U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

49–010 

" ! SENATE 113TH CONGRESS

2d Session 

REPORT

2014

113–276 

Calendar No. 606 

SECURITY CLEARANCE ACCOUNTABILITY, 

REFORM AND ENHANCEMENT ACT 

R E P O R T 

OF THE

COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

TO ACCOMPANY

S. 1744 

TO STRENGTHEN THE ACCOUNTABILITY OF INDIVIDUALS INVOLVED IN MISCONDUCT AFFECTING THE INTEGRITY OF 

BACKGROUND INVESTIGATIONS, TO UPDATE GUIDELINES FOR 

SECURITY CLEARANCES, AND FOR OTHER PURPOSES 

DECEMBER 1, 2014.—Ordered to be printed 


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(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

GABRIELLE A. BATKIN, Staff Director 

JOHN P. KILVINGTON, Deputy Staff Director 

MARY BETH SCHULTZ, Chief Counsel 

LAWRENCE B. NOVEY, Chief Counsel for Governmental Affairs 

TROY H. CRIBB, Chief Counsel for Governmental Affairs 

KEITH B. ASHDOWN, Minority Staff Director 

CHRISTOPHER J. BARKLEY, Minority Deputy Staff Director 

ANDREW C. DOCKHAM, Minority Chief Counsel 

MARK K. HARRIS, Minority U.S. Coast Guard Detailee 

LAURA W. KILBRIDE, Chief Clerk 


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Calendar No. 606 

113TH CONGRESS SENATE REPORT " ! 2d Session 113–276 

SECURITY CLEARANCE ACCOUNTABILITY, REFORM, AND 

ENHANCEMENT ACT 

DECEMBER 1, 2014.—Ordered to be printed 

Mr. CARPER, from the Committee on Homeland Security and 

Governmental Affairs, submitted the following 

R E P O R T 

[To accompany S. 1744] 

The Committee on Homeland Security and Governmental Affairs, 

to which was referred the bill (S. 1744), to strengthen the accountability of individuals involved in misconduct affecting the integrity 

of background investigations, to update guidelines for security 

clearances, and for other purposes, having considered the same, reports favorably thereon with a substitute amendment and recommends that the bill, as amended, do pass. 

CONTENTS 

Page 

I. Purpose and Summary .................................................................................. 1 

II. Background and Need for the Legislation ................................................... 2 

III. Legislative History ......................................................................................... 7 

IV. Section-by-Section Analysis of the Bill, as Reported .................................. 8 

V. Evaluation of Regulatory Impact .................................................................. 10 

VI. Congressional Budget Office Estimate ......................................................... 10 

VII. Changes in Existing Law Made by the Bill, as Reported ........................... 11 

I. PURPOSE AND SUMMARY

This bill seeks to make the vetting of federal government personnel more reliable by requiring that, if someone works for an 

agency or a contractor on conducting background investigations 

and submits false information into the record of an investigation, 

or otherwise engages in conduct that undermines the integrity of 

the investigation, the individual must be removed from performing 

further work on background investigations. Moreover, to help ensure that personnel are vetted appropriately for security-sensitive 

jobs, the bill requires the President to issue updated guidance to 


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1 Agency positions are designated at a ‘‘high, moderate, or low risk level as determined by the 

position’s potential for adverse impact to the efficiency or integrity of the service,’’ and those 

at the high or moderate risk levels would normally be designated as ‘‘Public Trust’’ positions. 

5 C.F.R. 731.106 (a)–(b). OPM’s regulations explain: ‘‘Such positions may involve policy making, 

major program responsibility, public safety and health, law enforcement duties, fiduciary responsibilities or other duties demanding a significant degree of public trust, and positions involving access to or operation or control of financial records, with a significant risk for causing 

damage or realizing personal gain.’’ Id. 2See Exec. Ord. 12968 ‘‘Access to Classified Information’’ (Aug. 2. 1995) (50 U.S.C. 3161 note). 3See Exec. Ord. 13526 ‘‘Classified National Security Information’’ (Dec. 29, 2009) (50 U.S.C. 

3161 note). To indicate access to sensitive nuclear information and materials, ‘‘Q’’ clearances and 

‘‘L’’ clearances are issued, with Q clearances allowing access to the more highly sensitive level. 

See U.S. Department of Energy, Order DOE O 472.2, Personnel Security’’ (Approved: July 21, 

2011), https://www.directives.doe.gov/directives-documents/400-series/0472.2-BOrder; U.S. Nuclear Regulatory Commission, Information Security (Last Reviewed/Updated October 31, 2013), 

http://www.nrc.gov/security/info-security.html. 4See Office of the Director of National Intelligence, Number 704.1, Intelligence Community 

Policy Guidance, Personnel Security Investigative Standards and Procedures Governing Eligibility for Access to Sensitive Compartmented Information and Other Controlled Access Program 

Information (ICPG 704.1, Oct. 2, 2008), http://www.ncix.gov/publications/policy/docs/ICPGl704- 

1lInvestigative%20Standards.pdf. 

or otherwise engages in conduct that undermines the integrity of 

the investigation, the individual must be removed from performing 

further work on background investigations. Moreover, to help ensure that personnel are vetted appropriately for security-sensitive 

jobs, the bill requires the President to issue updated guidance to 

assist agencies in designating the level of sensitivity of positions in 

the government and in determining what level of background investigation to conduct for positions with various levels of sensitivity. 

II. BACKGROUND AND NEED FOR THE LEGISLATION

Processes for Vetting Government Personnel. Federal agencies 

conduct background investigations for the purpose of vetting individuals to provide service to the government. The level of detail of 

the investigation depends on the nature of the job. Background 

checks help determine whether an individual is appropriate for employment by a federal agency or a federal contractor, and investigations are also used to determine whether to allow an individual to 

have access to government facilities or information technology systems. More intensive investigations are used to determine whether 

an individual is eligible to hold a ‘‘Public Trust’’ position (i.e., a position that could have a relatively large adverse impact on an agency’s efficiency or integrity),1 to have access to classified information, or to occupy a national security sensitive position with the 

government. 

Because unauthorized disclosure of classified information can 

cause damage to national security and loss of human life, federal 

civilian employees, military personnel, and contractor employees 

are allowed access to classified information only after the government conducts a rigorous background investigation and issues 

them a security clearance.2 The levels of security clearance correspond to the levels of sensitivity of classified information to 

which the individual may have access—‘‘Top Secret,’’ ‘‘Secret,’’ and 

‘‘Confidential.’’ 3 Some security clearances allow access to ‘‘Sensitive 

Compartmented Information,’’ which involves intelligence matters 

and is particularly sensitive.4

Moreover, positions within an agency are designated as ‘‘sensitive positions’’ if an individual occupying a position could bring 


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5See Exec. Ord. 10450 (April 27, 1953) (5 U.S.C. 7311 note). 6See 5 C.F.R. part 732 (The requirement to designate sensitive positions at one of these three 

levels of sensitivity applies to positions in the competitive service (i.e., positions filled according 

to the Office of Personnel Management’s competitive-hiring regulations) and to Senior Executive 

Service positions filled by career appointment, and agencies may apply the requirement to other 

positions); Office of Personnel Management, Position Designation Tool, Position Designation of 

National Security and Public Trust Positions (October 2010), http://www.opm.gov/investigations/ 

background-investigations/position-designation-tool/oct2010.pdf. 7See 5 C.F.R. 731.106. 8See, e.g., Memorandum for Heads of Agencies, subject: ‘‘Aligning OPM Investigative Levels 

with Reform Concepts,’’ from John P. Fitzpatrick, Asst. Dep. Director of National Intelligence 

for Security, Office of the Director of National Intelligence, and from Kathy L. Dillaman, Assoc. 

Director, Federal Investigative Services, Office of Personnel Management (Aug. 24, 2010), http:// 

www.opm.gov/investigations/background-investigations/federal-investigations-notices/2010/aligninglopmlinvestigativellevels.pdf. 9Office of Management and Budget, ‘‘Suitability and Security Processes Review: Report to the 

President,’’ conducted by the Suitability and Security Clearance Performance Accountability 

Council (February 2014) (‘‘120-day Suitability and Security Report’’), at page 2. 10See id. at pages 2–3, http://www.whitehouse.gov/sites/default/files/omb/reports/suitabilityand-security-process-review-report.pdf. 11See id. 

about ‘‘a material adverse effect on the national security.’’ 5 Most 

sensitive career civil-service positions and some others are categorized among three levels of sensitivity: ‘‘Noncritical-Sensitive,’’ 

‘‘Critical-Sensitive,’’ and ‘‘Special-Sensitive.’’ 6 Positions that require 

access to classified information are always considered sensitive positions. And aside from whether a position may have an impact on 

national security, positions within an agency are ‘‘moderate risk 

public trust’’ positions or ‘‘high risk public trust positions,’’ depending on the level of risk that someone in the position could harm the 

efficiency or integrity of the agency.7

The head of each agency must designate positions in terms of 

whether they require access to classified information (and, if so, at 

what level of classification), whether the positions are national-security sensitive (and, if so, at what level of sensitivity), and whether it is a position of public trust (and, if so, at what level of risk). 

Then, when an individual is under consideration for a position, the 

scope of the background investigation for the individual must be 

appropriate for the designations associated with the position.8 In 

addition, individuals in security-sensitive positions (including those 

requiring access to classified information) or in public-trust positions are subject to routine periodic reinvestigations, and agencies 

may require reinvestigations any time there is reason to believe the 

individual may no longer meet the standards for the position. 

The great majority of background investigations (over 90 percent) 

are performed by the Federal Investigative Services (FIS) within 

the Office of Personnel Management (OPM), at the request of other 

agencies,9 though several agencies, many of which are in the Intelligence Community, are authorized to conduct their own.10 OPM 

hires contractors to conduct much of the information collection, and 

other agencies also use a mix of contractors and federal employees 

to gather the information needed for a background investigation.11

Following a background investigation, and based on the information collected, comes the adjudication stage, in which the sponsoring agency assesses the information collected and determines 

whether to allow the individual to occupy the position, and, if relevant, have access to classified information. 

Integrity of Background Investigations by Federal and Contractor 

Employees. Several high-profile leaks of classified information and 

other crimes in the last few years by individuals with security 


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12See Department of Defense, ‘‘Internal Review of the Washington Navy Yard Shooting: A Report to the Secretary of Defense’’ (November 20, 2013) (‘‘DoD Internal Review’’) at page 16, 

http://www.defense.gov/pubs/DoD-Internal-Review-of-the-WNY-Shooting-20-Nov-2013.pdf. In 

April 2014, Manning’s name was legally changed to Chelsea Elizabeth Manning, at Manning’s 

request. See Ernesto London ̃ o, ‘‘Convicted leaker Bradley Manning changes legal name to Chelsea Elizabeth Manning,’’ Washington Post (April 23, 2014), http://www.washington post.com/ 

world/national-security/convicted-leaker-bradley-manning-changes-legal-name-to-chelsea-elizabeth-manning/2014/04/23/e2a96546-cb1c-11e3-a75e-463587891b57lstory.html. 13See ‘‘Safeguarding our Nation’s Secrets: Examining the Security Clearance Process,’’ joint 

hearing before the Subcommittee on the Efficiency and Effectiveness of Federal Programs and 

the Federal Workforce and the Subcommittee on Financial and Contracting Oversight, Senate 

Committee on Homeland Security and Governmental Affairs, 113th Cong, 1st Sess. (June 20, 

2013), S.Hrg. 113–316; testimony of James R. Clapper, Director of National Intelligence, ‘‘Open 

Hearing: Current and Projected National Security Threats Against the United States,’’ before 

the Senate Intelligence Committee, January 29, 2014, http://www.intelligence .senate.gov/hearings.cfm? hearingid=138603a26950ad 873303535a630ec9c9& witnessId=138603a26950ad 

873303535a630ec9c9-0-1, unofficial transcript at http://www.washingtonpost.com/world/nationalsecurity/transcript-senate-intelligence-hearing-on-national-security-threats/2014/01/29/b5913184- 

8912-11e3-833c-33098f9e5267lstory.html. See also, Mark Hosenball, ‘‘Snowden downloaded 

NSA secrets while working for Dell, sources say,’’ Reuters (Aug. 15, 2013), http:// 

www.reuters.com/article/2013/08/15/usa-security-snowden-dell-idUSL2N0GF 11220130815. 14See DoD Internal Review, note 12 above, http://www.defense.gov/pubs/DoD-Internal-Reviewof-the-WNY-Shooting-20-Nov-2013.pdf; Department of Defense, ‘‘Security from Within: Independent Review of the Washington Navy Yard Shooting’’ (November 2013) (‘‘DoD External Review’’), http://www.defense.gov/pubs/Independent-Review-of-the-WNY-Shooting-14-Nov-2013.pdf. 15 Joint hearing of the Subcommittee on the Efficiency and Effectiveness of Federal Programs 

and the Federal Workforce, and the Subcommittee on Financial and Contracting Oversight, of 

the Senate Committee on Homeland Security and Governmental Affairs, ‘‘Safeguarding our Nation’s Secrets: Examining the Security Clearance Process’’ (June 20, 2013) (‘‘June 20, 2013 hearing’’). 16Testimony of Patrick McFarland, Inspector General, U.S. Office of Personnel Management, 

before the Senate Committee on Homeland Security and Governmental Affairs, Subcommittee 

on the Efficiency and Effectiveness of Federal Programs and the Federal Workforce, ‘‘Safeguarding our Nation’s Secrets: Examining the Security Clearance Process’’ (June 20, 2013), 

http://www.hsgac.senate.gov/download/?id=c11fa433-8f01-440f-a306-741e879ce8a8. 

clearances have highlighted weakness in our processes for vetting 

federal personnel and have demonstrated the urgent need to 

strengthen these processes: 

• During 2010 and 2011, an Army intelligence analyst, then 

named Bradley Manning, stole and leaked enormous quantities of 

classified documents regarding military operations in Iraq and Afghanistan to a whistleblower website called Wikileaks.12

• During June 2013, computer systems administrator Edward 

Snowden leaked to the news media enormous quantities of National Security Agency classified documents that he obtained while 

working for intelligence contractors Dell and Booz Allen.13

• Most recently, on September 16, 2013, Aaron Alexis, while a 

Navy contractor with a Secret-level security clearance, fatally shot 

12 U.S. Navy civilian and contractor employees and wounded several others in a mass shooting inside the Washington Navy Yard 

in Washington, D.C.14

On June 20, 2013, shortly after the massive release of classified 

information by Mr. Snowden, very troubling information about the 

integrity of the background-investigation program was presented at 

a joint hearing before two of this Committee’s subcommittees.15

The Inspector General of OPM, Patrick McFarland, testified at the 

hearing about the fabrication of background investigations within 

OPM’s Federal Investigative Services.16 Mr. McFarland stated that 

‘‘one of the most flagrant criminal violations that we encounter is 

the falsification of background investigation reports’’ and that there 

are situations where the ‘‘Federal Investigative Services’ background investigators, either Federal employees or contractors, report interviews that never occurred, record answers to questions 


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17 Id. 18 Information provided to Committee staff by the OPM Office of Inspector General on November 13, 2014. 19 U.S. Department of Justice press release (Oct. 30, 2013), http://www.justice.gov/opa/pr/2013/ 

October/13-civ-1158.html. 20See id. and the United States’ Complaint in the case referred to there. 21See testimony of McFarland, note 16 above. 

that were never asked, and document records checks that were 

never conducted.’’ 17

Among the examples Mr. McFarland provided was a record 

searcher who fabricated 1,600 credit checks that she never actually 

completed. Moreover, her own background investigation had been 

falsified by a background investigator who had been convicted in 

a different fabrication case. Since the OPM Office of the Inspector 

General began investigating that type of case in 2006, twenty-four 

background investigators and records searchers have been criminally convicted, resulting in court-ordered restitution of at least 

$1,866,382 to OPM’s Revolving Fund.18

Further troubling allegations questioning the integrity of the 

background check program emerged on October 30, 2013, when the 

Department of Justice joined a civil fraud lawsuit claiming that a 

contractor, which was performing a large share of the investigative 

work contracted out by OPM and other agencies, had engaged in 

a systemic failure to adequately conduct security clearance background investigations.19 Specifically, the Department of Justice alleged that the senior management of the company ‘‘dumped’’ incomplete investigations on OPM in order to increase the company’s revenue and profit. This began at least as early as March 2008, according to the complaint, and continued through at least September 

2012, and involved 665,000 background investigations—approximately 40 percent of the total investigations conducted by the contractor during that time frame.20

In situations where misconduct by an employee of an OPM contractor was found, the Federal Investigative Services has shown 

itself to be able to take prompt administrative action to remove the 

employee from the contract. However, just removing the individual 

from the contract is, as Mr. McFarland said, ‘‘insufficient,’’ 21 because such an employee may obtain a position performing background investigations working under another contract. In one instance, for example, the OPM Office of the Inspector General found 

that a contract background investigator, who had been removed by 

OPM for falsifying reports, was later granted contract employment 

performing background investigations for another federal agency 

while awaiting criminal indictment for fabricating reports. 

To prevent this kind of abuse in the future, S. 1744 would require agencies that hire background investigators, whether as employees of the agency or as a contractor to the agency, to implement certain practices to help keep these employees accountable. 

Any federal employee who is found to have engaged in misconduct 

affecting the integrity of a background investigation would be 

deemed unfit for such employment and would be permanently 

barred from conducting background investigations as an employee 

of any agency. Likewise, if an employee under a contract has engaged in such misconduct, that individual would then be deemed 

ineligible to perform a background investigation for any contractor 

from that point forward. 


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22See testimony of Brenda S. Farrell, Director, Defense Capabilities and Management, GAO, 

‘‘Personnel Security Clearances: Further Actions Needed to Improve the Process and Realize Efficiencies,’’ GAO–13–728T (June 20, 2013), submitted at June 20, 2013 hearing, note—above; 

testimony of Brenda S. Farrell, Director, Defense Capabilities and Management, GAO, ‘‘Personnel Security Clearances: Actions Needed to Help Ensure Correct Designations of National Security Positions,’’ GAO–14–139T (November 20, 2013), submitted at hearing before the Subcommittee on the Efficiency and Effectiveness of Federal Programs and the Federal Workforce, 

Senate Committee on Homeland Security and Governmental Affairs, ‘‘Safeguarding our Nation’s 

Secrets: Examining the National Security Workforce’’ (November 20, 2014). 23See Farrell, testimony submitted at November 20, 2013, hearing, note 16 above, at page 18. 

This bill also requires that a contract to provide background-investigation services must require that, if the contractor discovers 

any instance of misconduct affecting the integrity of a background 

investigation, the contractor must disclose the situation to the 

agency within 24 hours. Finally, the bill requires annual Presidential reports to the appropriate congressional committees detailing the number of individuals determined unfit for federal employment or ineligible to perform background investigation work, and 

the details of the covered misconduct that resulted in their removal. 

Guidance for Designating the Sensitivity Level of Positions. A further source of vulnerability in the vetting of federal personnel 

arises from the absence of updated and consistent guidance for 

agencies to use in designating the sensitivity level of positions that 

require security clearances or are otherwise sensitive in terms of 

national security. The Government Accountability Office (GAO) explained this weakness at the joint subcommittee hearing on June 

20, 2013, and provided further explanation at a second subcommittee hearing on November 20, 2013.22

At these hearings, Brenda Farrell, Director of GAO’s Defense Capabilities and Management team, explained that applying the currently available methods have resulted in inconsistency in position 

designations, such as designating positions at too high a level or 

at too low a level. Both kinds of errors are harmful. If a position 

is designated as more sensitive than it should be, the background 

investigation will be more costly and time-consuming than necessary for the position. For example, Ms. Farrell told the Committee that a background investigation for a top secret clearance 

requires 10 times as many investigative staff hours as a secret 

clearance.23 And on the other hand, if a position is designated as 

less sensitive than it should be, the background investigation may 

not be sufficiently thorough and rigorous to ensure that an individual is sufficiently trustworthy to be given the highly sensitive 

national-security responsibilities of the position. 

To address this deficiency, GAO recommend that clearly defined 

policies and procedures should be issued that federal agencies could 

follow in determining whether federal civilian positions require a 

security clearance or should be designated as a national security 

position. Moreover, since circumstances and the duties of positions 

change over time, GAO recommends that these designations of positions be reevaluated periodically. 

The Director of National Intelligence and the Director of OPM 

are currently working to finalize regulations, which were published 

in proposed form on May 28, 2013, to establish policies and procedures for agencies to follow in designating the sensitivity of federal 

civilian positions. Ms. Farrell testified that the proposed rules 

would, if finalized, meet the intent of GAO’s recommendation to 


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24Farrel testimony at November 20, 2013 hearing, note 16 above, at page 13. 25 Under current delegations, the President would be expected to issue updated guidance 

through a collaboration of the Director of National Intelligence, as Security Executive Agent, 

and the Director of the Office of Personnel Management, as Suitability Executive Agency. See 

Ex. Ord. No. 13467 (June 30, 38103) (50 U.S.C. 3161 note) (designating the Director of National 

Security as the Security Executive Agent, responsible for developing policies and procedures 

with respect to eligibility for access to classified information and eligibility to hold a sensitive 

position; and designating the Director of the Office of Personnel Management as Suitability Executive Agent, responsible for developing policies and procedures with respect to determinations 

of suitability for federal employment and eligibility for access to facilities and systems). On the 

designation of positions, the President would be expected to act through the heads of each agency. 26On July 10, 2013, Senator Tester introduced S. 1276, the Security Clearance Oversight and 

Reform Enforcement Act, with Senators McCaskill, Portman, Coburn and Ron Johnson as cosponsors, and the bill was referred to the Senate Committee on Homeland Security and Governmental Affairs. As introduced, S. 1276 contained three provisions: (1) a provision providing the 

Inspector General of the OPM funds from OPM’s Revolving Fund to perform oversight of the 

Revolving Fund; (2) a provision requiring OPM to terminate or debar a federal or contractor 

employee involved in misconduct affecting the integrity of background investigations; and (3) a provision requiring the federal government to update its policies for determining which employees require a security clearance. The Committee considered S. 1276 at a business meeting on 

July 31, 2013. Senator Tester offered a substitute amendment striking the provisions other than 

the one authorizing the use of Revolving Fund resources for oversight activities. The Committee 

adopted the substitute amendment, as modified, and ordered the underlying bill reported favorably, both by voice vote. The Senate passed S. 1276 on October 10, 2013. Similar legislation introduced in the House of Representatives regarding oversight of the Revolving Fund, H.R. 2860, 

was signed into law on February 12, 2014 (Public Law 113–80). 

issue clearly defined policies and procedures for determining 

whether civilian positions need security clearances.24 However, the 

regulations have not yet been issued in final form, and they do not 

require a periodic reassessment of whether a position continues to 

need access to classified information or to otherwise be security 

sensitive. 

The Committee agrees with these recommendations put forth by 

GAO and has included requirements in S. 1744 that are similar to 

those recommendations. Specifically, the bill would require that, 

not later than 180 days after enactment, the President must review 

and update guidance for agencies in determining the sensitivity 

designation of positions and the appropriate background investigation to initiate for each position designation. The bill also provides 

that, at least every 5 years, the President must review and, if necessary, revise the position designations in accordance with the 

guidance. The President would act through relevant agencies, as 

determined by the President.25

III. LEGISLATIVE HISTORY

On November 20, 2013, Senators Tester, Baucus, Begich, Ron 

Johnson, McCaskill, Nelson, and Portman introduced S. 1744, and 

the bill was referred to the Committee on Homeland Security and 

Governmental Affairs. (S. 1744 is based on two provisions that Senator Tester had originally introduced on July 10, 2013, as part of, 

S. 1276, the Security Clearance Oversight and Reform Enforcement 

Act, but that were removed from that bill before it was ordered to 

be reported on July 31, 2013.) 26

The Committee considered S. 1744 at a business meeting on May 

21, 2014. Senators Tester, McCaskill, Begich, and Portman offered 

a substitute amendment. As introduced, S. 1744 required the Director of OPM to terminate or debar an individual intentionally involved in misconduct affecting the integrity of background investigations. The substitute directs this requirement more broadly 

across the government in order to include other agencies that conduct background investigations. The substitute also tightens deadVerDate Sep 11 2014 06:22 Dec 03, 2014 Jkt 049010 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\SR276.XXX SR276

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27The PAC was established by Executive Order 13467, Reforming Processes Related to Suitability for Government Employment, Fitness for Contractor Employees and Eligibility for Access 

to Classified National Security Information (June 30, 2008). The PAC is chaired by the Deputy 

Director for Management of the Office of Management and Budget and also includes, among 

other agencies, the Office of the Director of National Intelligence and the Office of Personnel 

Management. 

lines for contractors to report misconduct from the requirements included in S. 1744 as introduced. The substitute also makes a number of changes to terminology based on staff discussion with the 

agencies that participate in the Suitability and Security Performance Accountability Council (PAC), which is the inter-agency committee responsible for promoting reforms related to background investigations and the decisions that are based on those investigations.27 Senator Tester also offered an amendment to change the 

title of the bill. 

The Committee adopted the substitute amendment, as modified, 

and the amendment to change the title, both by voice vote. The 

Committee reported the bill, as amended, favorably by voice vote. 

Senators present for the votes were Senators Carper, Pryor, Landrieu, McCaskill, Tester, Begich, Coburn, Johnson, Portman, and 

Enzi. 

IV. SECTION-BY-SECTION ANALYSIS

Section 1—Short title 

This section establishes the short title of the legislation as the 

‘‘Security Clearance Accountability, Reform and Enhancement Act.’’ 

Section 2—Definitions 

This section establishes that, for purposes of this Act: 

(1) The term ‘‘agency’’ has the meaning given in Executive Order 

13467 (73 Fed. Reg. 38103), Reforming Processes Related to Suitability for Government Employment, Fitness for Contractor Employment, and Eligibility for Access to Classified National Security 

Information. This is a broad definition, encompassing Executive 

agencies, military departments, and other entities in the executive 

branch that come into possession of classified information or have 

designated positions as sensitive. 

(2) The term ‘‘appropriate agency’’ means, an agency with which 

a prime contractor enters a contract for background investigation 

work, or an agency on whose behalf a subcontractor is performing 

background investigation work. 

(3) The term ‘‘appropriate congressional committees’’ means the 

Committee on Homeland Security and Governmental Affairs and 

the Select Committee on Intelligence of the Senate, and the Committee on Oversight and Government Reform and the Permanent 

Select Committee on Intelligence of the House of Representatives. 

(4) The term ‘‘background investigation’’ means any investigation 

required for determining the eligibility of a covered individual for 

logical and physical access to federally controlled facilities or information systems; suitability or fitness of a covered individual for 

federal employment; eligibility of a covered individual for access to 

classified information or to hold a national security sensitive position; or fitness of a covered individual to perform work on or behalf 

of the United States Government as a contractor employee. 


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(5) The term ‘‘covered contract’’ is defined to include both prime 

and subcontracts to conduct background investigations. 

(6) The term ‘‘covered individual’’ means an individual who performs work, or seeks to perform work, for or on behalf of an agency. 

(7) The term ‘‘covered misconduct’’ is defined as misconduct affecting the integrity of a background investigation, including falsification or other serious misconduct that compromises the integrity of a background investigation. 

(8) The term ‘‘prime contractor’’ means an individual who enters 

a contract with an agency. 

(9) The term ‘‘subcontractor’’ means an individual who has contracted with a prime contractor or with another subcontractor to 

perform a contract on behalf of an agency. 

Section 3—Accountability of individuals involved in misconduct affecting the integrity of agency background investigations 

Section 3(a) establishes that an employee found to have engaged 

in covered misconduct affecting the integrity of a background investigation is unfit for federal employment. Section 3(a) requires agencies, in determining whether an employee has engaged in such conduct, to act in accordance with any statutory, regulatory, or internal agency procedures applicable to investigating alleged misconduct by employees. The subsection further provides that if an 

individual has been deemed unfit for federal employment because 

of such misconduct, that individual may no longer occupy a position 

as a federal employee performing background investigations. 

Section 3(b) makes accountability measures similar to those in 

subsection (a) apply to contract employees performing background 

investigations. In doing so, it establishes that if an agency, prime 

contractor or subcontractor determines that an individual performing work under contract has engaged in covered misconduct, 

the individual shall be ineligible to perform background investigations under a contract. Section (3)(b) also requires any background 

investigation contract to include a mandatory disclosure provision 

requiring a prime contractor or subcontractor to disclose any allegation of covered misconduct by an employee within 24 hours to 

the agency responsible for the contract. The subsection also requires covered contracts to include a provision requiring that, not 

later than 5 business days after the date on which a prime contractor or subcontractor discloses an allegation of covered misconduct, the prime contractor or subcontractor must refer the allegation of covered misconduct to the agency for investigation. The 

subsection also clarifies that nothing in the provision shall be construed to prohibit an agency from conducting its own investigation 

into an allegation of misconduct. 

Subsection 3(c) requires the President to submit an annual report to the appropriate congressional committees on the number of 

individuals determined to be unfit for federal employment or ineligible to perform work under a covered contract as a result of this 

legislation, including the specific covered misconduct that led to 

such a determination. 

Section 4—Review and update of position designation guidance 

Section 4 requires the President, at least every five years, to review and update, if appropriate, the guidance for agencies to deterVerDate Sep 11 2014 06:22 Dec 03, 2014 Jkt 049010 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 E:\HR\OC\SR276.XXX SR276

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mine position sensitivity designation and whether a position requires a security clearance. It further requires the President to 

submit a report to Congress on the content of the results of such 

a review. 

V. EVALUATION OF REGULATORY IMPACT

Pursuant to the requirements of paragraph 11(b) of rule XXVI of 

the Standing Rules of the Senate, the Committee has considered 

the regulatory impact of this bill and determined that the bill will 

have no regulatory impact within the meaning of the rules. The 

Committee agrees with the Congressional Budget Office’s statement that the bill contains no intergovernmental or private-sector 

mandates as defined in the Unfunded Mandates Reform Act 

(UMRA) and would impose no costs on state, local, or tribal governments. 

VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

JUNE 20, 2014. 

Hon. TOM CARPER, 

Chairman, Committee on Homeland Security and Governmental Affairs, U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1744, the Security Clearance Accountability, Reform, and Enhancement Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

S. 1744—Security Clearance Accountability, Reform, and Enhancement Act 

S. 1744 would require the Office of Personnel Management 

(OPM) to terminate or place on administrative leave any OPM employee that is involved in misconduct involving the security clearance process and debar employees of contractors and subcontractors involved in similar misconduct. Based on information from 

OPM, CBO estimates that implementing this legislation would 

have an insignificant cost. Enacting S. 1744 could affect direct 

spending by agencies not funded through annual appropriations; 

therefore, pay-as-you-go procedures apply. CBO estimates, however, that any net changes in spending by those agencies would be 

negligible. Enacting the bill would not affect revenues. 

A security clearance is a determination that an individual 

(whether a federal employee or contractor) is eligible for access to 

classified national security information. A security clearance may 

be granted only by a federal agency, and generally only upon completion of a background investigation. Most background investigations are overseen by OPM’s Federal Investigative Services (actual 

investigations may be conducted by private investigative firms). 

S. 1744 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 


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The CBO staff contact for this estimate is Matthew Pickford. The 

estimate was approved by Theresa Gullo, Deputy Assistant Director for Budget Analysis. 

VII. CHANGES IN EXISTING STATUTE MADE BY THE BILL, AS REPORTED

Because this legislation would not repeal or amend any provision 

of current law, it would make no changes in existing law within the 

meaning of clauses (a) and (b) of paragraph 12 of rule XXVI of the 

Standing Rules of the Senate. 

Æ 


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