Page 1 GAO-05-988R DOD Security Clearances 

United States Government Accountability Office

Washington, DC 20548 

August 19, 2005 

The Honorable George V. Voinovich 

Chairman, Subcommittee on Oversight of Government Management, 

 the Federal Workforce, and the District of Columbia 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

Dear Senator Voinovich: 

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

Program 

On June 28, 2005, I testified before your Subcommittee at a hearing on “Access 

Delayed: Fixing the Security Clearance Process.”1

 This letter responds to your 

request that I provide answers to Senator Frank R. Lautenberg’s questions for the 

record. The questions, along with my responses follow. 

1. Your 2004 report recommended that the Department of Defense (DOD) 

work closely with the Office of Personnel Management (OPM) to design 

and implement a plan for getting rid of clearance backlogs and delays. To 

your knowledge, what progress has DOD made on this? 

GAO is unaware of any progress that DOD has made toward implementing our May 

2004 recommendation to “develop and implement an integrated, comprehensive 

management plan to eliminate the backlog, reduce the delays in conducting 

investigations and determining eligibility for security clearances, and overcome the 

impediments that could allow such problems to recur.” Information supplied by DOD 

as part of a required follow-up action on all GAO recommendations lists a few 

actions, but nothing is mentioned about developing an integrative approach that 

incorporates objectives and outcome-related goals, sets priorities, identifies 

resources, establishes performance measures, and provides milestones for 

permanently eliminating the backlog and reducing delays. 

 

1

 GAO, DOD Personnel Clearances: Some Progress Has Been Made but Hurdles Remain to Overcome 

the Challenges That Led to GAO’s High-Risk Designation, GAO-05-842T (Washington, D.C.: June 28, 

2005). 
 Page 2 GAO-05-988R DOD Security Clearances

On June 17, 2005, the Deputy Director of Management at the Office of Management 

and Budget (OMB) announced that OMB would work with agencies to set clear and 

aggressive milestones for reducing risk in each area that GAO had designated high 

risk. On July 12, 2005, shortly after this Subcommittee’s hearings, GAO officials met 

with OMB’s Deputy Director for Management, Clay Johnson, and his staff to discuss 

DOD’s personnel security clearance program, the clearance backlog, and 

impediments to timely, high-quality clearances. Among other things, Mr. Johnson 

indicated that (1) OMB staff would work with DOD and OPM to develop preliminary 

milestones and metrics for correcting problems associated with the program and (2) 

GAO would be asked to comment on that information in August or September 2005. 

2. Based on your analysis, how much money do you think has been wasted 

due to lengthy security clearance processes, when employees come into 

work but cannot participate in substantive assignments until cleared? 

GAO does not have an up-to-date estimate of the costs resulting from delays in 

determining eligibility for a personnel security clearance. However, our February 

2004 report documents some past estimates as well as cost-related considerations 

that apply today.2

 For example, we noted that in our 1981 report, we estimated the 

DOD investigative backlog could cost nearly $1 billion per year in lost productivity.3 

More than a decade later, the Joint Security Commission report noted that the costs 

directly attributable to investigative delays in fiscal year 1994 could be as high as 

several billion dollars because workers were unable to perform their jobs while 

awaiting a clearance.4

In addition to the costs associated with delays in employees being able to start 

classified work, our February 2004 report also documented other types of costs that 

have been cited by industry personnel.5 Representatives from one company with $1 

billion per year in sales stated that their company offers a $10,000 bonus to 

employees for each person recruited who already has a security clearance. Such 

operating costs are then passed on to government customers in the form of higher 

bids for contracts. In turn, the recruit’s former company may need to back-fill a 

position, as well as possibly settle for a lower level of contract performance while a 

new employee is found, obtains a clearance, and learns the former employee’s job. 

Also, industry representatives discussed instances where their companies gave hiring 

 

2

 GAO, DOD Personnel Clearances: DOD Needs to Overcome Impediments to Eliminating Backlog 

and Determining Its Size, GAO-04-344 (Washington, D.C.: Feb. 9, 2004). 

3

 GAO, Faster Processing of DOD Personnel Security Clearances Could Avoid Millions in Losses, 

GAO/GGD-81-105 (Washington, D.C.: Sept. 15, 1981). 

4

 Joint Security Commission, Redefining Security: A Report to the Secretary of Defense and the 

Director of Central Intelligence, Chapter 4, Personnel Security—The First and Best Defense 

(Washington, D.C.: Feb. 28, 1994). 

5

GAO-04-344.
 Page 3 GAO-05-988R DOD Security Clearances

preference to personnel who could do the job but were less qualified than others who 

did not possess a clearance. The chair of the interagency Personnel Security Working

Group noted that a company might hire an employee and begin paying that individual, 

but not assign any work to the individual until a clearance is obtained. The head of 

the interagency group additionally noted that commands, agencies, and industry 

might incur lost-opportunity costs if the individual chooses to work somewhere else 

rather than wait to get the clearance before beginning work. 

If you or other members of the Subcommittee have any additional questions about 

DOD’s personnel security clearance program, please contact me at (202) 512-5559 or 

stewartd@gao.gov. Contact points for our Offices of Congressional Relations and 

Public Affairs may be found on the last page of this correspondence. GAO staff who 

made major contributions to this correspondence are listed in the enclosure. 

Sincerely yours, 

Derek B. Stewart 

Director, Defense Capabilities and 

Management 

Enclosure 
 Page 4 GAO-05-988R DOD Security Clearances

Enclosure 

GAO Contact and Staff Acknowledgments 

GAO Contact Derek B. Stewart (202) 512-5559 or stewartd@gao.gov

Acknowledgments In addition to the contact above, Jack E. Edwards, Assistant 

Director, and Mark A. Pross made key contributions to this 

correspondence. 

(350747) 
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