
    \5\ Department of Homeland Security, The Department of Homeland 
Security Personnel Suitability and Security Program, p. 20.
    \6\ Executive Order 13526, December 29, 2009, sec. 1.2. As of 
February 21, 2018: https://www.archives.gov/isoo/policy-documents/cnsi-
eo.html.
---------------------------------------------------------------------------
    It should be noted that anyone who holds an active security 
clearance has already gone through a background investigation that 
considers the same factors evaluated in a DHS fitness assessment--
though likely far more in-depth--and had the findings be favorably 
adjudicated. Yet even if one has a top-level security clearance--and 
even if that clearance was granted and held by DHS--a contractor must 
still undergo a less-thorough and duplicative fitness investigation and 
assessment before he or she can begin work.
                             inefficiencies
    In my personal experience and that of several INSA member firms, a 
number of factors hinder timely suitability determinations.
    1. Lack of transparency. Many DHS components do not make their full 
        suitability criteria publicly available, hindering firms' 
        ability to understand the personnel needs of a given DHS 
        component, both during the bid process and after the contract 
        is awarded.
    2. Inconsistency. Fitness standards vary across DHS components, 
        precluding reciprocity of favorable suitability assessments 
        when a contractor joins a contract with a different DHS 
        component.
    3. Redundancy. Even if an individual contractor has received a 
        favorable fitness determination from one DHS component, before 
        he or she can support a contract for another DHS component, he 
        or she must secure a favorable determination from that 
        component too. Similarly, even contractors who hold valid, in-
        scope security clearances must undergo a fitness investigation 
        despite having successfully completed a more in-depth 
        background investigation that addresses the Office of Personnel 
        Management's fitness requirements and many of the issues of 
        concern to DHS components.
Lack of Transparency
    In preparation for my testimony, I had intended to compare and 
contrast the suitability criteria of different DHS components to see 
where--and perhaps divine why--they differ. Unfortunately, only one--
the Transportation Security Administration (TSA)--makes its full list 
of criteria publicly known, as they are mandated in law. TSA is 
statutorily required to consider 28 types of criminal behavior that 
would disqualify an individual from employment with the agency.\7\
---------------------------------------------------------------------------
    \7\ The requirements are specified in 49 U.S.C.  44936(b) and 49 
C.F.R.  1542.209(d). See The Insider Threat to Homeland Security: 
Examining Our Nation's Security Clearance Processes, Hearing Before the 
Subcommittee on Counterterrorism and Intelligence, Committee on 
Homeland Security, U.S. House of Representatives, 113th Cong., 1st 
Sess. (November 13, 2013). (Gregory Marshall, Chief Security Officer of 
the Department of Homeland Security, Answers for the Record to 
Questions Submitted by Rep. Peter King.) As of February 21, 2018: 
https://www.gpo.gov/fdsys/pkg/CHRG-113hhrg87372/pdf/CHRG-
113hhrg87372.pdf. The criteria are specified more clearly in 
Transportation Security Administration, ``Self-Assessment for 
Applicants for the Transportation Security Administration (TSA),'' 
website, revised June 2011. As of February 17, 2018: https://hraccess-
assessment.tsa.dhs.gov/tsofaqs/backgroundrequire- ments.pdf.
---------------------------------------------------------------------------
    In the absence of information, contracting firms must decide 
whether, how, and how much to bid for contracts without knowing whether 
they have sufficient staff who will meet the fitness criteria. Firms do 
not even receive clearly-defined fitness criteria after being awarded 
the contract. As a result, they simply propose staff and wait.
Inconsistency
    DHS Instruction Handbook 121-01-007 establishes minimum standards 
for the DHS Personnel Suitability and Security Program but adds, ``any 
DHS component is not prohibited from exceeding the requirements.'' 
Barring comprehensive data, I would hazard a guess many components have 
added what they have identified as mission-specific criteria. The DHS 
Inspector General, for example, reported that because Border Patrol 
officials routinely come across illegal drug activity, CBP deems 
unsuitable anyone who has ``ever had any illegal involvement in the 
cultivation, manufacturing, distribution, processing, or trafficking of 
any drug or controlled substance''.\8\ Clearly, a person with such a 
history would not be fit to work at another DHS component, even if its 
personnel do not directly address illegal narcotics. This highly 
specific disqualifying factor is thus unnecessary. Yet because the 
criterion exists, CBP must investigate whether a contractor violates it 
even if the contractor has already been cleared to work by another DHS 
component.
---------------------------------------------------------------------------
    \8\ Department of Homeland Security, Office of Inspector General, 
The DHS Personnel Security Process, OIG-09-65, May 2009, p. 19. As of 
February 21, 2018: https://www.oig.dhs.gov/assets/Mgmt/OIG_09-
65_May09.pdf.
---------------------------------------------------------------------------
    It is not clear that component-specific security requirements have 
demonstrated any value-added. Instead, they have precluded or delayed 
qualified contractors from beginning work, introducing uncertainty for 
firms, contractors, and the components depending on them. Favoring 
component autonomy is a holdover from DHS components' legacy as 
independent agencies. In the present era, when successive DHS 
Secretaries advocate for a ``unity of effort'' across the Department, 
no DHS component requires fitness standards so unique that a uniform 
standard would not suffice.
    The continued existence of component-specific criteria yields a 
requirement for component-specific fitness assessments. DHS leadership 
should direct components to assess whether the specific criteria that 
are unique to them really add so significantly to determinations of 
employee and contractor trust that these inconsistencies must be 
maintained. A uniform set of standards would enable reciprocity across 
components that is presently not possible.
Redundancy
    When reciprocity is not an option, redundancy often surfaces. In 
the absence of common adjudicative criteria and a shared database of 
investigation data, DHS components are doomed to duplicate each other's 
work. Contractors--who often support multiple components within DHS and 
across broader USG--are considerably more susceptible to endure 
redundant investigations.
    DHS considers fitness determinations to be contract-specific. As a 
result, a contractor who has successfully passed one DHS component's 
fitness investigation cannot work on a contract for another DHS 
component unless he passes that organization's own investigation. As a 
comparison, consider if staff from this subcommittee could not support 
another subcommittee without being reinvestigated.
    Even worse, if a contractor is already supporting a DHS component 
on a contract, having successfully received a fitness determination, he 
cannot support a new task order on the same contract without undergoing 
another fitness investigation by the same component. So even if this 
individual is already doing work for a DHS component, he cannot work on 
another project for the same organization without being reinvestigated. 
This would be like investigating the staff of this committee so they 
could support today's hearing and then investigating them all over 
again to enable them to support a hearing scheduled for next week.
    In particular, reinvestigating contractors with an existing fitness 
determination or a valid, in-scope security clearance wastes time and 
resources. A Government agency already has compiled the entire body of 
information necessary to generate a complete fitness investigation 
(i.e., interviews with neighbors and employers, checks of police, 
academic, and credit records, etc.)--and adjudicated it successfully. 
DHS policy indicates prior investigations conducted within the past 5 
years would satisfy investigative requirements--but would not in and of 
themselves prove sufficient for an affirmative adjudication. Rather, 
data from investigative files must be ``obtained and reviewed in 
conjunction with pre-employment checks to make a fitness decision for 
employment.''\9\
---------------------------------------------------------------------------
    \9\ Department of Homeland Security, Office of the Chief Security 
Officer, The Department of Homeland Security Personnel Suitability and 
Security Program, p. 17.
---------------------------------------------------------------------------
    Nothing illustrates the lack of interagency trust and an almost 
compulsive need to check internal boxes more than requiring holders of 
active security clearances to undergo a more cursory fitness assessment 
from DHS. This happens all the time.
   One INSA member firm hired an individual specifically 
        because he had a skill set relevant to a DHS contract. Yet 
        despite holding a Department of Defense Top-Secret clearance, 
        he is still awaiting a fitness determination from DHS 14 months 
        later.
   The DHS program manager at one large services firm waited 4 
        months to receive her fitness determination from a DHS 
        component--even though a DHS Headquarters office, the Office of 
        Intelligence and Analysis (I&A), already held her TS/SCI 
        clearance. During this 4 months, she could not bill to the 
        contract--so she could not oversee or manage her firm's work 
        for the component.
   One company told INSA of a person who was denied a fitness 
        determination because he was married to a foreign national. But 
        this person held a TS/SCI clearance, which means that another 
        agency had already investigated the foreign spouse and 
        determined that she posed no security risk.
    Fitness investigations of cleared personnel virtually never yield 
derogatory information that would merit a denial of access. Data 
provided by several INSA member companies indicate that the share of 
their cleared personnel who are rejected for DHS fitness is between 
zero and 1.3 percent. One of the firms explained that the few employees 
it had who were denied fitness determinations had short-term debt 
problems associated with the collapse of the housing market at the 
beginning of the recent recession. Such employees are so few and far 
between--and so low-risk--that the fitness investigations of these 
firms' personnel added little, if any, to the Department's efficiency 
or integrity.
    I encountered this predicament more than I care to remember as 
DHS's under secretary for intelligence. I frequently saw cleared 
individuals with years of experience in the intelligence community 
unable to come to work because they were awaiting a cursory suitability 
or fitness review. If we are to make fitness and suitability standards 
work for DHS and its industry partners, reciprocity must be part of the 
solution.
                           impact on industry
    The requirement that all personnel on a DHS contract receive a 
fitness determination specific to that contract burdens both Government 
and industry with delayed productivity and increased costs--thus 
hindering the Department's ability to fulfill its mission.
    1. Firms struggle to staff contracts in a timely manner despite 
        having qualified personnel available.--Firms often must rely on 
        contractors new to a DHS component in order to complete 
        staffing of a contract. One large services firm told us that 
        the average wait over the past 5 years has been 61 days. 
        Another large services firm told INSA that its staff waits 26 
        days on average for a fitness determination to do Classified 
        work and 42 days for a fitness determination to do Unclassified 
        work. Another INSA member organization asserted that its staff 
        routinely wait 60 to 90 days to receive fitness determinations. 
        In practice, the delays encountered are even longer, as it 
        takes roughly 1 to 2 weeks to complete and submit paperwork 
        before a fitness investigation can be started, and it takes 
        another 1 to 2 weeks after a fitness determination is provided 
        for the individual to be indoctrinated, or ``read in'' by the 
        DHS component.
    Delays awaiting a fitness determination for contractors previously 
        unknown to U.S. Government are understandable and even prudent; 
        however, these figures also include contractors who hold Secret 
        or TS/SCI clearances, who received affirmative fitness 
        determinations from other DHS components, or who are already 
        working for the very same DHS component on another contract or 
        task order.
    These delays can be incredibly counterproductive for firms who, by 
        the nature of contracting, have limited time to produce 
        results. Some contracts may be issued for only 1 year, with 
        additional option years if the work is done satisfactorily. A 
        2-month delay to investigate staff wastes as much as one-sixth 
        of a firm's performance period, thereby diminishing 
        productivity and undermining relationships between the 
        contractors and the Government officials they support.
    2. Staffing delays increase overhead costs associated with contract 
        support.--Firms incur costs while their contractors wait for 
        suitability determinations. These costs increase the firms' 
        operating expenses and contribute to staff turnover, as bored 
        staff inevitably look for more engaging opportunities. One INSA 
        member firm stated it incurs $500,000 per year in overhead 
        costs waiting for staff fitness determinations. This figure 
        would be larger were it not for the firm's ability to give 
        employees other temporary assignments--work that may not be 
        substantive or professional rewarding.
    Another firm reported average costs of $900 per day per employee 
        and average wait times of 42 days, or 30 business days, for a 
        fitness determination. That comes to a loss of $27,000 for each 
        individual slotted to work on a DHS contract. If the company 
        was required to provide 50 people on the contract--not an 
        unusual level of effort, particularly for an on-site staff 
        augmentation contract--the company would lose $1.35 million in 
        revenue waiting for DHS to conduct fitness assessments. If this 
        firm had won its contract under a firm fixed price or Lowest 
        Price Technically Acceptable (LPTA) procurement, the firm would 
        be unable to recoup the costs of this lost staff time.
    3. Costs incurred waiting for fitness determinations hit small- and 
        medium-sized firms especially hard.--Small firms do not have 
        the resources to carry unbillable staff while they wait for a 
        fitness determination that could take weeks or months to 
        receive. If a small firm cannot put its people to work 
        relatively quickly, it will be reluctant to pursue DHS 
        opportunities--or it may assign employees to other projects, 
        making them unavailable to support DHS when the fitness 
        determination comes through. If the Department wants to take 
        advantage of the skills and expertise of smaller firms--many of 
        which are owned by women, minorities, and veterans--fitness 
        determinations must be better aligned to provide firms with 
        greater certainty that their personnel will be able to do the 
        job efficiently.
                            recommendations
    DHS can take a number of steps to eliminate the burden that the 
fitness requirement places on its industry partners. In doing so, the 
Department would improve its ability to execute its mission and reduce 
costs for both contractors and the Government.
    1. DHS should eliminate suitability requirements for staff who are 
        already hold a valid, in-scope security clearance. Fitness 
        assessments consider the same broad behavior and 
        characteristics that are investigated and evaluated in the 
        process of granting someone a clearance. DHS has no valid 
        reason for reinvestigating and readjudicating the same facts. 
        Requiring a more cursory and mostly duplicative background 
        check on contractors who have already undergone much more 
        thorough investigations is a waste of time and resources on the 
        part of both the Department and its industry partners.
    2. DHS should set consistent criteria suitability standards across 
        the Department. As I have discussed, there is simply no reason 
        for DHS components to have different standards for fitness and 
        suitability. The Department should determine the criteria that 
        make someone fit or unfit to handle sensitive information and 
        tasks on its behalf and apply those standards across the entire 
        organization. Such a measure would be consistent with a 2006 
        DHS Management Directive that called for DHS to ``standardize 
        security policies and appropriate procedures'' across the 
        Department.\10\
---------------------------------------------------------------------------
    \10\ Department of Homeland Security, ``Security Line of Business 
Integration and Management,'' Management Directive 11080, January 3, 
2006, Sec. VI(C)(1)(a). As of February 20, 2018: https://www.hsdl.org/
?view&did=692121.
---------------------------------------------------------------------------
    3. DHS should mandate--and implement--suitability reciprocity among 
        all components. Ten years ago, Under Secretary for Management 
        Elaine Duke signed a memorandum committing the Department to 
        implement suitability reciprocity at DHS headquarters.\11\ A 
        decade hence, this goal remains unfulfilled.
---------------------------------------------------------------------------
    \11\ Office of Inspector General, Department of Homeland Security, 
The DHS Personnel Security Process, OIG-09-65, May 2009, p. 18. As of 
February 20, 2018: https://fas.org/sgp/othergov/dhs/persec.pdf.
---------------------------------------------------------------------------
    4. DHS should share fitness investigations records across the 
        Department to facilitate reciprocity. The Department uses the 
        Integrated Security Management System (ISMS) to store 
        information needed to identify an individual and to track 
        completion of suitability/fitness and security-related 
        processes, including background investigations. Data in the 
        system includes a range of biographic and biometric data, as 
        well as records regarding previous suitability/fitness and 
        security clearance determinations.\12\ If the Department had 
        consistent fitness standards, a component could use this 
        database to verify that a contractor had already been granted a 
        fitness determination by another component and immediately 
        provide the contractor access needed to begin work.
---------------------------------------------------------------------------
    \12\ Department of Homeland Security, Privacy Impact Assessment for 
the Integrated Security Management System (ISMS), March 22, 2011, pp. 
6-7. As of February 20, 2018: https://www.dhs.gov/sites/default/files/
publications/privacy_pia_dhswide_isms_2011.pdf. Also Department of 
Homeland Security, Privacy Impact Assessment Update for the Integrated 
Security Management System (ISMS), DHS/ALL/PIA-038(c), June 26, 2017, 
p. 6. As of February 20, 2017: https://www.dhs.gov/sites/default/files/
publications/privacy-pia-dhsall038-isms-june2017.pdf.
---------------------------------------------------------------------------
    5. Fifth, to facilitate reciprocity, efficiency, and information 
        sharing, a single DHS official must be responsible for fitness/
        suitability determinations and be held accountable for 
        performance that facilitates the Department's work. The DHS 
        chief security officer is the single official who is positioned 
        to oversee this issue across the Department. A DHS Directive of 
        2008, which describes this official's responsibilities and 
        authorities, states:

    ``The CSO exercises the DHS-wide security program authorities in 
        the areas of personnel security, physical security, 
        administrative security, special security, counterintelligence 
        operations, security-related internal investigations, and 
        security training and awareness . . . The CSO develops, 
        implements, and oversees DHS security policies, programs, and 
        standards; delivers security training and education to DHS 
        personnel; and provides security support to DHS components. 
        Working with the CSO Council, the OCSO integrates all security 
        programs used to protect the Department in a cohesive manner, 
        increasing efficiency and enhancing the overall security of 
        DHS.''\13\
---------------------------------------------------------------------------
    \13\ Department of Homeland Security, ``Chief Security Officer,'' 
Directive 121-01, June 30, 2008, Secs. IV(A), V(A). As of February 20, 
2018: https://www.dhs.gov/sites/default/files/publications/
mgmt_dir_121_01_office_of_the_chief_security_officer.6.30.08.pdf.

    The Secretary should empower the Department's chief security 
officer to set consistent standards, enforce their implementation, and 
report on their effectiveness to Congress, industry, and other 
stakeholders.
    Finally, there is something specific that this body can do to 
promote fitness/suitability reciprocity and unity of effort at DHS. 
Congress should rescind the TSA fitness/suitability requirements that 
it has enshrined in law.\14\ Statutory requirements will inhibit any 
effort to standardize criteria across the Department and thus obstruct 
reciprocity among components. The statutory criteria for TSA are mostly 
(but not all) transportation-specific, but they should apply to anyone 
who works at the Department. If one has been convicted of air piracy, 
or interfering with an air crew, or smuggling drugs in an airplane, or 
forging aircraft registration--not to mention garden-variety felonies 
such as murder, kidnapping, hostage-taking, or armed robbery--one is 
not suitable to work at any component of the Department of Homeland 
Security. There is no need to define such criteria in statute only, and 
explicitly, to the TSA.
---------------------------------------------------------------------------
    \14\ 49 U.S.C.  44936(b) and 49 C.F.R.  1542.209(d).
---------------------------------------------------------------------------
                               conclusion
    These shortcomings, inefficiencies, and costs make it difficult and 
costly for DHS contractors to provide the support for which the 
Department has engaged them. More critically, however, they undermine 
the Department's ability to keep the American people safe. DHS relies 
heavily on industry to provide critical skills, experience, and 
expertise necessary to fulfill the Department's mission. If DHS impedes 
contractors' ability to do their work, it undermine its own 
effectiveness.
    The inefficiencies I have described should be no surprise to senior 
officials at the Department of Homeland Security and its components. In 
September 2015, in an appearance before this very subcommittee, Elaine 
Duke--the current Deputy Secretary of the Department, but at the time a 
private citizen--reflected upon her experience as a deputy assistant 
administrator at TSA and as the under secretary for management of the 
entire Department. In her prepared statement, she asserted:

``DHS must also address its security clearance, suitability, and on-
boarding processes for both its own and contractor employees. The long 
lead times, duplicity [sic] between the clearance and suitability 
processes, and lack of reciprocity between DHS components is very 
costly both in terms of time and cost of investigations. Additionally, 
it delays the time that employees can report to work, further degrading 
the efficiency of offices waiting for key staff and contractor 
support.''\15\
---------------------------------------------------------------------------
    \15\ Making DHS More Efficient: Industry Recommendations to Improve 
Homeland Security, Hearing Before the Subcommittee on Oversight and 
Management Efficiency, Committee on Homeland Security, U.S. House of 
Representatives, 114th Cong., 1st Sess. (September 18, 2015). (Prepared 
Statement of Elaine C. Duke, Principal, Elaine Duke & Associates, LLC.) 
As of February 21, 2018: https://www.gpo.gov/fdsys/pkg/CHRG-
114hhrg99575/pdf/CHRG-114hhrg99575.pdf.

    Deputy Secretary Duke was onto something back in 2015. As I have 
noted in my testimony, however, the Department continues to face the 
same challenges in 2018.
    On behalf of INSA and its members, I thank you for the opportunity 
to testify today. I look forward to addressing your questions.

    Mr. Perry. Thank you, Mr. Allen.
    The Chair now recognizes Mr. Pearl for his opening 
statement.

 STATEMENT OF MARC PEARL, PRESIDENT AND CEO, HOMELAND SECURITY 
                  AND DEFENSE BUSINESS COUNCIL

    Mr. Pearl. Chairman Perry, Ranking Member Correa, and 
distinguished Members of this subcommittee, I want to thank you 
for the opportunity to appear before you today to provide the 
collective perspective from what we call the Homeland Security 
Industrial Base.
    The issues surrounding fitness adjudication have frustrated 
the industry and program heads at DHS since the Department's 
inception 15 years ago this Thursday. All companies regardless 
of size or capability are affected. Despite numerous forums 
that the council and our members have participated in to bring 
greater attention to the issue, we have yet to see any 
improvement in communication or a more efficient process.
    As my written testimony outlines more fully, the current 
processes at DHS lack consistency and transparency, the same 
thing that both of you opened up with, take too long, limit 
competition, increase labor rates and are costly to both 
Government and industry. As a result, the Department is 
prevented from otaining the best work force and from having 
mission-critical contracts executed in a timely manner.
    We do believe that these, that changes can be made that 
would ensure the integrity of the program and reduce the pain 
points for everyone. There are numerous challenges facing 
industry with respect to the fitness determination process at 
DHS. Let me just briefly discuss two.
    There is not a single standard for fitness across DHS. In 
addition to eight types of conduct that may be incompatible 
with the duties of a position, each component is also given 
sole discretion in applying seven additional considerations. 
Each component also has its own personnel security office with 
different standards, different procedures, and different 
adjudicators to determine what is acceptable.
    While such differences may be justified in some instances, 
specific policies and standards are not communicated to 
industry and are inconsistently applied across DHS. The ability 
to grant fitness reciprocity from another component or other 
Federal agency ensures the saving of time, effort, and cost for 
both sectors. Reciprocity allows companies to quickly onboard 
or transfer employees to contracts that best fit their skills 
and experience.
    DHS and its components, unlike DOD, rely on equivalent 
fitness standards to determine reciprocity, which means that 
candidates who have a high-level security clearance can't 
receive reciprocity without additional scrutiny. This is an odd 
result when the investigation used for a TS SCI clearance 
exceeds the investigation standards of, say, a CBP background 
investigation.
    The Department's different fitness standards also reduces 
the pool of candidates who can promptly begin work, thereby 
increasing labor rates and the amount of time between contract 
award and contractor employees executing a contract.
    Furthermore, neither the company nor the candidate is 
informed of the investigation status, what is causing the 
delay, what is needed to be resolved with regard to problems 
identified. If a company knows that an individual will be 
leaving the position in the future, it can't submit a 
replacement name for a fitness determination until the seat is 
empty. Candidates with the best skills and experience often 
take other positions, because they can no longer sit around and 
wait while the investigation process and the fitness 
adjudication is going on.
    In many instances, companies may not find this out until 
after the adjudication and they must then start the process all 
over again. While our members have instituted internal 
processes to screen candidates, the uncertainty forces 
companies to continue to recruit and provide conditional offers 
of employment for a single position multiple times. As a 
result, companies will often build time and cost on hiring 
multiple candidates into their rates and their pricing models 
before Government.
    So, what can be done? Well, the council and members 
strongly support the need for DHS to have sufficiently-vetted 
contractors. The delays, inconsistencies, and cost inherent in 
the current system must be measured against alternative ways to 
get the same result.
    Allow me to offer two recommendations. Both sectors save 
time and money when fitness reciprocity, as we have already 
heard, is available. In the short term, if DHS and its 
components could work together to standardize, collapse, or 
even find greater alignment with some of the fitness standards 
across the Department, it would increase opportunity for 
reciprocity.
    In the longer term, the Federal Government needs to 
continue efforts to standardize background investigations and 
align them with suitability and fitness so that DHS could base 
reciprocity on investigative elements rather than fitness 
requirements. This would open up reciprocity to a much larger 
class of individuals with security clearances.
    DHS must also figure out ways, you have said it, Mr. Allen 
said it, to communicate the status of candidate investigations 
with industry throughout the process. DOD's electronic 
personnel security status system, for example, allows a 
designated person from industry to know the status and delays 
with candidate investigations. DHS should consider this 
approach. It would reduce staff workload, improve companies' 
ability to plan, budget, and hire staff.
    In conclusion, personnel security is a necessity and of 
utmost importance, but there are ways to improve the process 
without giving up the integrity of the program. DHS and 
industry need to continue to work together to reduce the system 
backlogs and time lines, allow companies to on-board quickly, 
improve communication, and ensure that DHS has access to 
quality contractor work force.
    We urge Congress to consider the ideas that all of us are 
putting forward today and play an active role in driving change 
at DHS and across the Federal Government. I thank you for the 
opportunity and to provide the collective perspectives of our 
members, and I look forward to answering any questions that you 
might have. Thank you.
    [The prepared statement of Mr. Pearl follows:]
                  Prepared Statement of Marc A. Pearl
                           February 27, 2018
    Chairman Perry, Ranking Member Correa, and distinguished Members of 
the subcommittee, thank you for the opportunity to appear before you to 
provide the collective perspectives from the Homeland Security 
Industrial Base on some of the challenges contractors face with respect 
to the DHS fitness adjudication process. I am Marc Pearl and serve as 
the president and CEO of the Homeland Security & Defense Business 
Council (Council). We are a non-profit, non-partisan corporate 
membership organization of the leading large, mid-tier, and small 
companies that provide homeland security and homeland defense 
technology, product, and service solutions to the Department of 
Homeland Security (DHS) and other Government agencies in the homeland 
security enterprise.
    The Council was created more than 13 years ago to facilitate 
greater dialog and engagement between industry and Government on 
critical issues that affect the mission and management of homeland 
security. Our focus is to bring both sectors together to share 
expertise and best practices, exchange perspectives of the procurement 
process, and to discuss ways to improve contract outcomes and the 
manner in which we conduct business together. In this regard, 
particularly as it pertains to today's hearing, our members have led 
and participated in a number of DHS forums, including Reverse Industry 
Days and Personnel Security Acquisition Innovation Roundtables that 
have identified challenges, future areas of focus, and provided 
industry perspectives on the vetting process.
    At the outset, we applaud DHS for its willingness to solicit 
feedback from industry on its personnel security business practices and 
engage with industry on this topic. However, despite the many 
discussions, both industry and program officials at the Department have 
been frustrated by the lack of meaningful change, particularly as it 
relates to improving communication and making the process faster and 
more efficient. Each component wants to individually set standards, 
conduct their own or additional background investigations, and control 
their process. Our perception is that many of the DHS components are 
resistant to change and in in some cases this is not entirely 
justified.
    Industry understands and supports the need to properly vet 
contractors, but the current system is inefficient at best or broken at 
worst. The process lacks consistency, transparency, and communication. 
It takes long amounts of time, sometimes requires duplicative efforts, 
which limits competition, adds substantial costs to both Government and 
industry, and prevents DHS from obtaining the best workforce to 
accomplish its mission.
    The Council's testimony today will focus on the challenges that 
contractors experience trying to recruit, vet, and on-board employees 
to the Government, the impact and costs to both Government and 
industry, and a few recommendations to improve the process. We strongly 
believe that changes can be made that would ensure the integrity of the 
program and reduce the pain points for everyone.
     background on contractor fitness and relationship to security 
                               clearances
    Suitability and fitness determination are often confused with the 
determination to grant a security clearance. A security clearance 
determines eligibility for access to Classified information. A 
suitability check evaluates an individual's character and conduct to 
determine if that person is suitable for Federal employment. Fitness--a 
term often used interchangeably with suitability--refers to the 
character and conduct required by a potential contractor employee to 
perform work for or on behalf of a Federal agency. Suitability refers 
to a potential Government employee. All contractor employees who need 
access to DHS facilities, their IT systems, or Sensitive Information 
must receive an appropriate fitness screening, based on the risk level 
of their positions (i.e. low, moderate, or high).
    The risk and sensitivity level of the position determines the type 
of background investigation required.\1\ The information gathered 
during the background investigation is used to determine fitness based 
upon specific requirements set for different mission areas. Some 
positions will require both a fitness determination and a security 
clearance (depending on position sensitivity), while others only 
require a fitness determination. Note that a fitness determination by 
itself does not grant access to Classified information. However, the 
background investigation used to determine fitness often involves many 
of the same investigative criteria used in the security clearance 
investigation. The decision to grant a security clearance is made in 
addition to and subsequent to a final fitness determination.
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    \1\ Different types of background investigations include Single 
Scope Background Investigation, Full Field Background Investigation, 
Minimum Background Investigation, National Agency Check with Inquiries.
---------------------------------------------------------------------------
            industry challenges with fitness determinations
Challenge 1: There are too many different fitness standards and 
        procedures across DHS, inconsistent application of policy, and 
        a need for better communication
    DHS policy \2\ established by the Office of the Chief Security 
Officer sets minimum standards and reporting protocols for the DHS 
Personnel Suitability and Security Program. It does not, however, 
prohibit DHS components from exceeding the minimum requirements. The 
result is that each component has its own personnel security office 
with different standards, procedures, thresholds, and adjudicators for 
determining fitness.
---------------------------------------------------------------------------
    \2\ DHS Instruction Handbook 121-01-007.
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    When determining fitness, adjudicators consider and evaluate the 
presence or absence of eight (8) types of conduct that may be 
incompatible with the duties of a position (i.e., alcohol and drug use, 
financial irresponsibility, criminal and immoral conduct, dishonesty, 
violence, employee misconduct/negligence, firearms and weapons 
violations, statutory or regulatory bars). Each component within DHS 
has established different requirements for fitness. For example, Border 
Patrol has particular concerns with applicants that have ever had 
involvement in illegal drug activity; USCIS with illegal immigration 
activities; and TSA with theft and interpersonal issues. There are also 
different tolerance levels for certain types of conduct (i.e., bad debt 
levels range from nothing allowed to $3,000, $5,000, or $10,000 
depending on the component). Each component is also given sole 
discretion over whether any of seven (7) additional considerations \3\ 
are pertinent to the adjudication.
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    \3\ (1) Nature of the position for which the person is applying or 
in which the person is employed: (2) The nature and seriousness of the 
conduct; (3) The circumstances surrounding the conduct; (4) The recency 
of the conduct; (5) The age of the person involved at the time of the 
conduct; (6) Contributing societal conditions; and (7) The absence or 
presence of rehabilitation or efforts toward rehabilitation.
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    While some are learned through time, the different standards are 
not always well-understood by industry. Companies frequently experience 
uncertainty in knowing what policies and procedures will apply as well 
as inconsistent application of similar policies across DHS. This is 
particularly true for policies and procedures related to prioritizing 
and expediting fitness determinations. Some members have said they have 
experienced an expedited process on some critical contracts while 
others did not believe prioritization procedures existed.
    There is a need for more transparency, consistency, and better on-
going communication with industry on all of the different fitness 
requirements, policies, and procedures. Having greater visibility and 
understanding of these issues by component is critical to a company's 
ability to recruit and pre-vet candidates, particularly to find 
candidates that might be eligible for reciprocity. Increased 
communication improves industry's ability to do business planning, 
develop budgets, and hire candidates that will make it through the 
process and execute contracts on time.
Challenge 2: Fitness reciprocity is difficult to achieve at DHS because 
        it is based upon equivalent fitness criteria rather than 
        equivalent investigative criteria
    Reciprocity refers to the acceptance of a prior, favorable fitness 
determination from another component or division of DHS or another 
Federal agency, without requiring additional information. The ability 
to grant fitness reciprocity for contractors is important because it 
ensures security but provides a way to save considerable time and 
effort as well as cost savings for both DHS and industry. The granting 
of reciprocity on a previously favorable fitness determination allows 
companies to quickly on-board or transfer employees to contracts that 
best fit their skill sets and experience.
    At DHS, fitness reciprocity can only occur when the new receiving 
agency uses equivalent fitness criteria as the former agency, the 
fitness criteria meets or exceeds the scope and standards for the new 
position, and there is no break in service. An agency is not required 
to grant reciprocal recognition of a prior favorable fitness 
determination when:
   The new position requires a higher level of investigation 
        than previously conducted for that individual;
   An agency obtains new information that calls into question 
        the individual's fitness based on character or conduct; or
   The individual's investigative record shows conduct that is 
        incompatible with the core duties of the new position.
    This is different than the standards for fitness reciprocity at the 
Department of Defense (DoD). Reciprocity criteria at DoD looks at 
whether the determination was based on an investigation equivalent to 
or more comprehensive than the investigation required for the new 
position.
    By relying on fitness standards to determine reciprocity, it 
prevents candidates who have a high-level security clearance from 
receiving fitness reciprocity. The effect is that even a candidate with 
a Top Secret, SCI clearance from the DoD who is selected to work on a 
Customs and Border Protection (CBP) contract will have to wait to have 
his previous investigative file requested and reviewed (and possibly 
undergo additional investigation steps) so that CBP can make an 
additional determination on fitness according to its unique standards. 
This is an odd result when the investigation used for a Top Secret, SCI 
clearance exceeds the investigation standards of a CBP background 
investigation.
    With so many different fitness standards throughout DHS, there are 
fewer opportunities for reciprocity to apply and for the Government 
(and industry) to receive the benefits of the policy. When there are 
reduced opportunities for reciprocity, there is a limited pool of 
candidates who can begin contract work promptly. This increases the 
likelihood of a company having to submit multiple candidates for single 
positions, which increases the number of investigations and costs for 
each component's Personnel Security Division (PSD), and increases the 
amount of time between contract award and contractor employees 
executing a contract.
Challenge 3: Unpredictable and lengthy time lines and the lack of on-
        going communication negatively affects company's ability to on-
        board quality employees
    As mentioned above, at any point in the process after submitting 
the requisite electronic forms to receiving notification of a fitness 
determination, there exists the potential for numerous delays and 
errors to occur. Often, neither the company nor the candidate is 
informed of the status of the investigation, what is causing delays, or 
what is needed to resolve problems. This makes the process 
unpredictable and lengthy.
    The contractor is also not allowed to submit someone else's name 
for an investigation until the original individual's adjudication is 
complete. They cannot submit another candidate(s) as a back-up. 
Additionally, if a company has advance knowledge that an individual 
will be leaving a position at some point in the future, they are not 
permitted to submit the paperwork for a new candidate until the other 
person has actually left. This also adds an unnecessary amount of time 
to the process.
    CBP is the DHS component that is most often cited by our members as 
having the most stringent fitness and investigation standards and the 
one that does not allow reciprocity from other components or agencies. 
One company told us that the average processing time for their CBP 
candidates has gone from less than 40 days in fiscal year 2015 to 111 
days in fiscal year 2017. There are also outlier situations where 
candidates with excellent credentials can take up to 2 years to receive 
fitness approval (even when these individuals already possess a 
security clearance) for reasons ranging from their having dual 
nationality or extensive foreign contacts.
    Due to the duration and unpredictable nature of the investigation 
process, candidates with the best skills and experience frequently take 
other positions while waiting for the completion or review of the 
investigation and fitness adjudication. They do not want to wait months 
or years to start a new job.
    Companies are often not notified that a candidate accepted another 
position until the background investigation and fitness adjudication is 
complete. One company told us of an instance when their candidate's CBP 
background investigation took 13 months. When they contacted the 
candidate to notify him of his approval, they learned he already 
accepted another position. This required the company to start the 
hiring process all over again.
    While our members have processes and procedures in place to screen 
candidates for likely disqualifiers, there is always uncertainty 
whether any individual will make it through the process. Companies must 
regularly recruit, interview, and provide conditional offers of 
employment for a single position multiple times. This happens so 
frequently that companies often build the time and cost of hiring 
multiple candidates into the company's rates and pricing models that 
are charged to the Government.
    Occasionally, as you can imagine, there are cases of delay and 
denials due to errors in the investigation process. I can cite one case 
where it took a candidate with a previous DoD Secret clearance over 14 
months to undergo a CBP background investigation. At the end of CBP's 
investigation, the individual was denied due to an alleged outstanding 
debt. The candidate retained a lawyer who discovered the debt belonged 
to someone with the same name, but not the same social security number 
or date of birth. The candidate resubmitted his paperwork and is back 
in the adjudication process at this time. Had there been better 
communication with the candidate and the company throughout the 
process, this issue could have been mitigated much earlier.
    With every new candidate or error in the system, the Government 
must spend additional time and money to conduct a new investigation, 
fitness determination, or to correct mistakes. These delays result in 
added cost, lost productivity, and prevent companies from executing on 
mission-critical contracts. It also prevents DHS from getting the best 
and most qualified contractor workforce.
Challenge 4: CBP's process adds an additional layer, forcing companies 
        to compete to attract vetted candidates, thereby further 
        raising labor costs
    Due to the length of time involved with getting a previously non-
cleared person processed at CBP, people that already have a CBP 
background investigation or a favorable fitness determination are 
highly valued and sought after. Companies compete and try to steal 
previously credentialed candidates away from other companies. These 
candidates know they can negotiate for higher compensation because they 
are the only resource available in the time frame of the company's 
requirement. This frequently happens during re-competes when companies 
seek to hire the same personnel that worked on the previous contract.
    Another problem is that this class of individuals with already 
existing CBP credentials often insists on working as independent 
contractors (1099s), rather than as an employee. This affects the 
company's ability to direct how the work is done and significantly 
raises rates to the Government because of allowable billing practices 
in these situations. The result is that the Government is paying 
excessive compensation (well above market rates) for positions such as 
software developers and system engineers. Companies often feel they 
have no choice--either meet the demands of the available workforce or 
not meet contract requirements.
Challenge 5: Lack of visibility and communication on the status and 
        known delays of a candidates investigation
    The fitness process begins when selected candidates provide their 
personal investigative data to the hiring agency through the electronic 
system known as e-Qip. The Contracting Officers Representative (COR) is 
the primary liaison between the PSD and the industry representative. 
However, due to privacy concerns, the COR only communicates the status 
and delays with the candidate. The candidate's employer is left with 
little to no information until the adjudication is complete.
    Companies need some ability to estimate how long the process will 
take, general information on where the candidate's case falls in the 
system, and if there are known delays that will extend the time line. 
Companies are not seeking to have derogatory or embarrassing 
information about a candidate disclosed. They simply need information 
on status and delays, so they can appropriately plan for contract 
execution, hiring, and future budgeting.
                            recommendations
    While the Homeland Security & Defense Business Council and our 
members strongly support the need for DHS to have appropriately and 
sufficiently vetted contractors, we believe the problems and costs of 
the current system far outweigh the security benefits. Change is needed 
and can be accomplished. Some of it will require DHS to study and 
evaluate the feasibility of consolidating functions and requirements 
while other aspects will require change across the Federal Government. 
In all instances, we feel that outreach to industry is a necessary 
component--not just for input, but to ensure a commitment to work 
together to resolve the delays and improve the overall process.
    Right now, we see only support for the status quo and an 
unwillingness, even by the Government officials who are burdened by the 
current system, to champion change or for any of the components to cede 
control. An improved system would have numerous benefits: It would 
reduce system backlogs and time lines; prevent unnecessary delays so 
that companies could on-board employees faster and begin contract work 
promptly; increase communication and transparency; mitigate unneeded 
costs and performance risk; avoid unnecessary duplication of effort; 
and ensure that DHS has access to a quality contractor workforce, so it 
can accomplish its mission most effectively and efficiently.
    The Council has three (3) suggestions for improvements:
1. Increase opportunities for reciprocity
    If DHS wants mission-critical contracts executed in a timely 
manner, companies need to be able to on-board employees in a faster 
manner. This can occur if reciprocity is available in more situations. 
Currently, reciprocity is only granted at DHS when the new agency uses 
equivalent fitness criteria and the fitness criteria meets or exceeds 
the scope and standards for the new position. Obtaining fitness 
reciprocity at DHS is difficult because every component has different 
fitness requirements.
    There is also no eligibility for fitness reciprocity when someone 
has a high-level security clearance from another component or agency 
even though candidates with the highest levels of security clearances 
will have necessarily been vetted through that investigation for 
fitness concerns. Many people in industry have a hard time 
comprehending why someone with a Top Secret, SCI clearance from the FBI 
or DoD would need to have an additional fitness determination for a 
contractor position at DHS.
            a. DHS should consider fitness reciprocity based upon 
                    similar investigative elements rather than fitness 
                    requirements
    If DHS relied upon investigative elements (like DoD) rather than 
fitness standards, this would increase opportunities for reciprocity. 
This would create many instances where fitness could be automatically 
granted by the fact that a candidate has a certain level of security 
clearance.
            b. Greater standardization and alignment is needed across 
                    the Federal Government on the investigation 
                    process, suitability/fitness standards, and 
                    application forms
    While Executive branch officials routinely honor other agencies' 
security clearances or investigations, DHS often finds it necessary to 
take additional steps to address limitations with available information 
on prior investigations before granting reciprocity. OPM ensures that 
certain clearance data necessary for reciprocity is available to 
adjudicators but shared information often contains summary-level detail 
so agencies take steps to obtain additional information, which prevents 
or slows down the granting of immediate reciprocity. Agencies are 
sometimes reluctant to be accountable for investigations and 
adjudications conducted by other organizations. To increase the speed 
and availability of reciprocity, granting agencies must have confidence 
in the quality of prior investigations and adjudications and a clear 
understanding of what conduct and character traits were evaluated 
during the course of the investigation.
    OPM has recognized this need and has been working on developing new 
Federal Investigative Standards for years. The new approach, partially 
in roll-out but not yet fully implemented, includes a five-tier 
investigation system, each which is intended to build on a successively 
higher level of investigation. Adjudication is also intended to build 
upon, but not duplicate, the ones below it. For example, Tier 1 
requires a, b, c; Tier 2 requires a, b, c, and d; Tier 3 requires a, b, 
c, d, and e. Therefore, Tier 3 meets all Tier 1 and Tier 2 
requirements.
    The tiered investigation system must also be tied to the 
investigative steps done for suitability/fitness determinations and 
aligned to the different personnel security intake forms. The lack of a 
single standard application form is still a barrier to aligning Federal 
investigations.
    If investigative standards are tied to fitness concerns, this would 
allow DHS to have different fitness standards but still increase the 
opportunities for fitness reciprocity. This would require some collapse 
and simplification of DHS's current suitability/fitness standards but 
would still allow the components to have different fitness standards 
based upon their mission. More importantly, this would dramatically 
increase the opportunities for fitness reciprocity by increasing the 
pool of people available to work at DHS and make recruiting and 
onboarding a faster process for industry.
            c. Consolidate and improve communication on different 
                    fitness standards across DHS
    While it will take time for the Federal Government to standardize 
investigations and tie them to fitness, DHS could still increase 
eligibility for reciprocity by looking for more opportunities for 
standardization, simplification, and reduction of the fitness 
requirements that currently exist across the Department. In some cases, 
as was suggested by the 2009 Inspector General report on the DHS 
Personnel Security Process (OIG-09-65, May 2009), it could help for DHS 
to set a maximum threshold (e.g. bad debt) and permit components to use 
less but not more than the maximum amount as the standard.
    We encourage the creation of a matrix or guide to the various 
fitness requirements and conduct thresholds for different types of 
positions across DHS and the Federal Government so that companies can 
more readily determine which candidates are likely to receive 
reciprocity. A matrix showing the greatest to least stringent 
requirements across components and the Federal Government would provide 
additional transparency and facilitate discussion into whether the 
current fitness requirements make sense and whether certain agencies or 
organizations should revise or realign their requirements.
2. Direct further investigation or study into opportunities to 
        centralize and consolidate the Personnel Security Department 
        functions within DHS to reduce the length of the process and 
        common delays
    The 2009 Inspector General Report focused on the effectiveness and 
efficiency of the suitability process with Federal employees, rather 
than the fitness process with contractors. However, many of the 
challenges and recommendations apply equally to the process for fitness 
determinations and still apply to DHS almost a decade later. As was 
suggested in the report, there are a number of opportunities for the 
DHS PSD, as part of the Office of the Chief Security Officer, to 
consolidate various functions of the personnel security process. Doing 
this would not remove components ability to apply mission specific 
requirements to their process. It would however help in aligning 
policies, reducing duplicative efforts and known bottlenecks, improving 
customer service, and increasing transparency into the system.
    There may also be additional value in having the DHS Inspector 
General or GAO look specifically at the fitness process since there are 
aspects to and challenges with this process that are unique from the 
suitability process.
3. Encourage DHS to explore the development of an electronic system 
        that provides companies with visibility into the status of 
        investigations and fitness determinations
    DHS lacks communication into the status and known delays of 
investigations. We believe the development of an electronic personnel 
security status system, similar to what is used by the Defense Manpower 
Data Center, would allow a properly designated person from industry 
(such as the company's Facilities Security Officer) to have some 
visibility into the status of a candidate investigations. Such a system 
would not require DHS to share unfavorable or derogatory information 
about a contractor employee that is discovered during an investigation. 
It would simply allow a company to know where the candidate's status 
falls against specific milestones in the process. Such a system would 
reduce the amount of phone calls and emails to staff and give companies 
a better sense that delays have occurred and whether more time will be 
required for the investigation. This would dramatically increase 
transparency and communication and improve a company's ability to plan, 
budget, and hire staff.
                               conclusion
    The current contractor vetting process at DHS lacks consistency, 
transparency, and communication. It requires duplicative effort and 
unnecessarily long amounts of time, it also limits competition which 
creates substantial costs to both Government and industry, and prevents 
DHS from obtaining the best workforce and ultimately from accomplishing 
its mission.
    Personnel security is of utmost importance, but there are ways to 
improve the process without giving up the integrity of the program. We 
urge Congress to consider the ideas put forth today and to continue to 
play an active role in driving change both at DHS and across the 
Federal Government.
    On behalf of the Homeland Security & Defense Business Council, I 
appreciate the opportunity to provide the collective perspectives of 
our members on the challenges involved with the DHS fitness process for 
contractor employees. The Council stands ready to answer any additional 
questions you may have on these topics.

    Mr. Perry. Chair thanks Mr. Pearl.
    Thank you, sir.
    The Chair now recognizes Mr. Berteau for an opening 
statement.
    Can you push the mike, sir? Yes, the mike.

STATEMENT OF DAVID J. BERTEAU, PRESIDENT AND CEO, PROFESSIONAL 
                        SERVICES COUNCIL

    Mr. Berteau. I am technically incompetent, so I don't know 
how to push the button that says talk. I want to particularly 
thank those here from home State of Louisiana, which I think is 
what teaches us that you don't need to push a button in order 
to talk, you just talk.
    There are a couple of things I would like to say that are 
not in my written statement and I appreciate your incorporating 
them in the written statement. I don't have it in there, but I 
should have had it in there and I think all my fellow panelists 
would agree with this.
    We need to recognize that every day there are thousands of 
people who get up in the Department of Homeland Security and 
come to work and do the absolute best they can. Some of those 
people are on the Government payroll. Some of those people work 
for contractors. They do their best to get their jobs done. I 
think they deserve a better system to support them and that is 
really what I think this committee can do to help and I think 
it is important to recognize that. The deck is stacked against 
them in many cases.
    I would like to associate myself with some of the 
recommendations that have already been made. In my statement, I 
have a number of recommendations and I tend to focus on things 
that I think this committee can do. But let me highlight three 
things that I think are goals that we ought to have in place 
here.
    We frequently look at this as a tradeoff, right, that if 
you are going to have a faster process you are going to 
actually jeopardize security as part of that. I don't think 
that's true, in fact, I think the opposite is true. In 
particular, if you start bringing in the kind of 21st Century 
capability we have of data and analytics and access to the 
databases that are out there and use this in a continuous 
evaluation process, you can actually speed the process up, 
exercise standards that actually make sense and create true 
reciprocity across the Department and actually increase 
security in doing that. I think that is one goal that you 
should certainly have in place.
    There is a second goal, the reciprocity is clearly there. 
Each component inside DHS thinks they have got something they 
have got to protect. I don't like to compare DHS to DOD 
because, in fact, that is not a fair comparison. But in this 
case I think it is evident in the Defense department they have 
managed to figure out how to transfer clearances very quickly, 
and easily without any loss to the culture and integrity of any 
of the components or subcomponents inside the Department. 
There's no reason DHS can't achieve that same objective I think 
going forward.
    Then third is, and this is where the committee can really 
help, we just don't have the information we need to have to 
tell how things are going. So this is true obviously for 
contractors, you described in your opening statement that 
contractor has to ask the COR, the COR has to ask the office, 
the office had to report back, et cetera. Frequently, there are 
weeks or even months go by inside that process.
    There is no reason why you can't have access to data right 
from the beginning for everybody. The Government would be more 
efficient, the contractors would be more efficient. If it is 
going to take 12 months for me to get a suitability 
determination, let me know that, I will go do something else 
for 11 and a half months and then I will come back when the 
time is done and let us get on with it, right?
    So I think if you put all three of those together, stronger 
reciprocity, a better, faster system that actually uses 
innovation to increase security rather than decrease it, and 
better reporting on the data, you will go a long way toward 
making things better.
    [The prepared statement of Mr. Berteau follows:]
                 Prepared Statement of David J. Berteau
                           February 27, 2018
                              introduction
    Chairman Perry, Ranking Member Correa, and Members of the 
subcommittee, thank you for the invitation to testify on behalf of the 
Professional Services Council's (PSC) nearly 400 member companies and 
their hundreds of thousands of employees across the Nation.\1\ PSC is 
the voice of the Government technology and professional services 
industry, supporting the full range and diversity of Government 
missions and functions, including the Department of Homeland Security 
(DHS). I appreciate the opportunity to discuss with you the DHS 
personnel security and contractor employee vetting process and to 
address several issues of critical importance to our member companies, 
their employees, and the success of DHS missions.
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    \1\ For over 45 years, PSC has been the leading National trade 
association of the Government technology and professional services 
industry. PSC's member companies represent small, medium, and large 
businesses that provide Federal agencies with services of all kinds, 
including information technology, engineering, logistics, facilities 
management, operations and maintenance, consulting, international 
development, scientific, social, environmental services, and more. 
Together, the association's members employ hundreds of thousands of 
Americans in all 50 States. See www.pscouncil.org.
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    Today, I will make several specific observations of opportunities 
and challenges in DHS and other agencies involved in the personnel 
security and contractor employee vetting process. I will also offer 
some recommendations for your consideration, and for consideration by 
DHS and the Federal Government as a whole.
    Let me start, though, with what I hope we can all agree are goals 
worthy of support from this subcommittee as you focus on actions that 
can improve the contractor employee vetting process. They include:
   Speeding up vetting and clearance processes while increasing 
        security through better use of data and process innovation,
   Defining and routinely applying reciprocity standards and 
        agreements across DHS component agencies, and
   Providing timely and regular access to accurate information, 
        both for individual firms under contract and more broadly 
        across DHS, in order to improve vendors' ability to recruit and 
        retain workers and successfully provide essential contractor 
        support to DHS missions.
    I believe there is much this committee can do in these and other 
areas that will lead to practical and productive improvements.
        contractors provide significant value to the government
    Contractors play vital roles in assisting the Government in 
providing services to the American people. In DHS, contractors support 
every mission and function of the Homeland Security Enterprise (HSE). 
Many of the capabilities that contractors provide do not exist within 
the Government, and contractors can quickly expand or adjust capacity 
to meet changing DHS needs. The Government benefits from a strong, 
diversified business base that supports its current and emerging 
requirements.
    To meet these demands, however, contractors need to be able to 
hire, retain, assign, and transfer qualified, skilled employees to the 
missions and functions with greatest need. Doing this means that DHS 
needs to provide timely Entry on Duty (EOD) decisions, reliable 
security clearance processing, reciprocal recognition of valid 
clearances across the Department, and regular status updates to DHS 
personnel and contractors.
  psc recognizes the government's central role in personnel security 
                                process
    Proper vetting and personnel security practices are essential 
before a Government or contractor employee receives regular access to 
Government facilities and information. Contractor and Government 
personnel go through the same personnel security process, conducted by 
the same entities, subject to the same levels of scrutiny and with the 
same kinds of risks. (The same personnel security process applies to 
other partners in the HSE, including State and local public safety 
officials as well as cyber and critical infrastructure officials in the 
private sector.)
                government's roles and responsibilities
    At the Government-wide level, the National Background 
Investigations Bureau (NBIB), established on October 1, 2016, is 
currently the primary provider of background investigations (BIs), 
including processing of electronic questionnaires, conducting National 
agency record checks, and maintaining a central clearance repository. 
In most cases, the NBIB processes the forms, schedules, and conducts 
BIs, and delivers results to DHS to adjudicate employee suitability, 
contractor fitness, and, when needed, a security clearance 
determination. In some cases, DHS itself will conduct an initial 
assessment that can lead to an Entry on Duty (EOD) determination.
                challenges in personnel security vetting
    Earlier this year, the Government Accountability Office (GAO) added 
the personnel security clearance process to its High-Risk List.\2\ This 
reaffirmed what the contractor community and National security experts 
across the Government already knew: The Government-wide personnel 
security clearance process is not meeting the needs of the Government 
or of its contractor partners.
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    \2\ See January 25, 2018 GAO Press Release, available at: https://
www.gao.gov/press/high_risk_security_clearance_process.htm.
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    The problems below affect DHS and the entire Federal Government.
Reciprocity Failures
    DHS has many separate operating entities, and nearly all of them 
place restrictions on recognizing a clearance from other parts of DHS. 
These failures to grant reciprocal recognition of valid clearances, or 
even EODs, make it unnecessarily difficult to transfer personnel from 
one task or contract to another, even if the Government's missions are 
negatively impacted by delaying or denying such reciprocity. Further, 
there is no visibility into or reporting on the number of reciprocity 
requests that are processed, how long they take, or why they are 
denied. The absence of such data make it extremely difficult to address 
problems.
Process Challenges
    PSC member companies regularly report that cases are delayed 
further by lost forms, communication disconnects, failure by DHS to 
process responses, and inadequate tracking of cases or reporting of 
their status, even to the responsible parties within DHS.
Backlog
    The backlog of cases awaiting final determination is higher than it 
has been in my nearly 40 years in this business. As of September 2017, 
at least 700,000 individuals remained in limbo awaiting a clearance to 
perform mission-critical work. In fiscal year 2016 initial 
investigations for Secret clearances took 108 days on average, while 
initial investigations for Top Secret clearances took an average of 220 
days. Wait times have increased since then, but data are no longer 
provided by the Government. These delays jeopardize Government 
missions, undermine contract performance, and harm the ability of both 
the Government and contractors to recruit and hire.
Lack of Access to Information
    Last June, as part of a memorandum aimed at reducing reporting 
burdens, the Office of Management and Budget (OMB) canceled public 
reporting by the Government on the backlog in security clearances.\3\ 
PSC registered a written complaint to OMB \4\ but to date no corrective 
action on this has been forthcoming.
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    \3\ OMB Memo M-17-26, June 15, 2017, ``Reducing Burden for Federal 
Agencies by Rescinding and Modifying OMB Memoranda,'' available at: 
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/
2017/M-17-26.pdf.
    \4\ PSC Letter to OMB Director Mick Mulvaney, June 22, 2017, 
available at: https://www.pscouncil.org/Downloads/documents/
PSC%20Letter%20on%20OMB%20Memos%206.22.- 17.pdf.
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Impact on Recruiting and Retention
    The problems outlined above make it substantially harder for both 
the Government and its supporting contractors to recruit, train, and 
retain the new talent needed to meet Government needs. Picture recent 
college graduates--skilled in the latest cybersecurity tools and 
techniques--having to wait a year or more between being offered a 
position and obtaining the clearances needed to start the work. Even if 
they can secure a way to make a living while waiting, they will no 
longer be current in the technology of their field. Only the most 
dedicated will tolerate such delays, and no one benefits from them.
       security clearance processes need to be better and faster
    Most broadly, PSC recommends adopting and implementing what we call 
the ``four ones.'' These principles can and should apply both to the 
Government and to contractors. DHS has made progress, but greater 
results are necessary. These principles are:
   One application;
   One investigation;
   One adjudication;
   One clearance.
    DHS personnel security processes for both Government and contractor 
employees are still quite decentralized. Various incremental 
improvements have occurred over the years; however, as throughput has 
increased and decreased so has the processing time for personnel. To 
the Department's credit, for the past several years DHS personnel 
security officials at DHS headquarters and component agencies have 
engaged in an annual program with industry to discuss processing times 
and recent policy changes. While this is a welcome forum, more should 
be done to keep the lines of communication open on a continuous basis.
    The recommendations below include concrete actions that Congress 
can take and also include steps for the Executive branch to address 
deficiencies and risks, reduce the backlog and speed up processing 
times, and carry out effective oversight of initiatives at Federal 
agencies, including DHS.
    1. Ensure accurate, up-to-date, and publicly-reported information 
        on the backlog and wait times for individuals seeking to obtain 
        a clearance. Section 925 of the fiscal year 2018 National 
        Defense Authorization Act (NDAA) includes many reporting 
        requirements on the size and scope of the backlog. Yet, unlike 
        previous Government reporting, this information will be seen 
        only by the Congressional committees of jurisdiction--leaving 
        the heavily-impacted contractor community in the dark, along 
        with many of their Government customers as well as State and 
        local officials.
    2. Participate with the other committees of jurisdiction in 
        regular, detailed oversight of the 3-year process to transfer 
        authority for certain clearances from the NBIB to the 
        Department of Defense (DoD). Section 925 of the fiscal year 
        2018 NDAA requires DoD to eventually conduct its own background 
        and security investigations. The time line is demanding, and 
        detailed plans are not yet available, increasing risk. Congress 
        can and should ensure that DoD stays on track, while also 
        ensuring that the remaining clearance requests at NBIB remain a 
        priority.
    3. Actively support funds and programs that will modernize and 
        improve the investigation process concurrently at DoD and NBIB. 
        The NDAA provided DoD with the authority to utilize existing 
        contractor background verifications to reduce duplication of 
        work. As this will save time and resources for DoD clearances, 
        Congress should give NBIB the same authority for actions taken 
        by DoD in the future.
    4. Mandate true reciprocity among all DHS entities. Existing 
        regulations already provide guidance for implementing 
        reciprocal recognition, which should increase reciprocity 
        between and among agencies. This committee could require DHS to 
        account for and report all requests for reciprocal recognition 
        of clearances, along with the length of time to process such 
        requests and a list of the justifications for each distinct 
        exception for requests for reciprocal clearances from other 
        components within DHS.
    5. In the forthcoming fiscal year 2018 and fiscal year 2019 
        appropriations bills, support full funding for all the programs 
        that ensure investigations are thorough and timely. We know 
        that there are too few people processing clearances and there 
        is too little money to meet the demand while investing in the 
        needed process improvements.
    6. Include in that funding the necessary support for more robust 
        use of technology, including adopting continuous evaluations 
        (CE) across the Government. The current process of 
        reevaluations is based on the calendar, not on risk or need. 
        Moving from a time-based process to continuous evaluation will 
        also contribute to increasing security and reducing insider 
        threats in a timely manner. To be successful, CE must be part 
        of the personnel system as well as security clearance, 
        suitability, and credentialing procedures. While the short-term 
        impact of CE on the backlog will be minimal, moving to CE will 
        significantly reduce the likelihood of future backlogs at the 
        level we are currently experiencing by removing a significant 
        number of periodic revaluations from the queue.
    7. Some solutions would likely not require legislation:
     Periodically, the inspector general or an independent 
        organization should ``test'' the process within each agency 
        randomly to assess the speed, quality, and level of customer 
        service;
     Each agency should host a customer service or other type 
        of mailbox or hotline for people to contact with inquiries. DHS 
        can set a threshold for how frequently entities may make 
        inquiries; and
     Each agency should have a current 1-pager that describes 
        the process at a high level so people know what to expect. They 
        should update it quarterly. It could include tips and resources 
        for contractors on hot topics like insider threat, where to 
        seek out more training on complying with security processes, 
        and tips for filling out the forms correctly.
    The failures and shortcomings of the current personnel security 
process impact uniformed personnel, civilian employees, and contractors 
across the country--in every State and Congressional district--and 
jeopardizes our homeland and National security.
       doing business with dhs: maturing the acquisition function
    As DHS continues to mature, and celebrates its 15th birthday this 
week, the Department has made significant improvements in the way it 
communicates and collaborates with industry. However, there remains 
substantial room to improve the partnership with industry. It begins 
with broadening communications channels, providing more comprehensive 
and long-term outlooks about future mission needs, and reforming 
acquisition processes to reduce costs, barriers to entry, and provide 
meaningful and rapid access to the best solutions industry can offer.
The Importance of Continuous and Meaningful Communication with Industry
    To enhance its partnership with the private sector, it is important 
that DHS understands how industry is evolving and what motivates 
industry to want to be a DHS partner. Industry dynamics are evolving at 
a pace that is faster than at any time in recent history. Both 
traditional DHS contractors and companies that have not traditionally 
contracted with DHS are consistently developing innovative capabilities 
and processes that can be leveraged and accessed by the Department. The 
growing trend of ``as a service'' delivery models, such as cloud 
computing, the evolution of the Internet of Things (IoT), data 
analytics, the need to rapidly deploy and upgrade cybersecurity 
capabilities, and emerging robotics and unmanned systems are prime 
examples of how innovation is changing the way the private sector 
operates. These developments and others may offer unlimited potential 
to assist DHS with meeting its missions.
    However, for such capabilities to be meaningfully utilized by the 
Department, it is crucial that DHS regularly and effectively 
communicate its desired outcomes to industry. To do so, the Department 
must share both its short- and long-term goals with the public. While 
the Quadrennial Homeland Security Review (QHSR) is an important 
component, such communication should occur more frequently than every 4 
years. The QHSR, and on-going industry communication efforts, should 
coherently lay out long-term DHS strategy and objectives beyond a 3- to 
4-year time period, describe efforts by the Department to better 
communicate its research and development objectives, and take steps to 
better enable tech transfer initiatives so that R&D breakthroughs can 
be applied to real-life solutions.
    To its credit, the Department has been at the forefront of 
conducting ``Reverse Industry Day'' (RID) sessions, where contractor 
partners can present directly to Government personnel about the key 
challenges and considerations they face in doing business with DHS. 
These sessions have been well-received by participants in both 
Government and industry, and we commend the Department on its 
continuing commitment to holding RID sessions and appreciate having had 
the opportunity to engage with DHS through this avenue.
The Benefits of a Well-Trained Acquisition Workforce
    A well-trained, skilled, and supported DHS workforce is necessary 
to achieve successful acquisition outcomes. But, regrettably, the 
upcoming generation of DHS workers is still being trained and oriented 
to traditional and outdated practices and rules. DHS should transform 
the workforce to be grounded in cross-functional development, business 
acumen, technical skill, and creative thinking. PSC recommends the 
expansion of initiatives that seek frequent rotations for the DHS 
workforce into functional areas outside of their main area of focus. 
For example, much can be learned by program managers by spending some 
time working within a Department acquisition office, and vice versa. 
PSC also encourages new authorities that would permit the Department 
and the private sector to experiment with personnel rotations. 
Initiatives such as these can go a long way to remedying the human 
capital challenges faced by the Department.
                               conclusion
    On behalf of PSC and our members, I thank you for your time and 
consideration of these matters. As always, PSC is available at your 
convenience to address any questions or concerns the subcommittee has, 
now and in the future. I will try to answer any questions you may have.

    Mr. Perry. All right, Mr. Berteau, thank you for your 
testimony.
    Chair now recognizes Mr. LaBonte for his testimony.

  STATEMENT OF BRANDON LA BONTE, PRESIDENT AND CEO, ARDENT MC

    Mr. LaBonte. Chairman Perry, Ranking Member Correa, Members 
of the subcommittee, thank you for the opportunity to speak 
with you about my company's support to DHS. My name is Brandon 
LaBonte. I am the president and owner of ArdentMC, a small 
business that started in 2006 with a primary focus on providing 
geospatial and technology solutions to the Department of 
Homeland Security.
    Much like many small businesses who focus on Homeland 
Security, ArdentMC is driven by a desire to advance the use of 
tools and technologies in the detection and deterrence of 
terrorist activities, to help respond and recover from natural 
and man-made disasters and to support our law enforcement 
security efforts around the country.
    While speaking today about our company's perspectives in 
particular, I believe our experience is representative of small 
businesses doing work at DHS across the board.
    In the summer of 2016, I had the privilege of joining 
representatives from the DHS Procurement Department and the 
Personnel Security Division for an Acquisition Innovation 
Roundtable, an AIR, on the contractor fitness process.
    While fitness determinations are a challenge for both 
industry and Government, the AIR allowed a better understanding 
of opposing viewpoints. For example, the AIR revealed that DHS 
seemed unaware that industry was hiring employees on the 
contingency of them receiving their fitness determination, and 
that recruiting costs were lost when excessive delays meant a 
contingent employee might take a job elsewhere.
    Given the monumental challenge faced by DHS, and the ever-
increasing volume of fitness requests submitted, I would 
respectfully submit three recommendations to increase the 
efficiency of the Department's fitness efforts and the level of 
support for the mission.
    First, DHS components should permit reciprocity of the 
fitness determinations. We hired an employee that had supported 
a DHS client for over 3 years. We submitted his fitness request 
on November 4, 2015, expecting a quick result and good 
continuity for the program.
    His fitness was approved, but not until March 3, 2017, 
about 15 months later. In the mean time, he took a job 
somewhere else rather than wait for the fitness process to 
clear. While differences in the way some components utilize 
reciprocity are understandable, our experience is that 
reciprocity is rarely honored between, or even within, 
components.
    This results in uncertainty for the contractor and fitness 
delays. ArdentMC's average fitness determination time across 
all our pending contracts as of last week was 213 days. A 
uniform approach to an already-approved contractor employee 
would increase predictability for contractors and mission 
support for DHS.
    Second, DHS should increase industry collaboration and 
partnership in the fitness process. On February 22 of this 
year--I think that was last week--we received an email from a 
DHS component security office in response to repeated requests 
for help with a delayed fitness submission, one that we 
inquired about monthly since the submission had been put in.
    The employee, it turns out, had been approved to work, had 
been granted fitness on June 22, 2017, yet the component did 
not convey the information and did not have it when we had 
asked about it repeatedly. This results in less support to the 
mission and over $120,000 of lost revenue, not an insignificant 
amount for a small business. This multiplies when the number of 
employees impacted increases.
    Today, unlike DOD, DHS will not communicate with employers 
about employees submitted for fitness. The result is excessive 
delays and miscommunication, or in some cases no communication 
between DHS and the employer. DHS should open communication 
directly to the employers about the status of their employees 
in consideration for fitness.
    Finally, DHS should leverage industry's Government-approved 
security officers. ArdentMC's corporate security officer known 
to many as a Facilities Security Officer or an FSO, works 
closely with DOD on submitting and monitoring the status of our 
employees in the security clearance process. In fact, DOD 
provides the training, the access, the authorization to handle 
sensitive personal information across the board.
    While the security process at DHS is distinct from DOD, the 
type of information dealt with is the same. Industry provides 
over 13,000 certified security officers today, all trained and 
approved to handle the same type of information used in the DHS 
fitness process through a program called the NISP, the National 
Industrial Security Program.
    DHS's work force could be augmented at no cost to the 
agency while also providing visibility and transparency by 
utilizing these FSOs to open communications with DHS. As a 
company that began its mission supporting DHS and has continued 
to work for DHS for over a decade, we believe we bring some 
uncommonly deep insight into these challenges, and we certainly 
understand the need for a secure work force.
    We continue to hope to work with DHS and to be part of the 
solution. Thank you for the opportunity to provide the 
testimony and I am happy to take any questions.
    [The prepared statement of Mr. LaBonte follows:]
                 Prepared Statement of Brandon LaBonte
                           February 27, 2018
    Chairman Perry, Ranking Member Correa, and Members of the 
subcommittee, thank you for the opportunity to speak with you about our 
company's support to the Department of Homeland Security. My name is 
Brandon LaBonte, and I am the president and owner of ArdentMC, a small 
business started in 2006 with a primary focus on providing technology 
and Geospatial solutions to the Department of Homeland Security. Much 
like many small businesses who focus on homeland security, ArdentMC is 
driven by a desire to advance the use of tools and technologies in the 
detection and deterrence of terrorist activities, help response and 
recovery to natural and man-made disasters, and support our law 
enforcement and security efforts around the country. ArdentMC has 
employees in 14 States and the District of Columbia supporting mission 
programs across every DHS operational and support component except TSA 
and FLETC. While I will speak today about our company's perspective in 
particular, I believe our experiences are representative of the many 
small businesses supporting DHS.
    In the summer of 2016, I had the privilege of joining 
representatives from the DHS Procurement Department and the Personnel 
Security Division (PSD) for an Acquisition Innovation Roundtable (AIR) 
on the contractor fitness process. While fitness determinations are a 
challenge for both industry and the Government, the AIR allowed a 
better understanding of opposing viewpoints. For example, the AIR 
revealed that DHS was unaware that industry was hiring employees on the 
contingency of their fitness determination, and that recruiting costs 
were lost when excessive delays meant a contingent employee decided to 
take another position.
    Given the monumental challenge faced by DHS, and the ever-
increasing volume of fitness requests submitted, I would respectfully 
submit three recommendations to increase both the efficiency of the 
Department's fitness efforts and the level of support for the mission:
First--DHS components should permit reciprocity of fitness 
        determinations.
    We hired an employee that had supported a DHS client for over 3 
years. We submitted his fitness request on November 4, 2015, expecting 
a quick result and good continuity due to his longstanding work in the 
program. His fitness was approved, but not until March 3, 2017, about 
15 months later. In the mean time, he took a different job rather than 
wait. While differences in the way some components utilize reciprocity 
are understandable, our experience is that reciprocity is rarely 
honored between, or even within, components. This results in 
uncertainty for the contractor and fitness delays. ArdentMC's average 
fitness determination time across all our pending requests, as of last 
week, is 213 days. A uniform approach to already-approved contractor 
employees would increase predictability for contractors and mission 
support for DHS.
Second--DHS should increase industry collaboration and partnership in 
        the fitness process.
    On February 22 of this year we received an email from a DHS 
component security office in response to repeated requests for help 
with a delayed fitness submission. The employee, it turns out, was 
approved to work on 6/22/2017, yet the component did not convey this 
information. This results in less support to the mission, and over 
$120,000 of lost revenue, a significant amount for a small business, 
which multiplies as the number of impacted employees increases. Today, 
unlike DoD, DHS will not communicate with employers about employees 
submitted for fitness. This results in excessive delays and 
miscommunications (or no communications) between DHS and the employer. 
DHS should open communication directly to the employers about the 
status of their employees in consideration for fitness.
Finally--DHS should leverage industry's Government-approved security 
        officers.
    ArdentMC's corporate security officer (known as a Facilities 
Security Officer, or FSO) works closely with DoD on submitting and 
monitoring the status of our employees in the security clearance 
process. In fact, DoD provides training, access, and authorization to 
handle sensitive personal information. While the security process at 
DHS is distinct, the type of information is the same. Industry provides 
over 13,000 certified security officers today, all trained and approved 
to handle the same type information used in the DHS fitness process. 
DHS's workforce could be augmented at no cost to the agency, while also 
providing visibility and transparency by utilizing these FSOs to open 
communications with DHS.
    As a company that began its mission support at DHS and has 
continued to work for DHS for over a decade, we believe we bring some 
uncommonly deep insight into these challenges. We continue to hope to 
work with DHS and to be part of the solution. Thank you for the 
opportunity to provide my testimony, and I'm happy to respond to any 
questions.

    Mr. Perry. The Chair thanks Mr. LaBonte and now recognizes 
himself for 5 minutes of questioning, and I will start out with 
Mr. Allen.
    Go a little bit off the script here, but I am just very 
curious from my standpoint as I looked at this. To me, if you 
have a TS or TS SCI or even Secret clearance, is there anything 
in the fitness standard that is more adjudicatory, is more in-
depth than any of those clearances that I have discussed, 
because there are different levels of clearance I understand, 
but particularly anything above the Secret level that you could 
know of?
    Mr. Allen. No, there isn't, Mr. Chairman. These are really 
excruciatingly very precise efforts to find out who you are, 
even if you have had a Top Secret SCI, you have to be 
reinvestigated every 5 years. We are moving to a new standard I 
think as Mr. Berteau stated about electronic. Today, we can 
check very rapidly everything about you electronically. Your 
whole life history is in digital dust there.
    But the standards are excruciating for those holding the 
highest clearances, SCI. A leakage of culture has occurred 
recently in the intelligence community, but it doesn't mean 
that you have to just sit and study the issue longer, you use 
better techniques and electronics. But SCI, everything about me 
is known to the National Background Investigative Bureau as 
well as Defense Security Service, and my wife, they know 
everything about my wife and my children.
    So, it is very thorough when you get to that Top Secret SCI 
and that is the reason I think it is redundant. I think if you 
have gone through that and you are within scope, within 5 years 
for a Top Secret SCI or a Secret within 10 years, I think you 
are pretty fit to come work for DHS.
    Mr. Perry. I certainly think that even if you--let us just 
say you had a TS SCI, and you are halfway through the term of 
your TS and you chose to put yourself out and you could be 
hired, so a simple background check just to update that you 
hadn't committed any crimes since you were adjudicated for your 
TS SCI would seem to be to me sufficient.
    As I thought about it, Mr. Snowden had a clearance, Bradley 
Manning had a clearance, and these folks were people that ended 
up being in my mind criminals. But that aside, it seems to me 
the fitness test isn't going to be any more thorough than the 
Top Secret or the Secret clearance.
    So, my question to you, if you know, it is that does the 
Department and the disparate organizations within the 
Department want to maintain this fitness standard as a vehicle, 
for lack of a better way of putting it? So we have got this 
individual that we are vetting, he passes all the security--let 
us just put it because I know it doesn't follow this track but 
let us say we have the Top Secret, let us say he comes or she 
comes with a security clearance, we just don't like the way he 
parts his hair, or we don't like the way she dresses, or we 
don't like her attitude or whatever. Do they want to maintain 
that? Is it your sense that they want to maintain that, because 
I am sure they are never going to say as a way to just say this 
person is not something that is going to work at this agency 
and we don't have to tell you why or provide any information. 
We are just saying no regardless of the fact that they are 
qualified.
    Mr. Allen. Yes. It seems to me once DHS for a fitness 
examination, if they check with the intelligence community, 
they look in databases, JPAS for Defense or Scattered Castle 
for the Top Secret SCI, they can verify when the person was 
given the clearance, is the person within scope for the 5 years 
or at a Secret level for 10 years. This can be validated very 
quickly.
    They have a lot of trust for a person who has gone through 
a lot of examination repeatedly through his or her career. With 
CIA, of course, you always have the added burden of going 
through polygraphs which they readily are happy to give you 
from time to time.
    Mr. Perry. Sure. Sure. As a person who has held a clearance 
for 30 years or so I for the life of me can't figure out the 
efficacy of this program.
    Mr. Pearl and Mr. Berteau, looking at the flow of 
information for new hires--and I think we might do a couple of 
rounds here because I want to ask a couple more questions a 
round at a time--but I don't understand how the COR are as a 
DOD person, as a military guy and understanding the functions 
of the contracting representative, contracting officer 
representative for DOD, what is the purpose for having them 
somehow injected into the personnel decisions of the would-be 
contractor?
    I have got a contract. I want to hire the person to execute 
the contract. In that process somehow it has to go to the COR 
and then back to me before I can--what is their purpose for 
being there? Am I missing something I guess is the question? 
Because we don't want to make bad policy but I don't understand 
why we are doing it that way.
    Mr. Berteau. Second time I forget, but by the third time I 
will remember to turn the button on first.
    The COR's primary responsibility is actually to be the 
interface between the administrative contracting officer and 
the performing contractor in terms of making sure that the 
contractor is doing what they have been hired to do and that 
they can comply with the terms and conditions of the contract. 
They don't have a contracting officer responsibility, but they 
are graded on how well the contractor does in terms of 
delivering on the scope of work.
    You can see a scenario in which a COR is worried because 
the contractor is not doing everything they signed up to do 
because they have got funded requisitions that can't be filled 
yet because the people assigned to fill that job are still 
waiting on either their fitness determination or their security 
clearance or both in some cases. So, the COR has a vested 
interest in kind-of making that happen.
    We have seen situations; I remember companies have told us 
about them in preparation for this hearing where the COR is 
pinging on the contractor because they are not delivering at 
the same time as the COR is not necessarily pursuing get me 
that answer more quickly so I can get these people to work.
    So, you can see a way in which the two could work together. 
The only way in which that works better though is if you have 
got time on your side where you have got responsiveness and the 
COR, the logical thing to do would be for the adjudicating 
activities to be pushing the information even on a daily basis 
so the COR just has to look at a checklist and say Joe is still 
in process. Pete has been cleared. Don't wait 7 months to tell 
me by email that he is ready to go, right? So, the system could 
actually make the COR's job easier and more effective so he or 
she can focus on their responsibilities with the contract.
    Mr. Perry. Gentlemen, I am way beyond my time but I am 
going to revisit that question with you a little further.
    But at this time I would like to yield my time and 
recognize the gentleman from California, Mr. Correa.
    Mr. Correa. Thank you, Mr. Chairman. Witnesses, thank you 
very much for your information there. Let me get this straight, 
so this is the Department of Homeland Security, a lot of 
organizations, a lot of agencies within one umbrella with the 
main task of protecting our country.
    So, if you have a need, you go out and contract for 
personnel because you need to take care of an issue that all of 
us deem vital to our National security. Yet, it is taking a 
very long time to go through these vetting processes.
    So, my question, I would open it up to all of you is, why 
does it take so long and why is it so secretive? I mean, once 
you apply to go through these security clearances, is there 
something that DHS found that is objectionable or it scares me 
to think or is that application just gathering dust somewhere 
and nobody is doing anything to move that clearance ahead?
    Mr. Allen. Yes, Congressman. It does bother me greatly 
because the criteria used by the various operating components 
except for the Transportation Security Administration which has 
a very long list of potential problems in law, the component-
specific criteria for a fitness examination are vague. They are 
not really understandable and I thought Mr. Berteau just 
outlined perfectly that the opaqueness of the process leaves 
contractors--if you are a large-scale integrator, you can 
absorb maybe time and keep people waiting to go on to the 
contract. But for small firms, as was illustrated by one of our 
witnesses, you can't do that.
    You have to make this finding very quickly and if you do 
the agency check, what they call the National agency check, 
other checks on the individual and they want to put you on a 
contract, a resume has been submitted, it should be pretty 
quickly arrived at. You shouldn't have to wait days and weeks. 
Some people just for fitness now wait 3 and 4 months and rarely 
is there a denial but you have to wait for 3 or 4 months for 
this to occur.
    Mr. Correa. So, Mr. Berteau, just following up. You came up 
with three points. This is not a trade-off primarily. No. 1, it 
is not a trade-off being expedient and taking short cuts here. 
Data analytics and access to information is there. So, why 
can't we get through this system and move ahead? Again, are 
these applications just gathering dust or somebody is actually 
moving ahead, or are we working with old computers that don't 
have access to these data analytics to move effectively forward 
on these applications?
    Mr. Allen. In my view, living with a tradition and a 
culture, many of these components go back decades, Customs goes 
back to the beginning of our country. But there is a lot of 
history and culture and a way of separateness.
    When I worked for Secretary Chertoff, his top priority was 
keep terrorists out of the country, keep dangerous materials 
out of the country and third, integrate the Department.
    Mr. Correa. Go ahead, Mr. Berteau.
    Mr. Berteau. Mr. Correa, I think two of the dynamics that 
are working here, No. 1 is that the problem is not just for 
contractors; this problem also extends to Government career 
civilians that you are trying bring in or to uniformed 
personnel. It is the same set of systems and criteria that 
often apply. In cases you will even find some of the 
reciprocity challenges inside DHS apply to career civilian 
personnel as well as to Government contractors.
    We hire contractors for many, many reasons, and one of the 
reasons that we like to use contractors is because of the 
flexibility that contracting provides you. Once you have got a 
Government career civil servant, that is the job they are in. 
With contractors, you at least theoretically have the ability 
to move to where the need is and to be able to go back and 
forth. The Department is actually working against its own 
interest by making it more difficult to do that with the 
contractors that they have in place.
    Mr. Correa. So, my question is why, I mean----
    Mr. Berteau. I don't think anybody actually wakes up with 
the intent----
    Mr. Correa. Mr. Allen kind-of alluded to that which is the 
integration issue, but why? Everybody has the best intentions 
but----
    Mr. Berteau. DHS alone can't fix this, of course.
    Mr. Correa. So, do we need to legislate a law that says you 
guys got to integrate all of this? You got to talk to each 
other?
    Mr. LaBonte. If I could add, Congressman. We talk about 
security at DHS as though it is a monolithic Department that 
handles the security but it is certainly not. As Mr. Allen 
alluded, there are security offices in each component. So, the 
component security offices have to submit their information to 
an enterprise security office that uses investigations that 
originate outside of the agency, typically OPM or other 
sources.
    That all initiates when a contractor sends it to a program 
manager who send it to a COR who then sends it to a local 
security officer and there are a lot of people in the chain. I 
don't think it even sits to gain dust because someone is not 
doing their job but there are just a lot of hand-offs where the 
paper can be dropped.
    Mr. Berteau. There are a bunch of systems that are 
antiquated. Case management alone which is something that there 
is good technology now to manage cases; this is what companies 
that depend on customers do all the time. Things get lost. 
Documents get lost. We have a number of companies that 
submitted examples to me where multiple forms sent in the same 
FedEx package signed for by the same person, they can find some 
of those forms but they can't find others of those forms.
    We have had examples where--well, your example that you had 
of the citizenship application. I have got half the form here 
but I don't have the other half of the form.
    These are the kinds of things that I think that 
individuals--I don't want to subscribe bad intent to anybody 
because I don't think anybody is intending to screw this up, 
but when you are a bureaucrat and you are faced with I can't 
find the damn forms, you probably are not going to say the most 
important thing for me to do today is to call the person whose 
form I lost and tell him I lost the form. You are going to hope 
it turns up, right? Maybe it will and maybe it won't.
    Mr. Allen indicated I think how many months, Charlie, for 
your last periodic investigation?
    Mr. Allen. For the last one conducted by Defense Security 
Service, 35 months. Although I continue to operate at Top 
Secret SCI level, I didn't have the validation until December 
14, 2017.
    Mr. Berteau. Mine was 4 years. They lost the electronic 
forms twice. Now, I thought the whole point of an electronic 
form is you won't lose it.
    Mr. Correa. Right.
    Mr. Berteau. So, I had to go back and refill it out on e-
QIP, start all over again and then, of course, there are a lot 
of outstanding things in the process that can be improved. You 
have to have somebody who has both the incentive, the 
motivation, and the authority to force those improvements to 
come into play.
    Mr. Correa. Mr. Chair, I yield.
    Mr. Perry. The Chair thanks the gentleman from California.
    The Chair now recognizes the good gentleman from Kansas, 
Mr. Estes.
    Mr. Estes. Good. That was my whole goal was to make sure 
that I addressed the issue and the third time was the charm for 
me, right? I apologize for that.
    The issue as we look at it, how to be more efficient and 
effective in getting things done. Obviously, through DHS, there 
are lots of agencies that cut across and have somewhat related 
but different missions. As we are sitting here today, we are 
thinking that there is a lot more related in terms of how we 
can make that more efficient.
    But I just wanted to talk, maybe just ask some questions. 
There are a lot of things we have talked about as problems but 
maybe starting with Mr. Allen, I mean, could we boil this down 
to two or three top recommendations that we would make that we 
would change differently, whether it is integrated systems, 
whether it is rules and regulations, whether it is accepting 
clearances that have already been done or fitness 
determinations that have already been done from other agencies.
    Mr. Allen. Yes. If the Department can't make the decisions, 
then I think legislation will be required. There is really no 
reason though, this decision could be made strikes me by the 
Secretary, that if a contractor and we have thousands of them 
who have some level of clearances, if they have a Secret or Top 
Secret clearance, they do not need a separate fitness. That is 
No. 1. You don't need a separate fitness report.
    There has got to be uniformity across the Department. When 
Elaine Duke was out of the Government in 2015, she talked about 
this and she was under secretary for management while I worked 
with Ms. Duke and she was terrific on this. She talked about 
consistent standards. Why can't that be done it seems to me 
within the Department?
    Reciprocity across the component, if you are a contractor, 
you are approved and you are fit to work for CBP, that is good 
enough for ICE. You can also work on a contract at ICE. Strikes 
me that these are the kinds of decisions--those are three--that 
could be done.
    Reciprocity, the intelligence community, to be fair, we 
shouldn't be too harsh on DHS which I admire in many ways. It 
took a long time to get reciprocity across the intelligence 
agencies and we still don't have it totally. I remember when I 
tried to get an NSA officer who has all the clearances in the 
world, come down to work on a CIA contract that I was managing, 
I had to move heaven and earth just to get that NSA officer 
quickly under my management.
    We have come a long way in the last 15 years. I submit that 
DHS could come a long way with strong decision making by the 
leaders of the Department.
    Mr. Pearl. In terms of recommendations, obviously, we all 
focused on similar in our written testimony, but I would point 
out two things that may not require legislation. It is an 
understanding, first of all and I don't want to be here to 
defend DHS, but in the conversations that we have had, there is 
a difference between the security clearance process and a 
suitability and fitness process.
    You are looking at character. You are looking at nature of 
conduct, maybe a Snowden, I don't know. Some of the Top Secret, 
some of the security clearances don't require an in-person 
interview. You do your investigations around that. You don't 
see the person.
    A lot of folks from DHS in terms of the person-to-person 
conduct that this agency has different from intelligence 
community and different from in some ways the National 
security. That should and could play--I am not here to defend 
it but it exists and not just at DHS. The fitness and 
suitability standards are across.
    But I would look at two things. One is the nature of 
communication. Even if you have a process that is broken, even 
if you have a process where things are going on for a long 
time, at least communicate with the contractor. At least along 
the time line, stay in touch, check in, give them that 
information.
    You don't have to give what the background that they do not 
part their hair. There is a thing about maybe credit checks or 
how behavior at home, whatever it might be. That is No. 1, 
communication.
    No. 2, I would talk about the whole nature of 
standardization, that there has to be a reason, why do you need 
to ask that? When we have asked the USM over the years, the 
last one being Russell Deyo, why does there need to be these 
various questions that are added between a CBP officer and an 
ICE officer. They couldn't really give us that answer. So, the 
nature of a standardization of a sense of continuity and 
communication I think are two of the ones that don't need a lot 
of legislative action.
    Mr. Berteau. Mr. Chairman, may I extend, I don't know if 
you have got another question but----
    Mr. Perry. Go ahead. Without objection, go ahead.
    Mr. Berteau. I think the one single thing that is most 
important here is in fact reporting on the information. You 
have got 20-plus entities inside DHS than can deny reciprocity 
to somebody who is either suitable or has a clearance somewhere 
else. You really ought to require every one of those components 
to report on a regular basis how many reciprocity requests they 
get. How many did they approve, how long did it take?
    For those that they denied, what is the general category of 
denial? You don't have to give out personal information because 
I go back to something that I think Mr. Allen alluded to, if 
you are not good enough for one part, what makes it OK that you 
are still good enough for the other part? Somebody ought to 
actually answer that question, right?
    I actually think if you take the heads of those components 
and you require them to submit that data to you in writing 
however periodically you want to get it, once a year, every 6 
months or whatever, by the second time around they are going to 
want to show something better than the set of data that was in 
the first time around.
    That is the single most important thing I think you could 
do to draw attention to this issue and preventing anybody from 
hiding behind, I just lost it and I do not want to go look for 
it.
    Mr. Estes. Thank you. I have exceeded my time and I 
appreciate your answers and help us with that. So, I yield 
back.
    Mr. Perry. The Chair thanks the gentleman from Kansas and 
now turns to Mr. Higgins from Louisiana.
    Mr. Higgins. Thank you, Mr. Chairman.
    Gentlemen, thank you for appearing before us today. I have 
three questions on three areas I would like address. I will get 
to them quickly.
    No. 1, we have discussed that the lack of coordinated 
effort essentially within the DHS and its component agencies 
both for fitness determinations which is for contractors and 
for suitability determinations for employees and that the 
overriding message we are receiving today and my own research 
confirms this, is the redundancy within the system that we have 
referred to.
    So, I ask you gentlemen because no one has mentioned, you 
are all, I am quite sure, familiar with the Department of 
Homeland Security Authorization Act of 2017, that was passed 
last year, in July of last year, July 20 of last year, this 
body passed the Department of Homeland Security Authorization 
Act, 386 to 41.
    The first paragraph of the summary of that bill, the bill 
amends the Homeland Security Act of 2002, that as an agency, it 
was never authorized, which meant it was spread across eight or 
nine committees for oversight. Now, how can we have an 
organized effort within a massive organization of this Nation 
with many components without centralized command and control? 
Does that not begin with this body's responsibility to 
authorize that Department?
    So, I bring you to this first paragraph, the bill amends 
the Homeland Security Act of 2002 to establish in the 
Department of Homeland Security a headquarters which shall 
among other things establish an overall strategy to 
successfully further the mission of DHS and to ensure that DHS 
successfully meets operational and management performance 
objectives.
    I would say this entire subcommittee hearing has pointed 
out the fact that DHS has not successfully met operational and 
management performance objectives, and yet the bill that was 
passed by this body through this committee as a whole in the 
summer of 2017 languishes in the Senate. So, I would hope that 
my Senate colleagues are listening and I hope that your 
organizations are communicating with our colleagues across the 
way.
    Regarding redundancy, I completely concur and I will just 
ask you gentlemen, do you believe that the full authorization 
of the Homeland Security in all of its components, the agency, 
that the full authorization passed through the Senate, signed 
by the President, would this help us address some of these lack 
of controlled efforts as a centralized effort within an agency?
    Mr. Allen.
    Mr. Allen. Yes, I would just like--yes, thank you, 
Congressman for the questions. On the whole problem of a number 
of committees and subcommittee to which DHS has to report, it 
is 88 or so or 90, that is--105, we struggled under Secretary 
Chertoff and I know Governor Ridge did before I came to the 
Department, we struggled and we found ourselves meeting with 
many subcommittees across the Senate and the House of 
Representatives in ways that did not further.
    But, every--until we have a more centralized command and 
control and oversight of the Congress, we want that oversight 
and we want an intense oversight. That is the reason we 
established the Homeland Security Committee.
    Mr. Higgins. Thank you for that answer.
    Let me allow Mr. Pearl, yes or no, sir?
    Mr. Pearl. Well, this subcommittee is not just the 
oversight and that is the I think the nature of the vision, it 
is oversight and management efficiency. Now, does that exist? 
Do you colleagues hear that in the House? Was it completely 
addressed in the authorization act? It was not.
    The nature of what industry which has so many detailees and 
so many contractors, that relationship between industry and 
Government, much different, the relationship is different, has 
not been fully addressed in the way that we can.
    Yes. My answer to you----
    Mr. Higgins. Would you not agree though that authorization 
is the first step toward centralized command and control?
    Mr. Pearl. It absolutely, but nothing that we have said 
here today Mr. Higgins would in fact impede and be impeded by 
the passage of an authorization bill, though it is needed. What 
we are talking about are standards and procedures that are cut 
across the entire Federal Government space and without the 
calcification that DHS has as an----
    Mr. Higgins. Mr. Allen referred to the culture, but the 
primary problem here we are discussing today is redundancy in 
its application toward fitness determination or suitability. 
Mr. Berteau, yes or no?
    Mr. Berteau. Mr. Higgins, I would. I would note that it 
took the Department of Defense 39 years between the passage of 
the National Security Act of 1947 and the passage of the 
Goldwater-Nichols Defense Reform Act of 1986 to consolidate the 
authority, direction and control of the Department in the hand 
of the Secretary of Defense.
    I would hope that it does not take the Department of 
Homeland Security that long. I think this authorization bill 
makes some steps in the right direction there.
    Mr. Higgins. Well stated, sir. Your mic was on. Mr. 
LaBonte.
    Mr. LaBonte. Yes. You know, I do not know if it solves the 
problem, but I think centralizing through the authorization act 
would only help. Yes.
    Mr. Higgins. Thank you, sir.
    Mr. Chairman, I yield back.
    Mr. Perry. The Chair thanks the gentleman. With your 
indulgence and without further objection I would like to go for 
a second round if you are interested in sticking around, fine. 
If you are not, so, I am going to take another 5 minutes here.
    Let me start out with Mr. LaBonte, first of all, are you of 
the family that does all that race car driving in NASCAR?
    Mr. LaBonte. I am still trying to find the connection.
    Mr. Perry. All right, all right, because some people 
complain about that dirty driving. No, that is not fair.
    So, for people that might not be familiar that might be 
watching this thing, what the heck is going on at DHS? Just as 
an employer, right, you have some contracts, walk me through 
the process of you think--you have got a contract and you are 
trying to hire somebody and you are waiting for them to get 
their fitness adjudication. You got a person, you submit for 
that.
    Where does that person go? What are you doing? How long is 
it taking? How much is it costing you which is essentially 
costing us because you, I am sure, planned for that in the 
contract price when you bid. I would just like to know maybe 
your--how do you even calculate that at this bid?
    Mr. LaBonte. Yes. We figured out that on average we have 
taken our contracts as we bid them and they are often 3-year, 
4-year, 5-year contracts, and instead of bidding at full staff 
at the beginning, we actually assume it is going to take at 
least 6 months to get the full staffing levels because we never 
are able to ramp up through the fitness process.
    To walk you through the process, there are a couple of 
different pieces, but to simplify, we will make an offer to a 
potential employee. We will recruit them, we will spend the 
money on a recruiter. We will spend the money on advertising. 
We will find them. We will spend time and overhead interviewing 
this people, trying to find out if they are the right person 
for the job. We will bring them in and screen them with a 
number of different sources.
    We like the person, we make them an offer, and it is 
contingent on them receiving a positive fitness determination 
from the Government. They are then asked to fill out the e-Quip 
form, that I think you probably are all familiar with, 
outlining their background. We review that and it goes into our 
COR, on our contract.
    The COR looks at it, but I will be honest, the COR is not 
trained generally speaking in personnel security issues. That 
is not really their job. So they end up just sort-of forwarding 
the information into the local security office for the 
component. It may sit there for a very long time. Sometimes it 
does, sometimes it doesn't. It then gets forward to PST. PST 
will either initiate investigation or try to grab an 
investigation that has been done recently and make their 
evaluation.
    All of this process takes months. We lose about 1 of every 
3 candidates waiting on the fitness process.
    Mr. Perry. What are they doing while they are waiting? What 
are they doing?
    Mr. LaBonte. So, we have not employed them.
    Mr. Perry. You are not paying them?
    Mr. LaBonte. I can't. I can't hire them. No, I can't. 
Because if I hire them, I can't bill them on the contract so 
that they would have to sit on overhead, that would put my----
    Mr. Perry. So, they have got a job, but they don't have any 
pay and they do not know when they are going to start the job. 
So, just like everybody else they have bills to pay, lives to 
live, and they move on.
    Mr. LaBonte. Not only that. So, that is all true, and not 
only that, but they ask us for information on the process----
    Mr. Perry. And you can't.
    Mr. LaBonte [continuing]. And I can't tell them anything.
    Mr. Perry. Because you do not get it.
    Mr. LaBonte. I am not allowed to get it. If I call DHS and 
say, ``I have got an employee who has been in fitness for 6 
months and I need some information.'' They will say, ``We will 
not speak to you. Talk to your COR.''
    Mr. Perry. All right, that will be for Round 3 for me. So, 
let me get----
    Mr. LaBonte. Sorry. You get me a little----
    Mr. Perry. Yes, right. No, me too. But I just want--so, let 
me ask you this, without--because I think Mr. Higgins, 
Representative Higgins touched on a very important part which 
is the authorization of this agency, which is fraught with its 
own perils and of course it sits in the Senate.
    But, let me ask you this, we have a Secretary and while it 
may have taken DOD decades to bring all those forces together, 
it seems to me and I guess my question to you folks, you are 
smart people, is there any reason in the absence of an 
authorization, right, as it sits in the Senate and waits for a 
Presidential signature assuming it gets past the Senate, is 
there any reason that the Secretary can't just wave her wand so 
to speak and make it so?
    Mr. LaBonte. I think that is partially a question for the 
Secretary. From my perspective, DOD does this pretty well and 
they have taken a long time to get there, but they figured out 
how to do it. They figured out how to engage industry and work 
back and forth.
    Mr. Perry. So, what I am reluctant to do as a legislator 
personally and I can't speak for anybody else on the dais here, 
but it is to legislate this when it seems to me this is a 
management/leadership function. We have a Secretary look at 
these problems.
    OK. You are using suitability and fitness when it seems to 
me for the most part, security clearance fixes that. 
Contractors operating, the COR is involved in this process, 
probably should not be. I do not see any reason for them to be, 
but maybe I am missing something. So, move the contracting 
representative at the end to manage the project and let these 
other folks at OPM and the people managing the individual 
agency at DHS decide who they want to hire based on whatever 
criteria, and cut half this overhead and redundancy out and 
then, by the way, report on the progress to people that call.
    This guy is a loser. We are not taking him. This lady is 
great. So, you can expect her to be approved in 3 weeks or a 
month. Like, that seems like to me something a Secretary can do 
and so, I am asking you. Is there any reason that you know of 
that the Secretary can't do what I just described?
    Mr. LaBonte. So, I don't know of any reason. But I sat 
across from PSD and I asked a question that was similar to that 
of the director of personnel security. I said, ``Why can't you 
utilize the folks who are already deputized by the DOD to help 
you get this clearance done?''
    The answer was ``We do not have a statutory way to engage 
folks.'' I do not know. I am not lawyer.
    Mr. Perry. Right, but that is a question for us to ask.
    Mr. Allen. I think that is a good question, Mr. Chairman. I 
do believe, for example, the Secretary of Homeland Security 
certainly has a power to further empower and authorize the 
chief security officer of the Department to centralize and 
organize and structure and give direction so that we are not 
broken up into little parcels of security as we are today.
    Mr. Perry. Correction. The Chairman recognizes Mr. Correa.
    Mr. Correa. Thank you. I just wanted to follow up on the 
Chairman's line of questioning which is Secretary of DHS, does 
the Secretary have a magic wand or do we need legislation to 
move this forward? As I look at all of you here, you are going 
to give me an answer, but I guess the person we have got to ask 
is the Secretary of DHS. What is it exactly that you need to 
implement these policies of efficiency?
    Mr. Berteau. Mr. Correa, from my perspective, there are no 
statutory or for that matter, regulatory impediments to the 
Secretary undertaking to do that. But I think it is important 
to recognize that many aspects of this problem are not under 
the Department of Homeland Security's control.
    If you look at and I think the fitness determinations are 
largely entirely under their control unless they determine that 
there is a point at which they have to hand off part of the 
background investigation to the Office of Personnel Management 
National Background Investigation Bureau to undertake 
additional inquiries in that regard. At that point, it goes 
into the hopper with all the rest of the Federal Government. 
So, it is now competing for limited resources with a host of 
other activities.
    Mr. Correa. So, I guess, it is only something that might 
happen.
    Mr. Berteau. Right.
    Mr. Correa. So, I guess the question is what percentage of 
those actually get to be handed off and which----
    Mr. Berteau. Well, and that is part of my point of where I 
come back to. I think the single most important thing you can 
do is to both reinforce the positive behavior from the 
Secretary and expose those places where maybe there is a little 
foot-dragging going on by requiring regular updates from them 
over all of the details and the data that come out of that, how 
many have been handed off to NBIB for further investigation, 
what is the status of those, so that you actually I think 
through your oversight can reinforce the positive things that 
the Secretary can do, help steer the opportunities toward those 
positive things and perhaps create a little disincentive for 
ignoring the problem.
    Mr. Correa. Mr. Allen, go ahead.
    Mr. Pearl. I would just add, the context of measurements 
and data, we don't have it. The companies do not have it in 
terms of why decisions are made or how long, what are the 
delaying challenges. You don't have it and I think that--and 
the Secretary does not have it either because each of the 
components--forget about everybody else.
    The head of the components will argue and have argued to 
us, and in your AIR that you were involved in, why they need to 
be different, why TSA needs to be different from CBP, from ICE, 
from Secret Service, et cetera. We have other character issues 
and personal issues. What we need--I am glad that you have a 
security clearance. That is great. You need it before we can 
even go to fitness. But the fact is that we have other aspects 
because of the interaction with the public or whatever excuses 
they give.
    I think that if you can get the kind of measurements, the 
kind of reporting back between you and DHS, that would go a 
long way to encouraging why a company and Mr. LaBonte's 
examples are not by themselves, are not a silo. They exist 
throughout the entire contracting community that are trying to 
do business to the best of their ability with DHS.
    Mr. Allen. I think, Mr. Correa, I think that one thing we 
have to do is--or that you will have to do is to repeal the TSA 
standards which are in law because if you are going to 
encourage reciprocity across all of it, it should be a common 
standard and there should be common reciprocity. As long as it 
stands out by itself, it really is an impediment.
    Mr. Correa. Yes.
    Mr. LaBonte. If I may add, Mr. Congressman.
    You asked the question is there a reason the Secretary 
can't wave a wand and change it, the question was asked. I will 
say that in the last 10 years that I have been doing this, this 
process has gotten progressively worse and it has also changed. 
It has changed I think absent those authorizing bills and 
whatnot over time. So, if it could get worse over time, it 
would seem like it could get better as well with management 
action inside the organization.
    Mr. Correa. Mr. Chairman, I just want to say using the 
oversight of this committee, I think we do have to have DHS 
come in here and testify and try to figure out should we need a 
better wand, the Secretary need a better wand or do we come up 
with some good legislative solutions here, but, more 
importantly, the on-going oversight to make sure that things 
move in the right direction.
    Mr. LaBonte, you were saying things got worse. Well, let's 
say we get them--we get better. Again, no trade-offs, it is 
just becoming more efficient for the sake of our National 
security.
    I yield, sir.
    Mr. Perry. The Chair thanks the gentleman from California.
    The Chair recognizes the gentleman from Louisiana, Mr. 
Higgins.
    Mr. Higgins. Thank you, Mr. Chairman.
    Mr. LaBonte, how large is your----
    Mr. LaBonte. About 150 people, sir.
    Mr. Higgins. One hundred fifty people. Are they all 
contracted? What percentage of them is contracted before with 
DHS, have been through fitness determination, suitability?
    Mr. LaBonte. We are about 85 percent Homeland Security, 
sir.
    Mr. Higgins. OK. So, if you are going through the vetting 
process for a new contract, those employees have to get vetted 
completely all over again in the same manner?
    Mr. LaBonte. Yes, sir. In fact, if employees who are 
sitting at a desk at one of DHS's facilities change contracts, 
without a new contract, without a real change, if they move, we 
have got an office where we have four contracts and the people 
sit in the same room. They collaborate together daily. If they 
end up changing from one contract to the other, they are 
required to go through fitness again.
    Mr. Higgins. You gentlemen today have been describing the 
colossal inefficiency of the Federal Government and it devours 
of people's treasure and we are duty-bound and sworn by oath to 
address it and fix it. I will tell you, there is a great deal 
of IQ sitting at that table and you have all shared very 
similar testimonies this day. They seem to be focused on 
inconsistency and redundancy.
    I turn to Mr. Allen's written testimony. He stated, 
``Fitness standards across DHS components precluding 
reciprocity of favorable suitability assessments when a 
contractor joins a contract with a different DHS component,'' 
and you have experienced this, Mr. LaBonte?
    Mr. LaBonte. Yes, sir.
    Mr. Higgins. Redundancy is tied into the inconsistency. So, 
it seems to me that this is an Executive fix and I can't 
understand--I recognize the various components and it seems to 
tie into what Mr. Allen has stated regarding culture, but I 
refer to my colleague's question and I just like to repeat it. 
Is there any reason that you gentlemen can see that within the 
authority and the infrastructure of the Executive that this 
could not be addressed at Secretary level?
    Mr. Allen. My view, Mr. Higgins, is that a great deal of 
this could be addressed by Executive decision by the leadership 
of DHS, working with Tom Bossert over at the White House, a lot 
could be done to improve this significantly and right away.
    Mr. Higgins. Mr. Pearl.
    Mr. Pearl. Well, I don't want to wipe away the fitness 
standards, but we want them standardized. We want to understand 
a sense of consistency, a couple of examples. Drugs is one 
example.
    Some agencies don't care. Some agencies may say within the 
last 3 years, within the last 10 years, that is not necessarily 
just a security clearance uniform approach. So, different 
components approach that question. They approach bad debt 
differently. Some don't even allow the asking of the question. 
Some set it at 3,000 or 5,000 or 10,000.
    All they have to do is justify it to the Secretary. They 
have to in essence say ``This is why we have found that when 
you are a Border Patrol agent we need more----''
    Mr. Higgins. But if there is a comprehensive effort and 
study within the Executive, then, these things could be 
addressed and standardized.
    Mr. Pearl. Absolutely. That is all that we have really been 
asking for. We have been asking for that.
    Mr. Higgins. Mr. Berteau.
    Mr. Berteau. Here is why I think leadership comes into 
play. In the end, this process of making a determination of 
whether somebody is suitable, whether somebody is fit, whether 
somebody earns the trust of the Government to have a clearance 
is a judgment call.
    Mr. Higgins. Right.
    Mr. Berteau, if you could automate this, if you could just 
make it a checklist and automate it, it would be very easy to 
do that.
    In the end, judgment implies some level of acceptance of 
risk, because you are not going to be right 100.0 percent at a 
time. So, I think where the leadership comes into play is not 
only giving the guidance, reporting the data, but giving the 
coverage that says it is OK to use judgment in a way that does 
not--you minimize risk by taking forever to do it. If you never 
say yes, then, you are never in trouble for having said yes to 
the wrong person.
    The Secretary and the officials underneath the Secretary 
need to provide the coverage that says it is OK to make a 
decision. What you see all too often is, maybe there is 
something suspicious out here. Well, maybe if we sit on it a 
while, the guy will quit and he will withdraw his name and you 
don't need to finish that.
    Mr. Higgins. Excellent point.
    Mr. Berteau. Let him exercise that risk in a way because 
ultimately it is where is the Government putting its trust. 
That is an important decision, but it is not one that should 
take forever.
    Mr. Higgins. Mr. LaBonte, close us out here, sir.
    Mr. LaBonte. I would completely agree. I think there is a 
lot that can be done within the management of the organization. 
I mentioned that we can't communicate with DHS about our 
employee status. That has not always been the case. That 
changed in 2016 and as best as we can tell, it was just an 
internal decision to make a change.
    So, if they could have changed it to be more restrictive in 
communication, they can change it to be more transparent with 
the employers. There is a lot that could be done.
    Mr. Higgins. Gentlemen, this has been a very enlightening 
testimony. We very much appreciate your participation.
    Mr. Chairman, I yield.
    Mr. Perry. Thank you. Just a couple of final questions 
before we close up here, I am just trying to determine because 
I feel like I am missing something. We got a big agency that 
wants to do the right thing. We got great people there, but 
somehow, the wrong thing seems to happen more in this case than 
the right thing.
    What is the reason for the secrecy? Why can't they talk to 
you about where your proposed employee/contractor is in the 
pipe? Is there some reason we do not know? Is there something 
that you know? Is there some National security thing that we 
haven't considered? What is happening here?
    Mr. Allen. It gets back, Mr. Chairman, to privacy. They do 
not like to--if there is derogatory information and they are 
evaluating and adjudicating whether the person is fit or not, I 
think attorneys and others have made it, inability to 
communicate well with the----
    Mr. Perry. But other agencies do not have the same problem, 
do they?
    Mr. Allen. Yes, they do.
    Mr. Perry. They do.
    Mr. Allen. The Central Intelligence Agency is very----
    Mr. Perry. How about DOD?
    Mr. Allen [continuing]. Is very good in seeing----
    Mr. Perry. There are a lot of contractors in DOD. How about 
DOD?
    Mr. Allen. They communicate. They have points of contact.
    Mr. Perry. So, if somebody can do it, then, everybody can 
do it. You got to want to do it though. You have to have a 
system in place.
    Mr. Allen. You got to want to do it. You got to have and 
they have got to have the authority to say ``Things are on 
track. Please hold on and we will give you the security 
clearance.''
    Mr. Pearl. Let me just say I think that that is why the 
standardization is important because if you do not know what 
the rules are, you make up your own rules.
    Mr. Perry. Sure.
    Mr. Pearl. Because there is a culture of risk aversion 
particularly at DHS and whether it is the intel community or 
DOD, but there is right now that culture of risk aversion, and 
if I am not given the standards and the rules by which I 
communicate, I am going to avoid it entirely.
    I am afraid that if I don't give the right information out, 
I tell the contractor personal identifiable information about a 
particular person which I am really not allowed to give and the 
general counsel's office says----
    Mr. Perry. Wait a minute. Doesn't the contractor who has 
hired so-and-so have some reasonable expectation to know about 
the employer or the employee that he just hired that filled out 
the SF-86?
    Mr. Pearl. Absolutely. Yes.
    Mr. Perry. So, what information is the Government going to 
give him that he does not already know unless the person, the 
prospective employee lied on the form, right? So, you could 
just say, ``Look. The form doesn't match up. It doesn't comport 
with reality.'' Is that enough information for you? I think if 
we get that, we can move on, right?
    OK. Let me ask you something else here. I understand you 
want to keep the suitability fitness thing. I am not sure 
because I don't know of other agencies that do that.
    But, Mr. Allen, you have mentioned the TSA minimum standard 
that that is in statute and that might be a hindrance to----
    Mr. Allen. I think it is because it puts such excruciating 
detail for TSA standards that it does inhibit I think other 
components from common standards----
    Mr. Perry. But is there anything--do any of the other 
agencies such as the Secret Service or immigration, ICE, or--do 
any of the other agencies have a lesser standard than that?
    Mr. Allen. No. I would say not.
    Mr. Perry. There could be a minimum standard at a minimum, 
right?
    Mr. Allen. I think there should be common standards and I 
think they can be agreed upon with the proper leadership of 
DHS.
    Mr. Perry. It seems to me you could use the security 
clearance requirement plus, right, for suitability because I 
agree with you. If you are not conducting an interview, you 
might miss something, so, security clearance, plus 10 questions 
or this criteria and then move on.
    Mr. Allen. It should be very efficient and very quick.
    Mr. Perry. All right. I think we beat this horse--I think 
it is dead, but anyhow.
    Mr. Berteau. No. It is nowhere near dead.
    Mr. Perry. Well, I guess the beating will continue from 
here. I think me and the fine folks on the committee and the 
wonderful staff here will try and figure out what the way 
forward is here and with your input as well.
    Did you have something----
    Mr. Correa. Mr. Chairman, if you indulge me again for just 
one question left, very quickly. We are talking about non-
legislative recommendations. We touched upon legislative 
recommendations in terms of the TSA minimum. Any other thoughts 
on legislative recommendations?
    Mr. Berteau. Mr. Correa, I think one thing that is critical 
here, we are operating right now under a continuing resolution 
inside the Executive branch. That continuing resolution goes on 
until March 23.
    Presumably, eventually, the appropriators are going to 
write the appropriations that will do this. I would urge this 
committee to pay close attention to make sure that the 
resources necessary to execute this mission and function inside 
DHS are included in those appropriations. We will be glad to 
help you pay attention to those and weigh in where appropriate 
on there.
    Mr. Higgins. Sir, you mentioned having sufficient 
resources. If we streamline this thing and introduce 
efficiencies, won't we devour less of the people's treasure and 
do a better job?
    Mr. Berteau. I think that is absolutely the case.
    Mr. Allen. Absolutely.
    Mr. Berteau. But I do not think we will streamline it by 
March 24. I think we are going to----
    Mr. Higgins. No. I agree completely that we have to fix 
what is broken within this body in appropriation process, the 
budgeting process, no doubt. But if we can develop standards 
and processes within the DHS and its various components that 
are reflective of best standards in private industry and 
efficient management, would the entire Department of Homeland 
Security not run more efficiently?
    Mr. Berteau. It would entirely cost you less. That false 
dichotomy that I laid out between speed and security, it is 
also a false dichotomy between speed and cost.
    Mr. Higgins. Thank you, sir.
    Mr. Perry. The Chair thanks the witnesses for their really 
valuable testimony and the Members for their questions. Members 
may have some additional questions for the witnesses and we 
will ask the witnesses to respond to these in writing.
    Pursuant to Committee Rule VII(D), the hearing record will 
remain open for 10 days. Without objection, the subcommittee 
stands adjourned.
    [Whereupon, at 3:30 p.m., the subcommittee was adjourned.]

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