U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

27–761 PDF 2018

SECURITY CLEARANCE INVESTIGATION 

CHALLENGES AND REFORMS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

GOVERNMENT OPERATIONS 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

OCTOBER 11, 2017 

Serial No. 115–41 

Printed for the use of the Committee on Oversight and Government Reform 

( 

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

http://oversight.house.gov 


KING-6430 with DISTILLER
(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Trey Gowdy, South Carolina, Chairman 

John J. Duncan, Jr., Tennessee 

Darrell E. Issa, California 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Justin Amash, Michigan 

Paul A. Gosar, Arizona 

Scott DesJarlais, Tennessee 

Trey Gowdy, South Carolina 

Blake Farenthold, Texas 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Meadows, North Carolina 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Mark Walker, North Carolina 

Rod Blum, Iowa 

Jody B. Hice, Georgia 

Steve Russell, Oklahoma 

Glenn Grothman, Wisconsin 

Will Hurd, Texas 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Paul Mitchell, Michigan 

Greg Gianforte, Montana 

Elijah E. Cummings, Maryland, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Stephen F. Lynch, Massachusetts 

Jim Cooper, Tennessee 

Gerald E. Connolly, Virginia 

Robin L. Kelly, Illinois 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

Stacey E. Plaskett, Virgin Islands 

Val Butler Demings, Florida 

Raja Krishnamoorthi, Illinois 

Jamie Raskin, Maryland 

Peter Welch, Vermont 

Matt Cartwright, Pennsylvania 

Mark DeSaulnier, California 

Jimmy Gomez, California 

SHERIA CLARKE, Staff Director 

ROBERT BORDEN, Deputy Staff Director 

WILLIAM MCKENNA General Counsel 

JACK THORLIN, Deputy Subcommittee Staff Director 

KILEY BIDELMAN, Clerk 

DAVID RAPALLO, Minority Staff Director 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS

Mark Meadows, North Carolina, Chairman 

Jody B. Hice, Georgia, Vice Chair 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Thomas Massie, Kentucky 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Rod Blum, Iowa 

Gerald E. Connolly, Virginia, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 


KING-6430 with DISTILLER
(III) 

C O N T E N T S 

Page 

Hearing held on October 11, 2017 .......................................................................... 1 

WITNESSES 

Mr. Charles S. Phalen, Jr., Director, National Background Investigations 

Bureau, Office of Personnel Management 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 8 

Mr. Garry P. Reid, Director of Defense Intelligence, Office of the Under 

Secretary of Defense for Intelligence, U.S. Department of Defense 

Oral Statement ................................................................................................. 14 

Written Statement ............................................................................................ 16 

Mr. William R. Evanina, Director, National Counterintelligence and Security 

Center, Office of the Director of National Intelligence 

Oral Statement ................................................................................................. 19 

Written Statement ............................................................................................ 21 

Mr. A.R. ‘‘Trey’’ Hodgkins III, Senior Vice President, Public Sector Information Technology Alliance for Public Sector 

Oral Statement ................................................................................................. 25 

Written Statement ............................................................................................ 27 

APPENDIX 

Opening Statement of Ranking Member Gerald E. Connolly .............................. 56 


KING-6430 with DISTILLER

KING-6430 with DISTILLER
(1) 

SECURITY CLEARANCE INVESTIGATION 

CHALLENGES AND REFORMS 

Wednesday, October 11, 2017 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON GOVERNMENT OPERATIONS, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, D.C. 

The subcommittee met, pursuant to call, at 2:01 p.m., in Room 

2154, Rayburn House Office Building, Hon. Mark Meadows [chairman of the subcommittee] presiding. 

Present: Representatives Meadows, Hice, Jordan, DeSantis, 

Blum, Maloney, and Norton. 

Also Present: Representative Krishnamoorthi. 

Mr. HICE. [presiding.] Subcommittee on Government Operations 

will come to order. Without objection, the chair is authorized to declare a recess at any time. 

Today’s hearing will cover a topic of great importance. How to 

ensure security clearance investigations are effective and efficient. 

We’re discussing this now because of the record 700,000 investigation backlog of background investigations throughout the Federal 

Government. 

For would-be Federal or contractor employees awaiting their first 

clearance, the backlog means they have to wait months before they 

can start working. 

The problem calls for thoughtful analysis and meaningful reform, 

not knee-jerk reactions and superficial solutions. 

Unfortunately, we appear to be on the verge of knee-jerk reaction. Transferring responsibility for the vast majority of clearance 

investigations, back to the DOD away from the National Background Investigations Bureau. 

I say ‘‘back to,’’ because in a similar record backlog situation in 

2004, DOD gave up the investigation responsibility. Back then, 

DOD thought it needed to focus on its function of defending the 

country, so it tasked the Office of Personnel Management with the 

labor-intensive investigations function. 

Today, only a year after the creation of the NBIB, the Senate 

NDAA contains a provision that would transfer the investigation 

function back to the DOD. 

Though DOD has put out a plan for how it would take over investigations, it has yet to issue much in the way of an argument 

as to why it should do so. There are much clearer reasons for why 

it should not. 

Standing up a DOD investigation capacity while NBIB is still operating would obviously be duplicative to agencies literally doing 


KING-6430 with DISTILLER
2 

the same thing. NBIB has only recently managed to hire enough 

contractor investigations to match what the Federal Government 

could muster in 2014 before a scandal involving one contractor 

forced OPM to terminate 60 percent of the contractor workforce. 

A major shift of resources to DOD would halt the growth and the 

contractor workforce that is digging the government out of the 

backlog hole. There is every reason to believe, therefore, that a 

transfer would worsen the backlog and deprive our Armed Forces 

of the people they need to function. 

At the same time, NBIB is spearheading new reforms in technology and administration to make the process more efficient. The 

ongoing reform effort could be slowed or abandoned altogether, as 

DOD spends its institutional energy simply recreating what already exists at NBIB. 

The contractor community shares these concerns. The people 

whose money depends most on a functioning investigation system 

are telling us not to transfer investigations back to DOD. 

I hope today’s hearing will help Congress make an informed decision on whether to go ahead with the transfer to DOD through the 

NDAA process. 

I would like to thank our witnesses for being here today and I 

look forward to hearing from your testimony. 

I now would like to recognize the ranking member, Ms. Norton, 

for her opening statements. 

Ms. NORTON. Thank you very much, Mr. Chairman. 

Thank you for holding this hearing to examine both the current 

backlog in the Federal security clearance investigations, and potential reforms to the background investigation process. 

Last month, the National Background and Investigations Bureau 

reported a backlog of approximately 700,000 security applications. 

This backlog and the lengthy wait time for security clearances is 

unacceptable. 

It is critical that the NBIB address this problem and important 

for Congress to provide and resolve the necessary resources and 

support to do so. 

Since it first began operating in October 1, 2016, the NBIB has 

been tasked with the challenge of not only improving the Federal 

Government’s process for conducting background checks, but also 

bringing down the growing security clearance backlog. 

Since its creation, the NBIB has made several enhancements to 

the security clearance investigation process. For example, it developed a continuous evaluation program for monitoring an 

employees’s or contractor’s eligibility to maintain access to classified information. And earlier this year, the NBIB created a new 

law enforcement unit to improve the government’s ability to gain 

access to criminal history records of State and local enforcement 

agencies. 

This is an important change that could eliminate a critical gap 

in how background checks were previously conducted. The gap has 

enabled an unknown number of people to gain security clearances 

they probably should not have received. The importance of gaining 

access to criminal history records became all too clear on September 6, 2013 when Aaron Alexis, a Federal contractor, with a seVerDate Nov 24 2008 12:19 Jan 08, 2018 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 H:\27761.TXT APRIL

KING-6430 with DISTILLER
3 

cret level clearance entered the Washington Navy Yard, killed 12 

people and injured four others. 

During the investigation into that incident, we learned that the 

background investigation of Mr. Alexis failed to identify his history 

of gun violence. 

Local police records of his 2004 firearms arrest had never been 

provided to Federal investigators. Improving the level of communication between local law enforcement agencies and Federal background investigators can prevent future tragedies like the one at 

the Navy Yard here in the District of Columbia. 

While the NBIB has made some gains in improving the background investigation process, it has struggled to reduce the heavy 

backlog of security clearance applications. 

The current backlog is largely due to termination of the contract 

that U.S. Investigation Services had with the Office of Personnel 

Management to conduct background checks. USIS had previously 

performed the bulk of background investigations for OPM, but was 

caught defrauding the government on a massive scale, allegedly 

dumping 665,000 background check cases, indicating to OPM that 

the background checks had been complete when the proper reviews 

had not taken place. 

OPM had no choice but to terminate the contract with that company. At the time of USIS’s termination, it held 60 percent of the 

Federal Government investigative capacity for background checks. 

OPM remains unable to fully replace the significant amount of capacity that was lost with USIS’s termination, and we need to know 

why. 

Various proposals have been put forward to address the backlog. 

The most notable of these is the Department of Defense plan that 

would strip the NBIB of its background investigations for DOD 

personnel. 

Most recently, the Senate has included language in its draft of 

the National Defense Authorization Act for fiscal year 2018 that 

would adopt DOD’s plan. The DOD plan raises serious concerns. 

Namely, it could potentially increase, rather than decrease, the existing backlog for security clearances. 

According to the DOD plan, it would take the Department at 

least 3 years to even assume responsibility from the NBIB for 

background checks of its personnel. During that 3-year transition 

period, the NBIB would be expected to use its limited resources to 

help the DOD build the capacity required to perform its own background checks, which may result in additional backlogs at the BIB. 

The BIB has examined DOD’s proposal and found it has potential 

to, and I quote, ‘‘exacerbate the current investigative backlog,’’ end 

quote. 

OPM has also examined DOD’s plan and reached the same conclusion. Outside of the Federal Government, policy organizations 

ranging from the Information Technology Industry Council to the 

Professional Services Council, have reported that DOD’s plan 

would, and I quote, ‘‘cause further delays.’’ 

Transferring a significant portion of the NBIB’s responsibilities 

to the DOD also risks returning to a process that was previously 

found to be inefficient. 


KING-6430 with DISTILLER
4 

Prior to 2005, DOD was responsible for conducting background 

investigations of its own personnel. During that time, the government accountability office issued a series of reports that raised concerns over the quality and the timeliness of those investigations. 

The most significant of those reports was released in 1999 in 

which the GO found that, and I quote, ‘‘DOD personnel security investigations are incomplete and not conducted in a timely manner,’’ 

end quote. 

DOD’s failure to adequately handle its own security clearance investigations was a primary reason that responsibility was transferred to OPM in 2005. 

Congress needs to seriously examine the best means to reduce 

the current backlog, but we must do so in a way that balances the 

need to expedite the process without sacrificing the quality of those 

investigations. 

The Navy Yard shooting, and high profile National Security 

leaks, such as the one carried by the contractor, Edward Snowden, 

highlight the need for ensuring that background checks are conducted in a thorough and efficient manner. 

I want to thank the witnesses for testifying today. We look forward to hearing from each of you on ways we can strengthen the 

Federal Government’s capabilities when it comes to security clearance investigations. 

And I thank you again, Mr. Chairman. 

Mr. HICE. Thank you. At this time, I’m pleased to introduce our 

witnesses. 

First, we have Charles Phalen, Jr., the Director of the National 

Background Investigations Bureau at the Office of Personnel Management. 

Next to him is Garry Reid, Director of Defense Intelligence in the 

Office of Under Secretary of Defense for Intelligence at the Department of Defense. 

Next is William Evanina, is that correct?Mr. Evanina is the Director of the National Counterintelligence and Security Center at 

the Office of the Director of National Intelligence. 

And then finally, Mr. Trey Hodgkins, III, Senior Vice President 

For the Public Sector At the Information Technology Alliance. 

I want to thank each of you for being here today. And welcome 

you all pursuant to the committee rules. All witnesses will be 

sworn in before they testify. So at this time, if you would please 

rise and raise your right hand. 

Do you solemnly swear or affirm that the testimony you are 

about to give is the truth, the whole truth, and nothing but the 

truth so help you God? 

Mr. HICE. The record will reflect that all witnesses answered in 

the affirmative, and we appreciate it. 

In order to allow time for discussion, please, I would ask that you 

limit your testimony to 5 minutes, knowing that your entire written statement will be made part of the record. 

As a reminder, the clock there in front of you shows your remaining time. When the light turns yellow, you have 30 seconds remaining, and then when it turns red, your time is up. So please, wrap 

it up as rapidly, as quickly as you can at that point. 


KING-6430 with DISTILLER
5 

And, please, also remember to press the button for your speaker. 

And I’d ask that you’d put the microphone up there closely right 

in front of you so we can hear. 

So at this time, Mr. Phalen, I’m honored to recognize you for 5 

minutes. And thank you for being here. 

WITNESS STATEMENTS 

STATEMENT OF CHARLES PHALEN 

Mr. PHALEN. Thank you, Mr. Chairman, ranking member and 

members of the subcommittee. I’m Charles Phalen, Jr., and I’m the 

Director of the National Background Investigation Bureau of the 

Office of Personnel Management, and I do appreciate the opportunity to appear before you today. 

Over the past year, since we stood up on October 1st, NBIB has 

established a strong focus on National Security, customer service, 

and continuous process and improvement to meet the critical government-wide need for a trusted workforce. 

NBIB conducts 95% of the investigations across the Federal Government, even those few agencies that have delegated or statutory 

authority to conduct their own investigations, such as some agencies in the intelligence community, rely on NBIB services in some 

capacity. 

Our organizational structure is aimed at leveraging automation 

to the greatest extent possible, transforming business processes 

and enhancing customer engagement and transparency. And I 

strongly believe that these efforts are paving the way for improvements in the efficiency, cost effectiveness and the quality of the investigations in the Federal Government. 

I would like to address NBIB’s existing investigative backlog, 

which has been the subject of much attention. The current inventory stabilized this summer and has reduced modestly over the last 

10 weeks. 

Our current inventory is approximately 704,000 investigative 

products, including simple record checks, suitability and 

credentialing investigations, along with the more labor-intensive 

national security investigations and reinvestigations. 

The total number of investigative products is greater than the 

number of individuals that are waiting for their first security clearance to begin working on behalf of the government. 

A significant percentage of individuals waiting for their initial 

national security investigations are working under interim clearances pending completion of the full investigation and ultimate adjudication. 

NBIB has worked to increase capacity and realize efficiencies in 

as many ways as possible. 

Stabilization and modest increases have been attained because 

we have invested in the necessary infrastructure. This infrastructure has been built through contractor and Federal workforce capacities. 

In 2016, NBIB hired 400 new Federal investigators, and awarded 

a new field work contract doubling our field work contract companies from 2 to 4. 


KING-6430 with DISTILLER
6 

In 2017, we initiated hiring another 200 Federal investigators, 

issued work under those new contracts, and we are working closely 

with the vendors to quickly increase the capacity of our contract investigators. We had a goal in 2017, and we missed it by about 6 

percent, but we are at, or near the level of contract investigations 

and Federal investigators that we had in 2014. We have recovered 

to that level. 

As of today, that’s a little over 6,900 full-time equivalent investigators working on our behalf. We are targeted to grow that number. 

NBIB also believes its capacity can be increased to the smarter 

use of our workforce’s time. The less time each investigator needs 

to spend on each case, the more time the investigator has for the 

next case in his or her own queue. This has led us to streamlining 

processes, reallocating resources and amending our internal policies for greater efficiencies and effectiveness while maintaining 

quality and reciprocity for all of the government. 

Use of investigator time can also be the strengthened through effective use of technology and other available tools. Our efforts have 

targeted surgical approaches, such as successfully expediting 

14,000 cases in accordance with agencies’ prioritize list, and done 

that in an average time of 95 days. 

NBIB has actively enhanced customer service and accountability 

in a number of ways, including realigning price adjustments earlier 

this fiscal year to better align with agencies’ budget cycles. 

NBIB is focused on policy and process changes to add efficiency, 

reduce the level of effort and maintain the investigative quality. 

And to support this effort, we work closely with the Department of 

Defense and other customer agencies. We’re working to address 

current challenges and introduce mitigation activities to best serve 

the interest of all government agencies and departments. 

We will, with the support of its interagency partners, make, and 

will continue to make, improvements on the background process. 

We have strengthened our partnership with DOD while building 

the National Background Investigation Services, NBIS, which will 

serve as NBIB’s IT system for the whole of government, to perform 

background investigations across the spectrum. 

As NBIS comes online, we will be able to phase out our legacy 

systems in favor of NBIS. It is imperative that this mission evolve 

by leveraging cutting-edge technologies and applying innovative solutions to obtain rich and valid information in support of clearance 

determinations. It is equally important that the process, improvements, and methodologies have made it across the entire enterprise 

in a standardized fashion so the quality of investigative products 

facilitate the reciprocity of clearances across the Federal Government. 

As we work to reduce the inventory, we will continue to explore 

new and innovative ways to meet our customers’ needs and leverage their expertise, and remain transparent and accountable to our 

stakeholders and to Congress. 

We recognize that solutions reduce the inventory, and to maintain the strength of the background investigation program, include 

people, resources and technology. 


KING-6430 with DISTILLER
7 

And thank you again for the opportunity to speak with you here 

today. I look forward to answering any questions you have. 

[Prepared statement of Mr. Phalen follows:] 


KING-6430 with DISTILLER
8 


KING-6430 with DISTILLERInsert offset folio 1 here 27761.001

STATEMENT OF 

CHARLES S. PHALEN, JR. 

DIRECTOR 

NATIONAL BACKGROUND INVESTJGA TIONS BUREAU 

U.S. OFFICE OF PERSONNEL MANAGEMENT 

before the 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS 

HOUSE OVERSIGHT AND GOVERNMENT REFORM COMMITTEE 

UNITED STATES HOUSE OF REPRESENTATIVES 

October 11, 2017 

Chairman Meadows, Ranking Member Connolly. and Members of the Subcommittee, my name 

is Charles S. Phalen, Jr., and I am the Director of the National Background Investigations Bureau 

(NBIB) at the Office of Personnel Management (OPM). I appreciate the opportunity to appear 

before you today. 

NBIB was established on October l, 2016. and is the primary provider of background 

investigations for the Federal government. Over the past year, NBIB has established a strong 

focus on national security, customer service, and continuous process improvement to meet the 

critical Government-wide need for a trusted workforce. In my 36 years working in the Federal 

security space at the Central Intelligence Agency, the Federal Bureau oflnvcstigation. the 

National Reconnaissance Office, and industry, I have seen this business through several lenses. I 

took the position as Director of the NBIB because I believe in its mission and want to make a 

lasting impact to the personnel vetting processes securing our Nation's most sensitive 

information, people, and assets. 

NBIB conducts 95 percent of investigations across the Federal government. Even those few 

agencies that have the delegated or statutory authority to conduct their own investigations, such 

as agencies in the Intelligence Community, rely on NBIB's services in some capacity (e.g., 
9 


KING-6430 with DISTILLERInsert offset folio 2 here 27761.002

Testimony of Charles S. Phalen, Jr. 

Director 

National Background Investigations Bureau 

U.S. Office of Personnel Management 

October 11,2017 

NBIB's electronic questionnaire, national agency record checks, central clearance repository, 

etc.). Its new organizational structure is aimed at leveraging automation to the greatest extent 

possible, transforming business processes, and enhancing customer engagement and 

transparency. I strongly believe these efforts are paving the way for improvement in the 

efficiency, cost effectiveness, and quality of the investigations across the Federal government. 

I would like to address NBIB's existing investigative "backlog," which has been the subject of 

media attention. The current inventory has begun to stabilize and has even reduced modestly 

over the last seven weeks. As of September 27, 2017, NBIB's inventory is approximately 

707,000 investigative products, including simple record checks, suitability and credentialing 

investigations, and more labor-intensive national security investigations. The total number of 

investigative products is greater than the number of individuals that are waiting for their first 

security clearance to begin working for or on behalf of the Government. Of the total outstanding 

investigative products, approximately 134,000 are either simple record checks that move in and 

out of the inventory daily or investigations that support credentialing and suitability 

determinations. Additionally, approximately 330,000 ofNBIB's national security determinations 

or clearances inventory are for initial investigations and 210,000 are for periodic 

reinvestigations. A significant percentage of the individuals waiting for their initial national 

security investigation are working under an interim clearance pending the completion of a full 

investigation and adjudication. 

Looking forward, it is our continued NBIB priority to address the investigative inventory while 

maintaining a commitment to quality and returning back to the level of performance realized 

from 2009 through 2014. NBIB is working with the Office of the Director ofNational 

Intelligence (ODN I), the Department of Defense (DoD), and other customers, to focus our efforts 

in primary areas. 

As OPM testified before you earlier this year, in late 2014, OPM's capacity for contract 

investigation services was drastically reduced by the loss of OPM 's largest field contractor, 

resulting in a loss of productivity, which led to the growth ofthe pending investigative inventory. 

This inventory was exacerbated by three unrelated events: 1) the cybersecurity incidents at OPM 

that were announced in 2015, which necessitated some immediate steps to respond to the 

incidents and enhance security, e.g., temporarily suspending electronic processing; 2) a higher 

than expected volume of fieldwork-intensive investigations in Fiscal Year 2016; and 3) 

concurrent implementation of the 2012 Federal investigative Standards which required new 

investigation types and different coverage requirements. 

Page 2of6 
10 


KING-6430 with DISTILLERInsert offset folio 3 here 27761.003

Testimony of Charles S. Phalen, Jr. 

Director 

National Background Investigations Bureau 

U.S. Office of Personnel Management 

October 11, 2017 

Understanding the impact these incidents had, in the last year since formation, NBIB has worked 

to increase capacity and realize efficiencies in as many areas as possible. This stabilization and 

these modest decreases have been attained because NBIB has invested in the necessary 

infrastructure. This infrastructure has been built through contractor and Federal workforce 

capacities. In 2016, NBIB hired 400 new Federal investigators and awarded a new investigative 

fieldwork contract, doubling the fieldwork contractors from two companies to four. In 2017, 

NBIB initiated the hiring of another 200 additional Federal investigators, issued work under the 

new contracts in February, and is working closely with vendors to quickly increase the capacity 

of contract investigators. As of today, there are over 6,900 full-time equivalent investigators 

working on behalf ofNBIB, a number we are targeting to grow. For context, the Federal and 

contractor workforce capacity increased by 25 percent to address the current investigative 

inventory. This allowed NBIB to increase average monthly production by 6 percent in FY2017 

for the T3 (secret) and T5 (top secret) population; and 15 percent higher in the last quarter of 

FY20 17 compared to the FY20 16 monthly average. As investigators complete training and reach 

maximum productivity, NBIB's monthly production rate is projected to continue to increase into 

FY2018. 

NBIB also believes that capacity can be increased through smarter use of our workforce's time. 

The Jess time each investigator needs to spend on each case, the more time the investigator has 

for the next case in his or her queue. This has led us to streamline processes, reallocate resources, 

and amend internal policies for greater efficiencies and effectiveness while maintaining quality 

and reciprocity for all of Government. This has allowed NBIB to reform traditionally manuallyintensive practices and reduce the number of hours each investigator needs to spend on each 

case. Use of investigator time can also be strengthened through effective use oftechnology and 

other available tools. NBIB has improved fieldwork logistics by centralizing and prioritizing 

cases; increasing efficiencies of Enhanced Subject Interviews (ES!s) and reporting; leveraging 

video teleconferencing (VTC) for Subjects in remote locations; and using telephonic interviews 

more liberally when applicable to quickly conduct investigative leads on clean non-issue cases. 

NBIB has also digitized and automated data. records and information by proactively reaching out 

to record providers to negotiate direct connections, access to terminals, and revised interagency 

agreements to more quickly facilitate downstream actions, such as case closings and 

adjudications. 

Our efforts have included targeted, surgical approaches such as successfully expediting 14,000 

cases in accordance to agency prioritized lists with an average timeliness of 95 days. NBIB has 

also made more targeted use of flags to trigger expanded investigations, resulting in the 

cancellation of unnecessary enhanced subject and converted top secret legacy cases to the new 

Page 3 of 6 
11 


KING-6430 with DISTILLERInsert offset folio 4 here 27761.004

Testimony of Charles S. Phalen, Jr. 

Director 

National Background Investigations Bureau 

U.S. Office of Personnel Management 

October 11,2017 

Tier 5 investigations for Federal workforce. NBIB has actively enhanced customer service and 

accountability in a number of ways, including realigning price adjustments earlier in the fiscal 

year to better align to agencies' budget cycles; serving as a key player on the Background 

Investigation Rate Council; and establishing a Customer Service Advisory Board to advise me 

and the agency leadership team. 

NB!B is focusing on policy and process changes to add efficiencies, reduce level of effort, and 

maintain investigative quality. To support this effort, NBIB, working closely with DoD and other 

customer agencies, conducted a detailed business process reengineering effort and worked in 

collaboration with ODNI, in its role as the office supporting the Security Executive Agent, to 

identify appropriate policy and process changes to help address the inventory. NBIB is also 

working with DoD to build a more secure and more flexible automated case management system 

that will allow NBIB to implement more efficient and effective case processes. NBIB has helped 

to establish a new organizational structure with strong interagency representation through fulltime employees recruited to OPM from stakeholder agencies as well as through a newly 

established joint duty program. This organizational structure addresses current challenges and 

introduces mitigation activities to best serve the interests of all Government agencies and 

departments, as well as Government-wide reform efforts. The structure will help facilitate 

NBIB's strategy tor reform, which focuses on innovation, risk management, and customer and 

stakeholder engagement in transformation activities. 

NBIB, with support from its interagency partners, has made and will continue to make 

improvements to the background investigation process. As part of the Performance 

Accountability Council, NBIB is working together with our interagency partners to develop, 

implement, and continuously re-evaluate and revise outcome-based metrics that measure the 

effectiveness of the vetting processes (e.g., security, investigative and adjudicative quality, cost. 

timeliness, reciprocity, customer service, and other performance characteristics). These efforts 

include: I) launching programs to continuously evaluate personnel with security clearances to 

determine whether these individuals continue to meet the requirements for eligibility; 2) 

enhancing information sharing among State, local, and Federal Law Enforcement entities when 

conducting background investigations; and 3) assessing the quality of background investigations 

using a standard set of rules and an automated tool. Additionally, we have strengthened our 

partnership with DoD while building the National Background Investigations Services (NBIS) 

which will serve as NBIB's IT system to perform background investigations, as well as shared 

services for the end-to-end processes for all government agencies and departments. NBIB 

finalized its Business Process Reengineering Plan in FY20 17 and formed a new Strategy and 

Business Transformation office that will address technology, process changes and data-based 

Page 4of 6 
12 


KING-6430 with DISTILLERInsert offset folio 5 here 27761.005

Testimony of Charles S. Phalen, Jr. 

Director 

National Background Investigations Bureau 

U.S. Office of Personnel Management 

October 11,2017 

decisions to realize results in efficiency gains and to further support the development ofNBIS. 

NBIB's work towards long-term solutions to reengineer processes and build out the requirements 

ofNBIS has resulted in progress. As NBIS comes online, NBIB will be able to phase out our 

legacy systems in favor ofNBlS. 

NBIB conducted a comprehensive, interagency diagnostics assessment in FY20 16 that identified 

57 areas of improvement to address. Successes and progress thus far include the launch of a law 

enforcement liaison office and campaigns to improve quality of criminal checks conducted by all 

23 investigative service providers (February 2017) and the release of the new national security 

questionnaire to be used by agencies (August 20 17). Further, we are on-track to release 

eApplication (early 2018) and to release eAdjudication as a shared service to all agencies (fall 

2017). 

NBIB has developed strong interagency partnerships with the broader Security, Suitability, and 

Credentialing Line of Business community to identifY and implement background investigation 

program improvements. As a member of this governance structure, NBIB engages with 

Performance Accountability Council Principals and DoD on a daily to weekly basis as the 

government's primary investigative service provider, and coordinates the 22 other delegated 

agencies that leverage NBIB's infrastructure in some capacity (e.g., electronic questionnaires, 

automated record checks, investigations, clearance repository, training materials, implementation 

policy guidance, etc.). NBIB has also continued engagement and provided solutions as part of an 

interagency initiative with the Presidentially-delegated Executive Agents (OPM and ODNI), 

OMB, and other stakeholders, including DoD, to reduce the investigation inventory more 

quickly. NBIB provided a substantial number ofthe ideas considered based on its vast expertise 

and ability to provide rich, historical data to inform decisions. Many of the efforts resulting from 

this idea sharing initiative are already underway by NBIB in close partnership with NBIB's 100-

plus Federal customers and stakeholders. 

NBIB is also supporting the evolving background investigation process by offering our customer 

agencies a continuous evaluation product in satisfaction of the guidance issued by the Director of 

National Intelligence in his role as the Security Executive Agent. NBIB will continue to expand 

coverage to fulfill future requirements and guidance issued by the Director of National 

Intelligence. 

Our operations follow the investigative and adjudicative processes and standards set out by the 

Security Executive Agent. It is imperative this mission evolve by leveraging cutting edge 

technologies, utilizing shared services capabilities, and applying automation and innovative 

solutions to obtain rich and valid information in support of clearance determinations. It is equally 

Page 5 of 6 
13 


KING-6430 with DISTILLERInsert offset folio 6 here 27761.006

Testimony of Charles S. Phalen, Jr. 

Director 

National Background Investigations Bureau 

U.S. Office of Personnel Management 

October 11,2017 

important that process improvements and methodologies are made across the entire enterprise in 

a standardized fashion so that quality investigative products facilitate the reciprocity of 

clearances across all government agencies and departments. 

As we work to reduce the inventory, we will continue to explore new and innovative ways to 

meet our customer agencies' needs, leverage their expertise as part of our decision-making 

processes, and remain transparent and accountable to our stakeholders and Congress. We 

recognize that solutions to reduce the inventory and to maintain the strength of the background 

investigation program include people, resources, and technology, as well as partnerships with our 

stakeholder agencies and changes to the overall clearance investigation process. 

Thank you for the opportunity to be here today, and I look forward to answering any questions 

you may have. 

Page 6 of 6 
14 

Mr. MEADOWS. [presiding.] Thank you. 

Mr. Reid, you’re recognized for 5 minutes. 

STATEMENT OF GARRY P. REID 

Mr. REID. Thank you, Mr. Chairman, members of the subcommittee. I appreciate the opportunity to participate in this hearing today. 

I’ll ask for the chair’s indulgence on submitting a statement for 

the record as a late-add. We didn’t get it over here prior to the 

hearing, but we will get it over here right away. Thank you. 

To summarize my statement, the background investigation backlog is a matter of significant concern for the Department of Defense. 

Long delays in obtaining security clearances are causing turmoil 

in personnel management, mission effectiveness, and technology 

development across the Department. This is within our military 

services, our civil workforce, and our cleared industry contractors. 

Despite focused efforts to mitigate the backlog and the resultant 

negative effects on DOD, our senior leaders have called for new 

and innovative approaches to address issues of costs, performance, 

and timeliness within the personnel vetting enterprise. 

As the committee is aware, Section 951 of the 2017 National Defense Authorization Act, required DOD to develop plans for assuming control of our background investigations, as is already done by 

23 of their Federal agencies. 

On August 25, Secretary Mattis approved the Section 951 plan 

and notified Congress, the Director of National Intelligence, the Director of the Office of Personnel Management, and the, Director of 

the Office of Management and Budget of his intent to look beyond 

the realm of incremental improvements and take full advantage of 

today’s technology to alleviate the burdens of costly, time-intensive 

investigations that are hampering our mission-readiness. 

The Department of Defense is well-postured to take these bold 

steps, and cognizant of the risks associated with such an endeavor. 

In recent years, with the support of Congress, DOD has developed and tested new processes and capabilities for continuous evaluation and automated records checks to enhance, automate, and 

accelerate background investigations. 

As of this month, the Department of Defense has 1.1 million personnel enrolled in a continuous evaluation program exceeding our 

annual goal. This program has demonstrated clear and compelling 

benefits of ongoing and more frequent vetting of cleared personnel. 

These methods, which significantly decrease risks associated 

with periodic reinvestigations, have shown convincing results and 

provide the basis for new approaches to modernize the vetting enterprise. 

Executing the Section 951 plan will provide DOD with the 

unique opportunity to build on our existing continuous evaluation 

and automated records checks architecture. 

This work will be done hand in hand with the security and suitability executive agents, collaboratively developing alternative vetting procedures that ensure continued adherence to Federal standards. 


KING-6430 with DISTILLER
15 

We are ready to begin this process in early 2018, and incrementally shift new investigative casework to DOD and process them 

through approved, innovated architectures developed in collaboration with the executive agents. 

By optimizing our investments and simplifying service delivery, 

we can achieve significant cost savings and cost avoidance, while, 

more effectively, driving system efficiency. 

As we implement the Section 951 plan, we will remain committed to our task to design, build, and operate, secure and maintain the National Background Investigative Service NBIS that Mr. 

Phalen referred to. This is the single end-to-end IT, shared-service 

solution for all personnel vetting in the government, not only for 

NBIB, but for other Federal agencies that conduct background investigations. 

DOD will remain committed to resourcing NBIB and NBIS 

throughout this transition process. I think that’s an important 

point. 

We would also continue to work very closely with the executive 

agents to streamline the legacy process, the process that exists 

today, to continue to identify ways to economize on field investigative work. We recently proposed and gained approval from colleagues here and in the Performance Accountability Council for a 

series of actions that are expected to produce near term reductions 

in the submission of investigative requests and reductions in field 

work. 

We will continue to collaborate to identify these additional measures in parallel with our work to implement the Section 951 plan. 

And as a result of this work, NBIB will continue to process every 

case that DOD has already sent to NBIB from now and any point 

in the future. Once we stand up the 951 plan and develop alternative processes that are approved and vetted, we will route new 

work into that pipeline. This will take new work off of NBIB’s 

plate, allow them to focus on the existing work as we continue to 

develop automated processes and feed them back into the overall 

architecture. 

And, chairman, I would be happy to discuss the plan in more detail, and I look forward to your questions. 

Thank you. 

[Prepared statement of Mr. Reid follows:] 


KING-6430 with DISTILLER
16 


KING-6430 with DISTILLERInsert offset folio 7 here 27761.007

STATEMENT FOR THE RECORD OF 

GARRY P. REID 

DIRECTOR FOR DEFENSE INTELLIGENCE 

(INTELLIGENCE & SECURITY) 

DEPARTMENT OF DEFENSE 

before the 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

UNITED STATES HOUSE OF REPRESENTATIVES 

on 

SECURITY CLEARANCE INVESTIGATION CHALLENGES AND REFORMS 

October 11, 2017 

Chairman Meadows, Ranking Member Connolly, and Committee Members, thank you for the 

invitation to offer testimony on behalf of the Department of Defense on the status of personnel 

security clearance reform and the challenges that we continue to face. 

The background investigation backlog is a matter of significant concern tor the Department of 

Defense. Long delays in obtaining security clearances are causing turmoil in personnel 

management, mission effectiveness, and technology development across the department. This is 

within our military services, our civil workforce, and our cleared industry contractors. 
17 


KING-6430 with DISTILLERInsert offset folio 8 here 27761.008

Despite focused efforts to mitigate the backlog and the resultant negative effects on DOD, our 

senior leaders have called for new and innovative approaches to address issues of cost 

performance and timeliness within the personnel vetting enterprise. 

As the committee is aware, section 951 of the 2017 National Defense Authorization Act require 

DOD to develop plans for assuming control of our background investigations, as is already done 

by 23 other federal agencies. On August 25th, Secretary Mattis approved the section 951 plan 

and notified Congress, the Director ofNational Intelligence, the Director of the Office of 

Personnel Management, and the Director of the Office of Management and Budget ofhis intent 

to look beyond the realm of incremental improvements and take full advantage oftoday's 

technology to alleviate the burdens of costly, time-intensive investigations that arc hampering 

our mission readiness. 

The Department of Defense is well postured to take these bold steps and cognizant of the risks 

associated with such an endeavor. In recent years, with the support of Congress, DOD has 

developed and tested new processes and capabilities for continuous evaluation and automated 

records checks to enhance, automate, and accelerate background investigations. As of this 

month, the Department of Defense has 1.1 million personnel enrolled in a continuous evaluation 

program, exceeding our annual goal. This program has demonstrated clear and compelling 

benefits of ongoing and more frequent vetting of cleared personnel. These methods, which 

significantly decrease risk associated with periodic reinvestigations, have shown convincing 

results and provide the basis for new approaches to modernize the vetting enterprise. 

Executing the section 951 plan will provide DOD with a unique opportunity to build on our 

existing continuous evaluation and automated records checks architecture. This work will be 

done hand- in-hand with the security and suitability executive agents, collaboratively developing 

alternative vetting procedures that ensure continued adherence to federal standards. 
18 


KING-6430 with DISTILLERInsert offset folio 9 here 27761.009

We are ready to begin this process in early 2018 and incrementally shift new investigative 

casework to DOD and process them through approved, innovated architectures developed in 

collaboration with the executive agents. By optimizing our investigations and simplifying service 

delivery, we can achieve significant cost savings and cost avoidance, while more effectively 

driving system efficiency. 

As we implement the section 951 plan, we will remain committed to our task to design, build, 

and operate secure and maintain the National Background Investigative Service, or NBIS. This is 

the single end-to-end IT shared service solution tor all personnel vetting in the government, not 

only for NBIB, but for other federal agencies that conduct background investigations. DOD will 

remain committed to resourcing NBIB and NBIS throughout this transition process .. 

We will also continue to work very closely with the executive agents to streamline the legacy 

process, the process that exists today, to continue to identity ways to economize on field 

investigative work. We recently proposed and gained approval from colleagues here and in the 

Performance Accountability Council for a series of actions that are expected to produce nearterm reductions in the submission of investigative requests and reductions in fieldwork. We will 

continue to collaborate to identify these additional measures in parallel with our work to 

implement the section 951 plan. 

And as a result of this work, NBIB will continue to process every case that DOD has already sent 

to NBIB from now and until any point in the future. Once we stand up the 951 plan and develop 

alternative processes that are approved and vetted, we will route new work into that pipeline. 

This will take new work off ofNBIB's plate, allow them to focus on the existing work. as we 

continue to develop automated processes and feed them back into the overall architecture. 

Chairman. I'd be happy to discuss the plan in more detail. I look forward to your questions. 

Thank you. 
19 

Mr. MEADOWS. Thank you. 

Mr. Evanina, you’re recognized for 5 minutes. 

STATEMENT OF WILLIAM R. EVANINA 

Mr. EVANINA. Thank you, Chairman Meadows and members of 

the subcommittee. Thank you for the opportunity to be here in 

front of you today. 

As the Director of the National Counterintelligence and Security 

Center, NCSC, I am responsible for leading and supporting the 

counterintelligence and security activities of the entire United 

States Government. 

The Director of National Intelligence, DNI, is designated as a security executive agent. In this role,the DNI is responsible for the 

development, implementation, and oversight of effective, efficient, 

and uniform policies and procedures governing the conduct of investigations, adjudications, and, as applicable, polygraphs for eligibility for access to classified information. 

The NCSC has been designated as the lead support element to 

fulfill the DNI’s security executive agency responsibilities. We’re responsible for the oversight and policies governing the conduct of investigations and adjudications for approximately 4.1 million national security cleared personnel. 

The security clearance process includes determining if an individual is suitable to receive a security clearance, conducting the 

background investigation, reviewing investigation results, determining if the individual is eligible for access to classified information, or to hold a sensitive position, facilitating reciprocity, and periodically reviewing continued eligibility. 

We work closely with the agencies responsible for actually conducting the investigations and adjudications, and managing other 

security programs associated with clearances. 

This ensures that our policies and practices are informed by 

those working to protect our personnel and sensitive information. 

In addition to supporting the DNI in its role as security executive 

agent, one of my other responsibilities is to support the DNI and 

the attorney generals’ efforts to ensure that the departments and 

agencies across the Federal Government have Insider Threat Programs established to help deter, detect, and mitigate the actions of 

individuals who may have the intent to unlawfully disclose classified information, or possibly do harm to themselves or others. 

The Insider Threat Programs go beyond traditional personal security practices implemented upon hiring, and offer an ongoing holistic approach to ensuring the well-being of the cleared workforce. 

These programs help us to be more proactive in preventing unauthorized disclosures by minimizing potential security gaps and/or 

identifying personnel who need assistance in getting them help before any damage occurs. 

The very first step in identifying and preventing an insider 

threat is the initial and periodic background investigation. This application and subsequent investigation, will continue with the 

clearance holder as the foundational assessment throughout the period of time the employee holds their security clearance. 


KING-6430 with DISTILLER
20 

So the interrelationship between the security clearance process 

and the insider threat detection is critical. 

NCSC is engaged as a partner with NBIB and the Department 

of Defense in the transformation of the security clearance processes, and remains committed to providing departments and agencies policy direction, while continuously assessing new ways for improvement. 

We have issued guidance to the community on a broad variety 

of topics, which are listed in my statement for the record. 

Additionally, NCSC, in coordination with NBIB partners with Director of OPM, who serves as a suitability and credentialing executive agent to align the security clearance process for the national 

security, suitability, and credentialing. This collaboration has resulted in a number of achievements, which are also listed in my 

statement for the record. 

We have also implemented efforts to track and report on the application of security clearance reciprocity. 

Reciprocity, acceptance of background investigations and national security determinations support the employee mobility and 

mission accomplishment, which is a critical element to ensure maximum effectiveness in human resource utilization. 

We are extensively engaged in modernizing security clearance 

processes, an effort that includes implementing continuous evaluation, to conduct automated record checks on a segment of covered 

individuals between the 5- and 10-year periodic reinvestigation cycles when security-relevant information may go unreported to security officials. CE is being implemented across the executive branch 

in phases. 

In conclusion, Mr. Chairman, as holders of security clearances, 

we are custodians of our Nation’s secrets, protecting the American 

people by protecting those secrets must be our highest priority. 

I, along with my colleagues sitting beside me here today, are 

firmly committed to doing everything we can to address security 

clearance investigation challenges, and strengthen our Nation’s security. 

I look forward to your questions. 

[Prepared statement of Mr. Evanina follows:] 


KING-6430 with DISTILLER
21 


KING-6430 with DISTILLERInsert offset folio 10 here 27761.010

UNCLASSIFIED 

STATEMENT BY NCSC DIRECTOR WILLIAM EV ANINA 

FOR THE HOUSE COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS HEARING ON 

"SECURITY CLEARANCE INVESTIGATION CHALLENGES AND 

REFORMS" 

Wednesday, II October 20 I7 

Room 2154 Rayburn House Office Building 

2:00p.m. 

Chairman Meadows, Ranking Member Connolly, and Committee Members, 

thank you for the opportunity to appear before you today to discuss security 

clearance investigation challenges and reforms. 

As the Director of the National Counterintelligence and Security Center 

(NCSC), I am responsible for leading and supporting the counterintelligence and 

security activities of the U.S. Government, including the U.S. Intelligence 

Community. 

The Director of National Intelligence (DNI) is designated as the Security 

Executive Agent (SecEA). In this role, the DNI is responsible for the 

development, implementation, and oversight of effective, efficient, and uniform 

policies and procedures governing the conduct of investigations, national security 

eligibility adjudications, and, as applicable, polygraphs for eligibility for access to 

classified information. The NCSC has been designated as the lead staff support 

element to enable the fulfillment of the DNI's SecEA responsibilities. 

We are responsible for the oversight of policies governing the conduct of 

investigations and adjudications for approximately 4.1 million national security 

cleared personnel. The security clearance process includes determining if an 

individual is suitable to receive a security clearance, conducting a background 

investigation, reviewing investigation results, determining if the individual is 

eligible for access to classified information or eligible to hold a sensitive position, 

facilitating reciprocity for these determinations, and periodically reviewing the 

individual's continued eligibility. 

As NCSC exercises the SecEA responsibilities, it works closely with the 

agencies responsible for actually conducting the investigations and adjudications, 

and managing other security programs associated with clearances. This ensures 

Page 1 of4 

UNCLASSIFIED 
22 


KING-6430 with DISTILLERInsert offset folio 11 here 27761.011

UNCLASSIFIED 

that our policies and practices are informed by those working to protect our 

personnel and sensitive information. One ofthosc agencies is the National 

Background Investigations Bureau (NBIB); and its Director, Charlie Phalen, is also 

here today, along with Garry Reid, Director for Defense Intelligence (Intelligence 

and Security), Department of Defense. 

I am going to focus my remarks on the efforts to improve security clearance 

processes and procedures, reciprocity, as well as the general challenges we face, 

including the backlog of investigations. 

NCSC is engaged in a transformation ofthc security clearance process, and 

remains committed to providing Departments and Agencies policy direction, while 

continuously assessing new ways for improvement. We have issued guidance to 

the community on a wide variety of issues, which we would be happy to provide to 

the Committee. 

Additionally, we partner with the Director, Office of Personnel 

Management (OPM), who serves as the Suitability and Credentialing Executive 

Agent, to align the security clearance process for National Security, Suitability 

and Credentialing. The following achievements have resulted from this 

collaboration: 

• Creation of the National Training Standards for Background 

Investigators, National Security Adjudicators, and Suitability 

Adjudicators, which align training requirements across National 

Security, Suitability and Credentialing. 

• Issuance of the Federal Investigative Standards (FIS), which align 

investigative requirements for suitability and national security, building 

upon previous investigative work, and avoiding duplication, where 

possible. 

• Provided clarifYing guidance to the position designation process using 

the Position Designation Tool. The tool aids in the classification of 

national security positions regardless of a requirement for access to 

classified information (i.e. Law Enforcement Officers). As a result, 

Title 5 Code of Federal Regulation (CFR) Part 732, was reissued as 5 

CFR Part 1400. 

Page 2 of 4 

UNCLASSIFIED 
23 


KING-6430 with DISTILLERInsert offset folio 12 here 27761.012

UNCLASSIFIED 

We are extensively engaged in modernizing security clearance processes in 

an effort that includes implementing Continuous Evaluation (CE) to conduct 

automated records checks on a segment of covered individuals between the fiveand ten-year periodic reinvestigation cycles when security-relevant information 

may go unreported to security officials. CE is being implemented across the 

Executive Branch in phases, due to the anticipated increased workload demands, 

technical complexities associated with developing personnel security 

enhancements, and the unknown impact to agency workforce requirements. 

Initial CE implementation began in October 2016, with a requirement for 

agencies to begin conducting automated records checks on clearance holders and 

on those eligible to hold a sensitive position (such as a border patrol officers), by 

30 September 2017. 

Metrics collected during implementation will be evaluated to assess how we 

can leverage CE to transform periodic reinvestigations. NCSC is also building an 

IT system that will conduct automated records checks, apply standard personnel 

security business rules, and generate alerts when security-relevant information is 

identified. Our goal is to deploy a fully operational CE System by Fall 2018 that 

will be available for use by any Executive Branch agency. 

NCSC is implementing the requirements directed by Congress in the Fiscal 

Year 2016 Omnibus Appropriation H.R. 2029-673 Enhanced Personnel Security 

Program (EPSP). The EPSP requires the DNI to direct Department and Agency 

heads to implement a program to provide an enhanced security review of covered 

individuals. No later than Fiscal Year 2021, the heads of the Agencies shall 

conduct automated records checks and check information from sources no less than 

two times every five years on the entire covered population, to ensure continued 

eligibility of each covered individual to access classified information and to hold a 

sensitive position. In response to the requirements of the Enhanced Personnel 

Security Program, we are working to incorporate capabilities developed through 

Continuous Evaluation to satisfY the requirement to periodically conduct records 

checks on all covered individuals. 

As directed by Congress, the DNI, in coordination with interagency 

participation, will determine the feasibility of including additional data sources 

such as government, publicly available and commercial data, consumer reporting 

agencies, social media, and other sources. 

Page 3 of 4 

UNCLASSIFIED 
24 


KING-6430 with DISTILLERInsert offset folio 13 here 27761.013

UNCLASSIFIED 

NCSC is also finalizing a plan to assist in the elimination of the backlog of 

periodic reinvestigations. The periodic reinvestigation backlog elimination effort 

uses a phased approach and specifically identifies NBIB's need to expand 

production capacity, implement process improvements, and stand up a modernized 

and secure IT architecture to eliminate its internal backlog of investigations. 

More broadly, NCSC is leading cross-governmental efforts to develop and 

implement improved investigative methodologies and processes to gain both shortand long-term advantages in managing investigative inventories and improving the 

quality and efficiency of the mission space. We interact at least weekly with 

partners at DoD, NBIB and other agencies to advance these goals and to ensure 

that as we move forward, we do so as a Federal enterprise in a manner which 

addresses the equities of all Departments and Agencies. 

Mr. Chairman, I defer to my colleague from NBIB to provide perspective on 

specific background investigation issues and challenges. I look forward to your 

questions. 

Page 4 of4 

UNCLASSIFIED 
25 

Mr. MEADOWS. Thank you, Mr. Evanina. Is that better than the 

first time? 

All right. Mr. Hodgkins. 

STATEMENT OF A.R. ‘‘TREY’’ HODGKINS 

Mr. HODGKINS. Thank you, Mr. Chairman, and members of the 

subcommittee. 

On behalf of the members of the Information Technology Alliance 

For Public Sector, I am pleased for the opportunity to share industry perspectives on the security clearance process in its current 

state. 

I have to start by saying, I sadly feel like a character in the 

movie, Groundhog Day. In the mid-2000’s, I testified several times 

before Congress, representing industry in what was then described 

as a clearance process. It was outdated and it needed modernization that addressed the backlog that rivaled the size of today’s. It 

is a testament to how little has really changed. 

The member companies of ITAPS appreciates the attention this 

committee is giving the issue. Like other sectors of the industrial 

base, the Information Technology Sector relies heavily on cleared 

personnel to provide IT goods, services, and solutions to the government mission. 

Unfortunately, the process we use today to grant and maintain 

clearances continues to be outdated, and sorely in need of modernization, just as it was over a decade ago. 

This is in addition to addressing the short term issue of backlog 

of investigations now numbering over 700,000. To put that into 

perspective, that’s about the same number of people you represent 

in your congressional district, Congressman. 

Industry outlined then what we believe was the path forward to 

modernize the clearance process, reduce the opportunity for another backlog to appear, and establish a 21st century process to 

protect the interest of the United States. 

These criteria were known as the four 1’s, and included one application, one investigation, one adjudication, and one clearance. 

After meeting with stakeholders for almost a year now, we believe that these criteria still fit today’s situation, and these steps 

should be used to guide efforts to address the existing problems in 

the system. 

One application speaks to one singular digital form online that 

serves as a basis for a permanent digital security record for a clearance holder. 

One investigation speaks to standardized investigation metrics 

and criteria to yield consistent, understandable findings that can 

be used across the government enterprise. 

It also speaks to establishing real-time, continuous monitoring as 

the baseline for tracking clearance holders and as a replacement 

for reinvestigations. 

One adjudication speaks to a dependable and repeatable set of 

standards by which agencies can determine whether an individual 

is eligible and suitable to be granted the privilege of a clearance, 

and for which a determination can be clearly understood across the 

government enterprise. 


KING-6430 with DISTILLER
26 

Finally, one clearance speaks to a dynamic where an applicant 

only applies one time for a clearance, is continuously monitored 

after it has been granted, and the clearance is accessible and transferable government-wide. It would also allow for industry personnel 

to move from one contract to another in a reciprocal fashion, all 

without having to undergo additional redundant examination. 

These criteria outline a reform process that will deliver and enhance security on a real-time basis, while achieving maximum efficiency across the Federal Government. 

Further, we believe that the reformation of the clearance process 

should not just look to catch up and draw down the existing backlog, but leverage technological advances to create a new dynamic 

needs of permitting access to our Nation’s most important information, while securing that information from the threats it faces. 

These technologies includes the application of big data analytics 

to the existing and past data set of clearance holders, to reveal patterns or anomalies that can lead to the discovery of insider threats, 

applying blockchain technology, to secure information and enable 

trusted information exchange, and the use of artificial intelligence 

to monitor trusted user activity and build trusted profiles. 

Finally, industry has consistently supported the concept of a singular standardized clearance investigation across the government 

enterprise, and would oppose efforts like Section 938 of the Senate 

National Defense Authorization Act, to bifurcate the process. 

Such an action would exacerbate, rather than relieve, the existing backlog, and enable agencies to silo their behavior regarding 

how they adjudicate and reciprocally treat clearances. 

Section 938 would also force the government to compete against 

itself, and artificially inflate costs for the most scarcest resource in 

the process: the investigators. 

Thank you again for the opportunity to share perspectives on the 

state of investigations for clearances and how we should resolve 

and evolve these issues. We look forward to working with you to 

reform and modernize the security process, and I look forward to 

answering your questions. 

[Prepared statement of Mr. Hodgkins follows:] 


KING-6430 with DISTILLER
27 


KING-6430 with DISTILLERInsert offset folio 14 here 27761.014

Testimony of 

A.R. "Trey" Hodgkins, Ill 

Senior Vice President 

IT Alliance for Public Sector 

before a hearing of the 

Subcommittee on Government Operations 

of the 

U.S. House of Representatives 

Committee on Oversight and Government Reform 

Wednesday, October 11,2017 
28 


KING-6430 with DISTILLERInsert offset folio 15 here 27761.015

IT Alliance for Public Sector Testimony on Security Clearances 

House Committee on Oversight and Government Reform 

October 11, 2017 

Page 2 

Introduction 

Chairman Meadows and Ranking Member Connolly, thank you for the opportunity to share industry 

ner;nerl"iV''' on the industry and the federal government face in regard to the broken security 

We and your oversight of the and would hope that your 

the very serious current state of the security 

clearance process poses. 

The 21" ~as brought new and ever to our national and homeland 

inside and of our government and beyond borders of our nation. Government and 

departments have increased thelr reliance on private sector partners to contribute to the diverse national 

and homeland missions. Unfortunately, the security clearance process has not adapted or 

sufficiently to meet these demands and enable the government and industry workforce it 

takes to meet these new mission imperatives. 

While the backlog of clearance applications is a major cause for convening this hearing, we hope that 

Congressional attention does not get lost on this short-term symptom of a 

problem. We recogniLe that as your partners in the contractor community, we a 

monopoly on the pain inflicted by the current system. The backlog impacts the ability of the federal 

~n•.1ernment to investigate applicants and determine their suitability for employment, just as much as it 

the ability for contractor personnet to a clearance to work on a contract. We believe that 

government-wide security clearance should be the objective, as it is imperative to both 

security and As we move to reform the process, industry remains agnostic as to who "owns" 

the process; we are, however, resolute that any bifurcation to the process would only 

inefficiencies, waste taxpayer dollars, potentially create greater vulnerabilities, 

achleving a truly reformed clearance process. 

nrf•rlir-;rnnerlt is not new. There are decades of reports from the Government Accountability 

challenges with the security clearance process and the backlog of applications. We 

must also security clearance process has been bifurcated in the with the Department 

of Defense (DOD) owning the portion for DOD as the latter of the 

last In fact it was the of the Department to manage volume 

in,·es:tig<ltic.ns in that era that led to consolidation of most of the government clearance and personnel 

in,·es•tiQ<ltiv·e functions at the Office of Personnel Management (OPM). It was also the inability of OPM to 

absorb that DOD backlog into a consolidated process that created the backlog 

problems of the 2000s. have seen these before and recommend that Congress act 

now to not only the short-term symptoms of the backlog of applicants, but also to invest in 

a permanent effort to address the systemic challenges of the security clearance process. 

Executive Summary 

The current the backlog of clearances awaiting investigation sits at over 700,000, a number that is 

unacceptable metric. Unfortunately, the immediate crisis that backlog creates is only part of the 

problem, as it increased risk into an outdated system that does not leverage the digital era to 

create a more security environment and which continues to inefficiently spend taxpayer dollars. 
29 


KING-6430 with DISTILLERInsert offset folio 16 here 27761.016

!T Alliance for Public Sector Testimony on Security Clearances 

House Committee on Oversight and Government Reform 

October 11, 2017 

Page 3 

In the early 2000s, I worked with a coalition of industry trade associations who partnered with 

government stakeholders to identify the problems with the security clearance process that time, 

implement a long-term solution to resolve the situation, and create a pathway of process reform, 

modernization, and improvement The situation improved in the wake of aggressive Congressional 

oversight by this Committee and others, culminating in the security clearance process reforms of the 

Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA). Unfortunately, the departure from that 

pathway of reform and modernization has contributed to the current state of security clearance 

processing. 

Because we have gone back to the future with our current state, resulting in exorbitant wait times, 

ballooning costs, and systemic inefficiencies, ITAPS has re-convened the broad and diverse industry 

coalition to help assess the problems, and to suggest short and long-term solutions. In conjunction with 

our partners at the Aerospace Industries Association, the Association of General Contractors, the National 

Defense Industrial Association, the Professional Services Council, and the U.S. Chamber of Commerce, we 

have met and spoken with government stakeholders over the course of the past year. These stakeholders 

include the House and Senate Armed Services Committees (HASC/SASC), the House Permanent Select 

Committee on Intelligence (HPSCI), the Senate Homeland Security and Governmental Affairs Committee 

(HSGAC), the House Oversight and Government Reform Committee (HOGR), the National Background 

Investigation Bureau (NBIB), the Defense Security Services (DSS), the Office of Undersecretary of Defense 

for Intelligence (USD(I)), the Performance Accountability Council Project Management Office (PAC/PMO), 

and the Information Security Oversight Office (ISOO) at the National Archives. 

At the time of the reforms of the IRTPA, industry brought forward a set of criteria to help guide the 

development of proposals and solutions to resolve the challenges the security clearance process faced. 

After our extensive engagement with stakeholders to assess the challenges we face today, we would 

submit to this Committee and others that those suggestions and criteria are still applicable and deserve 

resurrection to guide efforts to reform, modernize and improve the security clearance granting process 

today. We identify these suggestions as "The Four Ones": 

One application 

One investigation 

One adjudication 

One clearance 

We have also advanced and there are several options that can be applied to the process 

to improve efficiency, establish monitoring of clearance holders, and better enable the 

counterintelligence mission to take stock of those trusted by the government. My recommendations and 

testimony will outline what each of these means, why we believe these criteria for reform still hold merit 

in today's situation and discuss the technological capabilities that can be applied at each step to enhance 

and improve the process. 

Sadly, because these criteria still have merit today, it is a clear indicator of just how little has actually 

been improved in the clearance granting and maintenance processes. Adopting the Four Ones and the 

technological options will lead to a common operating picture, which we believe is the necessary end 

state for resolving the current challenges and positioning the process where it is ready for the threats and 

challenges of the new century. 
30 


KING-6430 with DISTILLERInsert offset folio 17 here 27761.017

IT Alliance for Public Sector Testimony on Security Clearances 

House Committee on Oversight and Government Reform 

October 11, 2017 

Page4 

hack of OPM, on October 1, 2016, the NBIB was created to absorb OPM's Federal 

,, co"''"'"c Services (FIS) and enable a centralized security clearance process. The FY 2017 National 

Defense Authorization Act (NDAA) required a report' from the Secretary of Defense (SECDEF), that was 

due on August 1", 2017, detailing how the Department of Defense would move the investigation of DOD 

clearance applicants to the Defense Security Service and on October 1, 2017, a plan was due from 

SECDEF and OPM on how to transfer these barely more than a year passed since the 

creation of NBiB, a plan has already been developed to bifurcate the clearance process. Industry is 

concerned that such a bifurcation will undoubtedly lead to further and compounding inefficiencies. 

Additionally, this plan moved forward so quickly that DSS published an RFI on FedBiz0pps.gov2 on 

September 20, 2017, requesting: "market research to gather data for the purpose of developing 

requirements to contract for investigative service providers to conduct background investigations on 

Department of Defense (DOD)-affiliated personneL" The conflation of the reporting timelines, along with 

the issuance of the RFI, show that this process is anything but collaborative and measured and is not 

taking into account the detrimental effects it will create on the clearance granting process governmentwide. 

The Senate Armed Services Committee (SASC) included a provision, Section 938, in their FY 2018 National 

Defense Authorization Act (NDAA), S. 1519, that would move DOD clearances and the process 

surrounding them, back to the Department. The SASC recognized that something must be done to resolve 

this latest bout of problems with the security clearance system. We must oppose Section 938 however, 

because it does not adhere to the criteria of the Four Ones and will create a parallel process and 

regime in the Department that will increase costs and drain resources, cause further 

process improvements, and undermine efforts to move the government toward true 

across all departments and agencies. 

Congress to address this systemic and enduring issue, 

Congressional Executive enforcement, and agency/department 

meaningful changes implemented in the security clearance process. Finally, we hope to with you to 

address the security clearance problem in a holistic, government-wide fashion. If the government seeks to 

deliver a more efficient, thorough, and secure process, it must include end-to-end digitization, shared 

services, utilize continuous evaluation, and leverage private sector partners for success. 

Background 

In order to perform many critical services for government customers, hundreds of thousands of industry 

personnel must obtain and renew security clearances every year. The security clearance process, rules, 

and regulations are very important to industry because they create the mechanism to obtain and clear 

qualified personnel to support the government's critical missions. Our suggestions, however, are not 

solely designed with industry goals in mind. Instead, our recommendations take a "whole of government" 

approach designed to create a system and processes that enable greater national security. indeed, 

government employees, the priority in the security clearance process, are sure to benefit. We humbly 

recognize that national security is an inherently governmental function. Yet, it is the industrial base that 

provides critical capabilities to the government that enables mission success. 

1

Section 951, FY 2017 NOAA 
31 


KING-6430 with DISTILLERInsert offset folio 18 here 27761.018

IT Alliance for Public Sector Testimony on Security Clearances 

House Committee on Oversight and Government Reform 

October 11, 2017 

Page 5 

Industry faces increased pressure to deliver cleared personnel on the day a contract begins. The current 

state of the clearance granting process makes it almost impossible for industry to meet these demands. 

These delays in obtaining security clearances result in increased costs to the federal government, and 

ultimately the taxpayer, by delaying the ability to use the most qualified personnel on critical programs. In 

fact, industry has turned to "poaching" already cleared personnel to deliver contract needs. This process 

unnecessarily inflates costs of contracts and is the reality of a broken system. These costs run into the 

hundreds of millions of dollars for both government and industry. It also stifles innovation and 

cooperation, since it is impossible to share a good idea or leverage an existing team to provide 

solutions across agencies or without having appropriately cleared personnel. Ultimately, we 

can only conclude that a amount of important work is not getting done. 

In the wake of the OPM breach of cleared personnel data, there was a contract to credit 

monitoring and restoration services for each person known to have had their stolen. To pay for 

this contract OPM apportioned the costs across their customer base. agencies, like DOD, lacked 

sufficient funding to both pay for new investigations and cover their of the contract, so the funds 

were used to pay for the service. Only when additional funding was were the agencies able to 

restore submission of applications for investigation. However, the ability to find an adequate number of 

investigators to meet the investigation demand signal still perplexes the government. 

process would only make that problem worse, while increasing costs. 

One Application 

"One application" envisions that an applicant would complete one standardized and digitized application 

that would become the permanent digital record and security history for an applicant and, if deemed 

suitable, a clearance holder. The "one goal made progress with the implementation of theeQIP application format. NBIB is also out in the near-term an updated, digitized Standard Form 86 

(SF86). Standardization across the process, however, is still lacking. 

Also submitted with the digital application are fingerprints and signatures, which form the completed 

application package. Any one of these elements, if not submitted can expire and delay 

initiation of an investigation, so coordination on submission is critical. In the technologically 

enable the process, the efforts to digitize fingerprinting is an area to be commended as, per 

NB!B, 94°/o collection is now done electronically. The next step ln the process needs to be a 

digital signature to a centralized database. 

From this continuously accessible, digitized central repository comes the beginning of the total security 

history of an individual. As other elements of the Four Ones noted below, like continuous evaluation, 

become the norm in the national security process, we must enable the evaluation component from the 

beginning. Today, investigators are only given a static snapshot with which to judge a dynamic 

environment and dynamic individuaL In the current process, such examinations only happen 

initial application and investigation, and thereafter only at S-or 10-year intervals depending on the 

of the clearance. We must also examine other elements that form the individual record, like foreign 

contact disclosure reports and other addendums, which are still handwritten, and move toward complete 

digitization of the forms and electronic submissions to the same repository to be appended to the total 

security history. Moving toward "One Application" would therefore enable dynamic access to the security 

history of a cleared person. Technology can enable all of these capabilities now. 
32 


KING-6430 with DISTILLERInsert offset folio 19 here 27761.019

IT Alliance for Public Sector Testimony on Security Clearances 

House Committee on Oversight and Government Reform 

October 11, 2017 

Page 6 

One Investigation 

One Investigation is vital to the continuity of the security clearance process and critical to the ability to 

achieve One Clearance, discussed later in my testimony. Unfortunately, agencies have historically 

disregarded investigations conducted on an individual and initiated a new process, even though the 

individual has already been investigated and has been granted a clearance. While this practice was 

statutorily prohibited in the IRTPA, it has not stopped agencies from refusing to accept the 

conclusions of other agencies and many take the liberty to execute additional of an 

Many in government and industry are very familiar with the situation where carry a multitude 

of different badges, each representing another examination. 

Congress should examine this practice and determine if additional legislative prohibitions are necessary. 

At the very least, these re-examinations cause further delay in the overall effort to get cleared personnel 

on contract or in a mission area, and they can be a redundant, wasteful use of taxpayer funding. Congress 

should require uniform, government-wide standardization of the investigative process, protocols, and 

vocabulary employed to achieve One Investigation. Such an outcome would produce an investigative 

record that can be reviewed and interpreted consistently across government 

Technology also allows us to move beyond the static investigations 

are dynamic, and so, too, should be the investigations. In order to create a 

should move toward continuous real-time evaluation of all clearance holders. One '""P<i'w''"''" 

not only the initial investigation of an individual, but also a continuous analysis of public private data 

sets for indicators and anomalies related to clearance holders. Continuous evaluation would also obviate 

the need for periodic reinvestigations at the 5-year (Top Secret) and 10-year (Secret) intervals. 

Periodic reinvestigations (PR) are another key component in the clearance granting process badly in need 

of attention. In order to slow down the volume of investigations and avoid increasing the NBIB, 

agencies have taken extraordinary measures to extend clearance viability beyond the time recJunenJerrts 

for PRs. Reinvestigations have been relegated to such a low priority that clearances held by 

personnel working on government projects sometimes expire before any action is taken to 

renewal application. The condition is such that many periodic reinvestigations are considered to m 

process" once the clearance holder has completed an application for reinvestigation. In reality, many such 

applications are never entered into the process because the emphasis is placed upon those who do not 

have clearances, under the assumption that those with a clearance can be placed in a lower priority and 

be processed at a later date. 

For government, this may seem to be an acceptable temporary solution. In practice, finds that 

more and more frequently, clearances have lapsed. These discoveries are made when personnel 

try to move from contract to contract, start supporting a new agency under an existing contract or 

relocate or get new employment and the validity of their clearance must be checked. It is at this time that 

both the employer and the clearance holder frequently first discover that. despite the completion of the 

periodic reinvestigation application, the paperwork was never processed and the clearance is "out of 

scope." Therefore, current clearance holders are now at even greater risk of havlng their clearance expire 

and/or lose their SCI access. 

If we migrated to a One Investigation dynamic that included continuous evaluation, we can watch for the 

appearance of any "flags" or indicators (e.g. multiple foreign trips, foreign disclosures, divorce, financial 
33 


KING-6430 with DISTILLERInsert offset folio 20 here 27761.020

IT Alliance for Public Sector Testimony on Security Clearances 

House Committee on Oversight and Government Reform 

October 11, 2017 

Page 7 

trouble, sudden financial gain, social media activity) that would show the need to reinvestigate an 

individual. In a situation where a cleared individual receives a clearance, and the very next day all these 

flags populate in an automated system, it would be pertinent and proper to investigate these occurrences 

rather than waiting 5 (TS) or 10 (S) years to delve into these issues. The consumer analogy is the real-time 

of credit by financial institutions. Charges to credit cards that appear fraudulent are 

alerted to the consumer. This "real-time" condition should become the expected standard of 

investigation and evaluation of anyone with a clearance. But, relnvestigations are prescriptive on an 

arbitrarily determined timeline. In order to assess the status of this condition, would recommend 

that a survey of the backlog be conducted to determine exactly how many of the applications are 

still valid, what steps be taken to ensure that cleared personnel are effectively scrutinized as appropriate, 

and that the clearances of industry personnel are not placed in jeopardy of being "out-of-scope." 

One Adjudication 

Industry has long sought standardization and uniformity in the process of adjudication and suitability 

determinations so that a person holding a secret or top-secret clearance could be confident that there 

would not be variances in the interpretation of their adjudication from one agency to the next A uniform, 

government-wide adjudication standard will allow private-sector partners to rapidly execute on contracts. 

We recognize that suitability determinations may be different for the various level of sensitive work 

conducted within the government A modular, building block type of suitability system, however, that 

even the least sensitive positions are investigated the same as the most sensitive, will produce common 

data and process. This will not only enable uniform insider threat data, but it will allow government and 

private sector employees to move from one department or agency to another with relative ease. 

As one contract with an agency or department concludes, the need to move personnel to other contracts 

exists industry-wide. There is no salient argument for different adjudication standards across various 

eo11enomentagencies and departments. The condition, however, is not limited to just the private sector. 

U.S. entities, such as DOl and DHS, with multiple component agencies frequently 

clearances issued within the same department The concept of "one adjudication" 

and standardization discussed above and leads directly into the following 

To be commended, at this point in time, adjudication is the least problematic step in the process for 

industry. Once the investigation has been compteted, the investigation record is returned to the 

requesting agency that is for making the determination about suitability and eligibility and 

the clearance. The most rapid portion of the security clearance has been, and continues to be, 

ao;uu1cauon. Yet, even adjudication can be improved upon by standardizing the process. 

One Clearance 

Cleared professionals access much of the same systems, Secret Internet Protocol Router Network 

(SIPRNet) and Joint Worldwide Intelligence Communications System (JWICS). across government so that 

all-source intelligence can help inform a common operating picture. Clearances, however, are not treated 

in the same manner. 

One reason for the persistence of the conditions outlined in this paper is the lack of a single, governmentwide, interoperable, real-time database containing all clearance and access information. The database 
34 


KING-6430 with DISTILLERInsert offset folio 21 here 27761.021

!T Alliance for Public Sector Testimony on Security Clearances 

House Committee on Oversight and Government Reform 

October 11, 2017 

Page 8 

containing this information for the intelligence community, Scattered Castles, is classified and not linked 

to the same unclassified but sensitive database for the civilian and defense agencies- the Joint Personnel 

Adjudication Systems (JPAS) which is slated to be replaced by Defense Information System for 

(DISS). There are also defense and civilian agencies that do not contribute information to the databases 

a timely manner, clearance information issued by them incomplete or unreliable. Another 

hurdle to overcome is requirement by some agencies to only recognize up-to-date clearances. (i.e., 

based upon a current investigation), even though the delays discussed above are pushing "active" 

clearances beyond their standard periodic reinvestigation timeframes. These requirements must be 

corrected for reciprocity to work as Congress envisioned it. 

We have seen some improvement in the reciprocity of clearances, particularly in the intelligence 

community5 with 86 percent reciprocity government-wide but instances when agencies refuse to 

each other's clearances still occur with regularity. Another improvement industry has noted is 

in cases requiring a re-investigation of a current clearance by a second or third agency. 

Other onerous requirements short of a re-investigation, however, are still sometimes imposed and they 

serve only to slow down the process, duplicate efforts, increase the burden on taxpayers for redundant 

government activity, and prevent the agency frorn meeting its demands in a timelier fashion. 

Ultimately, Congress and the Administration must require Federal agencies to provide accurate, timely, 

and thorough information about the clearances each has granted. This will enable the capability for 

others, when authorized, to review applications, the subsequent investigations, the results, and finally, the 

basis for a clearance positively so that reciprocity can be fully realized wherever the national 

security States demand. 

Each agency has its own rules that prohibit smooth, timely movement of cleared contractor personnel 

from one contract to another. Despite prescriptive statues and guidance directing reciprocity, there is not 

reciprocity in practice. 

The cost of doing business: 

A systemic issue our coalition discovered was the cost of a security clearance is dynamic, versus fixed, 

throughout a fiscal year. DSS is reliably able to predict in a given year roughly how many investigations 

will occur. In doing so, expectations are established about the width of the investigation pipeline, which 

informs customers. However, between this prediction and execution, the cost of a clearance can and does 

change. This leads to unfulfilled investigations due to budgeted versus actual nv'e,ti~etion< 

able to be executed a fiscal year. Director Phalen of the NBIB has executed a fi>< to this issue, 

it is not in statute. We commend his leadership on this. We recommend that this be codified so 

that future costs are known and able to be planned for, creating a measure of and reliability 

in the security clearance process. 

Conclusion: 

this hearing was held to address security clearances in the present tense, we would be remiss not 

to out future technology trends that will enable greater information and personnel security. Utilizing 

emerging technologies, like blockchain, to secure information and enable the trusted information 
35 


KING-6430 with DISTILLERInsert offset folio 22 here 27761.022

IT Alliance for Public Sector Testimony on Security Clearances 

House Committee on Oversight and Government Reform 

October 11, 2017 

Page 9 

among multiple parties through a shared ledger must be part of the conversation. Utilizing 

to monitor trusted user activity, building usage profiles, and sharing it among all 

other agencies, will also create a road map to reducing risk. Finally, applying big data analytics to the data 

on all past and current clearance holders can help identify and develop better counterintelligence means 

to address threats. Siloed department and agency efforts to eliminate the insider threat problem only 

harms the good. This problem is not unique to any agency or department and the government 

the issue holistically. 

Systemic issues still exist, enabled by arcane, bureaucratic red-tape, that promote distrust slow favorable 

outcomes, and increase cost to the American taxpayer. Despite repeated prescriptive measures by 

multiple Congressional committees, the security clearance issues persist. From backlogs of 600,000 in 

19994

, to a low point in the first decade of the 21" century, and now 700,000, the cycle must stop by 

enacting true reforms. 

In a "whole approach, a singular authority must own the entire security clearance process 

-for security accountability's sake.ln this no-fail mission, a singular entity should standardize all 

processes and reign in the disparate systems and procedures that exist today. As security clearances are 

no more than a combination of a continuous counterintelligence investigation and operational security, it 

is incumbent to standardize and centralize the process with "The Four Ones". 

It cannot be overstated that industry is committed to preserving the requirements to 

obtain security clearances. The process, however, must be optimized to leveraging industry 

relationships and deploying technology across the process. The interest is not to minimize current 

requirements, but to make appropriate changes to an antiquated process. This would allow the nation to 

remain vigilant in determining who has access to sensitive information while better meeting defense and 

intelligence needs at the lowest possible cost. Industry looks forward to working with the government to 

examine and implement these and other recommendations, and stands ready to devote its experience 

and significant expertise with best practices to ensure that critical government programs do not go 

unexecuted for lack of available cleared personnel. 

Thank you for the opportunity to share our perspectives with the Committee. 

RECOMMENDATIONS FOR CONGRESS AND THE ADMINJSIRA..li.Q.t-1 

1. Reinvigorate previous efforts to create one electronic record across a continuous digital process 

for clearances. 

2. Tap the expertise of leading technology companies to partner with the national security 

community to apply new technological solutions to rethink the entire clearance process. 

a. DIUx, DARPA, IARPA, and ln-Q-Tel enable wonderful outcomes, it's time to unleash them 

and others, on this problem. 

3. Ensure that the security clearance process- from application, to investigation, to adjudication, to 

re-investigation- is technologically enabled; do away with paper files and ensure that all systems 

are interoperable and can share data across platforms and agencies. 

4. Codify NBIB authority to fee-setting with fiscal years, instead of allowing the practice to 

occur after budgets are 
36 


KING-6430 with DISTILLERInsert offset folio 23 here 27761.023

lT Alliance for Public Sector Testimony on Security Clearances 

House Committee on Oversight and Government Reform 

October 11, 2017 

Page 10 

5. Move from the mindset of a security clearance "process" to that of continuous evaluation. 

a. Just like counterintelligence and operational security is a dynamic process, so too should 

the security clearances process. 

6. Enable information from employers to be used as a part of the security clearance investigation 

(e.g. college transcripts, previous employment history, etc.). 

7. Establish a singular system of record, utilized by all16 intelligence agencies and corresponding 

departments, that verifies the existence of a security clearance, without the clearance needing to 

be "passed." 
37 

Mr. MEADOWS. Thank you all for your testimony. 

The chair recognizes the gentleman from Iowa, Mr. Blum. 

Mr. BLUM. Thank you, Chairman Meadows, and thank you to our 

panelists for being here today. 

The chairman should not feel bad about mispronouncing anyone’s 

name on the panel. Last week I chaired a hearing and the gentleman’s name was Mr. Hakes, and my notes said ‘‘rhymes with 

cakes.’’ So, of course, I addressed him as Mr. Cakes. So don’t feel 

bad, Mr. Chairman. 

Mr. MEADOWS. Thank you. 

Mr. BLUM. We currently have a backlog of 704,000 investigations. 

What is the goal? I’m a businessman. So I hope we have a plan. 

I would like to know what our goal is for that backlog and by when. 

Does anybody have that answer? Because I know accountability is 

not exactly our strong suit in the Federal Government, but the voters want accountability. 

Mr. PHALEN. I appreciate that. Thank you, sir. 

I’ll take a first cut at this. There is a steady state inventory level 

that is about 180,000 cases, and that was where it was during the 

late 2007 through 2014 timeframe, before we lost investigative capacity. And within that inventory, we were able to complete investigations within the timeliness standards that are outlined in the 

IRTPA legislation. 

Mr. BLUM. Why did we lose capacity? 

Mr. PHALEN. I’m sorry? When or why? 

Mr. BLUM. Why? 

Mr. PHALEN. The Office of Personnel Management terminated its 

contractual relationship with USIS, which held about 60 percent of 

our investigative capacity as a contract company. 

Mr. BLUM. They were circumventing the contractual rules, correct? 

Mr. PHALEN. So I would—— 

Mr. BLUM. Is that correct? 

Mr. PHALEN. I don’t know precisely. I do—I 

Mr. BLUM. USIS, correct? They were circumventing the rules, the 

contractual rules? So I’m glad to hear they were terminated. In 

fact, I’m surprised. 

Mr. PHALEN. Yes, sir. The relationship was terminated with 

them, and it was done fairly abruptly, and the individuals who 

were working for them, most of them did not come back into the 

service with any other contractor. They left the business. And so, 

that was about a 60 percent loss in capacity in the space of just 

a handful of single-digit weeks, almost overnight. And it has taken 

to, now, to build up that capacity, contractually, and through Federal hires, to get to a number that begins to approximate where we 

were in the early fall of 2014, when that contract was terminated. 

Mr. BLUM. So do we have a goal? 

Mr. PHALEN. Goal in terms of? 

Mr. BLUM. Goal of investigative backlog by a certain date, we 

want to be at a certain level? 

Mr. PHALEN. I have an approximation. We are dependent upon 

certain changes in process. Two things will have an impact on our 

ability to bring this backlog down. 


KING-6430 with DISTILLER
38 

Number one is hiring investigative capacity beyond what we 

have today. And we have commitments from all four of our suppliers to continue building that capacity to the extent possible. And 

if they are able to meet the goals that they have set for us, it will 

take approximately 3 years or so to bring down that inventory 

number to a manageable level that we want, perhaps even a little 

longer. That’s without any other intervention. 

The second level of intervention that would make a significant 

difference in our inventory numbers and our ability to hit timeliness goals would be our ability to look within the population that 

is already cleared, what is today covered by periodic reinvestigations, and leverage the advantage we have with continuous evaluation and other programs that go by different names, but do the 

same thing that will allow us, perhaps, to focus periodic reinvestigations into something that is less periodic and more focused on 

individuals that need that level of scrutiny and rely on the continuous evaluation tools to give us early warning, give the agencies 

early warning of folks that are representing a graver threat and 

not wait until the 5-year mark to find this problem. And that 

would take inventory out of my organization and allow me to focus 

my assets and my resources on what is the most important step, 

that first one, which is a baseline development of a level of trust 

in an individual first entering the Federal service or into a classified. 

Mr. BLUM. So 3 years to get to—would that be like 125,000? 

Mr. PHALEN. 180,000 is our goal. 

Mr. BLUM. 180,000. 

Mr. PHALEN. And our other goal is to meet the guidelines or the 

standards of an IRTPA, which is 80 days to complete a top secret 

investigation, and 40 days to complete a secret investigation. And 

just for clarification, the 3 years is me being terribly optimistic. It 

could be an extra 1 or 2 years beyond that. But that’s—— 

Mr. BLUM. The investigations have become much more labor intensive? 

Mr. PHALEN. They have. 

Mr. BLUM. Especially since the theft of classified intelligence by 

Edward Snowden? 

Mr. PHALEN. Yes. 

Mr. BLUM. Now someone to the investigation has to be face-toface versus telephonically? Do you agree with that, or do you think 

that’s an overreaction? 

Mr. PHALEN. So actually, investigations have been required to be 

face-to-face, for the most part, since when I was doing investigations, if not earlier, back in the early 1980s. The default is to do 

it face to face. 

And what we have done with some of our mitigation efforts working, again, with the security suitability executive agent and the Department of Defense, is look for those opportunities where we can 

use technology, whether it is a telephone, or something as secure, 

video teleconference, to get to people who are in areas that we can’t 

otherwise get to very easily. 

Mr. BLUM. Can we make it less labor intensive? 

Mr. PHALEN. Exactly. 


KING-6430 with DISTILLER
39 

Mr. BLUM. Can we do that? Is that possible through the use of 

technology? 

Mr. PHALEN. Yes, it is. 

Mr. BLUM. And that’s in our plan, I assume? 

Mr. PHALEN. The telephonic changes we’re doing today. We have 

been running pilots with the video teleconference, particularly getting into areas in combat zones and other inaccessible zones to get 

to military members and have that conversation with them where 

we can’t get an investigator on the ground. And we’ve been doing 

that as a pilot now for probably 4 or 5 months. It’s been very positive working with the Air Force, and they would like to go more 

mainstream with that. 

Mr. BLUM. And in closing here, I would like to say, though it’s 

caused you an issue, USIS, that contract being terminated, I’m 

glad to hear that, because, to me, that represents accountability. So 

thank you for your answers. And I yield back the time I do not 

have. 

Mr. MEADOWS. I thank the gentleman. The chair notes the presence of our colleague, the gentleman from Illinois. Mr. 

Krishnamoorthi. You think your name is tough, I ask unanimous 

consent that he be fully allowed to participate in today’s hearing. 

And without objection, so ordered. And so the chair recognizes the 

gentleman from Illinois. 

Mr. KRISHNAMOORTHI. Thank you, Mr. Chairman. 

Mr. Reid, on September 6, 2017, Daniel Payne, the Director of 

the Defense Security Services, made headlines when he spoke at 

the Intelligence and National Security summit. 

This summit was hosted by the Armed Forces Communications 

and Electronics Association and the Intelligence and National Security Alliance. 

Director Payne said this, and I quote, ‘‘On a weekly basis, I got 

murderers who have access to classified information. I have murderers, I have rapists, I have pedophiles, I have people involved in 

child porn. I have all these things at the interim clearance level, 

and I’m pulling their clearances on a weekly basis. This is the risk 

we are taking.’’ 

Mr. Reid, are you aware of these statements? 

Mr. REID. Yes, Congressman. 

Mr. KRISHNAMOORTHI. Do you agree with him that murderers, 

rapists, and pedophiles have been given security clearances in the 

past? 

Mr. REID. Congressman, I’ve spoken, I work for Dan Payne every 

day in our jobs. And in the first instance, I would just submit that 

immediately after this excerpt was published, we talked about this 

in terms of the context of his remarks, and the most important 

point he was trying to make, respectfully, was the impact of interim clearances and the effects of the backlog. 

There are numbers that we can associate with revoked interim 

clearances, and we can provide that. I’m not sure it’s appropriate 

to articulate those publicly. They refer to different categories of behaviors that are flagged. 

There is a volume of some 200,000 interim clearances that DSS 

authorize. And the Director can authorize interim clearances under 

certain conditions for industry contractors, about 200,000 a year. 


KING-6430 with DISTILLER
40 

Several dozen of those you can map to some of these behaviors he 

was describing, but I would just say, Congressman, again, the description was intended to be more figurative than literal in terms 

of murderers and rapists. There are categories of behaviors that 

are within the guidelines that flag clearances. And that is what 

Dan was referring to. And we can certainly provide the numbers. 

Mr. KRISHNAMOORTHI. Okay. Well, to me, I mean, murder is 

murder, rape is rape. In response to these alarming reports, on October 5, our full committee ranking member, Elijah Cummings, 

sent a letter requesting documents about these allegations. Because of the urgency of this matter, he requested them by yesterday, but so far, we have not received anything. No documents, no 

briefing, no responses at all. 

Why is that, Mr. Reid? 

Mr. REID. It’s my understanding, Congressman that the Department is pulling a response together, and I’ll have to verify, when 

I get back, exactly where it is and when it’s coming over. But I am 

fully aware they are developing the response requested from the 

chairman. 

Mr. KRISHNAMOORTHI. We want to know when we can expect to 

receive this information, sir. 

Mr. REID. All right, sir. I’ll take that back to the building as soon 

as I get out of here and we’ll track it down. 

Mr. MEADOWS. Excuse me. If the gentleman will yield for just a 

second? 

Mr. KRISHNAMOORTHI. Sure. 

Mr. MEADOWS. I mean, he makes a valid point. If there was a 

deadline for yesterday, and we’re talking about security clearance 

backlogs, and you’re having a hard time responding to a simple request from the ranking member, at what point are we going to get 

a response. Do you have staff here with you today? 

Mr. REID. Sir? 

Mr. MEADOWS. Do you have staff here with you today? 

Mr. REID. Do I have my staff here, sir? 

Mr. MEADOWS. Do you have some staff here with you accompanying you here today? 

Mr. REID. We have our legislative liaison, sir. 

Mr. MEADOWS. Let them check while we’re going through the 

interview process. I’m sure that we would love, both in a bipartisan 

manner, to have some kind of update on when he can expect it. 

Mr. REID. Yes, sir. 

Mr. MEADOWS. I’ll yield back and I’ll extend your time. 

Mr. KRISHNAMOORTHI. Thank you. Thank you, Mr. Chairman. 

And I echo the chairman’s sentiments. You know, we would, you 

know, respectfully request that these documents be provided within 

48 hours at this point. It shouldn’t take longer than that. 

Do you understand my request? 

Mr. REID. Understood, sir. 

Mr. KRISHNAMOORTHI. What risk does this pose when you allow 

criminals with those different behaviors, like the ones Director 

Payne described, to have access to classified information, sir? 

Mr. REID. I’m not sure if I understood the question. The suggestion is not that known criminals are granted clearances;the clearance-granting guidelines are consistent. The comment was aimed 


KING-6430 with DISTILLER
41 

at behaviors that occur once people are in the workforce, and they 

create certain violations and their clearances are revoked. It’s not 

the other way around. It wasn’t a comment that a murderer is 

granted a clearance. The comment is someone with a clearance exhibits a certain behavior that breaks the threshold that’s allowable. 

And it could be of any category. It’s not, you know, murder is not 

the only category. That’s obviously a very powerful category. There 

are other behaviors when the guidelines that one’s clearance will 

be suspended. 

Mr. KRISHNAMOORTHI. Now, if there’s a backlog in processing 

these people, and they have committed these behaviors and they 

have clearance, that poses a risk. So what kind of risk does that 

pose? 

Mr. REID. Well, again, there is not a backlog in identifying behaviors that break the threshold and raising those up for adjudication as soon as they are discovered. That is, that is not the context 

of the backlog. 

When we’re referring to a backlog, we’re talking about cases that 

are in an open investigation. Your commentary, Congressman, 

we’re talking about people that are in the workforce, in this case, 

with an interim clearance, they exhibit a certain behavior, it raises 

a threshold as soon as it’s reported. Those aren’t backlogged. 

Mr. KRISHNAMOORTHI. So somebody who has committed these behaviors could be on interim clearance, correct? It’s not automatically revoked or anything like that. It goes through an adjudication? 

Mr. REID. The revocation process is the same for everyone. If the 

behavior becomes known, when it becomes known, it is reported 

through the security managers and raised up for a decision. Again, 

there’s different categories of behaviors, but they all get acted 

upon. That is not a phenomenon—the backlog phenomenon we’re 

referring to is not associated with flagging of behaviors. 

Mr. KRISHNAMOORTHI. Mr. Phalen, let me just turn to you for a 

moment. Do you have an estimate of how often the government relies on interim clearances as a result of the current backlog? 

Mr. PHALEN. I have an estimate, based on information I’ve received from the Department of Defense. And I think Mr. Reid just 

mentioned, there’s as many as 200,000 today in the Department of 

Defense that are carrying an interim clearance, which is, essentially, all the national level, and to the extent we can capture them, 

local name checks and other electronic information that we can 

capture; plus no indication of misbehavior on the application to 

start with. And that allows them to put him in an interim clearance status pending the complete outcome. 

Mr. KRISHNAMOORTHI. Thank you. 

Mr. MEADOWS. I thank the gentleman. 

The chair recognizes himself for a series of questions. So, Mr. 

Phalen, would you say part of the reason why Mr. Reid is wanting 

to take over is because you have such an extraordinary large backlog in clearances. 

Mr. PHALEN. I think the backlog in clearances has been a significant catalyst in people asking how to reexamine, how to rethink 

the process of doing clearances. And certainly—— 


KING-6430 with DISTILLER
42 

Mr. MEADOWS. So what hope would you give Mr. Reid that you’re 

going to get it fixed? Because if you’re not—listen, I’m agnostic in 

this in terms of whether it’s you or Mr. Reid, but I am not agnostic 

in terms of it being both. 

Mr. PHALEN. No, I understand. 

Mr. MEADOWS. And so at some point, we’re going to have to get 

serious about the backlog. You know, Mr. Hodgkins says it was 

Groundhog Day all over again. And what I don’t want is another 

hearing a year from now to find that the backlog is still at 700,000- 

plus. So what are you doing to alleviate Mr. Reid’s concern? 

Mr. PHALEN. So fair question. So, number one, assuming we are 

left to our own devices here to work off the backlog and to work 

for the future, is to build the capacity and work within today’s 

guidelines to reduce the levels—- 

Mr. MEADOWS. So why haven’t you done that already? 

Mr. PHALEN. We are working on that. We’ve increased—— 

Mr. MEADOWS. I understand it’s a work in progress. 

Mr. PHALEN. Right. 

Mr. MEADOWS. But we’re at 700,000. 

Mr. PHALEN. Yes. 

Mr. MEADOWS. So why have you not put that—I mean, how can 

you be more aggressive, I guess, may be a better way to phrase 

that on alleviating some of the concerns? 

Mr. PHALEN. So continuing to grow that capacity, which, again, 

and we’ve seen from experience, that the growth in investigative 

capacity is the single biggest positive effect upon reducing the 

backlog and getting to timeliness. 

The second piece is working very hard, and we’ve gone through 

two cycles of this now, in finding opportunities to reduce the level 

of effort that is required without compromising our virtues, but reducing the level of effort required to complete a clearance. And I 

would say, the third thing that we are beginning to work on, and 

this is a collective agreement amongst all of the principals, and I 

think one or two of the speakers already mentioned, is that we 

need to look at the future and fundamentally ask ourselves how do 

we do this differently? 

Mr. MEADOWS. Well, but Mr. Hodgkins made the point, he said 

that you should have looked at that 10 years ago. 

Mr. PHALEN. Sir, I wasn’t in this role 10 years ago, but he’s 

right. I would perhaps argue we should have look at this longer 

than 10 years ago. I have found evidence—— 

Mr. MEADOWS. So what you’re saying is you’re new to your role 

and you’re taking this serious and you’re going to make an effort 

to accommodate and make sure that Mr. Reid gets the security 

clearances that he needs? 

Mr. PHALEN. The short answer is, that’s exactly why I came back 

into the Federal service to do that task. 

Mr. MEADOWS. All right. So Mr. Reid, let me come back, because 

I think there was a little bit of cross-talk between my colleague 

here to my right and what you were saying. He was talking about 

interim security clearance. You said that there was, what, 3 dozen? 

Several dozen? Several dozen? 

Mr. REID. Of the 200,000 interims that were granted by DSS in 

2017, there were some number—I don’t have it—I can look it up 


KING-6430 with DISTILLER
43 

here, 100-plus or so that fell into the revocation status. And within 

those categories, single and some double-digit numbers that refer 

to sexual misconduct, criminal behavior, that’s what I was trying 

to characterize to the Congressman. 

Mr. MEADOWS. So, but on an interim basis, would not a normal 

background check have picked that up? 

Mr. REID. Again, these are behaviors that are occurring after 

they are granted. 

Mr. MEADOWS. Well, but the very definition of interim is that 

you’re actually going into a setting where you’re getting a security 

clearance. And so as we look at that interim basis, that’s what I’m 

saying, your testimony and what he asked doesn’t seem to be jiving. Because I’ve got several employees that are now working for 

the administration that are on interim security clearances. They 

left my employment and they went to work where they had to get 

a security clearance. Well, you would think at that particular point, 

when they get an interim, they would do a normal criminal background check. So did you do criminal background checks on all of 

those people? 

Mr. REID. Everyone that is granted an interim is granted an interim only when they submit a request for a clearance. And as Mr. 

Phalen said, if their initial screen comes up with nothing derogatory, and I don’t want to get technical, but if they meet the bar of 

no derog, they can be granted an interim clearance. And it depends 

on what job they’re in. It’s not uniform across even DOD—— 

Mr. MEADOWS. No, I get that. 

Mr. REID. They’re still—their investigation goes into the queue. 

And that investigation will run its course and come back final, once 

it’s adjudicated. Within that time frame, if people misbehave—— 

Mr. MEADOWS. This isn’t any first rodeo, I get that. 

Mr. REID. Okay. 

Mr. MEADOWS. I understand the process. 

Mr. REID. I’m sorry, if I’m not understanding—— 

Mr. MEADOWS. What I’m saying is, is before you give them an 

interim clearance, do they pass just a normal criminal background 

check? 

Mr. REID. An initial check, yes, sir. 

Mr. MEADOWS. All right. So every one of those people that he had 

on the list, passed a criminal background check? 

Is that your—— 

Mr. REID. Yes, sir. The initial checks. The initial layer of checks, 

with nothing derogatory, you may grant them an interim. 

Mr. MEADOWS. All right. And so how do you find this? Was it 

when they got their security clearance? 

Mr. REID. The behaviors occurred after they were granted clearance. 

Mr. MEADOWS. So you had murderers and all of that after—— 

Mr. REID. The examples of misbehavior were in the context of 

Mr. Payne’s comments, things that were occurring to people that 

had been granted—— 

Mr. MEADOWS. So they weren’t missed in your interim clearance? 

Mr. REID. Correct. 

Mr. MEADOWS. Every one of them? 

Mr. REID. Best of my knowledge, sir. 


KING-6430 with DISTILLER
44 

Mr. MEADOWS. All right. Well, that’s why it’s imperative that you 

get the kind of information to the ranking member that he requested. And so I assume—I’ll give you just a second to turn 

around to your staff. Is somebody working on that to get us a response? 

Mr. REID. Working on it, sir. 

Mr. MEADOWS. All right. Very good. 

So Mr. Reid, what makes you think that you can do it better 

than Mr. Phalen? 

Mr. PHALEN. I appreciate that question, sir. 

Mr. MEADOWS. This is softball. This is your chance to hit it out 

of the park. 

Mr. REID. I appreciate it. 

Mr. MEADOWS. And if you swing and miss, it’s going to have consequences. So go ahead. 

Mr. REID. Don’t you know it. I appreciate it. 

It’s not 10 years ago. What’s different now, and what’s only in 

the last few years made available to us, is the ability to fuse multiple sets of data, data that have been put in place as a result of 

incidents, some of which were referred to, Navy Yard, Fort Hood 

shooting, Snowden, Manning. 

We have a large enterprise within DOD for an Insider Threat 

Program. We have, at the component level, 43 subcomponents in 

the Department have Insider Threat monitoring programs. 

We have a continuous evaluation program that I’ve been exercising on a slice of the Department of about 500,000. We’re going 

to be at a million very quickly. We bring in data sets—— 

Mr. MEADOWS. So now is this the check that maintains the clearance that you’re talking about it? 

Mr. REID. The check that used to maintain the clearance, right, 

correct, 

Mr. MEADOWS. This is not the initial one, this is actually on the 

maintenance? 

Mr. REID. Well, it could be both. What we are professing—— 

Mr. MEADOWS. I understand what it could be. I’m asking what 

it is. 

Mr. REID. Today we have used our continuous evaluation programs that we’re conducting only on a sample basis to actually 

highlight behaviors that triggered revocations far in advance of 

when the next periodic review would have been. That’s proven 

itself. Our continuous evaluation program, we ran pilots over the 

last several years. We took a completed investigation. We took a 

CE data set and said, ‘‘could you have done this investigation the 

same way using CE?’’ And we got over 95, 96 percent correlation 

of things that were found. So we’ve been proving—— 

Mr. MEADOWS. So do you have a technical background? So are 

you an IT guy? 

Mr. REID. Me, sir? No, sir. 

Mr. MEADOWS. Okay. 

Mr. REID. We have IT guys. 

Mr. MEADOWS. Do you know what blockchain is? 

Mr. REID. I’m not 100 percent familiar with that term. 


KING-6430 with DISTILLER
45 

Mr. MEADOWS. All right. Mr. Phalen, let me skip before I let you 

finish off here. Because, you know, he’s making some points, and 

so at what point would you disagree with that? 

Mr. PHALEN. To the points he made, I do not disagree with. 

Mr. MEADOWS. So you think that he should have that ability? 

Mr. PHALEN. So I think he has that ability. He has that responsibility right now to conduct continuous evaluation. 

Mr. MEADOWS. So if we took resources from you and gave it to 

him, are you saying that he could do a better job than you could? 

Mr. PHALEN. No, sir, I’m not saying that. 

Mr. MEADOWS. Okay. I just want to make sure. That was a softball to you. 

Mr. PHALEN. Okay. I misunderstood the question, sir, I’m sorry. 

And I’m not sure if the Representative from Illinois is a Cubs fan 

or not. 

Mr. MEADOWS. He is. You just—not a swing and a miss. You did 

good. Go ahead. 

Mr. PHALEN. Okay. What I believe Mr. Reid is referring to is the 

use of continuous evaluation to monitor individuals near real time 

in the workplace. This is different than what is today’s model, 

which is to use periodic reinvestigations at the 5- or 10-year level, 

which is something that is done externally by my organization. 

I believe that much of that work can be supplanted by, after due 

consideration by much of the continuous evaluation that is required 

and being done within the Department of Defense, the intelligence 

community and a lot of cleared industry right now. And that that 

can be leveraged against the requirement to do periodic reinvestigations, and that those resources that are currently involved in 

periodic reinvestigations within my organization, or in any investigative organization, can be redirected towards the initial evaluations to work with those people who have not yet been cleared and 

focus our energies on that. 

Mr. MEADOWS. Okay. 

Mr. Evanina, I got a note here that said, I guess the rollout of 

the continuous monitoring program that was originally for, I guess, 

October of 2016, that you were going to roll it out in phases, or it 

was being rolled out in phases. I mean, what are the barriers to 

making sure that it goes government-wide? 

Mr. EVANINA. Sir, that’s a good question. None. We are completely on schedule with our CE program. And it’s important to 

back up a sec and talk—— 

Mr. MEADOWS. Hold on. We may have news breaking here. 

You’re saying there are no barriers and you’re on schedule? 

Mr. EVANINA. We are on schedule. 

Mr. MEADOWS. That is, let me just applaud you, because that’s 

probably one of the first times I’ve ever had in one of these hearings where I’ve gotten both ‘‘there are no barriers,’’ and ‘‘we’re on 

schedule.’’ So kudos to you. Go ahead. 

Mr. EVANINA. Thank you, sir. But it was not without pain,I’ll 

grant you that, to get to where we are now. But I think we need 

to step back a little bit and talk about what continuous evaluation 

is. We decided a few years ago to split it up into government. And 

what DOD’s continuous evaluation program has been successful at 

this point is germane to DOD. And what Mr. Phalen and BIB are 


KING-6430 with DISTILLER
46 

doing is germane to their processes. But we were doing at NCSC 

is providing a service to all executive branch agencies to opt into 

our continuous evaluation program to allow agencies to use our 

services for a couple reasons: Efficiencies of scale and cost, as well 

as provide agencies outside the intelligence community who don’t 

have the ability to procure these services to have the opportunity 

to get them from us, whether they are one of the top seven or eight 

databases we check. So this is in all-of-government executive 

branch program that we’re facilitating. 

Mr. MEADOWS. Mr. Hodgkins, I’m going to ask you one question 

before I recognize the gentleman from Illinois for a second round 

of questions. So we talked a little bit, or you mentioned in your testimony blockchain. And for those of us that are not technically 

savvy, fortunately, I have a brother that can tell me about 

blockchains and the secure way that we can communicate and compartmentalize that. So as we look at that—other that blockchain, 

what are some of the other technology aspects that we could actually deploy, whether it is at DOD or OPM that would help streamline this? 

Mr. HODGKINS. Well, the other suggestions I made in my testimony referred to artificial intelligence. So the—— 

Mr. MEADOWS. For most of us, that’s a danger. We get concerned 

when we hear about artificial intelligence. It is kind of—well, I 

won’t go there. 

Mr. HODGKINS. The commercial analogy I can point to, sir, is the 

financial services and how they monitor your credit. And if there 

is behavior that appears to be fraudulent on an almost real-time 

basis, you’re notified of that. They are asking you, is this you making this transaction, if you travel somewhere out of the ordinary. 

Mr. MEADOWS. So why have we not deployed that today in this 

realm? 

Mr. HODGKINS. Well, as the other panelists have identified, they 

are beginning to roll that out, but it is something that industry 

called for over 10 years ago, suggesting that that move to replace 

the periodic reinvestigation process eventually began as, I think 

Mr. Phalen noted, and Mr. Reid noted, that there are high degrees 

of compatibility, or alignment with the manual reinvestigation of 

an individual and using the automated processes and what they 

find, which has always been the question in using this capability. 

Do they find the same things? Will we still find the same bad actors, and identify them for the same reasons? 

So it is heartening to hear that that is the direction they are 

moving and that they are making advances and there are no obstacles. But using those capabilities in the way the financial services 

market does for credit monitoring, for any individual, is an example we would point to, an analogy we would point to, about how 

this could be deployed to look at things like criminal histories, although those are poorly automated across the country, particularly 

at the State and local level. We can look at marital records; we can 

look at financial records; and then we can look at other databases 

that are out there, either commercially available or in the possession of the government. 

And Mr. Evanina noted they are looking at several, and we can 

continue to identify and tie into and bring online additional data 


KING-6430 with DISTILLER
47 

sets that would reveal other flags about someone who holds a clearance, and we think we should continue to push out in that direction. 

Mr. MEADOWS. All right. So the chair recognizes the gentleman 

from Illinois for a second round of questions. 

Mr. KRISHNAMOORTHI. Thank you, Mr. Meadows. 

Mr. Phalen, as the NBIB director, I don’t think it is an exaggeration to say that you are a key player in our national defense and 

counterintelligence apparatus, making sure that the American people can trust secrets to remain secure is a vital task. Now, the security clearance process, as we all know, relies heavily on the proper completion of the standard form 86—SF–86 form. And as you 

know, complete valid and accurate answers to the questions on this 

form are vital for the security clearance process. 

What does the NBIB, or any other background investigative 

agency, do to ensure that the information on an SF–86 form is accurate? You don’t take applicants merely at their word, correct? 

Mr. PHALEN. Generally not. Much of the process is to validate 

that the information on the form is correct, both in terms of locations they worked, locations they lived, their claims of either some 

or no criminal involvement. Essentially they are explaining their 

life on this form, and our goal is to go validate that they have been 

correct in that, and to seek other information where it appears that 

it may be incorrect. 

Mr. KRISHNAMOORTHI. And, obviously, everybody makes mistakes. Let’s say I made a mistake on the SF–86 form. I’d have a 

chance to correct it. Is that not right? 

Mr. PHALEN. So in the subject interview when an investigator is 

speaking to applicant, going over the form, and talking to them 

about things, if there is a mistake to be made—that has been 

made, it can be corrected. And the agent will put that into the investigative report and that will be captured. What that mistake is 

may be dispositive of how much further we’re going to dig. If it’s 

something simple like the middle initial being wrong or I got the 

dates wrong in the years I was in high school, not a big deal. But 

if I forgot to mention a significant felony conviction, that would be 

far more substantive and we would want to go pursue that a lot 

further. 

Mr. KRISHNAMOORTHI. Ah-ha. Forgive me, I’m new to government. I spent most of my career as a small businessman, so I’m 

going to ask you some really perhaps some simplistic questions in 

your world. But what if I were to make several errors with my SF– 

86 form, not just one, but a bunch? What would happen in that instance? 

Mr. PHALEN. Again, it would depend on what kind of errors they 

were. One of the concerns we have had is in the current form the 

electronic SF–86, is to use technical talk, a little bit kludgy and can 

be prone to some level of people making mistakes, and so we take 

that into account. In fact, we are working together with other elements of the government to build an new electronic application 

form that is far more user friendly, and will lead to less errors on 

the front end, and even perhaps do some fact checking on behalf 

of the applicable doing it. To answer your question, if it was a 

number of errors, it would depend. 


KING-6430 with DISTILLER
48 

Mr. KRISHNAMOORTHI. I mean, how many do—what if there are 

errors, even in my correction, how many do-overs do I get? 

Mr. PHALEN. Fair question. Ultimately, we would capture the information as much as we could capture from the applicant and try 

to verify it. At some point, we will make a decision to send the information to the adjudication facility that it makes the ultimate decision about whether an individual gets the clearance and let them 

judge for themselves as to whether they think this is too much or 

not too much. 

Mr. KRISHNAMOORTHI. I understand. This isn’t a hypothetical situation. As you know, senior White House advisor Jared Kushner 

submitted four addendums to his security clearance paperwork 

after his original SF–86 forms contained more than 100 errors and 

omissions. Mostly related to the failure to disclose foreign contacts. 

Retired General Flynn failed to disclose payments of over $600,000 

for his work representing authoritarian regimes in Washington. 

Both were approved for their security clearances. What would you 

do if one of your employees approved such an incomplete form? 

Mr. PHALEN. So I’d un—working in the hypothetical, without 

using any particular subjects on this, if the investigator did not— 

if the applicant said, I didn’t do this or I never—or failed to report 

it, the question would be how does investigator find it was failed 

to be reported? And if the investigator discovered that it had been 

failed to be reported, the first step would be to go back and try to 

understand what—why it was missed and what was missed and 

capture it again. What I don’t know in the particular cases you’re 

talking about is we have no visibility in our organization to any of 

those activities. Those are done by other organizations, what that 

meant. But there would be a point when an adjudication facility, 

an adjudication organization, has to take into account those mistakes. It is not our decision to make that decision. It is not in our 

purview to make that decision. We simply report what we know 

and how many addendums there may be to a report, to report that. 

Mr. KRISHNAMOORTHI. Is there ever an instance where someone 

can command you to fast-track the verification of an SF–86 form? 

Mr. PHALEN. It depends how you define fast-track, sir. 

Mr. KRISHNAMOORTHI. Cut corners, fast track, get it through, 

ram it through the system. 

Mr. PHALEN. Cutting corners, no. So if people ask us to do 

things, to put things ahead of queue, yes, we do that all the time. 

To cut corners, we do not do that. 

Mr. KRISHNAMOORTHI. Can you recall if there’s ever been an application having to submit four addenda detailing over 100 errors 

and omissions being able to maintain their security clearance once 

those errors and omissions had been identified? 

Mr. PHALEN. I will caveat that by saying I have not seen the 

breadth of all the applications, but I have never seen that level of 

mistakes. 

Mr. KRISHNAMOORTHI. Neither have I. It’s clear that there is a 

lot more ground to cover on this. Mr. Chairman, you are doing a 

great job here. I hope that you will convene further hearings on 

this subject, because it really bears investigation. Thank you, sir. 

Mr. MEADOWS. I thank the gentleman from Illinois. 


KING-6430 with DISTILLER
49 

The chair recognizes himself for a series of follow-up questions. 

So Mr. Reid I interrupted you when you were making your closing 

remarks on why you would do such a fantastic job, so I will go 

ahead and let you finish. 

Mr. REID. Thank you, Chairman. To continue, the DOD plan we 

talked earlier about goals, our plan is to alleviate the burden on 

the backlog in the near term by shifting that work into an alternative process, focusing on the secret level investigations. We submit about 700,000 investigative cases to NBIB every year, about 

two-thirds of those are at the secret level, initial or reinvestigation. 

Based on the strength of the continuous evaluation, automated 

records checked and the fusing of all these data sets that we have 

already built within the Department to monitor performance and 

behaviors and spot anomalies, we are prepared, as early, starting 

in January, to work with the executive agents to get approval to 

use these systems as systems of records to meet the performance 

requirements, the Federal standards required to approve a secret 

level clearance. 

Doing that—so that process we’ll start in January, we envision 

within a few months, having those approved. We turn off the spigot 

of new secret cases. Again, this is about 500,000 a year that go to 

NBIB. We will incrementally do this, alleviate the pressure valve 

on their system, allowing the capacity they already have to focus 

on the workload they already have and to prove this system as we 

build it. It’s a phased process focusing initially on the secret. 

More than 90 percent of NBIB secret cases are DOD. This is very 

much a DOD issue. Almost every servicemember—in fact, every 

servicemember is cleared at the secret level upon entry into the 

service. So we have a very high volume, and we feel like the risk— 

the risks associated with this, knowing that we have proved and 

piloted systems, it is worth taking the next step to take the pressure off. 

Mr. MEADOWS. Tell me about the pilot. 

Mr. REID. We ran pilots for several years in DOD. 

Mr. MEADOWS. How many people? 

Mr. REID. Total that we piloted actual cases on, it is in the hundreds of thousands. And we have enrolled—— 

Mr. MEADOWS. And you were able to complete those how quickly? 

Mr. REID. We put the pilots in place, we ran them for periods of 

6 months at a time. For instance, initially, we took a slice of people—— 

Mr. MEADOWS. So how much faster than Mr. Phalen is doing it? 

Mr. REID. Well, they are not doing it at all presently but we 

are—— 

Mr. MEADOWS. Because—I would beg to differ on that particular 

thing. So how much faster than Mr. Phalen? Mr. Phalen, are you 

doing that? 

Mr. PHALEN. So, I would probably need to clarify whether we are 

talking about initial investigations or periodic reinvestigations. 

Mr. MEADOWS. I think we are talking periodic re—— 

Mr. REID. Initially, secret level periodic going within 2 years to 

initial secret. 

Mr. MEADOWS. Right. 


KING-6430 with DISTILLER
50 

Mr. PHALEN. So currently we are running the same automated 

checks through our system, what we have to do under today’s process. 

Mr. MEADOWS. So you’re shaking your head no. Is he not doing 

the same automated checks? You are both sworn testimony. So is— 

Mr. Phalen, are you doing those automated checks? 

Mr. PHALEN. When you put their system and ours side by side, 

we are doing the same automated checks. 

Mr. MEADOWS. Mr. Reid, you’re shaking your head no. 

Mr. REID. When we implement the DOD plan, which we want to 

start in January, the initial phase of that is to gain additional approvals. That’s the part where I said what we are proposing to do 

isn’t that same as what’s being done today. 

Mr. MEADOWS. So you pilot program—is he doing the same 

thing—in your pilot program, did he do the same thing? 

Mr. REID. Today those things are being done based on the pilot. 

Mr. MEADOWS. Yes or no, just tell me yes or no. In your pilot program is he doing the same thing that you did in your pilot program? 

Mr. REID. Not to my knowledge. 

Mr. MEADOWS. Mr. Evanina, is he doing the same thing? 

Mr. EVANINA. Sir, I’m not sure of the fidelity of both programs 

to answer. 

Mr. MEADOWS. Sure, I’m all ears. 

Mr. REID. We are not using these systems now as systems of 

record to complete investigations, and neither, I believe, is NBIB. 

We have data available. We have employed methods of automated 

records, checking and seeing. We have not implemented those as 

a system that can grant, one, a completed investigation. That is the 

step that we want to take in—— 

Mr. MEADOWS. So how do you know that that will work? 

Mr. REID. I’m sorry? 

Mr. MEADOWS. How do you know that that will work? 

Mr. REID. Because we have run the test and run the pilots. We 

feel—— 

Mr. MEADOWS. No. How much quicker are you doing things than 

OPM? 

Mr. REID. We will implement this starting in January, within the 

first 12 months, we have a three-phase plan. By the end of the first 

phase, we believe we will reach a point where there will be no more 

secret reinvestigations, which is about 300,000 a year that will not 

go to NBIB, made the first year. 

Mr. MEADOWS. A critical thing, you said ‘‘we believe.’’ What 

quantitative data do you have to support your belief? 

Mr. REID. The data would be based on the pilots, and the testing 

that we’ve done, and our confidence in our executive agents. 

Mr. MEADOWS. Confidence is not quantitative. 

Mr. REID. You’re correct, sir. We have tested these systems, and 

we believe they are ready to be implemented. We have to work 

with the executive agents to gain their approval to implement 

them. 

Mr. MEADOWS. Mr. Phalen? 

Mr. REID. It will be done much faster. 


KING-6430 with DISTILLER
51 

Mr. MEADOWS. Mr. Phalen, do you agree with that? Can they do 

it better than you can do it? Here is the thing, is my problem, and 

actually it has been mentioned over here, moving something from 

one bucket of the government to another bucket of the government 

does not necessarily create more efficiency. It—generally, it does 

not. And so I am skeptical that we are going to get all these unbelievable efficiencies just by moving it from one government agency 

to another. And what we’re going to do is end up with duplicative 

services, and I’m all about shared services, you can Google it and 

you can figure out where I am on that. I am all in. But what I’m 

not about is allowing DOD and OPM to do the same thing when, 

Mr. Phalen, you said that the basic problem that you have is getting talent to actually do these checks. Is that correct? 

Mr. PHALEN. To do the checks that involve a human-on-human 

interaction, yes. 

Mr. MEADOWS. So how are you going to fix that, Mr. Reid? 

Mr. REID. The efficiency, sir, it is a three-part process. There is 

submission, investigations and adjudications. 

Mr. MEADOWS. So would you submit that DOD is a model of efficiency? 

Mr. REID. I’m suggesting that putting submissions, investigations 

and a adjudications under a single agency is inherently more efficient because of the ability—— 

Mr. MEADOWS. If that’s your argument, then we would put it all 

under OPM. 

Mr. REID. Well, sir, because the level of data that we intend to 

bring into this process resides within our components and there’s 

data—monitoring data that is not readily exportable to be 

outsourcing the readiness of the Department of Defense. We have 

an opportunity because of the maturation of these programs, these 

insider threat and CE programs, this is the first opportunity we’ve 

have to bring all of this under an integrated architecture. And 

it’s—— 

Mr. MEADOWS. So in your pilot, what did you figure out that you 

didn’t do well? 

Mr. REID. We—it was mentioned earlier, solely relying on electronic data sets, there are gaps in State and local law enforcement 

flags that, to the best of our piloting, we can’t reach out into every 

county jurisdiction in real time and find out something happened 

last night. Okay? 

So the next step is to continue to bring in all—as many sources 

as we can, and with the right algorithms and we are using our innovation offices to develop these processes, to see how far you can 

go before you have to actually get to somebody knocking on somebody’s door. We’ve never proven that nobody ever needs to knock 

on anybody’s door. But with the secret level of checks—the top secret is definitely harder, but at the secret level, we have enough 

experience in this to be prepared to recommend to the executive 

agents that it is a suitable alternative process to meet the intent 

of the Federal guidelines doing the checks to verify the veracity of 

the individual’s application and the reliability of the individual, a 

large majority of that at the secret level initially. 

We believe we can get further, but we’re focused on secret up 

front. That’s the largest piece of work we give them, that that data 


KING-6430 with DISTILLER
52 

is in the Department already, we don’t think it’s necessary to build 

a separate process to send it somewhere. We are building the entire end-to-end IT system, that was already the DOD task from the 

review that created NBIB. That is a DOD system. It is a DOD system with DOD data. The missing piece is our investigative responsibility relies there. But it is not a bifurcation. They do 100 agencies. There are 23 other agencies that do what we’re asking to do. 

Mr. MEADOWS. Mr. Phalen, I mean, Mr. Reid’s making a compelling case. I mean how do you respond? 

Mr. PHALEN. I respond on a couple of threads. I think we are in 

complete agreement. Where I would concur with what his statements are is that in the realm of the periodic reinvestigation, there 

is information within each agency that has responsibility for the 

folks in that agency that are cleared, whether staff or contractor. 

They all have information that generally is not available to our investigators when they are doing—— 

Mr. MEADOWS. So you’re saying that they are better suited to do 

that? 

Mr. PHALEN. I think any agency is better suited to work on those 

and people that are already inside the organization. They will have 

a better optic—— 

Mr. MEADOWS. So what are they not better suited at? 

Mr. PHALEN. I defer whether it is better suited or not better suited, but for—— 

Mr. MEADOWS. No. I’m asking you for your opinion. I mean, Mr. 

Reid gave me his opinion very clearly. If not, you’re going to have 

a missed opportunity here. I want to have your opinion. 

Mr. PHALEN. We have both an electronic and a geographic reach 

that is across this country, and for any initial investigation at 

whatever level, tier one through tier five, we have the ability to 

reach out, real or near real time, to find information. They don’t 

have that capacity today. 

Mr. MEADOWS. How would you get that, Mr. Reid? 

Mr. REID. We have 43—40-something field offices under the Defense Security Service in the United States, we have combatant 

commands in investigative capacities stationed all over the world. 

Mr. MEADOWS. But that doesn’t make you efficient. 

Mr. REID. No. But that’s how we would cover the same ground. 

We have field offices, others have field offices, we have a robust—— 

Mr. MEADOWS. So Mr. Phalen, I may have misunderstood you. Is 

it your presence that allows you to do that, that you have multiple 

locations, because that’s what Mr. Reid is saying. I didn’t think 

that’s what you were referring to. 

Mr. PHALEN. So it is both electronic presence where we can get 

information electronically, and it is physical presence at 86 field offices around the country, and folks stationed at overseas locations 

to do this work. And that’s what allows us to get the local records, 

and to what is a key piece, particularly to a periodic reinvestigation 

as it exists today within the process and any initial investigation, 

that there is a human-to-human interaction at wherever that person is, and that is literally geographically around the country. And 

we have that presence today with accredited, training, fully capable 

investigators, both staff and contract. 


KING-6430 with DISTILLER
53 

Mr. MEADOWS. So how long, Mr. Reid, would it take you to get 

up to speed to match that capacity? 

Mr. REID. So our plan is the 36-month plan. We would phrase 

in incrementally over the 3-year period, so by the end of year 3, 

our plan would be complete. We would have the capacity and the 

processes. 

Mr. MEADOWS. So how much quicker will you be able to do background checks for DOD, Mr. Reid? 

Mr. REID. We would eliminate the reinvestigation, so that’s a 

zero. 

Mr. MEADOWS. I’m looking for—— 

Mr. REID. Let’s remove that completely. The goals for the government—— 

Mr. MEADOWS. You don’t remove it, you just move it. 

Mr. REID. Well, it just happens contemporaneously. 

Mr. MEADOWS. But if Mr. Phalen had the same kind of operation, 

where it is ongoing, similar to what Mr. Hodgkins is talking about 

from the technology standpoint, I mean it’s a distinction without a 

difference. 

Mr. REID. We see no reason why we cannot hold ourselves to the 

standards and the goals that we set, which for instance is 80 days 

for a top secret clearance that is currently taking 350. 

Mr. MEADOWS. So your sworn testimony today is that if we allow 

you to go forward and do this, and we appropriate the dollars to 

do this, that you can do this at less cost than Mr. Phalen, and 

make sure that you get it done in 80 days versus 300? 

Mr. REID. The cost savings and cost avoidance would be and the 

reduction of reliance on field investigative work, which is the most 

resource intensive. Our testing shows us that we can go a very long 

way towards eliminating, but not completely getting rid of it. The 

80-day standard, which has been achieved in government since it 

was established, it is being frustrated by the lengthy field work. So 

our rationale is if you get rid of the reliance on the field work, even 

increased field workers is still more field work. The goal—the DOD 

objective is to reduce, as much as possible, a 90-plus percent level, 

the work effort required by a field investigator, and our planning 

basis is that lowers, that’s a cost avoidance issue and there is it 

no reason to think we cannot operate within the standards that 

we’ve already set. 

Mr. MEADOWS. Mr.—so let me go ahead bring this to a close, and 

I guess with a few to-do items. 

Mr. Phalen, I would like for you, within a 30-day period, to get 

back to this committee, what are the three major concerns that you 

would have, other than just shifting responsibility from OPM, what 

are the three major concerns that you have in allowing Mr. Reid 

to go forward with his plan? All right? Can you do that? 

Mr. PHALEN. Yes, sir. 

Mr. MEADOWS. Mr. Reid, you’ve had probably more direct questioning today than perhaps you’re used to. And call me, you know— 

we get all kinds of people that come in and testify on a regular 

basis, and I hear every wonderful story on why it is going to be better, and very seldom do I hear a comment like Mr. Evanina gave 

me on the excellent work that they are doing and the fact that they 

are on time and not having roadblocks. And yet, I get to visit FedVerDate Nov 24 2008 12:19 Jan 08, 2018 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 H:\27761.TXT APRIL

KING-6430 with DISTILLER
54 

eral workers in a number of agencies across the spectrum, and we 

have great Federal workers. So it is not to question anything in 

terms of your intent. My question is, is sometimes long before what 

you believe that you can do and actually doing it, there are all 

kinds of roadblocks that you run into. Some of those many times 

are financial. And so the last thing I want you to do is to give 

sworn testimony here today only to find out that all we’re doing is 

shifting it from one agency to another, and that you’re going to 

come in and ask me for more money and more resources to meet 

that 80-day goal that you have in mind. 

So here is my three asks of you: I want you to identify what duplicative services that you would potentially have with OPM if you 

instituted your plan policy. The other two things is what two 

things do you not—would you not do as well as OPM under this 

rollout. Is that something you could provide to this committee in 

30 days. 

Mr. REID. Yes, sir. 

Mr. MEADOWS. And the quicker you can get that to me, because 

decisions are going to be made on NDAA, even before those—I 

mean, we’re going to conference here soon. And so, Mr. Reid, to be 

fair to you, I want you to make a compelling case, even if you need 

to come in and do a briefing with our committee on why it is important to you that things perhaps—because I can tell you your staff 

has been passing notes back and forth, they are going back and 

forth doing that, don’t ever play poker, but in doing that, they’ve 

got all kinds of things that they wish you had said or hadn’t said 

or as we look at that—so as you do that, as your team gets together, I would encourage you to actually come back and brief our 

committee. Mr. Phalen, I would encourage you the same way. 

There’s going to be some decisions that are made very quickly here 

on this particular issue. I apologize to both of you that most of the 

focus has been over here, but sometimes that’s the way that things 

happen when you have this. Again, I appreciate both of you being 

here as witnesses. The only item—and I see they’ve passed you a 

note so are we—when can the ranking member expect those documents? 

Mr. REID. So—— 

Mr. MEADOWS. Within 80 days? 

Mr. REID. Friday, sir, Friday. 

Mr. MEADOWS. Friday is fine. That would be great. I appreciate 

it. 

I appreciate all of your testimony. Listen, there is nothing more 

important than getting this right, and getting it right quicker than 

what we’re doing now, Mr. Phalen. I mean, the backlog is, quite 

frankly, unacceptable. And we wouldn’t be having the hearing 

today if I wasn’t hearing it from across the board. That is not to 

impugn the fine workers at OPM. I understand you didn’t create 

the bureaucracy, but you are here to fix it. And if we can get this 

fixed, even if it is in a combination of things, I’m all in and all ears. 

But I thank you all. If there is no further business, the committee 

stands adjourned. 

[Whereupon, at 3:30 p.m., the subcommittee was adjourned.] 


KING-6430 with DISTILLER
(55) 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD


KING-6430 with DISTILLER
56 


KING-6430 with DISTILLERInsert offset folio 24 here 27761.024

Opening Statement 

Ranking Member Gerald E. Connolly 

House Committee on Oversight and Government Reform 

Subcommittee on Government Operations 

Hearing on "Security Clearance Investigation Challenges and Reforms" 

October 11, 2017 

Thank you, Mr. Chairman, for holding this hearing to examine both the current backlog in 

federal security clearance investigations and potential reforms to the background investigation process. 

Last month, the National Background Investigations Bureau (NBIB) reported a backlog of 

approximately 700,000 security clearance applications. This backlog and the lengthy wait times for 

security clearances is unacceptable. It is critical that the NBIB address this problem, and important for 

Congress to provide it with all of the necessary resources and support to do so. 

Since it first began operating on October 1, 2016, the NBIB has been tasked with the challenge 

of not only improving the federal government's process for conducting background checks, but also 

bringing down the growing security clearance backlog. In the NBIB's first year in operation, my office 

received more than three times as many cases as we received in the preceding year where constituents 

sought our assistance because their background check was seemingly stuck at the NBIB .. 

Since its creation, the NBIB has made several enhancements to the security clearance 

investigation process. For example, it developed a continuous evaluation program for monitoring an 

employee's or contractor's eligibility to maintain access to classified information or hold a sensitive 

position. 

And earlier this year, the NBIB created a new law enforcement unit to improve the 

government's ability to gain access to the criminal history records of state and local law enforcement 

agencies. This is an important change that could eliminate a critical gap in how background checks 

were previously conducted. That gap has enabled an unknown number of people to gain security 

clearances they probably should not have received. The importance of gaining access to criminal history 

records became all too clear on September 16,2013, when Aaron Alexis, a federal subcontractor with a 

Secret level clearance, entered the Washington Navy Yard, killed twelve people, and injured four others. 

During the investigation into that incident, we learned that the background investigation of Mr. Alexis 

failed to identify his history of gun violence. The local police record of his 2004 firearms arrest had 

never been provided to federal investigators. Improving the level of communication between local law 

enforcement agencies and federal background investigators could prevent future tragedies like the one at 

the Washington Navy Yard. 

While the NBIB has made some gains in improving the background investigation process, it has 

struggled to reduce the heavy backlog of security clearance applications. The current backlog is largely 

due to termination of the contract that U.S. Investigations Services (USIS) had with the Office of 

Personnel Management (OPM) to conduct background checks. USIS had previously performed the bulk 

of background investigations for OPM, but was caught defrauding the federal government on a massive 

scale: allegedly dumping 665,000 background check cases, indicating to OPM that the background 
57 

Æ 


KING-6430 with DISTILLERInsert offset folio 25 here 27761.025

checks had been complete when the proper reviews had not taken place. OPM had no choice but to 

tenninate its contract with the company. At the time ofUSIS's tennination, it held 60% of the federal 

government's investigative capacity for background checks. OPM remains unable to fully replace the 

significant amount of capacity that was lost with USIS's tcnnination. 

Various proposals have been put forward to address the backlog, the most notable of which is a 

Department of Defense (DOD) plan that would strip the NBIB of its background investigation activities 

for DOD personnel. Most recently, the Senate has included language in its draft of the National Defense 

Authorization Act (NDAA) for Fiscal Year 2018 that would adopt DOD's plan. 

The DOD plan raises serious concerns, namely that it could potentially increase, rather than 

decrease, the existing backlog for security clearances. According to the DOD plan, it would take the 

Department at least three years to assume responsibility from the NBIB for background checks of its 

personnel. During this three-year transition period, the NBIB would be expected to use its limited 

resources to help the DOD build the capacity required to perfonn its own background checks, which 

may result in additional backlogs at the NBIB. The NBIB has examined DOD's proposal and found it 

has the potential to ''exacerbate the current investigative backlog." OPM has also examined DOD's plan 

and reached the same conclusion. Outside the tederal government, policy organizations, ranging from 

the Infonnation Technology Industry Council to the Professional Services Council, have reported that 

DOD's plan would "cause further delays." 

Transferring a significant portion of the NBIB's responsibilities back to DOD also risks 

returning to a process that was previously found to be inefficient. Prior to 2005, DOD was responsible 

for conducting background investigations of its own personnel. During that time, the Government 

Accountability Office (GAO) issued a series of reports that raised concerns over the quality and 

timeliness of those investigations. The most significant of those reports was released in 1999 in which 

GAO found that "DOD personnel security investigations are incomplete and not conducted in a timely 

manner." DOD's failure to adequately handle its own security clearance investigations was the primary 

reason that this responsibility was transferred to OPM in 2005. 

Congress needs to seriously examine the best means to reduce the current backlog, but we must 

do so in a way that balances the need to expedite the process without sacrificing the quality of those 

investigations. The Navy Yard shooting and high profile national security leaks such as the one carried 

out by the contractor, Edward Snowden, highlight the need for ensuring that background checks are 

conducted in a thorough and efficient manner. 

I want to thank the witnesses for testifying today. I look forward to hearing from each of you on 

ways we can strengthen the federal government's capabilities when it comes to security clearance 

investigations. 

Thank you, Mr. Chainnan. 

Contact: Jennifer Hofflnan Werner, Communications Director, (202) 226-5181.