Questions for the Record Related to DOD's Personnel Security	 
Clearance Program (19-AUG-05, GAO-05-988R).			 
                                                                 
On June 28, 2005, GAO testified before Congress at a hearing on  
"Access Delayed: Fixing the Security Clearance Process." This	 
letter responds to a Congressional request that GAO provide	 
answers to Senator Frank R. Lautenberg's questions for the	 
record. 							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-988R					        
    ACCNO:   A33737						        
  TITLE:     Questions for the Record Related to DOD's Personnel      
Security Clearance Program					 
     DATE:   08/19/2005 
  SUBJECT:   Background investigations				 
	     Cost analysis					 
	     Cost control					 
	     Financial analysis 				 
	     Internal controls					 
	     Personnel management				 
	     Productivity in government 			 
	     Security clearances				 
	     Personnel Security Clearance Program		 

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GAO-05-988R

     

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United States Government Accountability Office Washington, DC 20548

August 19, 2005

The Honorable George V. Voinovich Chairman, Subcommittee on Oversight of
Government Management,

the Federal Workforce, and the District of Columbia Committee on Homeland
Security and Governmental Affairs United States Senate

Dear Senator Voinovich:

Subject: Questions for the Record Related to DOD's Personnel Security
Clearance Program

On June 28, 2005, I testified before your Subcommittee at a hearing on
"Access Delayed: Fixing the Security Clearance Process." 1 This letter
responds to your request that I provide answers to Senator Frank R.
Lautenberg's questions for the record. The questions, along with my
responses follow.

1. Your 2004 report recommended that the Department of Defense (DOD) work
closely with the Office of Personnel Management (OPM) to design and
implement a plan for getting rid of clearance backlogs and delays. To your
knowledge, what progress has DOD made on this?

GAO is unaware of any progress that DOD has made toward implementing our
May 2004 recommendation to "develop and implement an integrated,
comprehensive management plan to eliminate the backlog, reduce the delays
in conducting investigations and determining eligibility for security
clearances, and overcome the impediments that could allow such problems to
recur." Information supplied by DOD as part of a required follow-up action
on all GAO recommendations lists a few actions, but nothing is mentioned
about developing an integrative approach that incorporates objectives and
outcome-related goals, sets priorities, identifies resources, establishes
performance measures, and provides milestones for permanently eliminating
the backlog and reducing delays.

1 GAO, DOD Personnel Clearances: Some Progress Has Been Made but Hurdles
Remain to Overcome the Challenges That Led to GAO's High-Risk Designation,
GAO-05-842T ( Washington, D.C.: June 28, 2005).

On June 17, 2005, the Deputy Director of Management at the Office of
Management and Budget (OMB) announced that OMB would work with agencies to
set clear and aggressive milestones for reducing risk in each area that
GAO had designated high risk. On July 12, 2005, shortly after this
Subcommittee's hearings, GAO officials met with OMB's Deputy Director for
Management, Clay Johnson, and his staff to discuss DOD's personnel
security clearance program, the clearance backlog, and impediments to
timely, high-quality clearances. Among other things, Mr. Johnson indicated
that (1) OMB staff would work with DOD and OPM to develop preliminary
milestones and metrics for correcting problems associated with the program
and (2) GAO would be asked to comment on that information in August or
September 2005.

2. Based on your analysis, how much money do you think has been wasted due
to lengthy security clearance processes, when employees come into work but
cannot participate in substantive assignments until cleared?

GAO does not have an up-to-date estimate of the costs resulting from
delays in determining eligibility for a personnel security clearance.
However, our February 2004 report documents some past estimates as well as
cost-related considerations that apply today. 2 For example, we noted that
in our 1981 report, we estimated the DOD investigative backlog could cost
nearly $1 billion per year in lost productivity. 3 More than a decade
later, the Joint Security Commission report noted that the costs directly
attributable to investigative delays in fiscal year 1994 could be as high
as several billion dollars because workers were unable to perform their
jobs while awaiting a clearance. 4

In addition to the costs associated with delays in employees being able to
start classified work, our February 2004 report also documented other
types of costs that have been cited by industry personnel. 5
Representatives from one company with $1 billion per year in sales stated
that their company offers a $10,000 bonus to employees for each person
recruited who already has a security clearance. Such operating costs are
then passed on to government customers in the form of higher bids for
contracts. In turn, the recruit's former company may need to back-fill a
position, as well as possibly settle for a lower level of contract
performance while a new employee is found, obtains a clearance, and learns
the former employee's job. Also, industry representatives discussed
instances where their companies gave hiring

2

GAO, DOD Personnel Clearances: DOD Needs to Overcome Impediments to
Eliminating Backlog and Determining Its Size, GAO-04-344 (Washington,
D.C.: Feb. 9, 2004).

3 GAO, Faster Processing of DOD Personnel Security Clearances Could Avoid
Millions in Losses, GAO/GGD-81-105 (Washington, D.C.: Sept. 15, 1981).

4

Joint Security Commission, Redefining Security: A Report to the Secretary
of Defense and the Director of Central Intelligence, Chapter 4, Personnel
Security-The First and Best Defense (Washington, D.C.: Feb. 28, 1994).

5 GAO-04-344.

preference to personnel who could do the job but were less qualified than
others who did not possess a clearance. The chair of the interagency
Personnel Security Working Group noted that a company might hire an
employee and begin paying that individual, but not assign any work to the
individual until a clearance is obtained. The head of the interagency
group additionally noted that commands, agencies, and industry might incur
lost-opportunity costs if the individual chooses to work somewhere else
rather than wait to get the clearance before beginning work.

If you or other members of the Subcommittee have any additional questions
about DOD's personnel security clearance program, please contact me at
(202) 512-5559 or [email protected] . Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this correspondence. GAO staff who made major contributions to this
correspondence are listed in the enclosure.

Sincerely yours,

Derek B. Stewart Director, Defense Capabilities and Management

Enclosure

                Enclosure GAO Contact and Staff Acknowledgments

GAO Contact     Derek B. Stewart (202) 512-5559 or [email protected]        
                   In addition to the contact above, Jack E. Edwards,         
Acknowledgments Assistant                                                  
                   Director, and Mark A. Pross made key contributions to this 
                   correspondence.                                            

                                    (350747)

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