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


                                     
                         [H.A.S.C. No. 115-123]

              SECURITY CLEARANCE PROCESSING STATUS REPORT

                               __________

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                      COMMITTEE ON ARMED SERVICES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                           DECEMBER 12, 2018

                                     
                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                     
                              ___________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
34-979                    WASHINGTON : 2019  




              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                  VICKY HARTZLER, Missouri, Chairwoman

K. MICHAEL CONAWAY, Texas            SETH MOULTON, Massachusetts
MATT GAETZ, Florida                  TOM O'HALLERAN, Arizona
JIM BANKS, Indiana                   THOMAS R. SUOZZI, New York
LIZ CHENEY, Wyoming                  JIMMY PANETTA, California
AUSTIN SCOTT, Georgia
             Christopher Bright, Professional Staff Member
                         Matt Sullivan, Counsel
                       Barron YoungSmith, Counsel
                          Justin Lynch, Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page

              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Gaetz, Hon. Matt, a Representative from Florida, Subcommittee on 
  Oversight and Investigations...................................     1
Moulton, Hon. Seth, a Representative from Massachusetts, Ranking 
  Member, Subcommittee on Oversight and Investigations...........     1

                               WITNESSES

Payne, Daniel E., Director, Defense Security Service.............     4
Phalen, Charles S., Jr., Director, National Background 
  Investigations Bureau..........................................     6
Reid, Garry P., Director for Defense Intelligence, Office of the 
  Under Secretary of Defense for Intelligence....................     2

                                APPENDIX

Prepared Statements:

    Gaetz, Hon. Matt.............................................    17
    Phalen, Charles S., Jr.......................................    25
    Reid, Garry P., joint with Daniel E. Payne...................    18

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    Mrs. Hartzler................................................    31


 
              SECURITY CLEARANCE PROCESSING STATUS REPORT

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
              Subcommittee on Oversight and Investigations,
                      Washington, DC, Wednesday, December 12, 2018.
    The subcommittee met, pursuant to call, at 3:30 p.m., in 
room 2118, Rayburn House Office Building, Hon. Matt Gaetz 
presiding.

  OPENING STATEMENT OF HON. MATT GAETZ, A REPRESENTATIVE FROM 
     FLORIDA, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

    Mr. Gaetz. Good afternoon. This hearing will come to order. 
I am chairing today's hearing because, sadly, Chairwoman Vicky 
Hartzler's father has just passed away. Certainly all of us 
here are mindful of the sad time for Chairwoman Hartzler and 
her family, and our thoughts and prayers are with them.
    Chairwoman Hartzler was eager that this hearing take place, 
notwithstanding these sad circumstances, and this is because 
the Armed Services Committee is deeply interested in the 
security clearance process. It is essential that a rigorous, 
fair, and expedient process exist to identify individuals who 
should be allowed to access classified government data.
    Without a sound security system, our Nation's safety is 
potentially endangered and military readiness harmed. It is the 
Oversight Subcommittee's fifth event on this topic. Today, we 
will receive another mandated quarterly briefing on the 
security clearance process. Among other topics, we will hear 
about the size of the clearance background--or backlog, I 
should say, the trends of the backlog, and the management 
initiatives to address it.
    I am also interested in learning about the status of the 
Department of Defense's assumption of responsibility for 
background investigations and the transition of the management 
of that process from the National Background Investigations 
Bureau.
    I now turn to my colleague, Ranking Member Seth Moulton, 
for his opening remarks.
    [The prepared statement of Mr. Gaetz can be found in the 
Appendix on page 17.]

     STATEMENT OF HON. SETH MOULTON, A REPRESENTATIVE FROM 
 MASSACHUSETTS, RANKING MEMBER, SUBCOMMITTEE ON OVERSIGHT AND 
                         INVESTIGATIONS

    Mr. Moulton. I thank you, Chairman Gaetz. And I also want 
to express my sympathies to Vicky Hartzler and her family.
    Today marks our subcommittee's fifth discussion on reforms 
to the Department of Defense's background investigation and 
security clearance process. Over the last 6 months, the 
National Background Investigations Bureau has made some notable 
improvements by significantly lowering the investigation 
backlog. However, every day the backlog exists, we are delaying 
the hiring of qualified national security personnel, which 
threatens to disrupt U.S. economic growth and military 
readiness.
    In June, the administration formally announced its plan to 
transfer responsibility of background investigations for all 
Federal agencies to the Department of Defense. Today, I am 
looking forward to hearing an update from our witnesses on the 
personnel conversion process for OPM [Office of Personnel 
Management] employees and any additional costs incurred or 
authorities required to keep this transition on track.
    While I agree that we need to streamline the background 
investigation process, I am skeptical of DOD's [Department of 
Defense's] current ability to absorb such a cumbersome task. 
Furthermore, I remain concerned about the current strategy as 
we must ensure that we are not expediting the investigation 
portion of the security clearance process while unintentionally 
backlogging the adjudication portion of the process.
    I look forward to hearing what efforts the Department is 
undertaking to ensure clearances will not be delayed in another 
part of an already laborious system. We must also be careful 
not to sacrifice thoroughness and accuracy for the sole purpose 
of achieving efficiency. I am aware that DOD is using 
continuous evaluation and automated processes to reduce the 
investigative timeline for periodic reinvestigations, and it 
appears to be having a positive effect. While there are 
benefits to using technology to expedite the review of security 
clearance investigations, there are limits to the role that 
technology can play. Portions of the investigative process, 
such as reference interviews, cannot be replaced.
    While some progress has been made, I am eager to hear more 
today about further steps the Department has taken towards 
resolving these issues. Thank you, and I look forward to your 
testimony, and with that I yield back.
    Mr. Gaetz. Thank you, Ranking Member Moulton.
    Our briefers today are Mr. Garry Reid, Director of Defense 
Intelligence in the Office of the Under Secretary of Defense 
for Intelligence; Mr. Dan Payne, Director of the Defense 
Security Service; and Mr. Charles Phalen, the Director of the 
National Background Investigations Bureau.
    Thank you all for being here.
    Mr. Reid, will you please begin.

STATEMENT OF GARRY P. REID, DIRECTOR FOR DEFENSE INTELLIGENCE, 
   OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR INTELLIGENCE

    Mr. Reid. Thank you, Congressman Gaetz and Ranking Member 
Moulton, other members here today, and staff. Thank you for 
having us over today to update you on where we are with our 
ongoing work to reform the Federal vetting enterprise, and we 
will talk about everything you just mentioned in terms of 
security clearance processing, changes in the system, and 
progress made today.
    Since we were here last, we have continued to collaborate 
closely from within DOD, the Defense Security Service, and the 
National Background Investigations Bureau on the planning to 
prepare for what you just mentioned, Ranking Member Moulton, 
this upcoming transfer.
    I would like to hit on a few key points that have occurred 
since we were here last. As I already mentioned, in June, the 
administration announced that the investigative activities 
currently performed by NBIB [National Background Investigations 
Bureau] would be consolidated with similar activities mandated 
to the Department of Defense. This was in light of the previous 
year's National Defense Authorization Act, which directed us to 
transfer the DOD portion of that mission to the Department.
    Subsequent to that, within the executive branch there was a 
review and analysis of government efficiencies more broadly and 
it was assessed that to maintain the greatest degree of 
efficiency, the full mission would be transferred to DOD. We 
were very supportive of this decision, frankly. We were working 
through the process of splitting out of an enterprise, and 
there was risk associated with that, and this is actually much 
more streamlined for us from an efficiency standpoint and it 
has served to increase our collaboration across the board.
    We continue to do that planning. We are not executing that 
just yet, but we soon will be once the final guidance is 
promulgated and issued by the President. So we are continuing 
to plan for that.
    But we are not staying idle. As you mentioned, Congressman, 
these interim measures that were announced in June included 
additional options that would streamline the process, cut out 
some of the man-hours, and speed things through the 
investigative cycle. They included the ability to apply 
continuous evaluation and automated records check as a way of 
offsetting some of that and, frankly, as a way of not adding 
new work to NBIB's existing work strain.
    We in the Department of Defense implemented that guidance 
on the last day of July, so about 4 months ago. We have been 
working very closely with NBIB and our Performance 
Accountability Council partners to implement these and help 
reduce the inventory. We are pleased to say that over that 
period of time, we are near a 20 percent reduction in the 
overall for the DOD side of the inventory. You know, we are 80 
percent of the total anyways, so across the board we are 
realizing those benefits in the 18 to 22 percent range that 
were envisioned when these measures were put in place. So in 
the aggregate, we are down significantly from where we were at 
the beginning of this year and where we were in the summer.
    What is promising to us in the Department about this 
development is the process that we are now implementing very 
much mirrors the process we advocated for and the plan we 
submitted to Congress in 2017 under section 951, which was a 
shift towards more use of continuous evaluation automated 
records checking. So we are doing that now. We are realizing 
the benefits. We have a substantial cost avoidance factor that 
we have already realized by processing up to--I think we are 
about 20,000 now over the past few months. So this is the 
system that we wanted to implement later. We are actually able 
to implement it now.
    The plan we submitted in 2017, we were directed 
subsequently by Congress to implement by October of 2020. We 
actually implemented the guts of that plan in July of this 
year. And it really--as a function of the inventory and the 
pressure to get that down, it actually helped us speed up 
something that we were working through and intended to do 
already. So we think that is a good development. It sets us on 
the path to what will follow, which is transfer and transition 
of this process for all the reasons you have already described.
    We are working very closely with the committee, with our 
industry partners, with academia, think tanks, and others 
across the intellectual and commercial and government space to 
identify best practices and help guide us through this 
transition that comes ahead. We have solicited support of 
mergers and integration experts to help plan this transfer. It 
is a very large enterprise going from one branch of the 
government to another, and there are a host of executive orders 
and laws that apply to these agencies, and we are going through 
that deliberate planning right now in anticipation of making 
the transfer.
    Throughout that time, we will continue to focus on the 
daily mission of getting down the inventory for the reasons you 
have already mentioned, and working with NBIB to help 
streamline that process as much as possible.
    Congressman, you mentioned, and we have heard it often, 
that there is some skepticism that we are able to do this. I 
can only tell you that we have the support from the highest 
levels within our Department, from the Secretary and the Deputy 
Secretary, and my boss, the Under Secretary, the Chief 
Management Officer, and many other principals within the 
Pentagon, our focus on this issue. We have strong support from 
OMB [Office of Management and Budget], from Ms. Weichert, who 
is also the acting OPM director, to help this through, from our 
executive agent offices at the DNI and at OPM. We are all 
pulling on this rope together. We are all cognizant of the 
significant challenges ahead, and we are equally cognizant of 
the necessity to do this mission on a daily basis. And we go 
into this clear-eyed, but understanding that it is a 
significant undertaking. It will not happen overnight. This 
will evolve over a period of months. We will keep the mission 
going. We will make the improvements, and we will do the 
transfers, and we will get on with the future construct.
    I look forward to addressing your questions and engaging in 
conversations with you today. Thank you.
    Mr. Gaetz. Thank you Mr. Reid.
    Mr. Payne.

   STATEMENT OF DANIEL E. PAYNE, DIRECTOR, DEFENSE SECURITY 
                            SERVICE

    Mr. Payne. Congressman Gaetz, Ranking Member Moulton, 
distinguished members of the committee, it is an honor to 
appear before you today representing the dedicated men and 
women of the Defense Security Service as we absorb the 
background investigation mission from the Office of Personnel 
Management's National Background and Investigations Bureau.
    As you know, we met with you and your staff several times 
this year on the status of the investigation mission transfer. 
Today, I want to provide an update on our progress since our 
last meeting and my philosophy moving forward.
    To set the stage, as Mr. Reid just outlined, section 925 of 
fiscal year 2018 NDAA [National Defense Authorization Act] 
directed that we transfer only the DOD portion of the 
background investigation mission, however, commencing no later 
than 1 October 2020.
    DOD background investigations represent approximately 
roughly 70 percent or so of NBIB's entire investigations 
workload. Separately, in June of this year, the administration 
announced a government reform plan which included 
recommendations for streamlining the Federal Government. One of 
the recommendations called for a complete transfer of NBIB to 
DOD. We are awaiting an executive order that will codify the 
recommendations giving the Secretary of Defense the authority 
he needs to execute the entirety of the background 
investigations mission and establish timelines for the NBIB-DOD 
transfer.
    How we conduct the transfer will be critically important. 
We are expecting that the executive order will allow us to 
integrate the NBIB structure into DSS [Defense Security 
Service] in a way that will not reverse or impact the great 
progress that NBIB has made in drawing down their investigative 
inventory, while allowing DSS to continue the progress we have 
made in innovation and transforming the vetting process.
    As we continue to innovate and employ new measures mandated 
by ODNI's [Office of the Director of National Intelligence's] 
Trusted Workforce 2.0, our structure will change accordingly. 
To facilitate this transfer, I am working closely with Mr. 
Phalen to integrate the NBIB senior staff into DSS in order to 
capitalize on their expertise and experience. We want to ensure 
we have the best and the brightest minds at the table and that 
we continue to build on the progress NBIB has made.
    Below the senior staff levels, I know that employees of 
both agencies are concerned about their jobs, their duty 
locations, their chains of command. I am committed to 
minimizing the disruption to both field workforces, the people 
on the ground doing the work in accomplishing our mission. I 
think our approach will do just that. However, let me be clear, 
this transfer is incredibly complex. We are integrating two 
organizations into DSS while simultaneously automating and 
changing operational processes and procedures. Everyone at this 
table recognizes these complexities and are resolute in 
ensuring it is done successfully.
    We have worked with NBIB to develop a joint transfer plan 
which provides a high-level roadmap for the transfer, and we 
are continuing to develop a detailed step-by-step blueprint 
that will capture all of the actions necessary to complete the 
transfer, touching all functional areas. We are also 
establishing a joint transition team within DSS that will 
implement these plans and work the myriad of details required 
for a successful transfer.
    While we work these transfer details, DSS is continuing its 
own innovation efforts. The executive correspondence signed in 
June by the Director of National Intelligence and the director 
of OPM allowed us to execute new measures for certain periodic 
reinvestigations and enroll them into a continuous evaluation 
program. This action allowed us to reduce the number of new 
cases being submitted to NBIB. It also allowed us to focus our 
attention on high-risk cases and begin to develop a risk-based 
approach to personnel vetting. While we are continuing to 
refine our processes and business rules, we are already seeing 
success in reducing the backlog and focusing our efforts on 
those elevated risk individuals within our cleared workforce.
    The administration's June reform plan stated: Now is the 
time for bold transformation change in how we vet our 
workforce. I could not agree more. I think the progress DSS and 
NBIB have made this year positions us all well for success and 
will truly lead to a modern risk-based, technology-enabled 
personnel vetting model.
    Finally, I would like to thank the members of the committee 
for your continued interest in not only the NBIB transfer, but 
in the important work that DSS does every day in personnel 
vetting, securing critical technology, and the defense of the 
industrial base, and conducting counterintelligence in order to 
preserve our Nation's military and economic competitive 
advantages.
    With that, I am happy to take your questions.
    [The joint prepared statement of Mr. Reid and Mr. Payne can 
be found in the Appendix on page 18.]
    Mr. Gaetz. Thank you, Mr. Payne.
    Mr. Phalen.

    STATEMENT OF CHARLES S. PHALEN, JR., DIRECTOR, NATIONAL 
                BACKGROUND INVESTIGATIONS BUREAU

    Mr. Phalen. Thank you.
    Representative Gaetz, Ranking Member Moulton, members of 
the subcommittee, thank you for the opportunity to appear 
before you here today. As you know, NBIB's mission is a 
critical element of this Nation's efforts to ensure the 
integrity and the trustworthiness of the Federal workforce. In 
this role, we are the primary background investigative service 
provider for the Federal Government.
    Each year, this program covers over 2 million individuals 
that require some type of formal investigation. These 
individuals work in more than 100 departments and agencies that 
are made up of civilians, military members, and contractors 
from the over 15,000 companies governed under the National 
Industrial Security Program.
    Today, I would like to quickly address three main focus 
areas that are critical to the success of this mission. Number 
one, our organizational transition from OPM to the Department 
of Defense, our current inventory and those mitigation efforts, 
and then a glimpse into the future.
    And as Garry and Dan have discussed, the successful 
transfer of NBIB from OPM to DOD is critical, and we are 
working closely with them daily, almost hourly, to ensure that 
this is a seamless transfer. We fully support the intent 
expressed in the President's Management Agenda to keep this 
mission intact, and I believe this decision will ultimately be 
beneficial for the whole of government.
    That said, while there is a lot of focus on the future and 
the transfer and on transforming this mission, we have not been 
waiting for those final decisions before tackling the 
challenges that we face. The future is, it has been now, and 
addressing this has been foremost in our minds.
    Some quick numbers. At its highest level, our inventory 
reached 725,000 investigative products this past April. Looking 
at the trending earlier today, I am pretty confident that 
sometime in the next 24 hours that number will cross below the 
600,000 mark, a reduction of over 17 percent in just 6 months.
    That number 600,000 gets a lot of attention and is 
sometimes misconstrued as the number of government and industry 
employees waiting for a security clearance. That does not 
accurately portray the number of investigations pending in our 
inventory for initial national security clearances. That number 
is 275,000, of which about 110,000 are already at work on an 
interim clearance. While these numbers are not optimal, they 
are not as high has the 600,000, and we are working closely 
with our partner agencies to prioritize their more immediate 
requirements.
    Getting back to the overall inventory, the reduction that 
we have seen so far is a direct result of the following sort of 
things: First, since our standup 2 years ago, we have worked to 
increase our Federal and contractor workforce to recover the 
investigative capacity we lost in 2014. We have exceeded that 
goal. At the same time, we introduced and implemented business 
practices and process improvements to include enhancement of 
technology that has enabled more efficient use of our 
workforce. And as a result, we have reduced the pending field 
work in our inventory by about 45 percent, reducing the 
workload by more than 2 million hours in a year.
    To give you an idea of some of these processes, we are 
implementing robotic automation, robotic process automation, 
RPA, and have deployed about 20 bots so far to streamline the 
existing investigative processes. This effort will automate 
manual, time-intensive activities to increase productivity and 
reduce the waste and improve our timeliness. We have also 
developed and implemented an approach to rapidly assess 
completed cases based on a predictive model to expedite case 
closure to all of our customers.
    We have leveraged our strong partnerships with our 
customers to focus investigative capacity around high-density 
work areas. These hubs have been established around geographic 
clusters of civilian, military, and industry partners, and 
through this strategic approach we have more efficiently 
completed hundreds of thousands of investigative items.
    These are just three examples of many we have worked on. 
The results of our combined effort have increased our monthly 
production rate by 15 percent, closing just under 60,000 cases 
every full week for the last quarter. And I expect that trend 
to continue, actually to increase.
    Investigative infrastructure is critical to our success. As 
we work with our partner agencies, particularly the Department 
of Defense that has primary responsibility to develop and roll 
out the National Background Investigation Services, the future 
end-to-end investigative system, it is imperative that we 
continue to make efficient use of our current IT systems and 
maintain the security of those systems and that data until we 
transition fully into the NBIS. This will enable us to continue 
working down the inventory, while also preparing and building 
for that future.
    Regarding that future, we are fully supportive and fully 
engaged with the Trusted Workforce 2.0, the interagency effort 
led by the executive agents to transform and modernize the 
personnel security process. Most of the processes we employ 
today are driven by policy constraints, some of which date back 
seven decades, and they need to be revamped to match today's 
environment and challenges. We at NBIB know from experience 
there is much to be gained through the strategic policy review.
    And in closing, while there is great focus on transferring 
and transforming this mission, there are over 10,000 people in 
the NBIB workforce, both Federal and contract support, who are 
focused every day on executing this mission. It is our shared 
goal that while we work to transfer and transform this mission, 
our work is uninterrupted and we continue our current path to 
progress.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Phalen can be found in the 
Appendix on page 25.]
    Mr. Gaetz. Thank you, Mr. Phalen.
    I see Mr. Gallego has joined us, and seek unanimous consent 
for him to participate as a full member of the subcommittee.
    So ordered.
    Mr. Reid, as this process goes forward, what will be the 
metrics that we use to determine whether or not this transfer 
has been successful? Will it be the duration until a decision 
has been made? Will it be, you know, some customer satisfaction 
metric?
    You know, in my district, this is a major issue because we 
have got a number of people who leave military service having 
very high clearances and then they seek to go into the private 
sector, and even if they have a short lapse in that time 
period, it becomes as if they are a person who is tabula rasa 
to the intelligence community. And so if you could speak to 
that briefly.
    Mr. Reid. So I would offer you a two-part answer. And 
within the government, in terms of efficiency, the transfer of 
functions, resources, personnel infrastructure, that will 
currently reside within the Office of Personnel Management, and 
transferring those to the Department of Defense, we have 
developed a transfer timeline. The intent of this is to go from 
the first of the year, from January, and complete those 
transfers by the beginning of fiscal year 2020, through 30 
September next year. So we have a 9-month window to complete 
those transfers. And we are working the fine details of the 
incremental transfers of those things.
    Then we have a series of plans to go through, such as a 
human capital, right. You have over 2,000 Federal employees 
transferring from one agency to another. So as we work through 
those details, we will establish a series of gates for 
deliberate transfers of functions and resources. Now, that is 
really inside the government.
    Your question, however, was more about the external facing, 
what do people see and what is the difference to the customer, 
right? So that goes to two parts. One is the continued progress 
that we will make working with the same people that are doing 
it now but now transferred under a DOD framework to work down 
the inventory. As the inventory works down, you have more 
resources to apply to existing cases, so you speed up your 
timeliness.
    Our immediate goal right now is to get into federally 
mandated timeliness standards, which are 40 days at the secret 
level, 80 days at the top secret level. We are operating way 
beyond that right now. But we see no reason why, through normal 
process, as we get that inventory down and we have these assets 
working on it, we can inch those numbers back down. But keep in 
mind, the third part of the answer, is what both my colleagues 
refer to, is that the executive agents are in the middle of a 
process now to reexamine the entire system, and this is this 
Trusted Workforce system. Some of those will be implemented 
concurrent with everything I just said, and that will establish 
new efficiencies and new timelines that we have yet to map out. 
But the good news is for those awaiting a clearance, it will be 
a faster process. It is already proving to be a faster process. 
We are very confident we can get down into those guidelines and 
we can probably go even further.
    As we talked about this issue of reinvestigations and using 
automated records check and continuous evaluation, currently, 
it is a several--it is upwards of 100 days to longer to get a 
reinvestigation done. Mr. Phalen said nobody is put out of work 
while that is happening, but nobody likes to be in limbo, 
right? As we implement the new process, you will not be waiting 
on a reinvestigation. That will be a continuous process, so 
that time component goes away completely. It also allows us to 
focus on the front end where we do our initial into the 
government, our initial checks, right.
    The fact that we have this continuous evaluation, 
continuous vetting framework that is now maturing as we go, 
will make us more able to bring folks through the front end 
investigative process knowing we are going to enroll them in a 
CE [continuous evaluation] program, right, so those will all go 
down.
    Mr. Gaetz. Thank you. I can submit the remainder of the 
majority's questions in writing for response.
    Mr. Moulton, we have had votes called, and so I do not know 
how many members of the minority have questions, but I am 
certainly happy to proceed under the 5-minute rule and yield to 
you. But if you would like to utilize any of that time to yield 
to your colleagues, that would be fine as well.
    Mr. Moulton is recognized for 5 minutes.
    Mr. Moulton. Gentlemen, I will just ask one question, and 
we will start with Mr. Reid. You know, fundamentally, I want to 
understand what is the audit process for this. We have learned 
a lot about continuous evaluations. We have learned about 
automation. I think a lot of these innovations make sense and, 
ultimately, should improve the process while also making it 
more efficient.
    But we are not talking about, you know, automating a 
grocery store inventory here where if a few tomatoes fall 
through the cracks, you just have some lost tomatoes. We cannot 
let one single mole fall through the cracks here. So how are we 
protecting that? How are we ensuring that we have some manual 
cover backup for the automated processes as we are implementing 
them for the first time?
    Mr. Reid. Well, there is a couple parts to that as well. 
First of all, it is very important to point out that human 
beings are involved in this process every step of the way. 
There is not a security clearance machine that is grinding in 
the background sending out notices saying, you know, you do not 
have a clearance. We have a vetting center that we have 
established, that Mr. Payne has established, the director is 
sitting right behind us here, and she has built up this 
capability to process.
    What we do now and what we will do on scale is we receive 
alerts through continuous evaluation. We go through a process 
to validate those alerts, right, is this a valid alert? Is this 
the right person? Are we associating this alert with this 
person? Is that correct? Is the identity matching? Is the 
information credible? Then we go through a process to assess 
the significance of those alerts and apply to them a framework 
to make a decision, should this be a change in their status?
    That is all monitored and regulated by people. It brings 
together the adjudicative functions with investigative 
functions in a new sort of dynamic fashion. That is the way we 
will evolve in the future. So you will always have trained 
adjudicators and trained information specialists working 
together to validate and verify and validate the system that is 
working properly and that action is being taken. I think to 
your point on the audit side, what are you doing about this, 
and are you doing the right thing based on the right 
information? So we have built that now.
    The challenge is to scale up for the full Department. We 
are in the early months of that, but there is nothing keeping 
us from extending beyond that. This will be, as we transfer 
workforce, right, people that are doing things a certain way, 
as we adopt new processes, then they adopt and they get trained 
into those methods as well.
    Mr. Moulton. This will be a question that I think will 
continue to come up as we want to make sure that we understand 
that not only is the process getting more efficient and the 
backlog is going down, but it is just as secure or more secure 
than it has been in the past.
    My colleagues are going to submit their questions for the 
record. I just have one more question for Mr. Payne very 
quickly.
    You mentioned, Mr. Payne, that you are moving to a risk-
based approach to personnel vetting. So does that mean we have 
not had a risk-based approach up until this point?
    Mr. Payne. Well, I would say that we have covered the board 
on risk. We have done everybody at periodic--at the same 
periodic point of reinvestigation, 5 years.
    Mr. Moulton. So everybody has been the same?
    Mr. Payne. Everybody has been the same.
    Mr. Moulton. So we have not been assessing people based on 
their risk to the enterprise?
    Mr. Payne. There has been movements where we have elevated 
people, like, for example, those who have administrative 
access, administrator access for IT systems. Some agencies have 
done that, but by and large, it has been a 5- and a 10-year 
process, every 5, every 10 years. This gives us the 
opportunity, actually, to really focus our investigative 
resources on the areas where we need to focus them. So if we 
are getting hits from a continuous evaluation standpoint on a 
particular individual, well, maybe that is the individual we 
want to focus on for a deeper reinvestigation, as opposed to 
someone who we are not coming up with anything, they seem to be 
leading a pretty clean life. Let's put the resources on those 
individuals that are the riskiest.
    Mr. Moulton. Thank you.
    Gentlemen, thank you.
    And, Mr. Chairman, I yield back.
    Mr. Gaetz. The gentleman yields back.
    Thank you, gentlemen. We will have additional questions we 
will submit in writing, but this concludes our subcommittee 
hearing, and the meeting is adjourned.
    [Whereupon, at 4:00 p.m., the subcommittee was adjourned.]


      
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                            A P P E N D I X

                           December 12, 2018

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                           December 12, 2018

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    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      
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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                           December 12, 2018

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                  QUESTIONS SUBMITTED BY MRS. HARTZLER

    Mrs. Hartzler. A recent Wall Street Journal article highlighted the 
difficulty that some defense contractors have in obtaining and 
retaining an adequate number of cleared employees. In order to ensure 
that workers have clearances by the time they join a classified 
project, some companies are submitting the names of individuals for 
background investigations while these individuals are still in college. 
At least one company also conducts its own initial background checks in 
order to expedite the official process. How might industry help to 
reduce further the clearance time?
    Mr. Reid. [The information was not available at the time of 
printing.]
    Mrs. Hartzler. How is the Department handling any shortcomings 
associated with databases used to monitor personnel?
    Mr. Reid. [The information was not available at the time of 
printing.]
    Mrs. Hartzler. Are there policies or laws that need to change to 
support the Continuous Vetting program?
    Mr. Reid. [The information was not available at the time of 
printing.]
    Mrs. Hartzler. What additional information technology, 
cybersecurity, and infrastructure costs are expected?
    Mr. Reid. [The information was not available at the time of 
printing.]
    Mrs. Hartzler. A recent Wall Street Journal article highlighted the 
difficulty that some defense contractors have in obtaining and 
retaining an adequate number of cleared employees. In order to ensure 
that workers have clearances by the time they join a classified 
project, some companies are submitting the names of individuals for 
background investigations while these individuals are still in college. 
At least one company also conducts its own initial background checks in 
order to expedite the official process. How might industry help to 
reduce further the clearance time?
    Mr. Payne. [The information was not available at the time of 
printing.]
    Mrs. Hartzler. How is the Department handling any shortcomings 
associated with databases used to monitor personnel?
    Mr. Payne. [The information was not available at the time of 
printing.]
    Mrs. Hartzler. Are there policies or laws that need to change to 
support the Continuous Vetting program?
    Mr. Payne. [The information was not available at the time of 
printing.]
    Mrs. Hartzler. What additional information technology, 
cybersecurity, and infrastructure costs are expected?
    Mr. Payne. [The information was not available at the time of 
printing.]
    Mrs. Hartzler. A recent Wall Street Journal article highlighted the 
difficulty that some defense contractors have in obtaining and 
retaining an adequate number of cleared employees. In order to ensure 
that workers have clearances by the time they join a classified 
project, some companies are submitting the names of individuals for 
background investigations while these individuals are still in college. 
At least one company also conducts its own initial background checks in 
order to expedite the official process. How might industry help to 
reduce further the clearance time?
    Mr. Phalen. As the primary investigative service provider to the 
federal government, the National Background Investigations Bureau 
(NBIB) believes there are three critical ways where Industry can 
participate in improving the timeliness of background investigations; 
however, this participation cannot be done unilaterally. First, 
clearance sponsoring agencies determine when a company can submit an 
individual for access and, typically, it is after the candidate has 
been hired by the company. Programs, such as the one referenced in the 
Wall Street Journal article, are currently limited in scope. It would 
be beneficial if sponsoring agencies broaden the use of this approach 
to allow or encourage industry case submissions earlier in the hiring 
process. Second, it is NBIB's experience that most companies conduct 
due diligence checks--often through a certified data provider--prior to 
employment. NBIB is looking at opportunities to leverage and reuse the 
data where NBIB can confirm the reliability of the source. Examples are 
education and previous employment validation. The reuse of previously 
collected and validated data will reduce duplication of effort, 
allowing for faster investigation completion. Lastly, NBIB, working 
with government agencies, is utilizing strategic geographic locations 
that serve as centralized points, or ``hubs,'' to streamline the field 
investigative process. These hubs provide opportunities to realize 
efficiencies through the use of concentrated fieldwork, enhanced 
accessibility to subjects and sources, and improved schedule 
coordination. NBIB intends to expand this practice more broadly to 
include Industry in this model.
    Mrs. Hartzler. How is the Department handling any shortcomings 
associated with databases used to monitor personnel?
    Mr. Phalen. We defer this question to the Department of Defense.
    Mrs. Hartzler. Are there policies or laws that need to change to 
support the Continuous Vetting program?
    Mr. Phalen. Executive Order (EO) 13467, as amended by EO 13764, 
states in Section 2.1 that covered individuals are subject to 
Continuous Vetting (CV) under standards determined by the Security 
Executive Agent and Suitability and Credentialing Executive Agent 
(henceforth referred to as the EAs). This gives the EAs the necessary 
authority to amend or establish new national policies as needed to 
improve personnel vetting processes. In spring 2018, the EAs initiated 
an interagency effort to review, transform, and modernize the 
government's vetting processes, known as the Trusted Workforce 2.0 (TW 
2.0). As an active member of the TW 2.0 Executive Steering Group and 
the Performance Accountability Council, NBIB provides input into 
considerations that drive policy, guidance, and standards issued by the 
EAs that serve to revolutionize the entire personnel security mission 
space. This includes implementation of a robust CV program within the 
Executive Branch. NBIB, as the largest investigative service provider 
to the Executive Branch, supports its customers' critical need for 
Continuous Evaluation (CE), an important complement to CV efforts. 
Since August 2010, NBIB and its predecessor organization, Federal 
Investigative Services, has offered an optional Special Agreement Check 
to its customers in support of CE. Additionally, as of October 2018, 
NBIB provides the Federal Bureau of Investigation (FBI) Rap Back 
Service to some of its customers. This service allows agencies to 
subscribe for real-time notifications of changes to an individual's 
criminal record. While these services are helpful in a CV program, 
additional actions are necessary to further develop a more robust and 
efficient CV program. An important element of a CV program is the 
timely capture of criminal history record information (CHRI). 
Presently, there is a lack of automated data to detect biometric and 
biographic arrest information across the spectrum of agencies, 
particularly as it pertains to the level of offense. Additionally, 
there is inconsistency in reporting arrest information based on the 
level of offense. The FBI's Next Generation Identification (NGI) System 
contains fingerprint-based arrest information. Therefore, all federal 
and state agencies should ideally report all fingerprint-based arrests 
to the FBI or state central record repository, as appropriate, to 
establish a fully automated repository of CHRI. The personnel vetting 
program would greatly benefit from the ability to leverage data from 
private pre-employment screening providers who perform a series of 
automated checks for private sector companies under the National 
Industry Security Program. Such collection from a Trusted Information 
Provider would greatly reduce duplicative work in the personnel vetting 
process. However, this commercial vetting process is performed under 
the Federal Credit Reporting Act (FCRA), which limits timely reuse of 
this data even with consent from the applicant. Currently, the legal 
community (private and federal) advises that this efficient process 
would make the U.S. Government and private sector company liable for 
damages because the information was provided to a third party. To 
remedy this concern, an indemnification clause in the FCRA for federal 
background investigations is necessary to allow this type of efficient 
solution, whenever consent is provided by the applicant, to eliminate 
liability in this area.
    Mrs. Hartzler. What additional information technology, 
cybersecurity, and infrastructure costs are expected?
    Mr. Phalen. Pursuant to Executive Order, the Defense Information 
Systems Agency (DISA) is responsible for building, developing, 
maintaining, and protecting all information technology (IT) systems for 
the National Background Information System (NBIS) that will support the 
entire background investigations enterprise. Since its inception, NBIB 
has played an active role in assisting DoD with the development of NBIS 
to ensure its formation is inclusive of the needs of today and 
tomorrow. Furthermore, NBIB is a member of the Enterprise Information 
Technology Shared Service Steering Committee, which manages the NBIS 
product vision and roadmaps. DoD would be best positioned to provide a 
cost analysis related to NBIS. However, NBIB would note that while NBIS 
is being developed and incrementally deployed, the legacy IT systems 
that currently support NBIB must continue to be maintained and 
protected. This activity is resourced through the NBIB revolving fund. 
Continuous use of technology during the transition period and after the 
mission is transferred will support the ability to reduce the 
background investigation inventory in a timely manner and permit NBIB 
to meet the needs of its customers.

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